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Grant payments deal with Post Office will cost Sassa R2.2bn

This figure is on par with what it currently pays Cash Paymaster Services.

Interim Sassa chief executive Pearl Bengu. Picture: @OfficialSASSA/Twitter

CAPE TOWN – The South African Social Security Agency (Sassa) will be forking out around R2.2 billion over the next year to hand the grant payment system over to the Post Office.

This figure is on par with what it currently pays Cash Paymaster Services (CPS).

This has been revealed in documents filed with the Constitutional Court on Friday, outlining the takeover plan.

In March, current service provider CPS told the court it would require R4.6 billion to continue paying grants for the next two years.

While Sassa won’t be saving much money through its contract with the Post Office, it will be keeping the money spent in government coffers.

While there’s some relief that a five-year agreement with the Post Office has finally been reached, it will be a race against the clock to get systems up and running in time.

With only three months left to phase out CPS's major tasks, including the transfer of biometric data, enrollment of new beneficiaries and the migration to commercial banks won’t be concluded before March.

The State Information Technology Agency and the Council for Scientific and Industrial Research have been charged with developing the software necessary to replace CPS’s IT system.

In an affidavit filed with the Constitutional Court, Sassa’s acting chief executive officer Pearl Bengu has raised concerns over cash payments and whether a tender can be awarded before 1 April.

Sassa will have to report back to the Constitutional Court in a month’s time on the progress it has made in implementing the agreement.

(Edited by Shimoney Regter)