The Constitutional Court is on Tuesday expected to hear an application by the South African Social Security Agency (Sassa) to extend the Cash Paymaster Services (CPS) contract by six months.
Roughly 2.5-million beneficiaries will not get their grant payments if the contract with CPS is not extended, the agency argued in court papers.
This contract expires on March 31, 2018.
Sassa's concern is for the 29 percent of grant beneficiaries, most of whom live in rural areas, who depend on cash deliveries of their social grants – a service that is currently provided by CPS.
Last Wednesday, acting CEO Pearl Bhengu and new Minister of Social Development Susan Shabangu appeared in Parliament to update MPs on Sassa and the department's state of readiness to migrate the nation's social grants scheme from CPS by April 1.
Sassa has less than a month in which to fully migrate core components of the grants scheme from CPS, as ordered by the Constitutional Court, to the South African Post Office (SAPO), as agreed in December 2017.
Bhengu told Parliament that there had been very important developments since Sassa requested an extension of the CPS contract in February, including the setting of a court date: March 6.
"We are waiting to hear if the court will grant us that six-month phase-in, phase-out of CPS. The court will say yes or no," she said at the time.
Bhengu assured MPs that all payments starting from April would come from Sassa's corporate account, not CPS's.
This includes payments to the 5.7 million people who had Grindrod Bank cards.
"On April 1, everyone will be paid, whether CPS is here or not. The only problem may be at the [cash] pay points.
She added that there was a contingency plan in place, should the court say no to the six-month extension.
CPS wins right to participate in future tenders
Bhengu said beneficiaries who use cash paypoints, roughly 2.9 million people according to the interministerial committee, had already been categorised.
SAPO chief operating officer Lindiwe Kwele previously told Parliament that, whatever the court's decision, in principle, SAPO would still be in charge of the scheme come April 1.
The "phase-in, phase-out" period was merely to ensure a smooth transition, she said.
The Constitutional Court ruled last month that CPS may participate in future Sassa tender processes, as allowed for by the law.
CPS had argued it was not consistent to bar the company from bidding for all future tenders as a result of its current contract being declared invalid.
The March 2017 judgment "did not render CPS ineligible to participate in Sassa's tender process", the court's notice read.
Meanwhile, the Centre for Applied Legal Studies (CALS), on behalf of the Black Sash Trust, said it would be in court on Tuesday to ensure that the social grants system and its beneficiaries are protected when the unlawful contract between Sassa and CPS comes to an end later this month.
It said it was unable to oppose the application, given the "significant risk posed to grant beneficiaries".
Attorney at CALS Wandisa Phama said the agency had known since December 18, 2017, that it would require a CPS cash payment extension.
"It delayed for nearly eight weeks before bringing this application. The conduct of Sassa is unexplained. The silence of the minister of social development is deafening."