Postbank worried about 3-million social grant beneficiaries after Sassa ends deal

While it will respect a high court ruling throwing out its urgent application seeking to force Sassa to uphold a service agreement, it is concerned about the impact on 3-million social grant beneficiaries, the embattled Postbank says.

Postbank filed the urgent application to prevent beneficiaries from “enduring financial hardships that would emanate from the termination of the MSA, therefore seeking relief that will ensure that their constitutional rights are protected”.

However, a Gauteng High Court judge struck the application from the court’s roll.

Acting South African Social Security Agency CEO Brenton van Vrede said on Friday the agency paid grants directly into beneficiaries’ bank accounts and the process did not require a formal service agreement.

“The Postbank account is a formal bank account regulated within the banking sector and we’ll continue to pay social grant beneficiaries their grants into the Postbank account, and that doesn’t need the service agreement to do that,” said Van Vrede.

In response, Postbank said it was “concerned” the judgement offered inadequate reprieve to millions of social grant beneficiaries whose livelihoods and rights would be affected by the termination of the MSA, which was the crux of the relief sought through the application.

It noted the application was struck off the roll as the judge did not consider it urgent, saying it respected the ruling, as Postbank always upholds the law.

“However, Postbank maintains that the protection of beneficiaries remains a critical issue that was not fully addressed. In line with Postbank’s mandate as a state-owned bank – to serve, protect and advance the interests of the most vulnerable in our society – we believe that this obligation has not yet been given due consideration.

“Without urgent intervention to safeguard beneficiaries’ rights before September 30, Postbank is of the view that the constitutional rights of millions of beneficiaries are at risk being infringed upon.”

The state-owned bank reaffirmed its commitment to its grant payments mandate, saying it would “remain dedicated to the welfare of all our social grant beneficiaries”.

“We assure the public and all social grant beneficiaries paid with our Black Cards and Sassa Gold Cards that no beneficiary will go unpaid. All payments to beneficiaries will continue timeously and still be accessible through the retailers and ATMs for all the upcoming grant payment cycles.”

The service agreement was originally concluded after a Constitutional Court ruling in a matter brought by the Black Sash Trust against the minister that invalidated the contract with Cash Paymaster Services (CPS).

The ruling directed Sassa to assume full responsibility for grant distribution. 

The SA Post Office was subsequently permitted by National Treasury to take over the payment function, using Postbank accounts and physical pay points. The pay points were discontinued in November 2023 after the Sapo’s liquidation, rendering the service agreement functionally obsolete.

Postbank serves about 3.04-million beneficiaries, including 1.96-million grant recipients and 1.08-million social relief of distress grant beneficiaries, with monthly disbursements totalling R3bn.

TimesLIVE