17/02/2017 07:38 SAST | Updated 20/02/2017 11:56 SAST

Legal Opinion Says It Would Take Years For Sassa To Take Over Distributing Social Grants

The state-run agency is far from ready to take over the work as the private contractor's term expires on March 31.

Gallo Images / The Times / Daniel Born
Minister of Social Development Bathabile Dlamini

A legal opinion obtained by the South African Social Security Agency (Sassa), seen by Business Day, says it would take years for the agency to take over the distribution of social grants.

Business Day reported that Sassa sought the opinion from advocate Wim Trengove, SC, to explore the legalities around extending the contract of its current service provider, Cash Paymaster Services (CPS).

In 2013 the Constitutional Court found the contract with CPS to be invalid but did not cancel the contract to avoid interrupting the distribution of social grants. But the Concourt gave Sassa until March 31 to come up with a new solution. Sassa indicated to Parliament on February 1 that it wanted to extend the CPS contract.

According to Business Day, the legal opinion said it was unclear why Sassa was unable to meet the March 31 deadline. "It seems prudent to assume, however, that Sassa has been remiss, either because of its decision of October 2015 to go it alone after March 2017 was overoptimistic in the first place, or because it has since then not been sufficiently vigorous in the implementation of the decision," the opinion reportedly states.

Business Day said that Social Development Minister Bathabile Dlamini had written to Finance Minister Pravin Gordhan asking for condonation to extend the CPS contract, but he had said that it would be unlawful to do so. According to the paper, CEO of Net1, the CPS parent company, Serge Belamant, questioned how extending the contract could work. He told Business Day: "How is it possible for Sassa to go to the Consitutional Court to extend a contract that has not only been declared invalid but as of April 1 will have been terminated?"