As the South African Social Security Agency (SASSA) prepares to disburse the COVID-19 Social Relief of Distress (SRD) grant payments for September 2025, a legal battle is brewing with Postbank over the termination of their grant payment agreement. The payments are scheduled to be made between September 25 and 29, 2025.
Beneficiaries are urged to verify their banking details to ensure they are correct and up to date, in order to avoid any delays in receiving their payments. SASSA advises those who have been approved but are yet to receive their funds to check if their banking details are pending verification or if their account has a referred status. Updates and amendments can be made through the SRD website or the self-service portal. Once banking details are confirmed, payment will be processed in the next payment cycle. If the payment date has passed and funds have not been received, beneficiaries are encouraged to contact the SASSA call centre, as the issue could be related to anomalies with their bank account.
SASSA continues to emphasise the importance of keeping personal and banking information current to ensure timely access to support grants. This is particularly crucial as the agency navigates the transition away from its long-standing agreement with Postbank.
The fallout between Postbank and SASSA over the termination of their Master Service Agreement (MSA) is heading to court this week. SASSA announced earlier this month that it would terminate the MSA with Postbank at the end of September. The deal, first signed with the Post Office in 2018, was intended to enable cash withdrawals for grant recipients. However, the agency argued that it no longer served its purpose after most cash pay points were shut down, and after the Reserve Bank stopped Postbank from opening new accounts in 2019.
SASSA issued six months’ notice of termination in December 2023. Postbank, however, requested an 18-month notice period, which would have kept the agreement in place until September 2025. With the contract ending, SASSA says Postbank will be treated like “any other bank” that pays grants into beneficiaries’ accounts.
However, Postbank CEO Nikki Mbengashe has warned that this could harm millions of grant recipients. “Postbank is the only bank that provides full access to funds for grant beneficiaries. No other bank does that,” she told News24. “If we lose this agreement, Postbank may be forced to charge customers for withdrawals, something we’ve never done before.”
Mbengashe stressed that the MSA was designed to protect vulnerable clients: Postbank accounts don’t allow debit orders, shielding beneficiaries from deductions, and withdrawals at retailers are free. “The argument we are making is that the agreement between Postbank and Sassa was being structured to ensure that beneficiaries get full access to their funds. For instance, customers’ accounts with us do not allow debit orders. The agreement is there to cushion customers against [deductions],” she explained.
Postbank currently pays about 16% of all social grants, including the Covid-19 SRD grant — around R3 billion monthly. By comparison, Capitec handles about 40% of payments, African Bank 11%, TymeBank 9%, and the big banks such as FNB, Standard Bank and Absa the rest. Mbengashe said that it would also initiate a dispute with SASSA, with the hearing on the interdict to be heard this week.
“If we lose this MSA with Sassa, it means that Postbank may be forced to charge customers for their withdrawals now […] We believe in the origin and intent of this MSA to protect and cushion these customers,” Mbengashe added.
In response to questions from News24, SASSA said it would oppose the legal action initiated by Postbank. No further comment was provided. SASSA CEO Themba Motlou also said any legislation allowing for the subsidisation had been repealed. “Many beneficiaries have opted to use private banks to receive their grants. To continue subsidising one group while excluding the rest amounts to unfair discrimination. Our focus right now is ensuring that all beneficiaries are treated fairly and without bias, regardless of which bank they choose,” he stated.
SASSA previously said that subsidising bank charges for Postbank would be discriminatory, as other banks were forced to fend for themselves. The agency also said it would invest the resources previously allocated for cash withdrawals in digitising its business, including biometric verification for grant recipients. This move towards digitisation is aimed at improving efficiency and reducing the risk of fraud.
The impending court battle highlights the complexities of providing social grants to millions of South Africans, particularly the most vulnerable. As SASSA seeks to modernise its operations and ensure fair treatment for all beneficiaries, Postbank is fighting to maintain its role in protecting those who rely on social grants for their survival. The outcome of this legal dispute will have significant implications for the future of grant payments in South Africa. Beneficiaries are advised to stay informed about any developments and to ensure their banking details are accurate to avoid disruptions in receiving their much-needed support.
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