CPS accused of blocking transfer of social grants

Panel of experts recommends legal action

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The Panel of Experts monitoring the change to social grants payment systems has recommended legal action against payment company Cash Paymaster Services. Archive photo: Barbara Maregele

The Panel of Experts monitoring the South African Social Security Agency’s (SASSA) social grants payment plan has recommended that the agency consider legal action against Cash Paymaster Services (CPS).

CPS is being phased out as paymaster for the country’s social grants in favour of the Post Office. But CPS is still contracted by SASSA to pay those grant beneficiaries who choose to get their money in cash rather than having it paid into a bank account or collecting it at a retailer. Some two million grant beneficiaries have accounts at CPS’s sister company EasyPay Everywhere.

Beneficiaries who want to keep these EPE accounts must let SASSA know in writing.

But in its sixth report to the Constitutional Court, this week the panel expressed concern that CPS was prioritising beneficiaries holding the green EPE cards.

“According to SASSA, CPS opens certain paypoints a day before payment date and when beneficiaries come to collect the grants, they are told that only EPE green card holders are paid on that day, thereby almost coercing beneficiaries to apply for EPE cards,” the panel said.

The panel also expressed concern at reports that CPS agents were interfering with the process of swapping the old SASSA cards for the new Postbank cards. The panel said SASSA had reported that CPS staff at cash pay points had on “several instances” stopped Post Office employees doing the card swapping from entering the premises.

“All SASSA’s regions have reported such incidents of intimidation and attempts to prevent SASSA and [the Post Office] from doing their duties at the paypoints. SASSA correctly points out that the paypoints are not CPS but SASSA paypoints,” the panel said. The most recent incident took place on 13 June at paypoints in Meadowlands and Zola in Gauteng, the panel said.

SASSA’s acting CEO had told CPS in a letter on 21 May that its employees and those of the Post Office were mandated to be at paypoints to conduct and monitor the card swaps. The panel said CPS had responded the same day “demanding identification and prior notice” before access was granted to Post Office employees.

“CPS cannot set requirements for provisional access. It is the service provider to SASSA and has a constitutional obligation to ensure payment of social grants to beneficiaries who are paid in cash,” the panel said.

“The panel is extremely concerned that CPS is actively preventing mandated organs of state (SASSA and The South African Post Office) from executing their functions,” it said. “The panel recommends that SASSA get affidavits from witnesses and then obtain legal advice on whether to institute proceedings or refer information to the prosecuting authorities,” the experts said.

They recommended that the court tell CPS to stop preventing SASSA and Post Office employees from doing their duties; to stop confusing beneficiaries about their payment options; and to stop giving inaccurate information to beneficiaries. SASSA has already asked Net1 to retract a “misleading pamphlet” being handed out to beneficiaries about the EPE card.

“CPS seems to be exploiting the gaps in SASSA’s communication with beneficiaries,” the panel said.

The panel also noted that a forensic audit of the EPE card programme was under consideration. “A process is underway to agree on a possible launch of an independent forensic audit on the EasyPay Everywhere (EPE) card programme where an appropriate regulatory authority will take the lead,” the panel said.

Response from Net 1 CEO Herman Kotze, the owner of CPS

After publication, Net1 sent this response:

“Please note that the Panel of Experts did not afford CPS the opportunity to comment or respond to any of the allegations contained in its report. Please refer to 2.13.7 of the Expert Panel’s report.

Grants are paid into every beneficiary’s bank account, irrespective of where the account is held on the 1st day of every month. Beneficiaries then have the option of where and when they wish to access their funds. CPS is obligated to provide a payment channel at designated pay-points on designated dates as communicated to beneficiaries on a monthly basis, and has done so for the previous 6 years and will continue to do so until the 30 September 2018. Beneficiaries who do not want to wait for the official pay point pay day are at liberty to utilise any other payment channel , including the point of sale and ATM infrastructure that operates within the National Payment System.

EasyPay Everywhere provides its client base with a mobile ATM service, who are also entitled to utilise this service or any other payment channel.

All cardholders are free to open an account with a bank of their choice or that of the SAPO. Payment channels will include the utilisation the SAPO infrastructure, if beneficiaries so wish to use it. There is no exclusivity in this respect. Please see attached correspondence from SASSA to the Banking Association of South Africa.

In isolated instances CPS did not allow teams purporting to be SAPO officials on the pay sites as no prior arrangements were made to allow unidentified individuals in the pay point environment. CPS has an obligation towards the beneficiaries as well as its own staff that the security is maintained at all times, given the high risk environment that payments are conducted in. Attach please find our correspondence to SASSA in respect of this issue.”

TOPICS:  Social Grants

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