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ConCourt SASSA ruling: What you need to know

By Jessica Anne Wood

Last week the Constitutional Court (ConCourt) released its judgement in the case regarding the South African Social Security Agency and its contract with Cash Paymaster Services who oversees the payment of grants to recipients.

The contract with CPS has been extended, with the suspension of the invalidity of the contract extended for another year. This is to allow SASSA to find another service provider who can facilitate the payment of the social grants, if it still does not have the capability within the next year to pay the grants out itself.

The court judgement

The final judgement in the case stated: “It is declared that the South African Social Security Agency (SASSA) and Cash Paymaster Services (Pty) Limited (CPS) are under a constitutional obligation to ensure payment of social grants to grant beneficiaries from 1 April 2017 until an entity other than CPS is able to do so and that a failure to do so will infringe upon grant beneficiaries’ rights of access to social assistance under section 27(1)(c) of the Constitution.

“The declaration of invalidity of the contract is further suspended for the 12-month period from 1 April 2017.”

The ConCourt highlighted that through the process of paying the social grants, CPS should not earn a profit as people have a constitutional right to receive the grants.

The court stated: “No party has any claim to profit from the threatened invasion of people’s rights. At the same time no one should usually be expected to be out of pocket for ensuring the continued exercise of those rights. That equilibrium was the premise of the Court’s previous remedial order. It is just and equitable to continue on that basis. Our order below reflects that SASSA and CPS should continue to fulfil their respective constitutional obligations in the payment of social grants for a period of 12 months as an extension of the current contract. To the extent necessary, our earlier declaration of invalidity of that contract will be further extended, as well as the suspension of that declaration of invalidity. In the event that CPS wishes to alter the content of its financial obligations or entitlement, the order makes provision for it to approach National Treasury for its consideration and approval, to be confirmed after a report on the issue to this Court.”

A report on Business Day highlighted that CPS may be required to return the estimated R1 billion it received since the contract was implemented five years ago.

Following the ConCourt initial suspension of the invalidity of the contract between SASSA and CPS, the court stated: “Within 60 days of the completion of the five-year period for which the contract was initially awarded (31 March 2017), Cash Paymaster must file with this court an audited statement of the expenses incurred, the income received and the net profit earned under the completed contract.

“SASSA must within 60 days thereafter obtain an independent audited verification of the details provided by Cash Paymaster under [the] paragraph [above] and file the audited verification with this Court.”

According to the latest ruling by the ConCourt, the auditing process mentioned above must be carried out after the current 12 month extension on the suspension of the invalidity of the contract.

SASSA’s delayed communication with the ConCourt

The ConCourt noted with concern that SASSA was aware that it would not be able to take over the payment of social grants from 1 April 2017 as early as April 2016.

“Since April 2016 the responsible functionaries of SASSA have been aware that it could not comply with the undertaking to the Court that it would be able to pay social grants from 1 April 2017. The Minister says she was informed of this only in October 2016. There is no indication on the papers that she showed any interest in SASSA’s progress before that. Despite repeated warnings from advising counsel and CPS, neither SASSA nor the Minister took any steps to inform the Court of the problems they were experiencing. Nor did they see fit to approach the Court for authorisation to regularise the situation.”

The court added: “The sole reason for the litigation leading to this judgment is the failure of SASSA and the Minister to keep their promise to this Court and the people of South Africa.”

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