Net1 may still deduct monies from social grants - court

The Pretoria High Court has ruled that Net1 and its subsidiaries may make deductions from social grant beneficiaries' accounts.

Net1 owns Cash Paymaster Services (CPS)‚ the private company that has controversially won the tender to distribute social grants.

The court on Tuesday ruled that regulations 21 and 26A Under the Social Assistance Act 13 of 2004‚ which was promulgated in May 2016‚ "do not operate to restrict beneficiaries in the operation of their bank accounts".

The SA Social Security Agency (Sassa) and the department of social development had in the new regulations prohibited all electronic debits‚ stop orders and electronic fund transactions from beneficiary accounts held at Grindrod‚ a subsidiary of Net1.

The new regulations allowed only one deduction per month not exceeding 10 percent of the value of the beneficiary's social grant for a funeral policy issued by an insurer.

The regulations stipulate that the beneficiary of the grant must consent to such deduction in writing and submit it in person to the agency.

The Black Sash‚ as an intervening party‚ argued that if the High Court rules in Net1's favour‚ that the minister be given the opportunity to fix regulations to protect grant beneficiaries from exploitative practices.

Net1 and other companies had argued that the Sassa bank account should not be restricted‚ "that deductions and debit orders should continue to be facilitated from social grant beneficiaries bank accounts".

Speaking outside court‚ Black Sash's attorney Nomonde Nyembe said the judgment was "devastating".

"I think it pretty much enabled companies to take deductions from social grants. It’s given them free reign to do so‚ and that is quite devastating‚ because of the impact that social grants have had on people’s livelihoods‚ but also because of the impact that deductions have had‚" Nyembe said.

Nyembe said Black Sash will "have to sit around the table and decide what would be the best way forward".

"Our ultimate objective is to always ensure that the integrity of the social grants still remains intact."