OUTA wants to see new welfare grants deal

2017-12-11 11:07 - Lameez Omarjee
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Post Office in Parliament. (Duncan Alfreds, News24)

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Johannesburg – Civil right body OUTA on Monday called for details of the new deal to distribute welfare grants to millions of South Africans to be made public.

This comes after Minister in the Presidency Jeff Radebe announced that the South African Post Office (SAPO) will officially take over the distribution of social welfare grants from the South Africa Social Security Agency (SASSA).

Radebe, who headed the inter-ministerial committee on social security, announced the new deal that SAPO would handle core functions of a new payment system at a media briefing on Sunday.

The hybrid model will allow the Post Office to provide several services and incorporate banks for more than two million people who receive grants electronically.

OUTA said at this point it is cautiously applauding the signing of the agreement, but it needs to see proof and success.

“The Organisation Undoing Tax Abuse welcomes the signing of the agreement between SASSA and the SA Post Office after long and unnecessary self-engineered delays,” said OUTA’s portfolio manager on special projects Dominique Msibi, in a statement.

“We are eagerly waiting to see the details, to ensure that all bases are covered and that the plan is feasible at a reasonable cost. Our main concern is that the recipients must receive their grants without fail,” she said.

“Parliament and the IMC should review the agreement without delay to ensure its feasibility, especially the timelines and the confirmation that it will indeed be implemented come 1 April 2018."

Msibi raised concerns that there is limited time to get the system ready before March 31, 2018. “All stakeholders will have to work around the clock to ensure a smooth takeover that will not see the most vulnerable going without their much-needed grant payments.”

The new deal follows a Constitutional Court ruling that the deal between SASSA and Net 1’s Cash Paymaster Services (CPS) was invalid. The court also extended the contract until April 1, 2018 pending the appointment of a new payment distributor.

Bloomberg reports that the handover from CPS to SAPO would take six months, to the end of August 2018. 

Current SAPO CEO Mark Barnes said the new hybrid model would cost the same as the current deal with CPS, reported News24.

News24 had seen the signed deal and reported it would cost R2.2bn per year.

“The cost to government is pretty much the same as it was before and is within the approved National Treasury budget for this service," Barnes said at the briefing on Sunday.

"The way it worked out is to take the total cost over the five years and divide that per year, so you have a flat rate for the period."

The Post Office will pay for its own capitalisation, which will be recouped over the five years, News24 reported.

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