Grants accounts can be debited
Recipients can have money they owe deducted – judge
There are no state regulations barring banks from deducting money from accounts of social grant beneficiaries.
Judge Corrie van der Westhuizen ruled at the North Gauteng High Court in Pretoria yesterday that Grindrod Bank was not breaking the law by making electronic payments from accounts of grant recipients.
The bank and its business partner, Net1 Applied Technologies, dragged the Department of Social Development and the SA Social Security Agency to court after they instructed it to stop the practice.
Grindrod refused to implement this instruction, and was together with Net1 criminally charged. The bank argued that the instruction went against existing regulations.
The regulations did not bar it from operating like any other bank and processing electronic payments from accounts, the judge heard.
Van der Westhuizen accepted this assertion: “In my view … it is clear once the grant is transferred into the recipient’s account at Grindrod, it operates as any bank account at any commercial banking institution.
“There is clearly no difference, and Sassa equally has no control over such an account with Grindrod as it does not have control over any account with a commercial bank.
“… there is no merit in the submission on behalf of [Sassa and the department] that the Grindrod Bank accounts are not bank accounts chosen by the beneficiaries, but is a ‘method of payment chosen by the agency’.”
He added that Grindrod did not take money for debts beneficiaries knew nothing about.
“The debit order levied against a recipient’s bank account is nothing other than a payment of a legitimate debt.”
Black Sash, an NGO, said it was upset by the judgment. Van der Westhuizen also dismissed its application to join the matter as amicus curiae (friend of the court).
The organisation’s KwaZulu-Natal manager Evashnee Naidu said: “We felt that the judge … should allow the minister enough time to clean up the regulations so that they protect the beneficiaries. As it stands, deductions can go on unabated.
“It means people have access to the beneficiaries’ accounts and can deduct at will ...”