Finance Minister Pravin Gordhan today Tuesday 14 March gave assurance that social grants would be paid on 1 April.
Finance Minister Pravin Gordhan today Tuesday 14 March gave assurance that social grants would be paid on 1 April.
This comes as the Black Sash has made an urgent application for the reinstatement of the Constitutional Court's oversight role of the for the payment of grants by the South African Social Security Agency (Sassa), and has called for the protection of the personal information of beneficiaries to be guaranteed.
Gordhan stated earlier this month that an extended, or new contract with CPS, a unit of Net1 UEPS Technologies, would be unlawful and uncompetitive, contrary to the requirements of section 217 of the Constitution, and could constitute a deviation from procurement procedures.
In a letter quoted from in Business Day https://www.businesslive.co.za/bd/national/2017-02-15-bathabile-dlaminis-plan-to-extend-a-net1-contract-is-unlawful-gordhan-says/ addressed to Social Development Minister Bathabile Dlamini, the Finance Minister also states that he would not sanction such deviation unless the Constitutional Court approved.
However, today, Gordhan spoke of "a higher duty" to ensure people receive their grants on 1 April.
The Black Sash outlined events leading to the surrent crisis as follows:
In 2012, Sassa contracted Cash Paymaster Services (CPS) to pay social grants.
In 2013, the Constitutional Court declared the contract invalid.
In April 2014, the order of invalidity was suspended. The CPS contract was allowed to continue until 31 March 2017 so beneficiaries could be paid. The Agency was to have initiated a new tender process.
Sassa filed a report with the Constitutional Court on 5 November 2015 stating that it would not award a new contract, but would instead take over the payment of social grants from 1 April 2017, when the CPS contract ends. The Constitutional Court then discharged its supervisory role in this regard.
"Sassa is not able to take over the payment of social grants on 1 April 2017," the Black Sash wrote in a statement.
"It appears that at this stage, a revised or new contract between SASSA and CPS is the only way to ensure that grant beneficiaries are paid on 1 April 2017. Sassa now intends to enter into a further contract with CPS to continue the payment of grants for an unspecified period. The contract price may also be increased by more than the inflation rate."
The Minister and Sassa had known in 2016 that Sassa would not be ready to pay grants by 1 April 2017, the Black Sash said, but had failed to seek guidance from the Constitutional Court.
"Sassa announced that it would approach the Constitutional Court for its approval of the proposal; however, it subsequently withdrew its application," the Black Sash said.
On 22 February 2017, the Minister of Social Development and the Agency informed Parliament that Sassa would not make any application to the Constitutional Court, but would merely report to this Court, at an unspecified time before 31 March 2017, on what it had done.
Almost 17 million South Africans receive social grants.
Gordhan today said the government would like to remove any uncertainty and assure South Africans that social grants will be paid on 1 April.
The Minister also said that a new Ministerial Task Team had been established to resolve the impasse over the payment of social grants.
Gordhan said this when he appeared before the Standing Committee on Public Accounts (Scopa) in Parliament, earlier today, to give clarity on the status of the payment of social grants after the contract between the South Africa Social Security Agency (SASSA) and Cash Paymaster Services (CPS) was outlawed by a 2014 court ruling.
His remarks come as the government works around the clock to ensure that 17 million beneficiaries receive their grants beyond the month of March.
“… We have both the Constitutional responsibility to obey the law but at the same time, given the current circumstances, both in respect of Sassa and ourselves, there is what one senior counsel called a higher duty and that higher duty is how do we ensure that people receive their social grants on 1 April,” he said.
Sassa’s current contract with Cash Paymaster Services is set to expire at the end of the month.
“… and I want to say very categorically that everything that we are doing at the moment is directed at ensuring within legal bounds and where flexibility is required – the court must determine that flexibility, how grants are to be paid on 1 April and I am fairly confident that grants will be paid on 1 April,” Gordhan said.
The Constitutional Court requested more information from Sassa regarding the payment of social grants.
Ministerial Task Team
The Minister’s briefing to Scopa comes after Social Development Dlamini appeared before the same panel of MPs at the Old Assembly last week to brief them on the update over the payment of grants.
Today, Gordhan said a new Ministerial Task Team, headed by Minister in the Presidency responsible for Planning, Monitoring and Evaluation, Jeff Radebe, has been established to resolve all social grant related matters.
The Ministerial Task Team, in turn, set up a technical Task Team that will comprise Director-Generals from various departments.
“In terms of current discussions, as we saw in the media, I am not sure what was said a week ago here.
"There were discussions between Sassa, the Department of Social Development delegation and CPS as a company and that was prior to a deviation being obtained.
“Those discussions have been declared void, or null and void, by a Ministerial Task Team appointed last week and a new technical task team has been appointed by the Ministerial Task Team and their responsibility is to take these negotiations further to consider any obstacles that there might be to grants being paid out on 1 April," Gordhan said.
How far Sassa had gone towards developing systems and what the Post Office could offer were among the considerations.
Gordhan said the Department of Social Development has been allocated a budget of R151.6 billion for the 2017/18 financial year.
Gordhan said approximately four million recipients get their grants at pay points and merchant outlets.
“Then there are payments made directly into bank accounts of recipients – that’s 1.6 million people that receive their grants in that way and another 4.9 million recipients who also have Grindrod Bank accounts. They receive their grants by going to ATMs…"
On the subject of interest, Gordhan said, “What’s important in this whole process, remember the first four or so transfers all take place on one day and then the money sits in the Grindrod account for anything up to five days on average.
“For five days, presumably, that money is attracting interest. So we are talking about R11.2 billion … at some interest rate, where does that interest go? It should actually go back to the government because it is money owned by government.”
The Black Sash said it had made an urgent application for direct access to seek the reinstatement of the oversight role of the Constitutional Court for the payment of social grants. This was in the public interest and in the interests of all grant beneficiaries, most of whom were unable to litigate themselves, the Black Sash said.
This oversight would be in order for:
* The ConCourt to have oversight over the proposed contract between SASSA and CPS for payment of social grants before it is a fait accompli;
* To ensure that grant beneficiaries continue to receive payment of grants from 1 April 2017;
* To protect the integrity of the social grant system; and
* To protect grant beneficiaries from harmful practices by, among others, CPS and sister companies.
"The Black Sash brings its application to ensure that Sassa complies with its Constitutional obligations to provide social assistance, to do so in a lawful manner, and to protect grant beneficiaries from unlawful depletion of their grants," the organisation said.
"The Black Sash submits that, given the situation Sassa has created, the ConCourt should compel Sassa and CPS to enter into a contract on terms designed to protect grant beneficiaries.
"The Black Sash asks that the ConCourt re-instate its oversight role to oversee Sassa’s further management of its Constitutional obligations relating to the lawful and effective payment of social grants."
The matter will be heard in the Constitutional Court on 15 March 2017.
PRIVACY PROTECTIONS
In terms of the Protection of Personal Information Act the Black Sash has demanded that the Minister, Sassa and any companies involved in grant payment:
* Protect beneficiaries’ personal information;
* Specify that beneficiary information is the property of Sassa
* Specify that beneficiary information will be removed from CPS’s possession (and related companies) at the end of the contract;
* Stop CPS from inviting beneficiaries to “opt in” to the sharing of their confidential information.
* Additional reporting: SANews
