Court to Rule on Government's Authority to Use AI for Welfare Decisions in South Africa

South Africa’s Supreme Court of Appeal will now decide whether government agencies can lawfully delegate welfare eligibility decisions to automated systems, after the national government challenged a High Court ruling that struck down key components of its algorithmic vetting process for social assistance grants.

In January 2025, the High Court declared certain regulations governing the Social Relief of Distress grant unconstitutional and invalid. The court found that provisions authorizing automated bank verification and database checks violated the country’s constitutional protections for social security and equality. The government’s appeal elevates the case to the nation’s highest appellate court, where the legal and governance implications of algorithmic decision-making in public administration will face renewed scrutiny.

The dispute centers on how South Africa administers a grant program designed to reach the nation’s most economically vulnerable. The Social Relief of Distress grant, launched in May 2020, was created to provide temporary relief to approximately one-third of South Africans living in extreme poverty. The monthly payment of R370, roughly US$23, falls nearly 50 percent below the food poverty line. To qualify, applicants must have no income and receive no other government assistance.

When the program began, approximately 16 million people received the grant. New regulations passed in April 2022 shifted the grant’s administration from emergency protocols to permanent social assistance legislation and introduced a fully digital application process. The system relied on automated checks of applicants’ bank accounts and government databases to verify income eligibility. The result was a dramatic contraction in the beneficiary population. By 2022, the number of recipients had fallen to 5.6 million, allowing the government to reduce grant expenditures by billions of rands.

The Institute for Economic Justice, a South African think tank, initiated legal proceedings in July 2023 to challenge the automated system. The civil society movement #PayTheGrants joined the case. Both organizations argued that the government’s digitization of the grant process violated constitutional obligations to progressively realize social assistance rights, and that the regulations resulted in the irrational, arbitrary, and unfair denial of assistance to millions of people legally entitled to receive it.

The High Court’s January 2025 ruling validated those concerns on several governance grounds. The system treated algorithmic verdicts as definitive, leaving unsuccessful applicants with limited avenues for redress since the appeal process was also conducted entirely online. The automated checks themselves proved unreliable: the system classified any bank deposit as evidence of income, failing to distinguish between temporary loans or money received on behalf of others and actual regular earnings. Government databases the system relied on also contained errors and outdated information, likely causing the system to incorrectly identify unemployed people as employed.

Meanwhile, the implications extend well beyond this single grant program. The Department of Education, the Department of Home Affairs, and the South African Police Service are all at various stages of integrating automated digital processes into their operations. The accountability risks identified in the grant case could materialize across multiple government functions. Digital systems are often perceived as neutral, but they can reinforce existing disadvantages experienced by vulnerable populations. If the government’s appeal succeeds without further review by the Constitutional Court, it could establish legal precedent that prioritizes digital efficiency over constitutional safeguards.

The case raises a fundamental question about how government institutions should exercise power through technology. Automated digital decision-making systems use algorithmic reasoning or machine learning to reach conclusions based on available datasets, replacing determinations that would historically have been made by human officials. While such systems are not inherently unlawful, the High Court’s ruling suggests they require careful monitoring to ensure compliance with constitutional requirements.

The Supreme Court of Appeal’s decision will determine whether government agencies can continue relying on automated systems to make eligibility determinations affecting millions of people’s access to basic social assistance, or whether such decisions require human oversight and accountability mechanisms to satisfy constitutional protections. Whether other departments watching this case will voluntarily pause their own automation rollouts, or wait for the court to compel them, remains an open question.