20/02/2017 09:57 SAST | Updated 21/02/2017 07:01 SAST

The Sassa Crisis In Nine Points

With one month left until the contract to administer grants expires, the situation is looking scary for recipients.

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

As February ends, the South African Social Security Agency (Sassa) is left with a month to get its affairs in order to be able to meet its obligation of paying 17 million grants. The agency was expected to file papers with the Constitutional Court last week Friday to explain how it would be able to ensure payments take place. That, however, did not happen.

Here are nine things to remember about the saga, which could see millions of South Africans going hungry.

  • South African social grants are currently administered and distributed by Cash Paymaster Services (CPS), a subsidiary of U.S.-based Net1 UEPS Technologies, after it was awarded a five-year, R10 billion tender in January 2012. The tender was declared invalid by the Concourt in November 2013, and Sassa was instructed to initiate a new tender process.
  • In 2015, Sassa issued a new tender but did not award it, opting to move the payment of social grants in-house.
  • Sassa received a legal opinion in October that it would not be able to make social grant payments itself for several years because of the complexity of the task.
  • Earlier this month, Sassa told Parliament's social development portfolio committee it had come up short in attempts to find working solutions to pay social grants.
  • Finance Minister Pravin Gordhan wrote to Minister of Social Development Bathabile Dlamini, and said a new contract should be awarded to commercial banks and the SA Post Office. He further stipulated that biometric identification should not be a contract requirement as it would disadvantage other companies and favour CPS.
  • Dlamini rejected Gordhan's proposal for the banks and post office to distribute social grants to 17 million beneficiaries. She said the National Treasury's proposal to distribute R10 billion in monthly grants was impractical and "not thought through carefully".
  • Dlamini said banks do not have the biometric system which has eliminated fraud from the grants system. She said they are driven only by profits, which are gained through opening new bank accounts and transaction fees.
  • In February, Sassa said the only way to make social grant payments from April was to stick with the current service provider, the same one whose contract was declared invalid.
  • Dlamini has assured recipients that grants will be paid on time come April 1, despite not indicating how that will happen.