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CALS and Black Sash welcome judgment against CPS

- Lee-Anne Gaertner

On 8 April 2026, the Constitutional Court handed down judgment in a case brought by Freedom Under Law and the Black Sash Trust against the state.

The Black Sash Trust and the Centre for Applied Legal Studies welcome the recent judgment from the Constitutional Court ordering Cash Paymaster Services to refund profits made from an unlawful tender to pay social grants. We continue to advocate for a universal basic income grant.

This litigation relates to a contract between the South African Social Security Agency (SASSA) and Cash Paymaster Services (CPS) which was set to run from April 2012 to March 2017. By April 2014, the Constitutional Court had ruled the contract was invalid and that CPS had no right to benefit from it. The Court suspended its order of invalidity, allowing the contract to continue to ensure that grant beneficiaries would continue to receive their grants without interruption, and to give SASSA time to in-source grant payments.

By early 2017, it became clear that SASSA would not meet the April deadline and that there was no plan in place to continue paying grants once the unlawful contract with CPS ended. The Black Sash Trust, represented by the Centre for Applied Legal Studies, approached the Constitutional Court in an effort to protect the social grant system and its 17 million beneficiaries at risk. The contract was allowed to continue for a further 18 months before the South African Post Office took over payments.

The final question left before the Court following extensive litigation was whether CPS should repay the profits made under the unlawful contract. Freedom Under Law sought to compel CPS to disclose information needed to make an accurate determination of its profits during the auditing process. The Court has now handed down judgment ordering CPS to repay R81.3 million to SASSA, concluding that the order constitutes a further vindication of the rule of law and the Constitution.

“This matter highlights the threat posed by a private company taking on the state’s constitutional obligations,” says Anesu Dera from CALS. “When this litigation was first launched, the only entity capable of paying grants was CPS as a result of a skewed tender process. This put the company in a position to negotiate for a further uncompetitive contract and placing over 17 million people at risk. It was only when Black Sash approached the Constitutional Court that the crisis was averted.”

“SASSA will benefit from this judgment, but it was social grant beneficiaries who bore the brunt of the crisis at the time,” agrees Hoodah Abrahams-Fayker. “It has taken twelve years to enforce the Court’s original judgment that CPS cannot benefit from the unlawful contract. This is a final step towards ensuring accountability.”

For inquiries, please contact:

From the Centre for Applied Legal Studies:

From the Black Sash Trust:

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