Cash Paymaster Service (CPS), performing as an organ of the state, will continue to pay social grants for the next 12 months.
Social Development Minister Bathabile Dlamini was ordered to provide reasons why she should not be held personally liable for the cost of all litigants in the case.
Zuma said he has expanded his IMC to make sure that social grants are monitored and the Constitutional Court's order on the matter is implemented.
President Jacob Zuma's announcement at the weekend that he will lead an interministerial committee (IMC) on social security has reportedly raised fears among officials at the South African Social Security Agency (Sassa) that finding a long-term solution to the payment of social grants to some 11 million citizens next year may be jeopardised.
The court confirmed that social grants were a right and said it was forced to assume wide reach to safeguard it because the government had failed in this duty.
But the president said the court has now given clear instructions on the extension of the grants distribution and the parameters within which government must operate.
"On behalf of government, I would like to welcome the pronouncement by the Constitutional Court on the distribution of social grants".
The CPS had asked the Court to allow it to enter into a new and "lawful" contract with the SASSA after the existing contract expires on March 31.
The court ordered that the terms and conditions of the contract shall contain adequate safeguards to ensure that personal data of grant beneficiaries remains private and may not be used for any objective other than the payment of grants.
"Government deeply regrets the undue anxiety that resulted from the uncertainty over grant distribution", it said in the statement.
"The labour movement has been calling for comprehensive reforms of our social security system over a period of time".
This is why the DA has already requested Parliament to act and called for an ad hoc committee to be established to investigate the role of the Minister in the creation of this crisis, the continuation of grant payments and the way forward in order to avoid any further crises to this vital lifeline.
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