The future of South Africa’s Social Relief of Distress (SRD) SASSA grants is hanging in the balance after a court ruling on the matter.
The South African Social Security Agency (SASSA) and the National Treasury have been granted permission to appeal a judgment made in January 2025 regarding the SRD grants.
The appeal could have significant implications for the millions of South Africans who depend on these grants for survival.
Judge’s Ruling and the Leave to Appeal
Back in January, Judge Leonard Twala ruled that limiting access to SASSA grants in 2025 was unconstitutional.
He found that it was unlawful to restrict access to the grants simply because there were insufficient funds.
As a result, the judge ordered SASSA to increase the amount granted to those in need.
However, despite this decision, Judge Twala acknowledged the complexity and seriousness of the case, noting that the issue affects almost 30% of the country’s population.
Therefore, he believed it deserved the attention of the Supreme Court of Appeal.
With that, the case will now proceed to the higher court.
The Crossroads for SASSA Grants
While the date for the appeal hearing is yet to be set, the situation has already reached a crucial point for SASSA grants in 2025.
Recently, the government announced a 5.9% above-inflation increase for the grants.
However, this increase is somewhat offset by a proposed 1% hike in Value Added Tax (VAT) over the next two years.
While this VAT increase might seem small at first glance, its impact will be felt deeply by the 28 million South Africans who rely on SASSA grants.
With most of their stipends going toward basic necessities, the increase in VAT will directly affect their purchasing power, making it harder to make ends meet.
Impact on Older Person Grants
The elderly are among the most vulnerable grant recipients.
For those aged between 60 and 74 years, SASSA grants will increase to R2,310 per month starting next month.
However, the proposed VAT increase will affect the price of essential goods.
For instance, a basic food basket that cost R1,500 before the VAT increase will now cost R1,507.50. While R7.50 might seem negligible, when you add up all the costs of living—groceries, transportation, and healthcare—the total impact could amount to an extra R40 per month.
This loss of purchasing power is particularly hard for those living on the edge of poverty.
To make matters worse, electricity prices are also set to rise by 12.7% next month, adding an additional strain of about R140 per month to household budgets.
The Broader Economic Impact
Economists have warned that food inflation often outpaces general inflation, meaning that even with the recent increases to SASSA grants, the purchasing power of grant recipients will diminish quickly.
For many South Africans, the grant increases will soon be wiped out by rising costs of living, leaving them no better off than before.
Finance Minister Enoch Godongwana has stated that if there were no need for SRD grants, the government would not have to raise VAT.
This statement adds a layer of irony to the situation, as the need for SRD grants could be dissolved entirely if the appeal is successful, making the VAT hike unnecessary.
What’s Next for SASSA Grants?
With the appeal now heading to the Supreme Court, the future of SASSA grants in 2025 is uncertain.
The decision made by the court could drastically alter the landscape for millions of vulnerable South Africans.
Will the Supreme Court uphold the original ruling, leading to increased access and amounts for SRD grants? Or will the appeal result in the dissolution of the grants altogether, removing the need for any VAT increases? The outcome will not only affect the recipients of these grants but could have far-reaching implications for the South African economy as a whole.