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Court allows deductions on SASSA accounts

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 09 May 2017
Net1 CEO Serge Belamant.
Net1 CEO Serge Belamant.

Net1 UEPS Technologies has welcomed what it says is a "favourable" order from the North Gauteng High Court allowing deductions from the bank accounts of social grant beneficiaries

In a statement, Net1 says the High Court issued that the declaratory order on the Social Assistance Act of 2004 and recent regulations promulgated in terms thereof do not restrict social grant recipients in their operation of their banks accounts.

Last year, the social development department and the SA Social Security Agency (SASSA) introduced amendments to a section of the Act that would inhibit deductions from the accounts of social grant recipients.

This decision was prompted by complaints from beneficiaries who said loan, airtime, electricity and funeral policy payments were being recouped before their social grants were paid out.

Soon after, Net1 sought a declaratory order with the High Court requesting certainty on "the interpretation of the Social Assistance Act of 2004 and recent regulations promulgated in terms thereof".

The matter was heard by the court on 17 and 18 October last year, with judgement handed down today.

Net1 says the order clarifies that recipients may continue to initiate debit order instructions? with any service provider, including the company and its subsidiaries, against their bank accounts for the payment of goods and services.

In accordance with industry practice, recipients may also query and request the reversal of disputed debits, it adds.

SASSA, its CEO and the minister of social development have been ordered to pay the costs of the application, says Net1.

The application filed by veteran human rights organisation the Black Sash Trust requesting the intervention of the court in the case over deductions made to beneficiaries' accounts was also refused.

"In support of its application, the Black Sash made several allegations of 'illegal deductions' which were comprehensively dealt with in the company's [Net1's] answering affidavits," according to the Net1 statement.

Net1, through its subsidiary Cash Paymaster Services (CPS) is responsible for distributing social grants in SA.

Serge Belamant, CEO of Net1, says: "We welcome this order as it clarifies that grant recipients may continue to exercise their human rights to transact freely with any service provider utilising the full functionality of their bank accounts.

"We will continue to facilitate duly authorised payments for financial services and other products and reiterate that we do not initiate any 'illegal deductions'. As verified by KPMG in their recent factual findings report, our debit orders have no preference over other debit orders, are submitted through the national payment system and are randomised in accordance with industry practice," he states.

Meanwhile, Democratic Alliance MP and Western Cape spokesperson on community development, Lorraine Botha, has labelled the court's ruling as a blow to the poor.

According to Botha, the court's ruling will further cripple the most vulnerable in our society.

"I do hope this judgement is taken on appeal and I will fully support such an appeal process, with the belief that the appeals court will rule differently on this matter," she says.

"Furthermore, I will invite CPS and Net1 to come and brief the Western Cape Standing Committee on Community Development and explain how and when the reimbursements for airtime and electricity will be settled. The law is very clear that deductions made from the pension grant should not exceed 10% and can only be made for funeral cover.

"It is vital that the poorest of the poor in our society do not continue to suffer from these unacceptable deductions, and that they are no longer manipulated or exploited," Botha concludes.

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