The South African Social Security Agency and National Treasury have been granted leave to appeal January’s judgment on the future of SRD SASSA grants in 2025, reports GroundUp. Two-months’ ago, Judge Leonard Twala ruled that regulations limiting access to SRD SASSA grants in 2025 were unconstitutional. He summarily ordered the agency to ‘expand and increase’ the grant amount. Essentially, limiting access to the R370-a-month simply because there was no more money left was ruled ‘unlawful.’
However, in granting leave to appeal, Judge Twala had this to say: “Although I am satisfied that I have considered all the issues, I am of the view that, due to the complexity and seriousness of SASSA grants in 2025, which impacts almost 30% of the population, it does deserve the attention of the Supreme Court of Appeal. I am therefore of the view that the interests of justice will be best served if this case is heard by the Supreme Court of Appeal,” concluded Twala.
CROSSROADS FOR SASSA GRANTS IN 2025
While a date for the appeal hearing has yet to be set, it represents a significant crossroads for SASSA grants in 2025. The powers that be announced a 5.9% above-inflation increase to SASSA stipends last month. Only to erode into that with a proposed 1% increase in Value Added Tax (VAT) over the next two years.
This may might seem insignificant on paper, but it represents a significant erosion into the purchasing power of SASSA grants in 2025. VAT hikes work like a ripple effect running through all consumer goods and services. For the nation’s 28-million SASSA grant recipients, nearly every penny of their stipend goes only to basic necessities. Therefore, everything needs to be meticulously accounted for to protect against price increases.
OLD-AGE GRANTS
Let’s take SASSA Older Person grants (between 60 and 74 years old), for example. Next month’s SASSA grants in 2025, for 4-million beneficiaries, will now pay R2 310 per month. However, because of the proposed VAT increase, a basic monthly food basket of essential items will also increase in price. A basket of items that may have cost approximately R1 500 – with a 0.5% VAT increase for the year – will now cost approximately R1 507.50.
R7.50 may not sound too bad in isolation. But that applies for every single basket of groceries per month. Multiply that across all VATable purchases – plus transportation costs, medication payments, etc – and a more realistic impact is closer to R40 per month. Sadly, vulnerable South Africans living near the poverty line cannot afford to lose R40 per month in purchasing power. Eskom electricity is also going up next month by 12.7%. Extrapolate its impact over a year, and the loss is approximately R140 per month. For low-income homes that’s simple unsustainable.
MULTIPLIER EFFECT ON THE ECONOMY
Furthermore, economists say food inflation typically exceeds general inflation by a few percentage points. Thus, even in a few months from now, the latest increases to SASSA grants in 2025 will already be swallowed-up by inflation. Putting the country’s neediest residents effectively back where they started.
Nevertheless, a cruel irony to SASSA grants in 2025 is the statement made by Finance Minister Enoch Godongwana. He said if he didn’t need to budget for SASSA SRD he would not have to increase VAT. Who knows, perhaps the Supreme Court of Appeal will uphold the department’s appeal, paving the way for SRD to be dissolved once and for all. Therefore rendering the need for a VAT increase null and void. It’s understood that a decision about National Treasury’s VAT adjustments will be reached in Cabinet by May 2025. A crossroads indeed for not only SASSA grants but the entire South African fiscus.
SHOULD THE SUPREME COURT UPHOLD SASSA’S APPEAL?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1.
Subscribe to The South African website’s newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
