The South African Social Security Agency (Sassa) has given an offer to the South African Post Office (SAPO) to take over the payment of social grants.
The offer follows talks between the two entities in what has been described as a "closed procurement process", the department of social development announced late on Thursday.
"Sassa has been hard at work under the leadership of the department of social development and the minister of social development in trying to find the best solution for the payment of social grants," the department said in a statement.
The announcement follows the agency missing a key parliamentary briefing to update MPs about its plans to terminate the relationship with CPS.
"The minister indicated that SAPO as a state entity could play a role and participate as merchants where they meet Sassa's mandatory radius.
"This can assist SAPO to revive some of its closed outlets especially in the rural areas and townships and is in line with the department's commitment in promoting Government to Government partnership as outlined in the report to the Constitutional Court," the department said.
Social Development Minister Bathabile Dlamini promised that a social grants distribution agreement would be signed by September 20, yet declined to appear before Parliament to explain why the deadline was missed.
The deal to shift the payment of the 17 million social grant beneficiaries was motivated after the Constitutional Court found the agreement between Sassa and CPS invalid.
Sassa however, failed to appoint an alternative service provider, forcing the court to grant an extension of the invalid agreement.