Social Development Minister Bathabile Dlamini suggested Parliament call in Cash Paymaster Services (CPS) if they have questions about the company's recent R1-billion profit posting.

Dlamini told MPs on Wednesday that Parliament has the ability to summon CPS, after a media report revealed it made a R1-billion profit from the last financial year on the social grants contract.

The Constitutional Court made it clear in its March ruling that CPS is effectively an arm of government when doing business with the State, and can account in the same manner, she told the portfolio committee on social development.

"It is important for the portfolio committee to also [understand] other money that is subtle, that you don't see in the whole thing."

She was possibly referring to profit also made by CPS on deductions, which was not a consideration in the company's recent profit posting.

Financial implications

Dlamini maintained the CPS contract has always been kept at R16.44 per grant beneficiary over the proposed five-year term.

Even fluctuations in the rand will not change the amount CPS charges the department, she said.

They will, as directed, appoint an independent panel at the end of CPS's term to look into the financial implications of the contract and the handover.

She admitted that the regulation governing beneficiary deductions has been abused.

South African State Security Agency (Sassa) CEO Thokozani Magwaza told the committee that they could not account for CPS's profit on their side. They could only handle the financials when they received it from elsewhere, but a private company's profit was not in their hands.

He said the one-year extended contract was ordered to have the exact same terms as the previous, unlawful contract.

Dlamini also agreed that they need to be more vocal to restore confidence in the Sassa brand.

She has also established communication with Justice Minister Michael Masutha. She said they were unhappy with the seemingly contradictory judgments from the Constitutional Court and the North Gauteng High Court in Pretoria regarding deductions from third parties.

They plan to appeal the High Court's ruling that third parties can still deduct from grant beneficiaries as it contradicts with the Constitutional Court.

Committee chairperson Rose Capa said the ability to call in CPS will definitely be examined. It was supported by ruling and opposition MPs.

Sassa also updated the committee on its progress in talks with the Post Office.

The Post Office looks closer to coming on board formally, while a new service provider could be expected by November, to carry out the functions the Post Office may not be able to this year.