SASSA Social Grant Debacle


In 2012, the South African government outsourced the national distribution of social grants to Cash Paymaster Services (CPS). The contract was deemed illegal because due procurement processes were not followed. One of the irregularities included not opening the tender process to the public.

This contract was ruled to be unlawful by the Constitutional Court in 2014 and SASSA was instructed to find an alternative service provider. SASSA delayed the process, flouting all instructions by the Constitutional Court.

The defiance of the court ruling meant that the millions of beneficiaries would have been left without any source of income. As a result, an extension of CPS’s contract was given to ensure grant beneficiaries continue to receive their grants. This extension has resulted in R10.00 bank fees per beneficiary.

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OUTA is however concerned at a number of legal and regulatory transgressions that the City of Cape Town may committing in its application of the Drought Levy, along with the unintended consequences and […read more] … precedents that may emanate from this action, such as; (a) lost opportunities to hold national government structures to account and / or provide the necessary funds for water augmentation; (b) enabling other towns and cities to apply similar levies and taxes without following due process.


Outa is challenging the CPS because of misuse of beneficiary personal information to market products that are no related to grants; such as selling airtime and funeral policies; and corruption. Former Minister of Social Development and the South African Social Security Agency (Sassa) appears to have misrepresented many facts in order to keep the SASSA/CPS contract going. She created and appointed work streams to prepare SASSA to take over grant payments. This function was also being performed by SASSA internally, thus creating parallel working groups to achieve one goal. This is corruption and taking advantage of the poor and needy.

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The Department of Water and Sanitation is the custodian of our water and its regulator.  They are the accounting authority for water information transparency, and for compliance and enforcement of the law in this regard. By not monitoring water quality and without publishing regular water quality and management reports, they are guilty of an abuse of authority. The Department is funded by tax – i.e. public money.  As part of OUTA’s commitment to hold governing authorities accountable on important public interest matters, it has set its sights on water issues.


OUTA has been supporting the first complainants Black Sash and Freedom under Law. In addition we have written to The President, urging him to remove Bathabile Dlamini from public Office; as well as report her to the Parliamentary Ethics Committee. We await the outcome of this recommendation. The President’s Office has acknowledged receipt of the letter from OUTA; We also await the ruling of the enquiry into if Bathabile and Pearl (former Acting CEO of SASSA) hould be held personally liable for the 6-month CPS extension. CPS should also pay back some of the fortune it made on the back of the illegal contract.

OUTA has also been vocal on public platforms, expressing outrage at the way the Minister has not been held accountable for her transgressions and will continue to pursue all avenues constitutionally available to us to ensure accountability.