SASSA intensifies fight against deductions
Debit orders for funeral policy and insurance premiums from disability social grant accounts will be discontinued from the beginning of December, says the South African Social Services Agency (SASSA).
SASSA warned social grant beneficiaries "to make alternative arrangements regarding the payment of funeral insurance premiums".
The agency's move follows a decision made by the Department of Social Development (DSD) in May to amend the regulations of the Social Assistance Act of 2004, whereby nobody is allowed to deduct money from a social grant beneficiary's account.
The department said its decision was motivated by complaints received from beneficiaries who said airtime, electricity and funeral policy and insurance payments were being recouped before their social grants were paid out.
"Amending these regulations was a necessary and responsible step taken by SASSA and the Social Development Department in order to protect vulnerable beneficiaries against unscrupulous financial service providers," says the agency.
It adds: "The law allows for only a maximum of 10% of the grant value to be deducted and requires that SASSA should be informed whenever a beneficiary enters into a contract with a funeral insurance service provider."
SASSA says if recipients of social grants for older persons, war veterans or a permanent disability grants would like to have the premiums for their funeral policies deducted directly from their grants, they must visit the nearest office to give permission in writing and in person for these deductions to go through.
SASSA and the DSD's decision to regulate the accounts of social grant recipients has not been received well by financial service providers, including Net 1 UEPS Technologies (Net 1).
Net 1, through its subsidiary Cash Paymaster Services (CPS) and Grindrod Bank, is responsible for distributing social grants to more than 16 million South Africans.
Following the introduction of the amendments, in June, Net 1 filed for a declaratory order with the North Gauteng High Court requesting certainty on "the interpretation of the Social Assistance Act of 2004 and recent regulations promulgated in terms thereof".
SASSA followed suit and filed criminal charges against CPS and Grindrod Bank for failing to comply with the newly amended regulations in the Social Assistance Act. SASSA contends the deductions made on social grant beneficiaries' money are illegal and that Net 1 has abused its position as the contractor handling social grant payments.
Net 1 argues the decision to amend regulations in the Social Assistance Act is a breach of the social grant beneficiaries' constitution.
According to reports, Net 1 said in court papers the amended regulations "unjustifiably infringe beneficiaries' right to contractual freedom and self-autonomy, which is an incident of the right to human dignity protected".
Although SASSA has not clarified what this move means for its court case with CPS and Grindrod Bank, the national spokesperson previously said because the matter is before the courts, the state agency respects the justice system and reserves comment about the amended regulations.
Last week saw human rights organisation the Black Sash Trust support the position taken by SASSA and DSD.
The Black Sash also filed an application requesting the intervention of the Pretoria High Court in the case over deductions made from accounts of social grant recipients.
According Black Sash national director Lynette Maart, the veteran human rights group received complaints from many grant beneficiaries about not receiving their grant in full, often the only source of income.
"The Black Sash supports the position taken by SASSA and DSD...If the court interprets the new regulations the way Net 1 and other applicants do, then the Black Sash seeks relief from the court that SASSA and DSD are directed to make new regulations that will protect grant beneficiaries from exploitation. We believe the state has a duty and obligation to protect grant beneficiary."
She adds: "The Black Sash seeks to protect the human dignity of all grant beneficiaries by ensuring they cannot be targeted for products and services against their social grants, diminishing the necessity of their need for such grants, but exploitative harmful practices that do not seem sufficiently regulated to protect them."