CPS says social grants debacle has battered its reputation


CPS says social grants debacle has battered its reputation

Katharine Child | 2017-03-14 08:02:43.0

Minister of Social Development Bathabile Dlamini.

Image by: Daniel Born

Cash Paymaster Services (CPS) does not want to distribute social grants in the long term‚ saying the debacle over who will pay them has harmed its reputation.

But the company accepts that it is not entitled to walk away from providing 17 million grants‚ until such time as another payment system is put in place.

CPS explained this in court papers filed at the Constitutional Court late on Monday.

The company has been distributing grants for the SA Social Security Agency (Sassa) since 2012. In 2014‚ the Constitutional Court found that the contract between Sassa and CPS was invalid because of vague and questionable tender processes.

The court allowed the current contract to continue until the end of this month so that the poor would get their grants.

But Sassa has failed to find a new provider to take over the payment of grants from April 1.

CPS holds the monopoly on being able to distribute grants‚ leading to fears that it would increase its prices for doing so.

Human Rights organisation the Black Sash asked the Constitutional Court two weeks ago to oversee any new social grants payment contract and to ensure that CPS worked out the contract pricing in a “reasonable” manner. The case will be heard on Wednesday.

CPS said in its response to the Black Sash that it had no problem with the Constitutional Court managing the process‚ as requested by the organisation.

“CPS supports the re-instatement of the court’s oversight role because this will ensure transparency and accountability and will also provide certainty for all parties.” CPS accepted that it had a duty to act “reasonably” in negotiations with Sassa.

The company also said it would prefer to invest its resources elsewhere.

“The reputational damage and the costs of the litigation and investigations have been considerable and CPS would prefer to use its resources in other commercial ventures.” The company‚ commenting on the questionable tender process that saw it being awarded the payments contract‚ said: “There was no finding of fraud and corruption on the part of Cash Pay Master and Sassa.”

The Black Sash wants the court to ensure that child support grants cannot be used for funeral policies. And it wants the details of all beneficiaries wiped from the CPS database when its interim contract ends. CPS said on Monday that it would not share beneficiary data with any third parties‚ including its other companies.

CPS and Sassa are locked in a separate court battle after Sassa filed charges against the company for selling products‚ such as funeral policies‚ to grant beneficiaries. That court case is on hold.

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