South Africa SCA: Hears SRD Grant Appeal Over Unconstitutional Regulations

• The Supreme Court of Appeal (SCA) recently heard arguments in an appeal against a High Court judgment that declared several Social Relief of Distress (SRD) grant regulations unconstitutional.
• The High Court had ordered the government to allow in-person applications, progressively increase the grant, raise the income threshold, and exclude once-off payments from income calculations.
• The National Treasury argued that expanding the grant as ordered could cost up to R139 billion annually and that the High Court's directives infringed on the separation of powers.
• SCA judges questioned the fairness of the online-only application system for vulnerable individuals who lack access to technology.
• The appeal's outcome will significantly impact the interpretation of socio-economic rights and future social welfare policy in South Africa.

The outcome of this South Africa SCA SRD grant appeal will clarify the constitutional limits of government's fiscal discretion in fulfilling socio-economic rights, setting a significant precedent for future social welfare policy challenges.

South Africa's Supreme Court of Appeal (SCA) recently heard arguments concerning the Social Relief of Distress (SRD) grant regulations, following a significant High Court ruling that declared several provisions unconstitutional. The Department of Social Development (DSD), the South African Social Security Agency (SASSA), and the National Treasury appeared before the court to defend the existing framework of the R370-a-month grant. This appeal stems from a January 2025 Gauteng High Court judgment delivered by Judge Leonard Twala, which found certain regulations governing the SRD grant to be invalid, prompting the government's challenge.

The High Court's decision was a victory for advocacy groups, the Institute for Economic Justice (IEJ) and #PayTheGrants, who argued that the regulations unfairly excluded millions of potentially eligible individuals. Judge Twala specifically found no reasonable justification for mandating online-only applications for vulnerable populations, ordering the government to implement in-person application options. Furthermore, the High Court directed the government to progressively increase the grant amount and raise the income threshold to align with the rising cost of living, while also stipulating that once-off payments and gifts should not be considered as income for eligibility purposes.

Introduced in 2020 as a temporary measure during the COVID-19 pandemic, the SRD grant has since been extended annually. It currently provides financial assistance to approximately 8.5 million people who meet the eligibility criteria, which includes an income threshold of R624 per month. SASSA maintains oversight by conducting monthly checks of applicants' bank accounts to verify their continued eligibility, a process designed to ensure the grant reaches those with insufficient means.

Central to the government's defense in the South Africa SCA SRD grant appeal was the National Treasury's argument, presented by Advocate Gilbert Marcus, highlighting a fundamental disagreement on the practical realization of socio-economic rights. Marcus contended that while Treasury shares the laudable goal of expanding social assistance, the state's current fiscal position, coupled with competing demands on government resources, prevents further expansion. He asserted that the High Court had failed to adequately assess the evidence presented by Treasury regarding these financial constraints.

Marcus further argued that the High Court's directives on government spending encroached upon the separation of powers, as the state can only disburse funds generated through taxation, with borrowing merely representing deferred taxation. He cautioned that any additional expenditure on the SRD grant would inevitably come at the expense of other critical government priorities. The Treasury's long-term strategy, he explained, prioritizes economic growth and job creation, with social assistance serving as a safety net rather than a primary economic driver.

The potential financial implications of the High Court's orders were a key point of contention. Marcus indicated that the relief sought by the IEJ could cost between R93 billion and R139 billion, depending on the extent of the grant value and income threshold increases. The government had previously warned that expanding the grant as ordered could cost the state up to R139 billion annually. Marcus also defended the use of bank and database checks as procedural safeguards to ensure public funds are allocated only to eligible recipients, acknowledging that while no system is perfect, some compromises are necessary in managing millions of applications.

The SCA hearing saw judges critically question the practical implications of the existing Social Relief of Distress grant regulations, particularly regarding the SRD grant online application constitutionality. Judge Pieter Meyer raised concerns about individuals lacking the means to even acquire a cellphone or those unable to navigate electronic platforms, questioning why assistance could not be provided at SASSA offices. Similarly, Judge Wendy Hughes probed what changes had occurred since the initial COVID-19 lockdown, when online applications were first introduced, and whether the government had done enough to accommodate those without access to digital systems.

These judicial inquiries underscore the ongoing tension between administrative efficiency and ensuring equitable access to social security for the most vulnerable in South Africa. The outcome of this South Africa SCA SRD grant appeal will clarify the constitutional limits of government's fiscal discretion in fulfilling socio-economic rights, setting a significant precedent for future social welfare policy challenges. It will also potentially alter SRD grant administration requirements for compliance officers, influencing how the government balances its financial responsibilities with its constitutional obligations to its citizens, particularly concerning access to essential social support.

This ongoing SCA appeal will clarify the constitutional limits of government's fiscal discretion in fulfilling socio-economic rights, setting a significant precedent for future social welfare policy challenges and potentially altering SRD grant administration requirements for compliance officers.

Source: Original reporting via Mail & Guardian