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

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

This ruling was made on Friday.

Postbank Files Dispute with Sassa

The master service agreement (MSA) detailing Postbank’s role in distributing social grants is scheduled to officially end on Tuesday.

This contract originated in 2018, when the Post Office—later succeeded by Postbank—was tasked with managing grant disbursements following the Constitutional Court’s directive to terminate the unlawful cash paymaster services (CPS) arrangement.

Read: Significant Changes in Sassa Planned for September

Sassa issued a notice in December 2023, announcing its intent to terminate the agreement with a six-month notice period.

In response, Postbank requested an 18-month transition period to wind down its services, which was approved.

Although 30 September 2025 was set as the final date for the agreement, Postbank raised a dispute and subsequently lodged an urgent interdict application to maintain the contract.

Sassa argued that the MSA had become obsolete since the majority of cash pay points were closed.

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

Interdict Application Considered ‘Inherently Urgent’

In her ruling delivered on Friday, the judge stated that Postbank formally informed Sassa of the dispute on 25 July.

She pointed out that Postbank asserted that despite ongoing discussions, Sassa publicly declared on 20 August that the MSA was set to be terminated the following week.

The judge noted that this announcement prompted Postbank to file the urgent application on 1 September, seeking to block the termination until the dispute resolution was settled.

Postbank further stated 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 contended that efforts were made to resolve the dispute before resorting to legal action, but due to the failure of those efforts, this application became necessary.

“Thus, it argues that this application is warranted as it pertains to the constitutional rights of the beneficiaries, making the matter inherently urgent,” the judge elaborated.

High Court Ruling

Meanwhile, Sassa maintained 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 approach the court.

“Moreover, [Sassa argued] that the applicant could obtain adequate redress during the scheduled hearing, as it has pending review proceedings before this court,” the judge commented.

The judge agreed with Sassa’s claims, noting that Postbank had not adequately justified the 18-month delay in its legal challenge.

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

Termination of MSA Will Not Impact Sassa Grants

Social Development Minister Sisisi Tolashe and Sassa officials 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 already led to the suspension of cash-payment points and over-the-counter grant services, culminating in the contract’s transfer to Postbank.

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

Officials indicated that these factors hindered the capacity to continue the contract.

Despite the MSA’s termination, Tolashe assured parliament that social grant payments to approximately three million Postbank clients would remain unaffected after the MSA concludes.

This article was originally published here.

Stay updated with Moneyweb’s comprehensive finance and business news on WhatsApp here.