More trouble is brewing on the social grant front as lawyers acting on behalf of grant recipients highlight a string of irregularities in the administration of the EasyPay service launched by Net1/Cash Paymaster Services last year. Within just a few months of its launch, EasyPay has signed up almost a million clients, mainly rural social grant recipients.Critics of EasyPay said it had been designed to stay one step ahead of regulations aimed at protecting the interests of grant beneficiaries - and by a party that has access to the details of 21 million grant beneficiaries.This week, M inister of Social Development Bathabile Dlamini called for comments on the latest amendments to regulations under the Social Assistance Act, aimed at clamping down on deductions from social grants.The changes specify that only strictly defined funeral insurance deductions will be permissible from the South African Social Security (Sassa) bank accounts set up to receive social grant payments.Because it is not a Sassa bank account, EasyPay will not be subject to this restriction.Net1 CEO Serge Belamant said the EasyPay account enabled the "poorest of the poor" to get access to loans (through Net1's MoneyLine Financial Services) and that EasyPay had been successful because it provides the services "citizens really want and need rather than simply offering what banks want to provide". An EasyPay account also allows for prepayment of a range of services including airtime and electricity.The Grahamstown office of the Legal Resources Centre (LRC) said indications from its clients suggested EasyPay accounts were being opened for the express purpose of getting a loan from Moneyline Financial Services, a subsidiary of Net1."In order to obtain a loan, social grant beneficiaries are required to apply for an EasyPay account and authorise the transfer of their full social grant to this account. The beneficiaries can then access their social grants only by way of the EasyPay card, rendering the Sassa card defunct," the LRC wrote in a letter to Belamant and to Virginia Petersen, CEO of Sassa. Sassa did not reply to requests for comment.The LRC said many of its clients had unwittingly authorised Cash Paymaster Services to transfer their entire social grant to an EasyPay account.story_article_left1Of particular concern to the LRC is that grant beneficiaries struggle to get information about their Sassa and EasyPay accounts. "Many grant beneficiaries have multiple deductions from their grants. They need to have access to a statement which will explain in whose favour the deductions are made before it can be queried with the service provider," the LRC said.Previously the LRC, which has a history of successfully challenging many of these deductions on behalf of clients, was able to contact Cash Paymaster Services directly and obtain the information - but the company has refused to divulge this since November.Belamant said Net1's lawyers had advised, in light of proposed new privacy laws (the Protection of Personal Information Act), that it must ensure the LRC has a right to the information. The LRC said it was still waiting for details of a process in this regard that would be acceptable to Net1. Powers of attorney furnished by clients to the LRC have not satisfied Net1.Other critics said the potential profits to be made by EasyPay through the sale of various services to grant recipients explain why Belamant was last year happy to walk away from a new contract for the distribution of social grants.In its just-released results for the three months to end December, Net1 referred to the significant growth in its lending book and the strong performance from EasyPay.In May last year, after announcing Cash Paymaster Services ' withdrawal from the tender process, Belamant told investors he was intent on developing the largest rural banking infrastructure in South Africa, free from the restraints imposed by Sassa . He said Cash Paymaster Services would prefer two to three million unrestricted EasyPay accounts to 10 million Sassa accounts...