NO TENDER, NO SERVICE PROVIDER REQUIRED AS SASSA-POSTBANK AGREEMENT COMES TO AN END

By Cuma Pantshwa.

• With the South African Social Security Agency’s agreement with the Postbank coming to an end, SASSA has offered assurance that beneficiaries of South Africa’s social grants will not be affected.
• SASSA explained to the parliamentary portfolio committee on social development that the termination of the agreement was an administrative matter between SASSA and Postbank.
• The issue will not affect the beneficiaries and payments made by Postbank, and the other 21 banks that deal with social benefits will continue as usual.

The South African Social Security Agency (SASSA) has explained to the parliamentary portfolio committee on social development that there will be no need for another service provider once the contract with Postbank comes to an end.

The committee was informed that the agreement between SASSA and the Postbank regarding the processing of social grant payments will expire at the end of September 2025 during a comprehensive briefing from the Minister of Social Development, Sisisi Tolashe, and SASSA.

SASSA assures continuity for beneficiaries

SASSA acting CEO, Brenton van Vrede, assured members of the committee that the termination of the agreement with Postbank would not affect the three million beneficiaries who receive their grants from Postbank.

“These clients will continue to receive their grants in their Postbank accounts, without interruption.

“The termination of the Master Service Agreement is an administrative matter between SASSA and Postbank, and does not affect client access,” Van Vrede explained.

While three million beneficiaries currently bank with Postbank, payments to the other 16 million beneficiaries are made through 21 other banks operating in South Africa.

Historical background

SASSA’s acting CEO reminded the committee that grant payments have previously undergone transitions.
•⁠ ⁠Until September 2018, grants were paid through Cash Paymaster Services, before that contract ended following the Constitutional Court’s Black Sash Trust judgment.
•⁠ ⁠The South African Post Office, and its subsidiary Postbank, stepped in, with Treasury approving a deviation from open tender to ensure continuity of payments.
•⁠ ⁠The current agreement with Postbank has always included an exit clause, permitting either party to terminate with 18 months’ written notice.

Committee raises concerns on public awareness

The meeting took place without the Postbank and the absence of the South African Reserve Bank, prompting questions from the MPs.

One member stressed that all parties should be present to ensure “full representation and accountability”, adding: “I’m raising this because, due to the gravity and seriousness of the nature, and I’m sure Reserve Bank, if they were here today, they would help a great deal.”

Committee chairperson Bridget Masango clarified that Parliament’s oversight role was constitutionally directed at the Department of Social Development and SASSA.

“We hold the department to account, not Postbank. That is why Postbank was not invited,” she explained.

At the start of the meeting, the chairperson tendered an apology from the South African Reserve Bank for not being present; the organisation had mistakenly assumed the meeting would be held virtually.

While SASSA reassured the committee no beneficiary would lose access to their grants, members warned that confusion could arise if SASSA did not invest in strong public awareness campaigns.