Letters reveal Sassa was warned months ago about a looming social grants crisis

An exchange of letters reveals that Cash Paymaster Services (CPS) urged the SA Social Security Agency (Sassa) almost a year ago to avoid several pitfalls that could lead to a social grants crisis.

CPS warned that there needed to be a smooth transition when its contract ended to ensure than 17 million social grant recipients continued getting their money come April 1‚ 2017.

Letters have revealed that the Sassa saga was foreseen.

The correspondence is attached to an affidavit submitted to the Constitutional Court by Net1 boss Serge Belamant. His company‚ CPS‚ is at the centre of the pension grants crisis.

But the repeated warnings did not appear to spur Sassa into action and the parties only agreed to meet on March 1‚ 2017 – exactly a month before the CPS contract ends.

Belamant wrote to the executive manager of special projects at Sassa on May 24‚ 2016‚ saying it would take more than a year to replace social grant cards and stressed that timing was important to ensure “a smooth take over that would not result in massive disruptions in the payment process”.

“As time is running out quite rapidly‚ it is critical for Sassa to decide on the way forward.”

CPS reminded Sassa on December 9‚ 2016‚ that it had told Parliament that the department would be ready to pay social grants by April 1‚ 2017. It proposed a temporary solution to update the cards of some grant recipients.

Sassa replied on December 22‚ 2016‚ saying: “After much deliberation and satisfaction of due process Sassa is now in a position to formally express its intentions to engage CPS on probabilities to assist in the transition
of Sassa operations (while ensuring grant payment continuity) towards a new service model that must be subject to a regular procurement process.”

On February 9‚ 2017‚ Sassa asked for “an exploratory meeting” with CPS. CPS replied on the same day asking for suitable dates.

Belamant wrote to Sassa CEO Thokozani Magwaza on February 16‚ 2017‚ saying that CPS had “not received any formal notification” about the meeting date.

“I must admit that I do not understand the rational[e] or need to put the entire grant payment service at risk and by doing so potentially affect the lives of so many poor South Africans‚” he wrote.

“I kindly request that you please do me the courtesy of replying to my letter‚ dated 9 February 2017‚ and advise if it is SASSA’s intention to continue to utilise the CPS system and infrastructure post 31 March 2017‚ as reported in the media.”

Magwaza replied on February 21‚ 2017: “We have been preoccupied with other equally pressing matters that relate to the transition of Sassa operations and which were to precede any discussions on the subject matter.

“Now that those have been cleared the Sassa team comprising of nominees from major stakeholders is ready for discussions.”

The parties finally scheduled a meeting on March 1‚ 2017. — TMG Digital

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