The Constitutional Court of South Africa has ordered Cash Paymaster Services (CPS) to repay more than R81 million to the South African Social Security Agency (Sassa), following a long-running legal battle over an unlawful social grants contract.
In a unanimous judgment handed down on Wednesday 8 April, the apex court ruled that CPS must refund an “adjusted certified profit” of R81 286,177 derived from the invalid contract for the nationwide payment of social grants.
Decade-long litigation over unlawful contract
The matter forms part of litigation dating back more than a decade to AllPay Consolidated Investment Holdings v CEO of Sassa (AllPay I), where the court declared Sassa’s award of the tender to CPS constitutionally invalid.
In subsequent proceedings, including AllPay II, the contract itself was also declared invalid. However, the court suspended that declaration to ensure the uninterrupted payment of social grants, allowing CPS to continue rendering services under court supervision.
Further oversight followed in cases such as Black Sash Trust v Minister of Social Development, with the court requiring CPS’s finances to be audited while leaving open whether profits should be repaid.
Court finds profits must be repaid
The latest ruling focused on determining whether CPS benefited financially from the unlawful contract and what remedy would be just and equitable.
The court found that while the original invalidity stemmed from procurement failures by Sassa, CPS had performed a public function of constitutional importance and was required to account for any gains.
It held that “any benefit derived from the unlawful contract had to be subject to public scrutiny” and that repayment of profits was justified.
Audited reports initially reflected a certified profit of about R252 million. However, the court applied several adjustments – including prior repayment orders, unsupported expenses and other financial considerations – ultimately reducing the amount to R81.2 million.
Liquidation complicates recovery
The court noted that CPS had since been placed in liquidation, creating a concursus creditorum process in which creditors’ claims must be pursued through insolvency proceedings.
Evidence before the court showed CPS had assets of about R50 million, with liabilities far exceeding that amount, meaning creditors may receive limited or no payout.
Despite this, the court ruled it was appropriate to finalise the matter and ordered CPS to repay the adjusted profit, granting Sassa leave to prove a concurrent claim.
Sassa welcomes judgment
Sassa has welcomed a landmark ruling by the Constitutional Court of South Africa ordering CPS to repay more than R81 million in profits linked to an invalid contract.
“The judgment delivered on Wednesday, 08 April 2026, affirms the rule of law and the supremacy of the apex court in South Africa,” said Sassa CEO Themba Matlou.
Matlou welcomed the outcome, describing it as a step towards resolving long-standing issues involving CPS.
“We are satisfied with the order handed down by the justices of the Constitutional Court. We believe this is a vital precursor to addressing other outstanding issues concerning CPS and finally close the chapter,” he said.
He added that the agency would comply fully with the court’s directives.
“Sassa will abide by all the directives issued by the Constitutional Court and put the matter to bed,” Matlou said.
