Supreme Court of Appeal hears challenge over Sassa’s R370 monthly grant and government affordability arguments

The Department of Social Development, along with Sassa and the National Treasury, defended the grant’s regulations before the SCA after Gauteng High Court Judge Leonard Twala found them unconstitutional.

No funds available?

GroundUp reports that the Institute for Economic Justice (IEJ) and #PayTheGrants challenged the regulations, arguing that they excluded millions of potentially eligible people.

During his ruling, Twala ordered the government to progressively increase the grant and raise the income threshold in line with the cost of living, and ruled that once-off payments and gifts should not be counted as income.

However, Advocate Gilbert Marcus, for National Treasury, argued that Treasury could not afford to do more, given competing demands on government and the country’s weak fiscal position.

“Government can only spend money it extracts through taxation. Borrowing money is nothing more than deferred taxation,” Marcus said.

He added that additional spending per the IEJ’s request — which could be around R93bn to R139bn — could come at the expense of other government priorities.

According to Marcus, Treasury is focused on economic growth and job creation while providing social assistance as a safety net.

No change to spare

SABC News reports that economists agree, saying the economy is not growing fast enough to sustain this grant.

Citibank economist Gina Schoeman questioned where the funds would come from to keep the grant going.

“The grant is R370 per month. About 8.3 million people get that, so that works out to a bit under R40bn … nothing to spare in the budget,” says Schoeman.

Efficient Group economist Dawie Roodt believes that an extension of the grant is unaffordable unless government shifts spending on other matters.

“The reason why we have these very high levels of poverty and unemployment in the country has to do with the wrong economic policies.

“So, that’s why the economy is not so (great). It is because the government is messing it up. That’s why we have unemployment and this sort of thing.

“We have reached the point where approximately 30 million people and probably more now, depending on what the court decides, that we talk about nearly 50% of the South African population depends on the state through an income that is totally unsustainable.”

In line with inflation

Advocate Jason Brickhill, representing the Socio-Economic Rights Institute (SERI), the IEJ, and the #PayTheGrants campaign, argued that the evidence presented to the high court did not support the government’s position.

He referenced proposals from the DSD in 2023, which suggested increasing the grant amount to between R430 and R663 and raising the income threshold to R663, R945, or R1,417. The Treasury had modelled the costs associated with these options.

Brickhill contended that the Treasury had presented the maximum possible costs of expanding the grant to the SCA without providing the larger context of the social assistance budget.

He said the proposed R20-per-month increase in the grant for 2024 would cost about R2bn for 8.5 million beneficiaries, which is less than 1% of the overall social assistance budget of roughly R250bn at the time.

“The central issue in this case is that grant beneficiaries are seeking incremental increases that are more in line with inflation,” he explained.