Cape Town - The South African Post Office has finally been given first rights to provide core functions and services in a new hybrid social grant scheme system, provided it is cost effective, Parliament has heard.
The Post Office and the South African Social Security Agency have been locked in a months-long deadlock over the details of a proposed deal to assist with the new scheme.
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Sassa required four key services from a new service provider before the April 1, 2018 deadline, but was only willing to offer the Post Office the chance to build an IT system for the scheme.
This led to Cabinet's inter-ministerial committee on social security having to intervene in the impasse.
On Tuesday, IMC chairperson Jeff Radebe told Parliament that an "Implementation Protocol" was finally reached on Friday, November 17.
The agreement gives the Post Office the rights to provide the core functions by April 1, 2018, including:
- Corporate Control Holding Account
- Special Disbursement Account
- Card body production and distribution subject to price competitiveness
- On-boarding of new beneficiaries.
The four functions are all subject to the Post Office being able to deliver the above with "cost effectiveness". A final agreement will be signed on November 24, once the IMC team finalises which functions will be cost effective for the Post Office.
It is a minor win for the Post Office, which had argued since July that it can deliver on core functions.
In a nutshell, according to this statement by Radebe, this deal is a win for the post office. It has first option to provide the core holding account, produce new cards and bring in new beneficiaries, provided it is cost effective. #SASSA @TeamNews24— Paul Herman (@PaulHermanCPT) November 21, 2017
Radebe said the agreement does not exclude external parties from assisting with the scheme.
There is still room for commercial banks to assist in their capacity. The Banking Council of SA agreed in principle on November 10 to establishing a special affordable account for Sassa beneficiaries, and more meetings are planned.
'Maximum choice, access and convenience'
The hybrid system ultimately is designed to give beneficiaries "maximum choice, access and convenience", and to ensure no one service provider has a monopoly on the scheme.
A communication strategy has also been developed and will now be rolled out to inform the country of new changes.
Radebe also said existing Sassa cards that were due to expire on December 31 will now be extended.
Lastly, the IMC's reporting lines will now be aligned with the Constitutional Court's deadlines, the next one of which is on December 8.
This is to avoid confusion and allow for uniform feedback.
It will submit the final detailed agreement between the two entities to the ConCourt on December 6.