The South African Social Security Agency (Sassa) and Postbank are embroiled in a tense dispute over the cancellation of a long-standing agreement that made Postbank Sassa’s primary disburser of grants.
This comes after Postbank last week threatened Sassa with a lawyers’ letter over an outstanding R116m debt Sassa owes it, which the agency refuses to pay.
Sassa has cited concerns raised by the auditor-general (AG) over the legal standing of the agreement. It has also questioned the legality of a special dispensation given to Postbank to disburse Sassa grants, given that the same opportunity has not been granted to other major banks.
Unlike other banks that disburse social grants, Postbank does not charge grant recipients normal bank charges. Instead, it receives fees from Sassa for the services it offers. Sassa argues it does not make sense for it to continue paying Postbank about R20m a month in service fees when it does not offer the same facility to other major banks.
The master service agreement (MSA) between Sassa and Postbank was ceded to Postbank from the South African Post Office (Sapo) when the latter started having financial problems in 2023.
According to information before an interministerial committee on Sassa, the AG views the agreement between Sassa and Postbank as a deviation that should be flagged as irregular if the service is not put out to tender, thereby offering other banks a fair opportunity to bid to provide the service as well.
According to sources, Tolashe — who has faced media onslaught over the past few weeks — accused Gungubele of being one of the people who had sent “imidlwembe” (scoundrels) to target and defame her
The standoff between Sassa and Postbank has resulted in unpaid invoices of about R20m a month between October 2025 and March 2026, leading to Sassa owing Postbank a total of just under R120m in service fees.
Postbank last week threatened to take Sassa to court over the unpaid fees, despite it offering the services specified in the MSA to grant beneficiaries over that period.
“Sassa has failed to pay service fees due to Postbank since October 2025. As at the date of this letter, the outstanding balance stands at over R116m (inclusive of VAT) for the period October 2025 to March 2026,” reads a letter dated April 21 by Postbank CEO Nikki Mbengashe.
“Postbank has extended Sassa every reasonable opportunity to resolve this matter, and has pursued the following steps over a period of more than six months. Despite all this, Sassa has not made any meaningful commitment to settle the outstanding service fees.”
So tense is the dispute between the two government entities that social development minister Sisisi Tolashe is believed to have clashed with deputy minister of communications Mondli Gungubele at a cabinet committee meeting this week.
Tolashe allegedly told Gungubele she would not back down on the decision to cancel the MSA and refused to pay Postbank the disputed R116m.
According to sources, Tolashe — who has faced media onslaught over the past few weeks — accused Gungubele of being one of the people who had sent “imidlwembe” (scoundrels) to target and defame her.
“She told Mondli she knows he is one of those behind these stories about her because she is not budging on the agreement with Postbank,” said an insider.
Gungubele did not answer calls or respond to WhatsApp messages sent to him.
The elimination of the CPP and OTC services as of April 2024 will result in Postbank rendering traditional banking services like any other bank.
— Raphaahle Ramokgopa, Sassa acting CEO
The Sunday Times has seen more than 10 letters concerning the MSA that were exchanged between Sassa and Postbank, dating back to 2024. In the letters, Sassa insists it is well within its rights to terminate the agreement with Postbank and has adhered to the 18 months’ notice period stipulated in the contract.
But Postbank rejects this stance, telling the Sunday Times that, as far as it is concerned, Sassa is yet to formally inform it about the cancellation.
A letter from former Sassa acting CEO Raphaahle Ramokgopa to Mbengashe dated February 2024 states that Sassa had already informed Postbank of its intention to terminate the agreement some two months earlier.
“The letter sent to Postbank on December 20 2023 was our notice to Postbank that Sassa is terminating the MSA, and that is still the position,” said Ramokgopa.
Ramokgopa also told Mbengashe that Sassa would no longer pay Postbank over-the-counter (OTC) service fees for recipients who received their grants in cash at post offices, and that no beneficiaries would be using the cash paypoints (CPP) from April 2024.
“The elimination of the CPP and OTC services as of April 2024 will result in Postbank rendering traditional banking services like any other bank,” Ramokgopa said.
Sassa believes that without the OTC and CPP services, Postbank no longer offers special services that are not being offered by the commercial banks and that it therefore does not make sense to continue with the MSA.
This comes after millions of grant beneficiaries migrated from Postbank and the Post Office to use the facilities of other banks.
Mbengashe acknowledged in a response to the Sunday Times that Sassa beneficiaries could choose where their grants were paid. “Postbank is not the sole distributor of social grants in South Africa. Beneficiaries retain full choice over where and how they access their funds,” she said.
Postbank’s model ensures zero deductions from grants, full and immediate access to funds, and protection from banking fees that would otherwise erode value
— Nikki Mbengashe, Postbank CEO
“Postbank’s role is to ensure that those who depend on government support, particularly the most financially vulnerable, have access to a banking partner that protects their funds and enables full financial inclusion.
“Postbank’s model ensures zero deductions from grants, full and immediate access to funds, and protection from banking fees that would otherwise erode value.
“This is not simply a cost consideration — it is a financial inclusion policy choice. The government’s intent in enabling Postbank’s role is precisely to ensure that those who rely on social support are not disadvantaged by the cost structures of the financial system.”
According to briefing notes of the department of monitoring & evaluation, seen by the Sunday Times — which have been presented to the interministerial committee on Sassa, President Cyril Ramaphosa and the top ANC leadership — most grant beneficiaries prefer using ATMs to access their money.
“The national payment system [ATMs and point-of-sale retailers] remains the preferred method, with 98.5% of beneficiaries opting for this channel. [The] Sapo branch channel is the second [most] preferred,” the notes say.
“Of the 18,013,692 grants paid [excluding social relief of distress grants], only 123,675 (0.7%) use Sapo branches, and 141,978 (0.8%) use cashpoints. All [social relief of distress] recipients use the national payment system, [and] none use paypoints.”
The notes recommend the termination of the MSA, saying that “the partnership for all intents and purposes is now obsolete, as grants are paid by Sassa on time by paying grants into individual bank accounts”.
The notes go on to say: “The Post Office is closing branches, and thus its competitive advantage of reach [is no longer relevant]. The Post Office is in business rescue, and this could lead to Postbank having minimal physical presence pending the outcome of the business rescue.”
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