The SRD grant was introduced in May 2020 to support people without income during the Covid-19 lockdowns. Initially set at R350, the grant aimed to mitigate the economic hardship caused by the pandemic. While similar pandemic-era income supports have been phased out in other countries, the grant remains in South Africa. This is partly due to pressure from civil society, which invoked the constitutional right to social assistance amidst the ongoing unemployment crisis. 

Various research studies have shown the grant’s crucial impact; despite its meagre value, it has helped prevent millions of people from falling into food poverty and improved the ability of people to search for work. Most recipients primarily spend it on food. 

Regulations cause reductions

At its peak in March 2022, around 11 million people relied on the grant for their survival. However, after new regulations were introduced in April 2022, the number of recipients plummeted to around 5.5 million. While there has been some recovery, recipients still fall below the peak, averaging around only 8.5 million. This precisely matches the grant’s current budget cap. 

The introduction of these regulations followed a substantial cut in the grant’s allocation by the National Treasury at the start of the 2022/23 financial year. This was part of a decade-long trend of shrinking social service provisions, as the government prioritises achieving a primary budget surplus above all else—a goal that is disconnected from the realities faced by vulnerable people.

The drastic funding reductions were not based on any rational assessment of need. Even at the grant’s peak, the number of approvals still fell far below expert estimates of the eligible population. This is estimated to be around 17 to 18 million people. The Department of Social Development (DSD) was pressured to implement restrictive measures to keep beneficiary numbers below this arbitrarily low budget threshold. As a result, the department consistently underspent on the grant over the last three years. This has been used to justify further budget cuts.

This backdrop of cutbacks and restrictive regulations prompted the Institute for Economic Justice and #PaytheGrants to initiate legal action. This litigation aims to challenge the administrative systems of the SRD grant that unfairly exclude millions. We made many attempts to constructively engage with the government but the exclusionary approaches have been deliberately retained in successive versions of the regulations. 

Explaining the case

The case targets three primary issues within the administration of the SRD grant: procedural barriers that restrict access, the erosion of the grant’s value and the means test threshold, and the systematic non-payment of approved grants.

1. Procedural barriers 

• 

  Unlike other grants, Sassa cross-checks applicants against other government databases like UIF or NSFAS. These databases are known to be inaccurate and outdated.

  The SRD grant uses an automated income verification process. This is unlike other social grants that allow for document submission to prove income. This process, through partnerships with banks, flags all bank account inflows as income. This overly broad definition wrongly excludes many who lack regular income or financial support. For example, people have been excluded from receiving once-off emergency family assistance, child maintenance payments, and even loans. This is detailed in 79 supporting affidavits submitted alongside our founding papers. 

• Payment of the grant is constrained by the budget cap, which is not informed by any objective determination of the size of the eligible population. 
• Unlike other grants, SASSA cross-checks applicants against other government databases like UIF or NSFAS. These databases are known to be inaccurate and outdated. This leads to the wrongful exclusion of many who are listed on the databases but are not actually receiving benefits. 
• The appeals process is extremely narrow. It does not allow applicants to submit any new information to contextualise wrongful exclusion. It merely repeats the same flawed database and bank verification processes. 
• The online application form includes questions about how applicants survive in the absence of the grant. This can potentially mislead applicants into excluding themselves. 
• Unlike other grants, the SRD administration is exclusively online, which poses significant barriers in a country with low internet access, smartphone ownership and digital literacy.

• Going backwards

The constitution mandates the progressive realisation of social assistance to all those who need it. Progressive realisation means that the state must expand and improve access to social assistance (such as grants) over time. With the SRD, however, there has been a retrogression (a walking back) in two areas:

• The means test threshold of R624 is equal to the outdated 2021 Food Poverty Line (FPL); that’s the lowest amount that a person needs to meet minimum food requirements. Despite annual inflationary adjustments to the FPL, which now stands at R796, the means test threshold for the SRD remains unchanged. This means that, in real terms, people need to be poorer than before to access the assistance. 
• The value of the grant remained at R350 between 2020 and 2024 and has not kept pace with inflationary adjustments seen in other grants. It received only a small R20 increase in April 2024. It buys far less than it did in the past, despite the slight increase, especially in the context of high cost-of-living increases.

• Systematic non-payment of approved grants

There is a persistent gap between the number of approved grants and actual payments; a significant number of approved beneficiaries never actually receive them. Furthermore, a new clause now allows SASSA to cancel historic pending payments. These are payments that have been approved but not yet disbursed. This further increases the risk that approved beneficiaries will not receive their entitlements.

State’s arguments  

The state defends its differential treatment of the SRD grant by labelling it as a temporary measure. It was intended only to address the unemployment spike caused by the pandemic—a condition they claim is improving. However, this is misleading; unemployment levels were at crisis levels before the pandemic and remain so today. Furthermore, according to SASSA’s own data, the majority of SRD grant applicants have never been employed. So, the grant is less of a temporary stopgap between periods of unemployment and, in fact, more of a permanent basic income support for those without regular income, including carers and those precariously employed.

This sentiment has been shared publicly by high-ranking government officials, including the President, in two State of the Nation addresses. They have repeatedly made clear commitments that the SRD grant would not only remain but also that it would serve as a basis for a more comprehensive system of basic income. These commitments clash with the stance taken by the state, and especially the National Treasury, in their papers and in court.

This case presents a clear-cut example of the National Treasury exceeding its constitutional mandate and attempting to usurp the powers of other government departments in pursuit of its austerity policy position. It purports to speak for the government as a whole on social development policy matters. It is dictating social development policy (including the value of the grant) to DSD and SASSA. It is imposing retrogression in coverage and value of the grant. And it is claiming sole authority to determine the budget for the SRD grant—when that is a decision for parliament.

The government has also made bold assertions about the affordability of the SRD grant in its founding documents. It claims that any improvement in the grant value or fixes in the procedural barriers would lead to a collapse in the system. Yet, under the pressure of litigation, they announced an unbudgeted R20 increase in the grant value. 

The legal remedy that we seek has also been misrepresented by the state. The litigation does not aim to dictate the design of the SRD grant policy. Instead, it asks for the state to implement its own policy in line with the Constitution rather than undermining it. We want the court to direct the government to develop a reasonable plan that provides for the grant on a long-term basis with annual adjustments to the value and means test. These must take into account relevant cost-of-living factors and other real-world evidence of need. And we seek orders remedying the unlawful aspects of the SRD grant administration. These are the bare minimum steps that the government can take towards fulfilling its responsibilities to the millions of adults who face daily hunger and poverty. 

Next steps
All papers in the case have been filed, and both parties have had the chance to argue before a judge at the High Court. We are now awaiting the judgement. The decision will likely influence the design of the next version of the grant. We will also be alert to the possibility that some of the exclusionary measures, such as online-only systems and flawed bank verification, could be extended to other grants as implied by the Treasury in the recent MTBPS document. This could affect more than the 8 million currently at risk of being unfairly excluded from necessary social assistance. 

Siyanda Baduza is a researcher in labour and social security at the Institute for Economic Justice, with a focus on universal basic income guarantee.