The conundrum of SASSA and the VAT freeze in 2025 is almost certainly something no one in government has an answer for right now. However, it’s what happens when fiscal matters like the 2025 Budget straddle political, social and legal issues. And it’s a question we raised back in March 2025, too …
If you’ll recall, following the unprecedented Budget Speech postponement in February, Finance Minister Enoch Godongwana’s had a hard time finding sufficient money for social welfare. Indeed, South African Social Security Agency grants are our second-highest budget expenditure, after debt servicing.
Now, it appears SASSA and the VAT freeze are inexorably linked at the hip. Because, in light of the minister’s proposed VAT increase to pay for a ever-ballooning social wage, he decided to deliver above-inflation social grant increases to ease the burden. These came into effect this month, April 2025. But the question is whether SASSA can by law reverse them after one month?
SASSA AND THE VAT FREEZE
Moreover, central to Godongwana’s strategy was a 5.9% increase to ‘core’ SASSA Old-Age and Disability grants. This reflected as R2 310 for over 60s and R2330 for over 75s. However, SASSA Child Support would only make do with a lower 5.6% hike, paying out R560 from April 2025 onwards.
Nevertheless, unlike VAT increases that never actually materialised, because they were only due on 1 May 2025, SASSA grants have already been paid. The DA and EFF were always opposed to the Finance Minister and plans to hike VAT to pay for it. And they’ve taken matters to the High Court with great success.
Specifically, DA leader John Steenhuisen said he would not support a budget that puts more pressure on needy citizens. The ANC then sought support outside of the GNU to get the Budget passed in the National Assembly. So, where does that leave SASSA and the VAT freeze?
WHAT’S NEXT FOR GRANTS?
Interestingly, in previous examples of budgets being overturned in court, it was often because governments didn’t do enough for social welfare. Examples from Hungary, Columbia and India forced a re-appropriation of funds for the needy. However, South Africa has arguably gone the other way. It’s already started spending money on SASSA grants it can no longer account for.
However, at this stage, it’s too early to tell if SASSA and the VAT freeze will lead to reversed grant increases in 2025. Our instinct on the matter is that it’s too late to reverse April 2025’s grant increases. And any gain in government coffers from such action will be offset by tremendous bad will from the millions of SASSA beneficiaries.
Having said that, we’ve had plenty of firsts already in 2025. And until we are reassured for certain from SASSA official, this could leave beneficiaries with plenty of anxiety. Let’s just hope it’s not the country’s elderly and needy who are left in the lurch due to, once again, poor policies from the ANC.
CAN YOU IMAGINE SASSA GRANTS WILL BE REVERSED?
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