The South Africa Social Security Agency (Sassa) has 59 days left to negotiate terms with the provider of social grant payments or up to four million people stand to lose access to their lifeline monthly payments.
Those negotiations have not yet started.
On Wednesday, Sassa told a Parliamentary committee that the biometric cards used to identify social grant recipients at pay points will no longer work come April.
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“For the biometric system, predominantly used at cash pay points, these cards will expire on 31 March 2017,” the agency said in a presentation to the Parliament’s social development committee. “Approximately three to four million people make use of this system, and may not have the alternative PIN [personal identification number] activated on their card (thus they will not be able to use the [payment] infrastructure). These encryption keys too can be extended automatically over the next few months when beneficiaries draw their cash, however, an agreement needs to be reached with CPS as their proprietary system is used for these payments.”
CPS is Cash Paymaster Services, a subsidiary of listed company Net1. It holds the contract to handle all social grant payments, to some 17 million beneficiaries in total. The majority of those recipients use banks to access their money.
In 2014 the Constitutional Court confirmed that the CPS contract had been awarded unlawfully, and ordered that a new tender be issued. Sassa said the responses it received to that issued tender were poor and that it would take over the entire process instead. The Constitutional Court condoned this, on the basis that Sassa promised to conclude that process by the time the invalid CPS tender expires on March 31.
On Wednesday, for the first time, Sassa admitted that will not happen.
“We need to come and acknowledge that, yes, we have failed,” said Sassa executive manager Raphaahle Ramokgopa.
The only option Sassa thought possible, she said, was to extend the CPS contract for at least another year.
The treasury does not agree with that option, Ramokgopa said.
The treasury has previously told the Mail & Guardian that Sassa would need to approach the Constitutional Court if it wished to extend the CPS contract, because there was no mechanism in law to extend an invalid contract.
Sassa executives confirmed they had not yet approached the Constitutional Court, nor started negotiations with CPS. It would do so this week, it said.