Ann Crotty Writer-at-large
Checks: The South African Social Security Agency has contracted the Council for Scientific and Industrial Research to undertake a due diligence inquiry into the capacity of the South African Post Office to pay social grants Picture: FILE PICTURE
Checks: The South African Social Security Agency has contracted the Council for Scientific and Industrial Research to undertake a due diligence inquiry into the capacity of the South African Post Office to pay social grants Picture: FILE PICTURE

Net1 subsidiary Cash Paymaster Services (CPS) will continue to provide back-end banking systems for the entire social-grant distribution process until at least the end of September.

The full extent of the services required, which will be considerably beyond what the South African Social Security Agency (Sassa) recently indicated to the Constitutional Court, will be known only on Friday after a workshop with Sassa and CPS.

This high degree of uncertainty is starkly at odds with the application Sassa made last week to the Constitutional Court and points to a troubling level of uncertainty just six weeks before the critical end-March deadline. An extension of invalidity of Sassa’s contract with CPS for six months from March31 was requested in the application. It envisaged a significant reduction in CPS’s involvement. For the extended six-month period Sassa told the court CPS would only provide cash grants to 2.5-million recipients. Sassa CEO Pearl Bengu said in the application that Sassa had "made arrangements" for the remaining 8.3-million but provided no details.

However, correspondence between Sassa and CPS, referred to in CPS’s answering affidavit to Sassa’s court application presents a significantly different picture and gives some indication of the "arrangements". In a letter to CPS dated February13, Bengu refers to a February 2 letter in which she indicated the services required from CPS during the six-month "transitional" period. These included "system support for the existing Sassa/Grindrod cards for as long as these are still in circulation". Although the expiry date on the cards reads December 2017 CPS has extended their lifespan by to December 2018 to cope with the transition.

Bengu’s letter also states that Sassa will require support for the existing Sassa-branded cards for as long as they are still in circulation. "In addition, until such time as Sapo [South African Post Office] is ready to start rolling out the new Sassa-branded card, CPS will be expected to continue issuing the current Sassa card to new beneficiaries as well as to those existing beneficiaries who require replacement cards," Bengu said in her letter to CPS.

A letter dated February 12 from Net1 CEO Herman Kotze to Bengu reveals that Sassa has already instructed CPS to order an additional 800,000 Sassa-branded Grindrod cards.

In his affidavit to the court, Kotze says they are not opposing Sassa’s extension application but are seeking clarity on terms and conditions.

It also wants the court’s authority to apply to the Treasury for "a reasonable fee" for the continued provision of the 2.5-million cash payouts as requested by Sassa.

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