SASSA briefed the Social Development Portfolio Committee on its state of readiness for taking over grant payments from 01 April 2017. The current contract with Cash Paymaster Services (CPS) expires at the end of March.
A task team was set up to look into modalities of a takeover of this role by SASSA and it made recommendations. Currently grants are distributed through different channels including cash at pay points, card swiping for cash back at points of sale and ATM's among others. It also requires a capacity to move cash from one pay point to another. This requires different types of infrastructure including banking systems which require accreditation and membership of professional bodies and regulators.
The time that SASSA had planned to put all these arrangements together seems to have been underestimated given how mammoth the task was. SASSA complied with the Constitution Court ruling which ordered it to go out on tender again. This was after the court declared the current CPS contract invalid. The invalidity declaration was however suspended by the court so that beneficiaries could not be at the receiving end when the contract is abruptly ended.
A tender was advertised for a new service provider and unfortunately there were only three bidders and they all couldn't meet the conditions of the tender in 2016. A process of developing biometric standards was initiated and the standards have been adopted for the banking industry. Biometrics are key in correctly identifying genuine beneficiaries and separating them from potential fraudsters, which makes them the backbone of any payment system. A Request for Information was issued in December to determine what services the market can provide for the different areas of specialization which make up the envisaged takeover of payments by SASSA.
At the moment SASSA has come up with short and long term options that will lead to a takeover of the function of grant payment. The short term options are as follows:
1. Procuring services from the current service provider 2. Procuring services from the Grinrod bank which is being used currently 3. Procuring services from all SASSA-compliant banks 4. Procuring services from banks used by individually banked beneficiaries 5. Procuring services of the South African Post Office 6. Appointing the services of cash distributing company
The National Treasury is of the view that the better option is that of appointing a service provider to distribute grants in cash and for banked beneficiaries to utilize their accounts for accessing grants. The challenge is that this option won't allow SASSA to pay grants as early as April 2017 and can create a huge influx at pay points.
SASSA believes that the viable option is that of putting transitional measures in place while the current tender is extended for a brief period. The challenge with extending the current contract is that the current contract was declared invalid by the Concourt. What will be done is that the Concourt will be approached to request it to suspend the invalidity declaration so that beneficiaries cannot be prejudiced.
Issued on behalf of SASSA
