Court rules deductions may be made from grant beneficiaries’ bank accounts

A judge made it clear the law does not allow deductions other than for funeral policies before payment to beneficiaries.

FILE: Right2Know campaigners picket outside of the Sassa pay point in Khayelitsha. Picture: Cindy Archillies/EWN.

CAPE TOWN - The High Court in Pretoria says deductions can be made from the bank accounts of social grant beneficiaries if the account holders consent to them.

The ruling follows an application by Cash Paymentmaster services’ parent company Net1 Technologies, which had gone to court to get a declaratory order against the government's decision to prohibit direct deductions.

Grindrod Bank was most affected by regulations that stipulated that no deductions could be made from beneficiaries’ accounts.

In his ruling, Judge Corrie van der Westhuizen makes it clear the law does not allow deductions other than for funeral policies before payment to beneficiaries.

He says, however, once funds have been transferred to a beneficiary's bank account, in this case Grindrod Bank, it operates like any other banking institution.

Judge Van der Westhuizen further states the amended regulations don't restrict beneficiaries from authorising electronic debits on their bank accounts.

He also mentions that the Reserve Bank has cautioned that an incorrect interpretation of the regulations could disrupt the system of collection and payment by creditors and debtors.

Sassa pays about R550 million into the accounts of more than 10 million beneficiaries who bank with Grindrod every month.