12 March 2017

South Africa: Social Development Responds to Sunday Times

press release

The Department of Social Development did respond to the Sunday Times

The Department of Social Development (DSD) wishes to clarify that it in fact did not refuse to reply to the Sunday Times questions as incorrectly stated in today's edition (March 12, 2017).

The Department sent to the weekly newspaper an extensive reply on the questions raised. The Sunday Times were even encouraged to use the response in its entirety.

Below are the questions from the Sunday Times as well as the department's response.


"Good Day

1. Did the minister in December meet or speak to Michael Hulley about the South Africa Social Security Agency (SASSA) payment options?

2. We understand that there was meeting at the Continental Hotel near the airport where senior officials were addressed by Mr Hulley was this at the behest of the minister? And if so why?

3. We also understand that there was a meeting in Durban on 30 December where the minister called senior officials within DSD, SASSA and the work streams. It has been alleged that this meeting was at Michael Hulley's offices in Durban, chaired by the minister and Zodwa Mvulane made presentations of how the work streams needed R8 billion from Treasury for another five years? Is this so and why has Hulley been involved in the DSD process and who called this meeting?

4. Can the minister confirm that she has been receiving legal advice from Hulley on this matter and if so what kind of advice?

5. It is also alleged that during October, November last year, the task team made up of SARB, Treasury, DSD and SASSA officials proposed a plan where the banks including Grinrod would pay the grants come April 1. It is alleged that there was a plan in place and the minister was not convinced it would work. Can the minister confirm that a plan of this nature was presented to her by the task team and what her reservations were?"

Our response:

Dear Athandiwe

Firstly, it is clear that the ConCourt questions have unsettled a few people and it is advisable that instead of talking to the papers, they write their affidavits for the ConCourt and submit by tomorrow (Monday).

This alleged meeting and involvement of Mike Hulley has been extensively written about by Amabhungane and we are not certain how it now adds to the noise. It has been our position that if people believe that there was something fundamentally wrong with the process at SASSA, they should be bold to speak on the record and approach law enforcement agencies. At least give you some evidence that these meetings happened. Even a copy of the presentation.

On your last question, the Minister has never denied that there were options presented to her including the option to use Grinrod. It is there. She knows about it but she has been saying:

The banking infrastructure will require beneficiaries to travel approximately 22km to receive their social grant instead of the 5kms stipulated in the norms and standards by SASSA.

The banking system requires on-line capability, therefore people living in rural areas will not be able to collect their grants in the areas they live. This in turn will destroy the economic activity that pay points provide to the rural areas.

Grinrod does not have a technical solution and the plan presented would be no different to using CPS. CPS would continue to provide the technology and the Paypoints infrastructure. However, Grindrod would be able to charge beneficiaries whatever they chose.

SASSA would lose all control over the payment system.

Minister has said she is not backing down on biometric verification. It has saved the fiscus R2 billion and has cleaned up the system of fraud and corruption.

The banking solution does not have a biometric solution that is a prerequisite for proof of life and safety of the poorest of the poor.

The Minister will not support a solution that puts her constituents at risk by enforcing PIN verification. The utilization of PIN as authentication methodology is the primary reason for fraud and theft, not only for social grant beneficiaries but all other banking accounts. The system currently in place provides for social grant beneficiaries to enter the formal banking environment by CHOICE.

When the RFP and the subsequent RFP was advertised, the banks did not bother to submit bids. Why would they vaguely be interested in assisting the poorest of the poor?

We cannot afford another failed attempt by the banks to bank the unbanked! At least not with the social grant beneficiaries. What happened to the Mzansi account?

Today, South Africa has a biometric standard through this process. The Taylor Commission recommended that biometric verification should be utilized for social grants beneficiaries and the Minister is following up on that.

Do we really believe that the banks are going to spend billions of rands upgrading the infrastructure to accommodate poor people?

Taking service delivery to our constituents has always been an important vision of this Government. The 10 000 paypoints that we use to utilize to distribute grants in the most rural parts of South Africa is proof of our commitment.

Not only do we service more than three million people at these sites, we have created an economic hub for those living there.

On any given pay day, these points are a service hub of activity, where communities gather to sell their wares, ranging from fresh produce, vegetables, clothes etc.

Notwithstanding the above, the very people we want to serve no longer need to travel long distances with exorbitant fees to receive their social grants.

This time this Minister is hitting the nerve of the white establishment and is already amending the SASSA Act to make sure that social grant beneficiaries have a funeral scheme.

You may also check the shareholders of Grindrod and see if this Minister is not on the right track.

Issued by: Department of Social Development

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