Garnishee ruling a 'setback for poor'

In what has been described as a "devastating" blow to social-grant beneficiaries, the High Court has ruled that deductions may be made from their personal bank accounts.

Net1, which owns Cash Paymaster Services, the company that has controversially won the tender to distribute social grants, scored a victory in the Pretoria High Court yesterday, when a judge declared new regulations invalid.

Net1 was challenging the government's interpretation of the regulations.

The SA Social Security Agency 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.

• Debit orders against social grant beneficiaries nothing more than payment of legitimate debt: court saysA debit order made against a social grant beneficiary’s account is nothing more than payment of a valid debt‚ the Pretoria High Court found on Tuesday.

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

But the court found 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 debit order against a recipient's bank account is nothing other than payment of a legitimate debt," said Judge Corrie van der Westhuizen.

Speaking outside court, Black Sash attorney Nomonde Nyembe said the judgment was "devastating".

• Net1 may still deduct monies from social grants - courtThe Pretoria High Court has ruled that Net1 and its subsidiaries may make deductions from social grant beneficiaries' accounts.

"It pretty much enabled companies to take deductions from social grants. It's given them free rein to do so, and that is devastating, because of the impact social grants have on livelihoods," she said.

Nyembe said Black Sash, which was an intervening party in the matter, would "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."

Black Sash expressed its concern as early as 2011 over "unauthorised, undocumented and irregular third-party debit deductions" from social grant beneficiaries' accounts.