The Constitutional Court on Tuesday heard an urgent application by Postbank against the South African Social Security Agency (Sassa) regarding the termination of an agreement for the payment of social grants.
Postbank is seeking interim relief to stop Sassa from terminating the master services agreement (MSA), arguing that millions of grant beneficiaries could face banking charges and lose protection against unauthorised deductions if the agreement lapses.
The matter follows an earlier Gauteng High Court ruling that struck Postbank’s urgent application from the roll in September last year, finding that the state-owned bank had delayed too long before approaching the courts.
Questions raised over Sassa beneficiaries
During proceedings, concerns were raised about how beneficiaries who currently receive grants through Postbank would continue accessing their money if the agreement is terminated.
Addressing the court, Sassa’s lawyer Advocate Oupa Modisa said: “But now we know that there is about three million beneficiaries who receive their grants through Postbank. And we don’t know what is to happen to those.”
The court further heard concerns over whether beneficiaries would continue receiving their grants without deductions.
“It’s not good enough to just say they will receive their grants without deduction. How are they going to receive it?” the ConCourt asked.
The hearing focused heavily on beneficiaries who do not bank with commercial banks and who currently rely on Postbank’s system.
The court heard that these beneficiaries “will receive their grants through Postbank, through the very same regulation 23”.
The court further questioned what alternative payment methods Sassa intended to use if the MSA ends.
“What is that payment method that is determined by Sassa?” the court asked.
Sassa points to retail collection points
In response, Modisa said that Sassa beneficiaries would continue accessing their grants through existing retail collection partners.
The court was told that Sassa “should [allow] beneficiaries to go and collect money at Pick n Pay and all the other partners who were with Postbank”.
“They will continue getting the money there,” said Modisa, without explaining the banking system that the partners would have to use.
Millions of grants at stake
The case carries major implications for South Africa’s social assistance system, which supports millions of vulnerable beneficiaries every month.
Postbank has argued that terminating the agreement could expose beneficiaries to higher service charges and unlawful deductions, while Sassa insists alternative banking options remain available.
Judgment in the matter has been reserved.
