Business 23.3.2018 02:50 pm

Concourt extends illegal CPS Sassa contract for six months

On March 6, the Post Office told the court it was ready to take over grants, but it needed initial assistance from CPS to phase in the takeover.

The Constitutional Court on Friday allowed the SA Social Security Agency (Sassa) to extend its contract with Cash Paymaster Services (CPS) for another six months.

The ruling followed shortly after a different court ruled that Sassa must repay R317 million to the state.

An angry court earlier this month demanded that Sassa and the SA Post Office (SAPO) make it clear what their contingency measures were to ensure social grants are paid.

In the first week of March, the country’s highest court was asked to rubber-stamp illegal activity in order to prevent chaos in the payment of social grants.

CPS ordered to repay R317m to Sassa to benefit the poor

As many as 2.8 million social grant beneficiaries were at risk of not being paid come April 1 unless the Constitutional Court ruled in favour of an urgent application to extend the illegal contract between Sassa and CPS.

The Constitutional Court’s judges accused Sassa of effectively holding the court hostage.

The department of social development admitted in court that it had 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, which 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.

Advocate for Freedom Under Law Gilbert Marcus SC argued at the time that they did not oppose the relief sought but CPS should not benefit further from the unlawful contract.

– Additional reporting, Earl Coetzee

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