Sassa crisis: SA court averts welfare payments crisis
South Africa's constitutional court has averted a crisis on welfare payments to 17 million people by extending the contract of the processing company by one year.
The court had ruled in 2014 that Cash Paymaster Services (CPS) was awarded the contract unlawfully.
The state had failed to clarify how the payments would be handled after CPS's contract ends on 31 March.
One in three South Africans depend on these payments.
Minister Bathabile Dlamini, who is in charge of the state's Social Security Agency (Sassa), has been facing growing calls to resign over how she has handled the crisis.
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- Sassa crisis: South Africa's social security payments in chaos
The court ruled that Sacca and CPS are under a constitutional obligation to ensure that payments are processed at the beginning of April.
Analysis by Milton Nkosi, BBC News, Johannesburg
Welfare payments are a social safety net - one of the biggest in Africa - and among the proudest achievements in the 23 years the African National Congress (ANC) has governed South Africa, since the end of white minority rule.
Beneficiaries usually stand in long queues in townships and villages across the country to receive their grants.
Today's judgement requires Development Minister Bathobile Dlamini and Sassa to report their progress in finding a replacement for CPS.
This raises the question - who is in charge of cabinet if a minister has to report to a court?
Not only is this an indictment of the embarrassed and apologetic Ms Dlamini but also her boss President Jacob Zuma.
In figures: South Africa's social grants
- 17m people receive payments (rising to 18m by 2020)
- 10% increase in social grant spending announced in this year's budget
- Total bill comes to $11bn (£9bn) a year
- 10% of total government spending goes on social grants
- Three times what South Africa spends on defence