Grants saga has ConCourt judges hot under collar

The country’s highest court is being forced to rubber-stamp illegal activity in order to prevent chaos in the payment of social grants.

As many as 2.8 million social grant beneficiaries are at risk of not being paid come April 1 unless the Constitutional Court rules in favour of an urgent application to extend for six months the illegal contract between the South African Social Security Agency’s (Sassa) and its service provider Cash Paymaster Services (CPS).

This submission by Sassa got the Constitutional Court’s judges hot under the collar yesterday, and they accused Sassa of effectively holding the court hostage.

The department of social development admitted in court that it has known since December 8 that the planned takeover of Sassa’s grants payment responsibilities by the Post Office would not be able to go ahead as planned next month. The Post Office apparently lacks the means to handle the payment of grants to beneficiaries who don’t have bank accounts.

Despite this, the department delayed filing an urgent application for CPS’s contract extension with the court until last month.

Advocate Nazeer Cassim, acting on behalf of Sassa, faced a barrage of questions from Chief Justice Mogoeng Mogoeng, and his fellow justices, on why his clients delayed filing their application.

Cassim submitted that the department had been hamstrung by their attempts to ensure the specifications for the tender for a new service provider for the distribution of social grants to those beneficiaries without bank accounts was finalised.

The large interest in the contract, which oversees the distribution of approximately R3 billion per month, also allegedly contributed to Sassa’s inability to deal with the issue.

Cassim claims the department had hoped to be able to “get their act together”, and ensure that the handover to the Post Office, and appointment of an alternative service provider, would be finalised in time.

He told the court that the department had “acted in the best of their ability, besides coming to court a week or two late”.

In response, Deputy Chief Justice Raymond Zondo said: “There appears to be an attitude of not caring about dealing with issues urgently and explaining things to the court. It’s as if the attitude is that the court has no choice. It will give us what we want.” Zondo described this attitude as a serious cause for concern.

The department’s application was supported by the Post Office, who submitted that they would require the assistance of CPS to deal with the phasing in of their services. This assistance would only be necessary on a diminishing scale, until the Post Office is able to issue enough of their own beneficiary cards and take over the payments system as a whole.

CPS argued that it would run out of money by the end of May, as they would be operating at a loss, if the electronic payment part of their current contract is taken over by the Post Office, and they only retain the distribution of cash payments to the 2.8 million beneficiaries without bank accounts.

Judgment has been reserved.

Outa’s outlook:

Dominique Mcebi, Outa’s portfolio manager handling Sassa, says South Africa has been painted into a corner by Sassa, since the payment of grants to approximately 20% of beneficiaries is non-negotiable. “This 20% only represents the number of direct recipients, which means these grants feed multiple dependents,” said Mcebi.

“Sassa and CPS are holding the country to ransom for personal reasons and gains year after year.”

One can conclude that the whole situation continues to be engineered to benefit certain individuals who benefit from the CPS relationship, added Mcebi. “This is at the sacrifice of the poorest of the poor.”

The Black Sash’s input:

Civic organisation The Black Sash joined in the application against the extension of CPS’s contract. They said they could not oppose the extension in good faith, since the failure to extend the illegal contract posed significant risk to grant beneficiaries.

They did, however, argue that Sassa has placed insufficient information before the court for the relief they seek; Sassa’s proposed plan has inadequate safeguards for protecting beneficiaries’ personal data, which leaves them vulnerable to exploitation; There is no justification to pay CPS any additional fees for fulfilling its constitutional obligations; and the court should extend its supervisory role in the matter.

The organisation believes the impact of a further extension will create further confusion among grant beneficiaries, who are fearful that their grants will not be paid.

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