Hands off our grants -what have we done to assist?

What have we done to assist?:

In 2013, together with the LRC, we engaged a SASSA delegation on the debit deductions crisis; met with NET 1 to discuss the unlawful debit deductions, the use of beneficiaries’ confidential data, and recourse options; wrote a letter to the South African Reserve Bank to issue a Directive 12 into the banking system and wrote an open letter to the Minister of the DSD and the CEO of SASSA, copied to various other government departments, containing our demands.

The Constitutional Court and a New SASSA Tender process:

In November 2013 the Constitutional Court declared the contract between SASSA and CPS, for the administration of social grants, invalid. The Court was to hear arguments towards a just and equitable remedy on 11 February 2014.

 In 2014, the Constitutional Court, in the matter of AllPay 2 vs SASSA and Cash Paymasters Service, ruled the outsourced contract between CPS and SASSA invalid. It found that corporates performing a state function (such as the payment of social security) are organs of state, subject to the same public accountability and scrutiny. However, the judgment of invalidity was suspended so as not to cause disruption to the payment of social grants. The ConCourt further ruled that SASSA put out a new tender that will run for a period of five years and that SASSA had to ensure that the confidential data of grant beneficiaries was protected. If the tender was not awarded, CPS would continue its five-year term, ending in March 2017.

 In January 2015 the Black Sash joined the AllPay2 Constitutional Court matter as Amicus Curiae (friend of the court). The Legal Resources Centre (LRC) were instructing attorneys. On 24 March 2015, the ConCourt ruled in our favour for SASSA to set up a time-frame to conclude the process of awarding the new tender for the national payment of grants.

 On 15 October 2015, SASSA announced that it would not appoint a new service provider and would continue with the current CPS (constitutionally invalid) contract until its termination in March 2017. While this wouldn’t stop the fraudulent deductions, it meant that SASSA would take over the function of the national payment of grants sooner, as a new contract was to be awarded for a five-year period.

In May 2016, the Minister of Social Development issued new regulations to stop unauthorised deductions from the SASSA bank account. But in June 2016, Net1, a few of its subsidiaries and other commercial companies took DSD and SASSA to court in four legal cases, challenging primarily SASSA and the Department of Social Development’s interpretation of the new regulations and secondly, the new regulations itself.  

The Black Sash and six co-applicants asked the court to order that the Minister publish regulations to protect social grants from exploitation if: (a) DSD and SASSA’s interpretation is correct; and (b) the interpretation renders the new regulations unconstitutional. Government should be given the opportunity to fix the new regulations, if defective, to protect vulnerable beneficiaries from unscrupulous third-party service providers.

The Black Sash Trust again approached the court in March 2017 after SASSA acknowledged it would not be able to pay millions of grants from April 1‚ despite promising the court in November 2015 it would do so. The ConCourt reinstated its oversight over the payment of social grants by requiring that the Minister of Social Development and SASSA file quarterly reports with the ConCourt. They also suspended the declaration of invalidity for the additional year that the CPS contract had been extended to by the Court.  By 1 April 2018, SASSA must follow the proper tender procedure or insource the grant payment function itself.  The Court further ruled that there must be safeguards to ensure personal data obtained from social grant beneficiaries in the payment process remains private and may not be used for any other purpose than the payment of grants.

On 15 June 2017, the Court ordered that Minister Dlamini be joined to the case in her personal capacity.  Allegations against the Minister by senior staff from the Department of Social Development as well as SASSA, related to parallel work streams, would now be investigated. The ConCourt further instructed all parties to agree on a referee and a process to investigate this matter. 

On 20 July 2017, Black Sash appealed against a ruling that permits Net1 to continue to allow deductions from the social grants it administers. The appeal has been lodged with the Supreme Court of Appeal (SCA) after Justice Van der Westhuizen, who decided the initial application, denied leave to appeal in the Pretoria High Court. On 2 August, the Court ordered that Justice Bernard Ngoepe be appointed as the referee for the inquiry to investigate the outstanding issues in the case. The order further states that the inquiry should be open to the public and that SASSA will bear the costs of the appointed referee.

The Constitutional Court’s final ruling over Social Development Minister Dlamini’s liability in the crisis over an invalid contract between the South African Social Security Agency (SASSA) and social grant payment provider Cash Paymaster Services (CPS) has yet to be decided.

Tags: #HandsOffOurGrants