Minister Dlamini: Social grants will be paid on 1 April

Minister Dlamini: Social grants will be paid on 1 April
Cash paymaster services and white monopoly capital

Social grants to South Africa’s 17 million beneficiaries will be paid on the 1st of April.

This was an assurance from Social Development Minister Bathabile Dlamini on Sunday when she briefed the media over the confusion regarding the payments of the social grants.

“I can assure the nation that come April 1st, all our social grants beneficiaries will receive their social grants. As has been the case in the past no one will go unpaid,” said the minister.

The minister’s assurance comes as the South Africa Social Security Agency’s (SASSA) current contract with Cash Paymaster Services, which currently pays social grants beneficiaries, is set to expire at the end of March.

The Constitutional Court had previously made a ruling that the contract between SASSA and Cash Paymaster Services was invalid and ordered a re-run of the tender process.

But Cash Paymaster was allowed to continue to fulfil its contractual obligations so that social grants payments would not be disrupted.

Despite the assurance the minister said no deal was finalised with Cash Paymaster Services as negotiations were still in the pipeline.

“A deal will mean a signed-off contract and a service level agreement and signed-off contract will entail the deliverables and the cost structure, therefore there is no deal in this regard. We are still going to follow our internal processes that will lead to the conclusion of this process with the signing of the contract.”

Instead the minister said the department is engaging stakeholders such as the and the Treasury, Reserve bank, Post Office and Home Affairs Department to look at different options.

The department is also analysing the transitional options as well as their risks. These are:

Option 1: Procuring the service from the existing service provider
Option 2: Procuring the service from the Bank that services the majority of the beneficiaries (i.e. Grindrod)
Option 3: Procuring the services from all Banks wishing to comply with SASSA’s requirements
Option 4: Procuring the services from all Banks that comply with SASSA’s requirements for those (~60%) beneficiaries who have access to banking services, and procuring the services of a Service provider for those currently using cash pay-points.
Option 5: Procuring the services of the South African Post Office (SAPO)
Option 6: Appointing a new supplier for cash distribution and utilising the Banks for beneficiaries with bank accounts.

On Saturday, President Jacob Zuma met with Ministers of Finance Pravin Gordhan and Minister Dlamini to receive a progress report on the process and readiness to pay social grant beneficiaries.

“The President is of the view that the matters are solvable. He has directed the two Ministers to mandate their technical teams to work on the outstanding issues in order to ensure that social grant beneficiaries receive their grants on the 1st of April,” the presidency said.

The treasury has in the past proposed that Cash Paymaster Services should not be part of the service providers to be considered for the distribution of grants, and that the tender be given to banks and the post office instead.

Despite the uncertainty, Minister Dlamini said her plan for the future payment model of Sassa was:

“To provide an integrated grant administration and payment process. This entails Sassa acquiring own payment card which can operate in an open and closed system, underpinned by the use of a biometric authentication system.

“The new payment plan is implemented over four phases. The two first phases have already started.”

The new Payment Plan is implemented over four phases:

Phase 0: Ministerial Advisory Committee investigations (2013/14)
Phase 1: Planning for the transition including Phase-out of the current service provider (2015/16 – 2016/17)
Phase 2: The Transition (April 2017 – March 2019)
Phase 3: Full Roll out (from April 2019)

The minister said on the 1st of April, “Sassa begins a new era in continued development. As has been the case in the past- no one will go unpaid. We are focused on our mandate to deliver social assistance to our country’s most vulnerable, and with the legal and regulatory framework that governs our work and actions. We cannot afford to be distracted from our focus to be able to deliver on this promise to our grant beneficiaries.”

Minister Dlamini refused to comment on the resignation of director-general Zane Dangor who resigned at the weekend after citing breakdown in the relationship with the minister.

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