Grant payment continuity in the spotlight as SAPO-SASSA agreement ends

The Portfolio Committee on Social Development has officially acknowledged the termination of the Master Service Agreement (MSA) between the South African Post Office (SAPO) and the South African Social Security Agency (SASSA), which will conclude at the end of September 2025.

During a recent briefing chaired by Minister of Social Development, Sisisi Tolashe, the committee learned that the ending of this contract would lead to significant shifts in the handling of grant payments for millions of South Africans.

SASSA has informed the committee that the funding previously allocated for Postbank to establish infrastructure for mobile cash withdrawal services will now be redirected towards the digitisation of the agency's business processes.

Chief among these developments is a crucial biometric verification system that will be rolled out for all new grant applications starting on 1 September 2025.

The MSA was initially established in 2018, following a Constitutional Court ruling that mandated the government to terminate the unlawful Cash Paymaster Service (CPS) contract.

The situation evolved further when the liquidation of SAPO in 2023 spurred the closure of costly cash pay points and over-the-counter services, prompting the MSA to be assigned to Postbank instead.

However, the South African Reserve Bank's decision in 2019 to restrict Postbank from creating new bank accounts until the SASSA gold cards could be properly replaced undermined the original intent of the MSA.

With the withdrawal of these services, the committee concluded that the MSA no longer effectively met the needs it was designed to address.

Amid these developments, Minister Tolashe reassured committee members that the termination of the MSA would not disrupt grant payments for beneficiaries.

She clarified that payments will continue seamlessly through all banks operating in South Africa, including Postbank, ensuring that the process remains stable for the millions of individuals reliant on these funds.

Expressing the committee's commitment to safeguarding grant payments, Chairperson Ms Bridget Masango stated, “The main interest of the committee is to ensure that there is no interruption of the payment of grants to the 3 million beneficiaries who bank with Postbank, post the termination of the MSA.”

In a proactive response to these changes, the committee plans to conduct an oversight visit to rural communities to evaluate the impact of the closure of cash pay points on grant beneficiaries, thereby fulfilling its mandate to ensure transparency and accountability in social service delivery.

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