14/03/2017 10:41 SAST | Updated 15/03/2017 11:50 SAST

Here Are Gordhan's 5 Ways To Pay For Social Grants Without CPS

Treasury tells Scopa there are six options available for the payment of social welfare, five of which they don't need.

Alet Pretorius/Gallo Images

Finance Minister Pravin Gordhan has attempted to put the controversy around the continued payment of social grants back on to the right path.

"Grants will be paid by April 1," he told Parliament's committee on public accounts on Tuesday morning. "The question is what route do we take between now and then."

Gordhan's briefing followed repeated assurances by Social Development Minister Bathabile Dlamini that grants would be paid after the current contract of Cash Paymaster Services expired. Dlamini, however, has been less forthcoming about the options available, repeatedly saying the department had no option but to give another contract to CPS.

The Constitutional Court in 2014 ruled CPS's contract invalid and gave the department until the end of this month to find another service provider. The department has, however, failed to do so.

Gordhan described National Treasury as "a supporting act", in the payment of social grants. "The prime responsibility is with my colleague, minister Dlamini, and the entity that reports to her, Sassa [South Africa Social Security Agency]," he said.

Gordhan said there was "no shortage of money available to do what needs to be done" for the payment of grants. He said one option was to extend CPS's contract, but this could only happen without the consent of the court. Treasury also didn't support this.

The other option was a new contract. However, to get a new contract proper tender procedures had to be followed, and emergency contracts, like the department has proposed doing with CPS, could only happen under conditions that warranted it.

Gordhan said there were five ways to pay out grants without using CPS. These are:

  • Grindrod Bank, which has been used for the payment of grants and which already has an account for each of the recipients.
  • The South African Post Office, which has indicated its willingness and ability to deliver grants.
  • All banks that comply with Sassa's requirements can pay out the money. About 60% of beneficiaries are signed up.
  • Asking all beneficiaries with bank accounts to come forward and have cash payments done to them through the banks.
  • Paying beneficiaries into their bank accounts or an institution where the beneficiary resides (subject to authorisation by beneficiary).

Gordhan also asked why a three-day process was taking five days in the payment of grants. He questioned whether Grindrod Bank delayed the process in order to earn extra interest.