Cash Paymaster Services must pay R316m back to Sassa as supreme court appeal fails

Cash Paymaster Services (CPS) must repay R316m to the South African Social Security Agency (Sassa).
Cash Paymaster Services (CPS) must repay R316m to the South African Social Security Agency (Sassa).
Image: Gallo Images / Alet Pretorius

Cash Paymaster Services (CPS) will have to comply with a Pretoria high court order last year to repay R316m to the SA Social Security Agency (Sassa).

This after the supreme court of appeal on Monday dismissed an appeal by CPS against the order.

CPS, the former social grants distributor, had agreed to a separate contract of R316m with Sassa for the re-registration of beneficiaries of social grants. Corruption Watch was not happy with that contract and took both Sassa and CPS to court for it to be set aside.

Although Sassa initially opposed the high court application, it later withdrew its opposition.

Corruption Watch argued in the high court last year that the re-registration of beneficiaries was already catered for in the original contract between the parties for the payment of grants and therefore did not require a separate contract.

In March last year, the high court ordered CPS to pay back the full amount, with interest, to Sassa. The interest would have to be backdated to the time of the transaction, in May 2014.

In its judgment on Monday, the full bench of the appellate court said it was clear from the contract signed between CPS and Sassa that when CPS was required to register social grants beneficiaries, it was required to register not only recipients in the strict sense - the persons to whom the payment was made - but also those who benefited from social grants.

"So if a parent received payment of child care grants in respect of three children, CPS was required to register not only the parent but the three children as well," judge Clive Plasket said in his judgment.

Plasket said this was consistent with the contract and the duties imposed on CPS in respect of the service it was to provide. He said this was also consistent with the legislative context, in terms of which Sassa sought to outsource the provision of an efficient, effective, corruption-free payment system for social grants.

"The result is that this registration process was part of the service that CPS agreed to provide in return  for payment of the fixed price for the duration of the contract," he said.

Plasket added that CPS's claim for payment was contrived and opportunistic.

"There was consequently no lawful basis for the decision to pay CPS the amount of R316,447,361.41 and it must be repaid by CPS to Sassa," he said as he dismissed the application.

He also ordered CPS to pay the costs of the application.


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