The Constitutional Court has reserved judgement in an application by the South African Social Security Agency (Sassa) to extend Cash Paymaster Services' (CPS) contract by another six months.

Sassa argued at length on Tuesday on why the court should allow for an extension of the unlawful contract.

If the contract with CPS is not extended, roughly 2.8-million beneficiaries will not get their grant payments. The contract expires on March 31.

However, the South African Post Office (Sapo) told the full bench of justices on Tuesday that it was ready to take over grants, but needed assistance from CPS on a diminishing scale.

"Sapo is prepared and ready to start dealing with the entire electronic payments," advocate Aslam Bava argued.

Asked about the Post Office's state of readiness, Bava said about 250 000 new Sassa cards would be issued by March 16, and then again by April, and thereafter 250 000 cards would be issued every day.

Advocate for Freedom Under Law, Gilbert Marcus, said that they did not oppose the relief sought, however, CPS should not benefit from the unlawful contract.

Marcus said it was imperative that the court make it clear that, once audited statements have been accepted, CPS must pay back profits they have made from the unlawful contract with the agency.

Advocate Les Morison, representing CPS, said his client had never been found guilty of any corruption.

Earlier, the court heard that Sassa did not have alternative plans if the court refuses to extend the CPS contract by another six months.

"There will be chaos," Nazeer Cassim, the advocate for Sassa, told the justices.

Justice Johan Froneman responded: "So you come to us, basically giving this court no choice."

Cassim conceded that there were no plans in place.

Chief Justice Mogoeng Mogoeng questioned why Sassa only approached the court in February and not in December 2017, when they were aware that an extension would be needed.

Cassim responded that Sassa had "genuinely believed they had their act together". He added that the agency also needed the input of the National Treasury.