Johannesburg - The South African Social Security Agency (Sassa) said it’s in talks with the National Treasury to provide additional funding so that it can comply with a Constitutional Court order and replace Net1 UEPS Technologies as the distributor of more than R150bn of welfare payments a year to at least 17 million people.
Sassa wants funding to finance a pilot project so that it can conduct a trial for the South African Post Office (SAPO) to make the payments even though it only has funding to pay Net1, it said in the first progress report ordered by the court so that Net1 is replaced by April next year.
While the court in 2014 ruled that the contract with Net1 was invalid, Sassa failed to find a new service provider. Net1’s contract was extended until 2018 to ensure welfare payments didn’t stop.
“The lack of budget may negatively impact on Sassa’s ability to pilot and may result in disruption of social grants payments on April 1 2018,” it said in the documents.
The failure of Sassa to comply with the 2014 order and threat to welfare payments this year have caused criticism of Social Development Minister Bathabile Dlamini, the government and Net1, which human rights organisations allege has been illegally deducting funds from welfare payments for goods and services.
Dlamini has admitted some fault while saying she wasn’t solely responsible. Government has apologised and Net1 has denied wrongdoing.
Welfare payments are a signature policy of the ruling African National Congress, which says it's working to reduce the inequality caused by apartheid.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: