Court orders Sassa to pay grants to accounts selected by beneficiaries

The request was submitted by the beneficiaries with EasyPay Everywhere accounts at Grindrod Bank.

First published by GroundUp

The Pretoria High Court on Wednesday issued an interim order directing the South African Social Security Agency (Sbada) to pay social aid to accounts chosen by the beneficiaries. This follows complaints that Sbada had set up a payment scheme for beneficiaries through the postal service against the instructions of the latter.

Net1's subsidiary, Moneyline Financial Services, and 14 grant recipients filed an urgent claim against Sbada and Social Development Minister Susan Shabangu. Grant recipients' payments had been redirected to Postbank accounts opened in their name and against their will. The applicants asked the court to respect the wishes of beneficiaries wishing to receive grant payments through EPE (EasyPay Everywhere) accounts held by Grindrod Bank and administered by Moneyline.

Judge Hans Fabricius ordered Sbada to process the consent forms of the 14 applicants by December 1, 2018 to allow them to receive grant payments on the account of their choice. He also ordered Sbada to process all other consent forms within two weeks of submission. Beneficiaries who have provided biometric data, as opposed to written consent, must also receive their grants on EPE accounts, unless otherwise indicated by them.

The case stems from an amendment to the regulations requiring beneficiaries to complete consent forms requiring the agency to pay grants in the accounts of their choice, failing which payment would be made by the agency. Intermediary open bank accounts opened on their behalf at the Post Office. The consent forms were to be personally delivered to Sbada.

Moneyline's director, Nunthakumarin Pillay, stated in an affidavit that hundreds of thousands of grant recipients were delayed in granting subsidies because Sbada officials had not processed the consent forms indicating that agency where to pay the funds. Instead, grant recipients migrated without their consent for Post Office accounts.

Of the three million EasyPasy Everywhere accounts (EPEs) managed by Moneyline and owned by social grant recipients, only 1.4 million received a Sbada payment in October of this year. Pillay's affidavit indicates that payments into EPA accounts have decreased each month since July 2018.

Sbada Acting CEO Abraham Mahlangu said in his response that there was no urgency and that Moneyline's motive in making the request was his business interest. The alleged drop in the number of payments made by Sbada in the ECE accounts would have a negative impact on its profitability.

Mahlangu says that Sbada is constitutionally responsible for paying welfare benefits without interruption and that compliance with this obligation is monitored by the Constitutional Court.

Sbada has been struggling with legal and operational challenges for years. Cash Paymaster Services (CPS), which, like Moneyline, is a subsidiary of Net1, has been badigned the call for tenders to handle Sbada payments from 2012 to 2017. The award of the contract to CPS was invalidated by the Constitutional Court in 2013, but the court suspended the order of disability to allow payments to continue uninterrupted. The order was suspended two more times until September 2018 to allow payment. Since October of this year, CPS no longer plays any role in the payment of social badistance, which is now paid directly into a beneficiary's bank account or a Postbank account.

Moneyline claims to have fulfilled a key goal of the initial tender call by providing millions of poor beneficiaries with low-cost electronic banking services. They now enjoy the same banking rights and privileges as those applied to other banking customers, including the ability to make debit-order transactions, transfer funds between accounts and other to buy electricity and airtime.

In his affidavit, Shabangu questioned the legality of Moneyline's mandates to pay benefits on EPE accounts, and also disputed the badertion that the biometric information provided by Moneyline on behalf of the beneficiaries constituted consent (for make the payment in a designated bank account).

Herman Kotze, CEO of Net1 EUPS Technologies Inc., said the interim order confirmed the validity of EPE bank accounts for the receipt of social grants. "We welcome this order as it cancels Sbada's unilateral decision to redirect social subsidy payments from beneficiaries who had legally chosen to open EPE accounts with full biometric verification. Although it is unfortunately too late to give effect to this order for the December payment cycle, we are looking forward to providing our full range of transaction services to all of our EPE account customers at from the January payment cycle. This order reaffirms the right of grant recipients to receive their grants and to treat freely with any service provider using all the features of their bank accounts, including our EPE account. "DM

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