Black Sash Media Statement: "a hollow victory for Net 1 and its subsidiaries"

10 May 2017

In what the Black Sash describes as a “hollow victory for Net 1 and its subsidiaries”, acting Judge Corrie van der Westhuizen ruled in favour of Net1 on Tuesday 9 May 2017. The ruling allows for deductions from social grants to continue.
Black Sash National Director, Lynette Maart, said she was deeply disappointed that the judgement will have ongoing negative consequences for grant recipients who, she argues, should be entitled to receive their grants without deductions including via debit orders. “It is disturbing that commercial interests seem to take precedence over protecting the Section 27 rights of the poorest and most vulnerable in our society to receive their grants in full” said Maart.       
The Black Sash has worked tirelessly together with other civil society organisations and government to tighten the Social Assistance Act Regulations in order to eliminate deductions (other than the permissible 10% allowed for funeral cover on old age and permanent disability grants) from the SASSA branded bank accounts. 
Regulation 26(A) was intended to protect recipients from these deductions, but this ruling technically argues that when the grant has been transferred into the bank account it is deemed to have been paid.  Unfortunately, this creates the perception that the grant is now “fair game” for those predators targeting financial services at the poor particularly loans, funeral policies, airtime and electricity. This is sometimes done under the guise of misrepresenting the South African Social Security Agency (SASSA). 

The reality for many grant beneficiaries is that deductions and debit orders often go off before they have received their grants leaving people with insufficient funds to care for themselves or their families for the rest of the month which perpetuates the cycle of indebtedness.  These financial institutions that appear to have captured a portion of the social grants budget have no qualms in continuing to sell financial products to the poor, as their repayments are basically guaranteed irrespective of the undue hardship this creates. 
We requested in our application that if the regulations required further tightening that the Minister of Social Development should be allowed to do this.  This was not dealt with since our application to intervene was dismissed.                  
Under the Apartheid regime the Black Sash had a well known slogan - 'legal' now but immoral forever. This really sums up what we think of the debt trap that is deliberately being facilitated through the marketing of policies and loans to grant beneficiaries. 
The state, civil society and the private sector all have a collective responsibility to ensure that socio economic rights are protected.       
“The Black Sash will certainly not give up in our quest to make human rights real and is strongly considering joining the process to appeal the judgement.” insists Maart.  

For interviews, please contact:

  • Elroy Paulus (Black Sash Advocacy Manager) – 082 748 5621
  • Evashnee Naidu (Black Sash KZN Regional Manager) - 084 430 6133
  • Lynette Maart (Black Sash National Director) – 083 628 3425

For more information, please contact:

  • Esley Philander (Black Sash Communications and Media) – 073 468 2909