Constitutional Court File picture: Tiro Ramatlhatse

Johannesburg - The Constitutional Court has ruled that the SA Social Security Agency (Sassa) may continue its contract to distribute social grants with Cash Paymaster Services (CPS) for six months.

The suspension of the unconstitutionality of the contract between the two is only for six months and takes effect from April 1.

Sassa has to appoint an independent service provider once the extension ends, said the court.  

The Justices of the Constitutional Court stressed that Sassa and CPS were constitutionally obligated to pay social grants, but they set a number of conditions for the extension.

The conditions include extensive reporting to the court which include; that the Minister of Social Development and Sassa should update the court of any changes and that the agency should make sure that beneficiaries’ personal details remain private and not used for other purposes.

The court further ordered that former social development minister Bathabile Dlamini and Sassa CEO Pearl Bhengu must provide the court with affidavits explaining why they should not be personally joined in the matter and be ordered to pay costs.

An inquiry into whether Dlamini, now minister of Women in the Presidency, should not be joined in her personal capacity and pay the costs of the litigation that led to CPS's contract being extended for a year ended on Monday.

Retired Judge-President Bernard Ngoepe is expected to submit a report on the inquiry to the Constitutional Court.

The ConCourt did not provide reasons for its order, promising these later.

The court has also allowed CPS to approach the National Treasury for payment for its services, but Treasury has to file a report to the court on those discussions within 21 days.

Sassa applied to the court earlier this month to extend its contract with CPS for a further six months. 

Sassa said it is concerned that it is not ready to distribute cash payments to 2.5 million beneficiaries, as the South African Post Office (Sapo), which it has appointed, did not have the capacity to make the cash payments. 

The first extension of the CPS and Sassa contract first took place in 2017.  

The court made the tough decision as the risk of providing social grants to 17 million South Africans hanged in the balance. 

It all started in 2012 with an illegal contract that was awarded to CPS by Sassa for the provision of social grants. The Constitutional Court ruled that this contract was unlawful and that Sassa should make should reissue its tender. But in 2015, Sassa said it would not issue a tender but would instead personally take-over the distribution of social grants. 

As the deadline loomed for the end of the contract with CPS, Sassa told the court that it would not be able to take over the payment of social grants as it was not ready. 

This led to the March 2017 decision where the Constitutional Court was left with no choice but to extend the CPS contract for a further six months. 

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