The South African Social Security Agency (Sassa) and Cash Paymaster Service (CPS) have reached an agreement on the distribution of social grants.
The department of social development made the announcement on Friday night after a week of scrutiny.
The agreement came after negotiations began between Sassa and CPS on Wednesday.
“The department of social development, Sassa and Cash Paymaster Services have reached an agreement after they were locked up in intense negotiations for three days,” the department said.
The terms and conditions of the contract, as well as the costs, have not yet been disclosed. The announcement said that Social Development Minister Bathabile Dlamini would release “the nature of this agreement soon”. It concluded that more information on the announcement “will be communicated in due course”.
The department notably excluded the national treasury in its statement. Earlier on Friday, the social development department claimed that the treasury had participated in negotiations but the national reasury denied any involvement.
The Concourt stake
The announcement comes after Sassa filed an affidavit to the Constitutional Court on Thursday stating that it believed the court’s approval was “not necessary” for the contract with CPS to go ahead.
In 2014, the court ruled that the CPS contract was unlawful because the tender was invalid.
On Friday afternoon, the court summoned Sassa to appear on March 15 for an agreement to be reached on grant payments. The summons came after human rights organisation Black Sash filed an application asking the court to urgently intervene and allow Sassa to continue its contract with CPS.
The national treasury has said it will not approve any CPS contract with Sassa unless the court rules that the contract is lawful.
On Wednesday, national treasury official Solly Tshitangano said Sassa should “face the consequences” if it signs an unlawful contract with CPS.
CPS is contracted to disburse social grants to 17-million beneficiaries on behalf of Sassa. The contract expires on March 31.
The contract signed between CPS and Sassa cost R10-billion and Parliament’s public accounts committee is now scrutinising the contract for irregular expenditure.
With expectations mounting that Sassa must find a delivery plan to pay grants before April 1, it remains to be seen what the true cost of the CPS agreement is and whether it will be found lawful.