10/05/2017 16:19 SAST | Updated 10/05/2017 16:19 SAST

Dlamini: It's Going To Cost R6 Billion And Take Five Years For Sassa To Take Over Social Grants

"We not the first department not to reach its targets" says the social development minister.

Minister of Social Development, Bathabile Dlamini.
The Times via Getty Images
Minister of Social Development, Bathabile Dlamini.

Social Development Minister Bathabile Dlamini says the South African Social Security Agency (Sassa) needs R6 billion and up to five years to take over full control of the social grants system.

Dlamini told the parliamentary portfolio committee on social development on Wednesday that Sassa won't be able to take over the grants scheme in full before April 2018.

"The company who is paying, CPS, has to go [in one year], we agree, but the takeover is going to be a five-year process."

She said that at the moment, Sassa does not have the expertise to manage the grants scheme on its own.

"We don't have staff who understand biometrics at Sassa. We don't have banking, payment, costing, modelling, cyber risk assessment."

She said estimates for Sassa to prepare itself in full in those five years will be around R6bn, but claimed it would lower costs in the long run.

"What South Africans should do is look at the whole process as an investment. Once Sassa starts paying, you won't be paying this amount of money."

Sassa CEO Thokozani Magwaza, though, disagreed with Dlamini on the timespan and said it could be achieved in two to three years.

Dlamini ultimately defended her department, saying they were "not the first department not to reach its targets".

She criticised those who created false hype around the payments of grants, claiming the April payments were largely successful.

However, she understood that her department's failures affected the vulnerable.

'Come 2018, there will be no CPS'
Magwaza reassured the committee that, despite how long it may take for Sassa to take over the scheme fully, CPS will not be called upon beyond March 31, 2018.

"We have given 12 months to phase out CPS. There is no doubt about that, we have not been asked, we have been told," Magwaza said.

Magwaza said they would have a workshop with the South African Post Office next week with a view to the post office coming on board to fill the short-term gap left by CPS's departure.

They could also still go on tender for a new service provider, or partial services to aid the post office.

Magwaza said the timeframe for a full takeover will be determined by the above factors, and therefore could take as little as two years, or a maximum of five.

He said they have not pronounced on timeframes yet.

'One-stop shop'
A new scheme will also take into account an open banking option, getting all major banks involved rather than one specific bank.

Ideally though, the best solution is for Sassa to be a "one-stop" shop, where the agency is in control of all aspects including banking, and are currently talking to the Reserve Bank for permission.

Sassa could not present its annual performance plan on Wednesday, as it had not been changed to take into account the March Constitutional Court ruling.

They would arrange for a later date, but time was running out ahead of the annual budget votes in two weeks, where MPs will decide the next financial year's budget.