FUL’s Intervention in the Social Grants Crisis

The matter concerns the operation of a contract for the payment of social grants. A third of the country’s citizens are recipients of these grants. In 2012, SASSA contracted with Cash Paymaster Services (Pty) Limited (CPS) to pay social grants on its behalf. That contract was subsequently declared invalid by the Constitutional Court and the order of invalidity suspended so as not to disturb the distribution of grants. Despite assurances provided by SASSA that it intended to take over the payment function of social grants itself, it became apparent as the contract’s expiry date approached that SASSA would instead look to enter into a new contract with CPS.

The Black Sash brought its application to the Constitutional Court, seeking reinstatement of the Court’s supervisory role and certain protections for grant beneficiaries. FUL intervened as second applicant, seeking relief to further discipline the proposed contractual arrangement between CPS and SASSA. The matter had clear implications for the rule of law and the obligations of a constitutional democracy. A ruling of the highest court of the land, carefully structured so as to best protect the rights and interests of the most vulnerable in our country, had been cynically disregarded. Instead the security of those dependent on social grants had been recklessly imperilled in a bid to ensure the interim contracting process escaped scrutiny and oversight.

The Court granted relief in line with the applicants request: the contract was extended for a period of 12 months, sufficient only to allow that a lawful competitive bidding process be put in place and that SASSA capacitate itself so that it can take over the grant payment system. The contract was also extended on the basis of the no-benefit principle requested by FUL i.e. the same terms and conditions as the original agreement. The Court also reassumed its supervisory function and called on the Minister of Social Development to show cause why she should not be liable for the costs of the application in her personal capacity.

Following the Constitutional Court’s judgement, FUL made submissions to the court regarding the appointment of experts to monitor the extension of the contract. In response to parties’ submissions, including FUL’s, relating to the Minister’s personal liability, the Constitutional Court has ordered an inquiry in terms of s 38 of the Superior Courts Act.

Experts, among them several of those proposed by FUL, were appointed by the Court to monitor the transition period. They make reports on a quarterly basis. The reports submitted thus far have been deeply alarming, pointing to the lack of appropriate expertise within SASSA and the Ministry of Social Development to oversee the transition to a new grants regime system and indicating that information required by the panel to fulfil their monitoring role has been purposefully withheld from them. FUL has reviewed those reports as they are submitted to the Court. It wrote to the Court following the submission of the first expert report, urging the Court to urgently issue directions ensuring that the panel was given the cooperation and information it required in order to discharge its monitoring function. Such directions were given.

At present, the section 38 inquiry is underway with Justice Nogoepe presiding.