By Lehlohonolo Lehana.
The High Court in Pretoria strikes off the roll Postbank application to stop the termination of the Master Service Agreement (MSA) to disburse the social grants.
SASSA entered into a contractual relationship with the South African Post Office (SAPO) Master Service Agreement (MSA) in 2018 after the Constitutional Court ordered the government to terminate an unlawful Cash Paymaster Service (CPS) contract.
The court directed SASSA to assume full responsibility for social grant distribution, but the agency lacked the necessary infrastructure and expertise at the time.
This led to a partnership with the Post Office to ensure grant payments are fulfilled while SASSA developed capacity.
However, the SAPO’s liquidation and business rescue proceedings in 2023 necessitated the closure of costly cash pay points and over-the-counter services, and the contract was ceded to Postbank.
Therefore, this partnership evolved into the Postbank arrangement under a Master Service Agreement (MSA).
This agreement will be terminated at the end of September 2025, with the Department of Social Development (DSD) explaining that the resources that were allocated to the Postbank will now be used to roll out its digitisation programme.
Delivering her ruling on Friday, the judge noted that Postbank declared a formal notice of dispute against Sassa on 25 July.
She highlighted that Postbank argued that, despite ongoing engagements between the parties, Sassa publicly announced on 20 August that the MSA would proceed to be terminated next week.
According to the judge, Postbank told the court the announcement prompted it to file the urgent application on 1 September, seeking interim relief to block the termination until the dispute resolution process had run its course.
Postbank also told the court it had given Sassa until 8 September to oppose the application, with the matter scheduled for hearing on 23 September.
“On behalf of the applicants, argued that it attempted to resolve its dispute before initiating legal proceedings, but as a result of the failure of that step so taken, it decided to institute these proceedings.
“Therefore, the bringing of this application, so it asserts, is justified as the matter implicates constitutional rights of the beneficiaries and therefore the matter is inherently urgent, “the judge said.
Meanwhile, Sassa contended Postbank knew as far back as March 2024 that the MSA would end on 30 September and had, therefore, created its own urgency by waiting until then to approach the court.
The judge agreed with Sassa’s submissions, stating that Postbank had not adequately explained the 18-month delay in launching its court challenge.
“Consequently, the application is struck from the urgent roll with costs, “she ruled.
Despite the termination, DSD assured parliament that social grant payments to roughly three million Postbank clients would not be interrupted after the MSA ends.