Court Denies Postbank’s Bid to Halt Termination of Sassa Contract

The Gauteng High Court in Pretoria has dismissed Postbank’s urgent application, which sought to prevent the South African Social Security Agency (Sassa) from terminating their service agreement.

This ruling was issued on Friday.

Postbank Files Dispute Against Sassa

The master service agreement (MSA) defining Postbank’s role in social grant distribution is set to officially end on Tuesday.

This agreement originated in 2018, when the Post Office—later succeeded by Postbank—was entrusted with grant disbursements following a Constitutional Court (ConCourt) ruling that required the government to terminate the unlawful cash paymaster services (CPS) contract.

Read: Significant Changes in Sassa Planned for September

In December 2023, Sassa issued a notice intending to terminate the contract with a six-month notice period.

Postbank, however, requested an 18-month transition period to cease its services, which was approved.

While 30 September 2025 was established as the final date for the agreement, Postbank disputed this and subsequently filed an urgent interdict application to maintain the contract.

Sassa argued that the MSA had lost its relevance since most cash pay points had been closed.

Conversely, Postbank contended that terminating the contract would adversely affect grant recipients, as it would have to implement withdrawal fees.

Urgency of the Interdict Application Acknowledged

In her ruling on Friday, the judge noted that Postbank had formally notified Sassa of the dispute on 25 July.

She pointed out that Postbank claimed that despite ongoing negotiations, Sassa publicly announced on 20 August that the MSA would be terminated the following week.

The judge indicated that Postbank informed the court that this announcement led to the urgent application filed on 1 September, aiming to halt the termination until the dispute resolution process was finalized.

Postbank further explained that it had given Sassa until 8 September to respond to the application, with a hearing set for 23 September.

“On behalf of the applicants, it was argued that efforts were made to resolve the dispute prior to taking legal action, but due to the failure of those attempts, this application became necessary.

“Therefore, it asserts that this application is warranted as it concerns the constitutional rights of the beneficiaries, rendering the matter inherently urgent,” the judge noted.

Judgment from the High Court

Meanwhile, Sassa asserted that Postbank had been aware since March 2024 that the MSA would conclude on 30 September, thus creating its own urgency by waiting until the deadline to bring the matter before the court.

“Additionally, [Sassa stated] the applicant could obtain sufficient redress during the scheduled hearing, as it has ongoing review proceedings in this court,” she remarked.

The judge agreed with Sassa’s arguments, stating that Postbank had not convincingly justified the 18-month delay in its legal challenge.

“Consequently, the application has been removed from the urgent roll, with costs,” she ruled.

Termination of MSA Will Not Affect Sassa Grants

Social Development Minister Sisisi Tolashe and Sassa representatives briefed parliament on the conclusion of the MSA in late August.

The Social Development portfolio committee was informed that the Post Office’s liquidation in 2023 had led to the closure of cash-payment points and over-the-counter grant services, which resulted in the contract being transferred to Postbank.

Members of parliament also learned that the South African Reserve Bank (Sarb), in 2019, had restricted Postbank from opening new accounts until it addressed the replacement of Sassa’s gold cards.

Officials indicated that these factors contributed to the inability to continue the contract.

Despite the termination of the MSA, Tolashe assured parliament that social grant payments to approximately three million Postbank clients would remain unaffected following the conclusion of the MSA.

This article was originally published here.

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