The stalemate between the South African Social Security Agency (Sassa) and Postbank over the former’s stipulation of a three-month extension of a master service agreement (MSA), affecting about three million beneficiaries, has landed before the Constitutional Court after behind-the-scenes disputes overtook a Presidency-appointed inter-ministerial committee (IMC) process.
This follows the expiry of the three-month MSA extension at the end of December, while the IMC has yet to conclude its deliberations, leaving the fragile relationship to be resolved through submissions to the Constitutional Court.
Sassa spokesperson Paseka Letsatsi confirmed in an update that the matter is currently before the Constitutional Court.
“The Court ordered that the status quo be maintained pending further directions. The passing of 31 December 2025 does not alter Sassa’s legal position, but since the matter is before the Constitutional Court, we are bound by the Court’s order until the dispute is finally determined,” Letsatsi said.
Letsatsi maintained that it was Postbank that made an urgent application to the Constitutional Court on September 27, 2025 to prevent Sassa from terminating the MSA, and that the Court issued directions on December 29, 2025 setting out timelines for the parties’ submissions.
“The Constitutional Court has not yet set a hearing date. There is no arrangement, nor a need for one, as all social grant beneficiaries are paid directly by Sassa into their own bank accounts, which they have opened with banks of their choice, including Postbank. The status of the MSA has no bearing on the payment of social grants.
“Sassa has the sole responsibility to ensure that social grants are paid into beneficiaries’ accounts each month and will continue to do so,” Letsatsi said.
Postbank spokesperson Bongani Diako confirmed that the MSA remains in force beyond December 31, 2025.
“The Constitutional Court has ruled that the status quo of the contract must remain until the matter is heard, and no end date has been determined for the extension. Postbank continues to operate within this framework, guided by its mandate to protect social grant beneficiaries, ensure the stability of the payment system, and support financial inclusion,” Diako said.
Letsatsi dismissed questions on why the dispute required Constitutional Court intervention between government entities instead of being resolved through ministerial processes, which critics argue has led to wasted taxpayer funds.
“Postbank took the matter to the Constitutional Court, and Sassa has a constitutional right to defend itself before the Court,” Letsatsi said.
Diako disputed claims that Postbank’s litigation was vexatious or undermined the IMC process, saying the bank had escalated the matter only after formally requesting the establishment of the inter-ministerial committee to address the issue within government frameworks.
“Postbank has at all times acted in support of, and in deference to, the IMC process. Any court proceedings initiated by Postbank were limited in scope and purpose and aimed solely at securing interim relief to ensure stability and continuity, while allowing the IMC process the necessary space to deliberate on the matter.
“Postbank has never sought for the courts to determine the substantive issues that fall within the IMC’s mandate,” Diako said.
He denied that Postbank had continued the dispute in defiance of the IMC or attempted to bypass intergovernmental processes.
“Postbank remains committed to cooperative governance and to an IMC-led resolution of the matter. It is not possible to set a specific timeframe for the IMC to conclude its deliberations. However, it is safe to assume that all parties involved are committed to resolving the matter as swiftly as possible, while ensuring the process is fair and does not prejudice any party or compromise the interests of social grant beneficiaries,” Diako said.
Postbank, which is paid a fixed fee by Sassa under a clawback arrangement, insists it is acting not only in its own interest but also to protect millions of social grant recipients who could be forced to pay commercial banking fees for services such as balance enquiries, mini-statements and card replacements should the contract end.
Diako said that Postbank had not continued the dispute in defiance of the IMC or that it had sought to bypass intergovernmental processes. “PostBank is acting in the best interest of the most vulnerable beneficiaries. Without the MSA, beneficiaries will lose the government offered option of receiving 100% of their grant without incurring fees,” Diako said.
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