A statement released by the Department of Social Development says Magwaza and Minister Bathabile Dlamini agreed to terminate his contract after a consultative process.
Magwaza has allegedly received death threats after cancelling R47 million worth of contracts set up by Dlamini.
Chairperson of the Standing Committee on Public Accounts (Scopa) Themba Godi said he had spoke with Magwaza on Sunday about the alleged threats and the finalising of the contract between Sassa and the SA Post Office to replace Cash Paymaster Services in the payment of social grants.
Godi said there was an orchestrated campaign to remove Magwaza.
“As Scopa, we are shocked and angry at what is evidently brazen lawlessness by a criminal gang of rent seekers who want to intimidate Mr Magwaza out of his job so they can frustrate the Sassa Sapo contract and instead open the door for the looting of public funds,” Godi said.
“The fate of 17 million vulnerable and poor South Africans is at stake. This is an attack and sabotage of national interest for the benefit of an immoral and parasitic clique. As Scopa, we fully support Mr Magwaza and he must stay put and be steadfast in his post to serve the national interest.
“It is shocking that the Minister of Social Development, Ms Bathabile Dlamini, has not said a word or stood in solidarity with Mr Magwaza, thus making him feel he is on his own.”