IEJ Legal action targets flaws in Social Relief of Distress grant distribution

31 Oct 2024

The Gauteng Division of the High Court in Pretoria is set to make a ruling in a Social Relief of Distress grant exclusion case brought by the Institute for Economic Justice and #PaytheGrants against the government. Millions of people who qualify to receive the grant are excluded by the system, and hundreds of thousands have challenges accessing the funds despite being approved to receive the R370 monthly grant. The food basket is still unaffordable for SRD grant recipients, sitting at almost R400.

The Institute for Economic Justice has raised the alarm that millions of people who qualify to receive the Social Relief of Distress (SRD) grant are excluded by the system, while hundreds of thousands more have challenges accessing the funds despite being approved to receive the R370 monthly grant.

Advocate Jason Brickhill, representing the Institute for Economic Justice and #PayTheGrants, said that the case was about protecting the rights of the South Africans who qualified for the grant but were excluded, and those that were approved but didn’t receive payments.

“What is the case about? It is about three identified category issues; the first concerns the regulations that cause barriers to access to applicants, the second issue is the grant value and the income threshold, the third is the systematic problems of non-payment… We do not ask the court to set the precise grant value; we do not ask the court to set the income threshold,” said Brickhill.

Although 16 to 17 million adults are eligible for and in need of the grant, the government only allows it to go to 8.5 million people per month.

“The application, which has been brought by the Institute for Economic Justice and #PayTheGrants, challenges the lawfulness and constitutionality of the steps the government has taken, and failed to take, to implement its own commitment to meeting its constitutional obligation to progressively realise access to social assistance by providing the SRD grant to working-age adults who need it,” Brickhill said.

The Institute for Economic Justice in its heads of argument alleged three instances of unlawfulness and unconstitutionality:

The first is that aspects of the SRD regulations and the procedure for applying are not fit for purpose.

The irrational, arbitrary and unfair denial of social assistance to persons who are legally entitled to receive it.

Provisions in the SRD regulations that provide for an online-only application procedure for SRD grant applications.

The use of automated bank verification and databases as a means of verifying an applicant’s means.

A narrow appeal procedure that always excludes new evidence.

An arbitrary cap on payments to successful applicants when funds are depleted.

Sassa’s screening questionnaire for ascertaining an SRD grant applicant’s means that seeks irrelevant information and is ultra vires the SRD regulations.

The Department of Social Development and Sassa’s incorrect interpretation of “income” and “financial support” for purposes of verifying an applicant’s means.

The second is the static and irrationally determined value of the SRD grant (currently R370) and the income threshold (currently R624).

The third is the unjustified failure by the second respondent, the South African Social Security Agency (Sassa), to pay the SRD grant to successful applicants.

Advocate Gilbert Marcus, representing the National Treasury, Sassa and the Department of Social Development, said the government was operating under the assumption that the grant was a temporary stopgap measure, and pointed to the multiple amendments made to make the grant regulations more accommodating, like including asylum seekers and the R20 increase. Marcus added that this was proof that the department had gradually adjusted the grant to be fit for purpose. He said it is unfortunate that the grant was insufficient and not getting to enough people, but the government could not be accused of not trying, especially considering the shrinking number of taxpayers and the dwindling economy.

Marcus said that it would be impractical for the government to pledge additional funding for the Social Relief of Distress (SRD) grant, and emphasised the National Treasury’s stance on affordability, noting that borrowing has “distinct limits lest the state fall into bankruptcy”.

“How to meet the needs of the population is dependent on budget constraints and sometimes beyond the control of the state, as when for example the Covid-19 pandemic resulted in devastating economic consequences all of a sudden,” the advocate told the court.

Buyi Sikhakhane, 36, is a recipient of the SRD grant and said that she always checked if she had received the R370 grant.

“Sometimes you get approved, sometimes you don’t, so you can’t make plans to buy with that money or you will starve or miss fees you planned to pay,” she said

Buyi lives in Adams Mission, 25 minutes away from Durban Central, and it costs her R50 for a return trip. She lost her job after the business she worked for shut down in 2023.

'Unfortunate truth'

“The unfortunate truth is that the two problems are inextricably linked. The fewer people who are economically active, the less resources available to the fiscus, and the fewer resources available to the fiscus, the less the state is able to assist the poorest of the poor with social assistance,” Marcus said.

“Expenditure exceeded revenue by R321.6-billion in 2024/2025 and the gross borrowing requirement is R559.6-billion, rising to R623.3-billion in 2025/2026. So the government, as it is put, cannot expand society further due to drops in anticipated revenue and increasing debt services costs.”

The Institute for Economic Justice in its heads of argument expanded on why exclusionary regulations are unconstitutional and defeat the purpose of the grant.

“The 2024 Amendment Regulations do not cure the defects in the SRD regulations. In fact, they introduce provisions that underscore and make more urgent the structural relief sought by the applicants in relation to non-payment of successful applicants,” it said.

The applicants cited the Department of Social Development minister and Sassa as respondents because their mandate is to implement the SRD regulations.

“The National Treasury has consistently allocated funding to the SRD grant that would fund payment of the grant to just half the number of people who the government itself accepts should qualify to receive the grant. In order to suppress the number of beneficiaries under pressure from the National Treasury, the Department of Social Development and Sassa have put in place procedural barriers that arbitrarily and unreasonably exclude persons who are eligible to receive the SRD grant from receiving it. The Department of Social Development has openly acknowledged that these barriers have as their purpose the reduction of the number of SRD grant recipients,” the document read.

Statement of support

The South African Federation of Trade Unions (Saftu) released a statement of support on Tuesday, 29 October 2024, saying: “We wish to state our full support for the applicants in the case, the Institute for Economic Justice and #PayTheGrants and the remedies they are seeking. This long-anticipated case is critical not only for the future of the SRD grant itself, but for the realisation of socioeconomic rights in South Africa.”

The trade union pointed out that the Constitution required the government to progressively realise the right to social assistance within available resources.

“Due to the structural lack of labour demand in our economy, millions of adults are shut out of the labour market and living in food poverty. The only social assistance they have access to from the state is the SRD grant, which despite being a lifeline has been consistently underfunded and undermined by the agencies tasked with administering it,” the statement read.

“The government has committed to transitioning the SRD grant into a comprehensive system of basic income support for all those who need it. Saftu supports a universal basic income grant for South Africa, and calls on government to urgently progress its policy and stop undermining it.

“Saftu calls for access to the SRD grant to be gradually expanded to reach universal eligibility, and for the value of the grant to be progressively increased to the Upper Bound Poverty Line. Attempts to target social assistance narrowly to the unemployed will be costly, counterproductive and difficult to enforce.”

Brickhill asked for the judge to make a judgment as soon as possible so that those who had been excluded could get social relief. The Institute for Economic Justice and #PayTheGrants are hoping for a judgment by the end of this year, or early 2025.

“The Constitution requires the government to use measures that are reasonable in both their formulation and implementation to progressively realise the right to social assistance,” said the Institute for Economic Justice. DM

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'Unfortunate truth'

Statement of support