By Wendell Roelf
CAPE TOWN (Reuters) - South African President Jacob Zuma said on Thursday there was no "crisis" as doubts mounted over the payment of welfare benefits to 17 million people because of a court battle involving the service-provider.
The welfare system is a lifeline for South Africa's most vulnerable and includes more than 11 million child support grants. Each month long queues form at pay points as people wait for money needed to feed their families.
Zuma told parliament his government was "doing everything possible" to ensure welfare payments are distributed.
"There is no crisis," Zuma said in response to a question from the opposition in parliament.
The chaos in South Africa's social security agency comes three years after the Constitutional Court ruled that the tender won by Cash Paymaster Services (CPS), a unit of technology company Net1, was illegal. The government had until April 1 of this year to take responsibility for social service payments or find a new provider, but failed to do so.
The country's top court is now hearing a case brought by applicants who want it to take oversight of a new contract. The Constitutional Court said it would rule on Friday.
Earlier this week the country's chief justice placed the blame for the debacle squarely on the shoulders of Social Development Minister Bathabile Dlamini, calling her inaction incomprehensible.
Zuma, however, defended his minister and rebuffed opposition calls for her removal.
"Why punish somebody before anything happens? That's a funny democracy," Zuma said.
The chief executive of CPS has said a resolution is needed urgently if April's payments are to be made on time.
Officials at the South African Social Security Agency (SASSA) have said privately the agency has opted to negotiate a new deal with CPS despite the 2014 court order. There has been no public confirmation.
A cabinet minister on Thursday said any negotiations for a new deal between SASSA and CPS were void.
Net1 said on Thursday: "Notwithstanding the uncertainty regarding its arrangements with SASSA, CPS has not in any way reduced or downgraded its operational capabilities to deliver grants."
(Additional reporting and writing by Ed Stoddard; Editing by James Macharia and)