Faulty Algorithm Cuts Off Millions From Legal Poverty Aid in South Africa

Millions of South Africans lost access to poverty relief they were legally entitled to receive, not through deliberate policy exclusion, but through a flawed automated system that a court has since declared unconstitutional.

The case centres on the Social Relief of Distress grant, a programme designed to provide temporary financial support to the country’s poorest residents. When the South African Social Security Agency launched the grant in May 2020, it aimed to reach nearly one-third of South Africans living in extreme poverty. The monthly payment of R370, though far below the food poverty line, was intended for people with no income and no access to other government assistance. The government estimated the eligible population at approximately 18.3 million people.

Initially, the grant reached 16 million beneficiaries. Then, in April 2022, new regulations fundamentally changed how applications were processed. The system shifted to online-only applications and began treating decisions made by automated processes as final verdicts. Income was verified through bank account checks and government database records, making it the country’s first large-scale fully digital social grant programme.

The consequences were immediate and severe. By 2022, the number of people receiving the grant had plummeted to 5.6 million. Millions who should have qualified were denied assistance. The government simultaneously reduced the grant budget by billions of rands.

What changed for applicants was not just the outcome but the process itself. Rejections arrived without meaningful explanation. Appeals were difficult to pursue because the entire system was online-only, effectively locking out people without reliable internet access or digital literacy. The process had become opaque in ways that ordinary citizens could not navigate.

In July 2023, the Institute for Economic Justice, a South African think tank, filed a court challenge alongside #PayTheGrants, a civil society movement advocating for economic justice. They argued that the automated process violated constitutional protections for social assistance and resulted in the arbitrary and unfair denial of aid to millions of people legally entitled to receive it. The constitution requires that socioeconomic rights be progressively realised over time, meaning the government cannot simply restrict access to benefits that people are entitled to claim.

The High Court agreed in January 2025. It declared key regulations governing the automated system unconstitutional and invalid, specifically those authorising automated bank verification and database checks. The government has appealed the decision, and the matter is scheduled for hearing in the Supreme Court of Appeal.

The ruling exposes fundamental problems with how automated systems operate in public administration. One criterion for determining whether applicants had income was whether they had received any bank deposits. Yet deposits could have been temporary loans or money received on behalf of someone else, neither of which constitutes regular income. The databases the system relied on were also error-ridden and outdated, likely flagging unemployed people as employed and therefore ineligible.

Three significant concerns have surfaced through this case. The automated system directly violated the constitutionally protected rights of millions of South Africans, including their right to equality, their right to social security, and the state’s obligation to uphold the Bill of Rights. The case also demonstrates that automated decision-making is not inherently unlawful, but it must be carefully monitored to ensure constitutional compliance. And it reveals a basic truth about algorithmic systems: they are only as reliable as the data they depend on, and flawed data produces flawed outcomes that harm the very people the system was meant to serve.

The implications reach well beyond this single grant programme. The Department of Education, the Department of Home Affairs, and the South African Police Service are all integrating automated digital processes into their operations. Without careful scrutiny, these systems risk excluding citizens from essential services they have a right to access. The concern is not confined to government, either. Private sector companies using AI-enabled systems, including surveillance cameras, operate with considerably less public oversight and accountability.

If the government’s appeal succeeds, it could establish legal precedent that places digital efficiency above constitutional safeguards, shaping how public services treat citizens across the country for years to come.