Sassa-Postbank Stalemate Heads to the Presidency as Tension Over Social Grant Agreement Deepens

The ongoing standoff between the South African Social Security Agency (Sassa) and Postbank over the three-month extension of the Master Service Agreement (MSA) has now been referred to the presidency, as tensions continue to escalate between the two state entities. The dispute, which affects around three million social grant beneficiaries, has drawn in the Department of Planning, Monitoring and Evaluation (DPME) and may soon require direct intervention from President Cyril Ramaphosa.

The DPME, cited by both Sassa and Postbank as the mandated mediator, has confirmed that the matter has been referred to the presidency for further direction. This comes amid growing uncertainty about the future of the MSA, which governs how Postbank processes and distributes social grants on behalf of Sassa.

Presidency Expected to Step In

DPME spokesperson Litha Mpondwana said the department’s role has been limited to facilitating intergovernmental relations to ensure grants reach beneficiaries without interruption.

However, he referred all further responses to the presidency, noting that the establishment of inter-ministerial committees (IMCs) falls under the president’s prerogative.

The referral suggests that the mediation process between Sassa and Postbank has not yet formally begun. Both institutions have accused each other of acting unilaterally.

Sassa Stands Firm on Three-Month Extension

Andile Tshona, Sassa’s Senior Manager for Media Relations, said the agency is standing firm on its decision to extend the MSA termination notice by three months.

Tshona said, “Sassa had given a termination notice of 18 months, set to come into effect on 30 September 2025. The three-month extension allows time for the executive authority to deliberate on the issues.”

Sassa maintains that the extension ensures social grant payments will continue as normal and that beneficiaries will not experience interruptions.

Postbank Pushes Back

Postbank disagreed with Sassa’s decision, saying it undermines a presidential directive calling for the formation of an Inter-Ministerial Committee (IMC) to resolve the dispute.

Postbank insists that the existing agreement should remain in force until the IMC is established and completes its review.

Postbank CEO Nikki Mbegashe said the MSA was originally created through a cabinet process, and only a similar high-level mechanism could decide its future.

She argued that issuing and timing the termination notice “undermines the fairness and integrity of the dispute resolution process.”

Court Ruling Adds Complexity

The North Gauteng High Court recently dismissed Postbank’s urgent bid to stop Sassa from terminating the MSA, citing a lack of urgency.

Sassa first issued a six-month termination notice in December 2023, later extended to 18 months, moving the termination date to September 2025. The latest three-month extension has reignited tensions and drawn in the presidency.

Impact on Beneficiaries

Both institutions say social grant beneficiaries will not be affected. However, Postbank warns that if the agreement ends, recipients might have to pay commercial banking fees for basic services and face disruptions in rural areas.

A Matter of Governance and Coordination

The standoff highlights ongoing challenges in inter-agency coordination. While both Sassa and Postbank are government entities, they operate under different mandates, leading to overlaps and disputes.

The DPME’s involvement was meant to bring a neutral perspective, but with the issue now referred to the presidency, only executive intervention may resolve it.

Awaiting the Presidency’s Response

It remains unclear when the IMC will be established or what its composition will be. The presidency has not released a statement.

Observers say Ramaphosa’s intervention will be key to restoring order. The outcome could set an important precedent for government service delivery.

For now, Sassa is defending its right to manage contractual timelines, while Postbank demands a fair process. The final decision now rests with the presidency, which must protect the livelihoods of South Africa’s most vulnerable citizens.