Don’t blame Treasury for welfare payment saga - DA

Cape Town – The Social Development Portfolio Committee and the Department of Social Development should not blame National Treasury for the saga regarding the the distribution of social grants after the Cash Paymaster Services (CPS) contracts end on March 31, the Democratic Alliance (DA) said on Thursday.

DA MP and shadow minister of Social Welfare Bridget Masango told Fin24 on Thursday that the reason for calling off Wednesday’s committee meeting was incorrectly blamed on Treasury by the chairperson.

The meeting would have seen the South African Social Security Agency (Sassa) and the Department of Social Development present their budgetary implications for the CPS service providers they recommended.

However, Social Welfare Portfolio Committee chairperson Rosemary Capa wrote to members earlier this week, saying the meeting was being called off as Finance Minister Pravin Gordhan had said Treasury could not attend.

What Gordhan told committee chair

Fin24 has a copy of the letter Gordhan wrote to Capa on Sunday excusing Treasury from the meeting, revealing that it was not required to be there.

“Payment of social grants does not fall within the mandate of the National Treasury,” he said in the letter. “This is the statutory responsibility of my colleague, Minister (Bathabile) Dlamini.

He said Sassa, the Department of Social Development and the relevant executive authority "have the responsibility to account to the committee on this matter".

Gordhan said Treasury will advise and support the Department of Social Development and Sassa wherever possible.

“However, this matter falls within the mandate of the executive authority for Social Development, who(se) responsibility it is to ensure that Sassa manages payment of grants within the correct legal and financial framework,” he wrote.

Masango said while Treasury has given its advice to the department and committee, it should not be seen as responsible for the crisis that is unfolding with the CPS contract deadline.

She believes the actual reason the meeting was cancelled was due to a disagreement within the task team working on the future of the CPS system.

“Treasury did not need to be there,” she said. “The people that needed to come were from the Department of Social Development and Sassa.

“Treasury has nothing to do with Sassa,” she said. “They are making it look like Treasury is interfering.”

Delay tactic to create emergency situation - DA

Masango said the department had withheld information since June 7 and believes it is stalling to ensure an emergency situation allows it to continue the CPS contract with Net1 UEPS Technologies.

"This whole delay has been orchestrated to ensure there is an emergency so they can continue with the current CPS," she said.

Sassa was set to ask the Constitutional Court on Thursday to allow it to extend a welfare distribution contract with Net1 UEPS Technologies’ Cash Paymaster Services unit, which the nation’s top court had ruled invalid, to ensure that 17.2 million people continue being paid, Bloomberg explained.

While Net1’s contract expires at the end of March, Sassa hasn’t appointed a replacement or made arrangements to take over the payments itself.

Although six options, including using other banks, were considered, granting Net1 a one-year extension was considered the only viable one, Sassa executive manager Raphaahle Ramokgopa told Parliament in February.

Treasury gave department advice on request

This week, another letter Gordhan had written to Dlamini with Treasury’s advice regarding the payment system was leaked in the media, alluding to a simmering war between the two, an assumption Treasury rejected.

Bloomberg quoted Gordhan in the letter advising Dlamini that continuing the Net1 contract would be unlawful.

Treasury this week said it was requested by the department to give it advice on the matter.

“National Treasury explored and analysed the pros and cons of a range of payment options and provided expert inputs in areas of procurement, public finance, financial sector policy, banking and other related matters,” a spokesperson said.

“However, it is up to Sassa as to which option to choose taking into account all relevant facts, laws and regulations. This includes the relevant decision of the courts in the same matter.

“National Treasury stands ready to assist (the department) and Sassa by any legal means possible to achieve the goal of paying grants to deserving South Africans relying on such grants.”