Shepstone & Wylie Attorneys Presents the Post Office as Alternative Social Grants Dispenser

By Tayob Kamdar, Litigation Partner and Noushaad Omarjee, Associate at Shepstone & Wylie Attorneys

Shepstone & Wylie Attorneys was instructed by the South African Post Office to bring an application to be admitted as amicus curiae (friend of the court) in the Constitutional Court (“CC”) matter of Black Sash Trust v Minister of Social Development and Others.

The purpose of bringing the application was to make the Court aware that the Post Office is a viable alternative to carry out the payment of social grants through its PostBank division.

Shepstone & Wylie, represented by Litigation Partner, Tayob Kamdar, was granted leave to present argument on the day of the hearing (15 March 2017), and the Post Office was accordingly admitted as an amicus curiae in the court judgment which was handed down on 17 March 2017.

The urgent application for direct access was brought by The Black Sash Trust (“Black Sash”), a non-profit organisation that works to advance equality, social justice and human rights, including standing up for the many marginalised people who are recipients of social grants.

In 2012, the South African Social Security Agency (“SASSA”) contracted with Cash Paymaster Services (Pty) Ltd (“CPS”) to pay social grants on its behalf. This contract was declared invalid by the CC, with the order of invalidity suspended and the Court retaining a supervisory role over the matter.

On 5 November 2015, SASSA filed a report in the CC, stating that it would not award a new contract, but instead intended to take over the payment function of social grants from 1 April 2017 (date that the suspension of invalidity would lapse). Based on this report, the CC discharged its supervision, however, over time, it became apparent following reports from various counsel that SASSA was not actually able to take over the payment function and would have to seek further assistance from CPS to ensure that over 17 million beneficiaries would continue receiving social grants.

Black Sash brought its application to seek reinstatement of the oversight role of the CC for the payment of social grants and to ensure that SASSA complies with its constitutional obligations to provide social assistance in a lawful manner.

The CC found that SASSA and CPS are under a constitutional obligation to ensure payment of social grants to grant beneficiaries from 1 April 2017 until an entity other than CPS can do so, and that a failure to do so will infringe upon the rights of grant beneficiaries of access to social assistance under section 27(1)(c) of the Constitution.

The CC further suspended the initial declaration of invalidity of the contract for a 12-month period from 1 April 2017. SASSA and CPS have been directed by the CC to ensure payment of social grants to grant beneficiaries from 1 April 2017, for a period of 12 months, on the same terms and conditions as those in the current contract between them that will expire on 31 March 2017, subject to further conditions set out by the Court.

The Minister of Social Development (“the Minister”), Ms Bathabile Dlamini, and SASSA are to file reports with the CC laying out how they plan to ensure the payment of social grants after the expiry of the 12-month period. After being admitted as amicus curiae in the Black Sash matter, the South African Post Office has now made both the Minister and the CC aware that it could and would carry out the payment of social grants through its PostBank division if contracted to do so in 2018 when the 12-month contract suspension expires.

For more information on the above, please contact:

Tayob Kamdar
tkamdar@wylie.co.za
+27 82 450 4680