We can save the grants payment crisis, Post Office says

We can save the grants payment crisis, Post Office says

Mar 15, 2017

The South African Post Office (SAPO) has officially joined the scramble to replace Cash Paymaster Services (CPS) as the country’s social grants distributor amid an ongoing crisis over the payment of beneficiaries.

CEO Mark Barnes has submitted an affidavit dated March 13 to the Constitutional Court as part of the Post Office’s application to be admitted as a friend of the court in the Black Sash vs Sassa matter due to be heard on Wednesday.

In the court papers, Barnes states that using the Post Office would “serve the national interest, protect beneficiaries’ information and support government’s ambitions for radical socio-economic transformation”.

Barnes has proposed two alternative systems to solve the crisis, including one that could be implemented within days. However, another long-term plan would need to include CPS.

The South Africa Social Security Agency (Sassa) is under more pressure to find a solution after CPS said it would not be able to pay social grants from April 1 if an agreement is not reached by Thursday.

Read the article here: If there’s no new contract by Thursday, grants may not be paid

Barnes states in the papers that the Post Office had already submitted an emergency backup solution to Sassa on March 1 in case CPS pulled out of the payment of grants to 17 million beneficiaries.

It says it can step in by using an electronic voucher system already used to pay staff employed at the department of public works in the Eastern Cape.

The Post Office said the system can be up and running within days, ruling out the need to extend the CPS contract that expires on March 31.

“Pay points would include SAPO branches as well as the 10 000 locations managed by the current cash-in-transit service provider. Identity documents and identity cards would be checked to ensure that the right people are paid the right grants after comparing to Sassa’s SOCPEN database,” Barnes states in the affidavit.

However, Barnes’ long-term solution that would meet the Sassa requirements would need CPS to assist for a maximum of twelve months as the Post Office prepares to take over.

The Post Office would need CPS to provide the biometric system, personnel that could be retained or replaced over time and cash dispensing machines owned by CPS.

Social Development Minister Bathabile Dlamini has insisted on a biometric system, arguing that it guards against fraud and has saved the fiscus R2bn. She said the system ensures that the right beneficiary is paid the right grant and proves the beneficiary is still alive.

‘State organ should have first preference’

Barnes proposes that the Auditor General monitor the 12-month handover period, with quarterly reports submitted to the court.

Barnes said the Post Office would charge R20 per beneficiary. CPS is currently charging R16.44 per beneficiary, an amount that is expected to increase if a new interim contract is signed.

Barnes argues in the court papers that the Post Office as a state organ should have first preference as a service provider.

“Where an organ of state is able to provide services, it is suggested that such services should first be procured from organs of state prior to the invitation being sent out to the public.

“The procurement of such services from the state-owned entities, where it is possible, is in the national interest and is fiscally prudent,” Barnes states in his affidavit.

However, Sassa and Dlamini have previously argued that the Post Office has only 2 567 outlets that are predominately in urban areas while the current system offers 10 000 outlets, mostly in rural areas. The two also said their norms and standards state that beneficiaries should not travel more than 5km to a pay point.

By Mahlatse Gallens for News24