Cash Paymaster Services (CPS), which used to administer social grants to more than 17m people, has lost its R1.3bn lawsuit against Sassa. Sassa said Judge Robert Nugent, the arbitrator in the dispute, ruled in favour of the agency in all the claims lodged by CPS, BusinessLIVE reports.

CPS' contract with Sassa ended in 2018 after a number of Constitutional Court judgments.

In 2014, the court found that the contract Sassa had signed with CPS was illegal and invalid. However, the contract was continued to allow Sassa to find another alternative for distributing social grants.

In 2017, then Social Development Minister Bathabile Dlamini approached the court to have the contract extended, which was granted until the end of September 2018.

Sassa has now partnered with the SA Post Office (Sapo) to distribute grants.

'The contract between Sassa and CPS has a history of litigation brought by CPS in an effort to amass maximum and ... unreasonable financial benefit,' Sassa said, claiming that in this case CPS attempted to monopolise the payment of grants and shut Sapo and other commercial banks out.

'The fiscus has been saved a whopping R1.3bn ... ,' it said.

One of the claims lodged by CPS related to the company believing it was entitled to enroll all beneficiaries on its computerised system, irrespective of whether they were to be paid by it. CPS also claimed that Sassa was not entitled to pay grants by electronic transfer to bank accounts of beneficiaries, and that Sassa was not entitled to cause grants to be paid in cash at post offices and other Sapo facilities, nor by electronic transfer to Postbank and other accounts of beneficiaries, and that Sassa was not entitled to enroll all beneficiaries on its database.

CPS was ordered to pay costs in each case.

Full BusinessLIVE report