The Department of Social Development and the South Africa Social Security Agency (Sassa) have tried to prevent Net1 from allowing deductions for loans, airtime and electricity from beneficiaries’ accounts.
Net1 is in charge of administering payments to grants beneficiaries through its subsidiary company, Cash Paymaster Services (CPS).
The court also dismissed an application by activist group Black Sash Trust to be part of the court case.
Evashnee Naidu, a KwaZulu-Natal regional manager for Black Sash, said the organisation was shocked and aggrieved by the judgement.
Naidu said the ruling disregarded the 17 March Constitutional Court ruling which stated that the information of beneficiaries should be respected.
“The judge didn’t take into consideration the impact of deductions on poor households,” she said.
CJ van der Westhuizen, acting judge of the High Court, said the case put forward by Sassa and the department hinged on its interpretation of the new regulations 21 and 26A.
The regulations related to an interpretation as prohibiting all electronic debits, stop orders and electronic fund transfers from beneficiary accounts held at Grindrod, a subsidiary of Net1.
Sassa spokesman Kgomoco Diseko said: “It is a complex judgement and we are still studying it. We will issue a statement after allowing our legal department to study it.”
The ruling is a blow to millions of arme mense, including a group which recently marched to Parliament to protest against what they called “illegal deductions”.
Mervin Beech, 70, from Mitchells Plain said: “Every month my pension is short. They [Sassa] are skelm for taking portions of our money without our permission.”
Cosatu leader Tony Ehrenreich blames Minister of Social Development Bathabile Dlamini for the ruling, saying: “The actions of Dlamini just shows how very little she thinks of our most vulnerable people and this judgement is how the government is continuing to allow the people to be robbed of what is supposed to be a social service.
“The vulnerable will always suffer at the hands of those in government.”
The DA called it a “huge blow to the poor.”
Lorraine Botha, the Western Cape spokesperson on Community Development says: “We continue to be deeply concerned by the likes of Net1 and CPS, the financial bodies responsible for the payment of grants, seeing that 19 of CPS’ employees were arrested for corruption.
“This company continues to have access to funds which are specifically set aside for the poor in our society.
“I once again call on Sassa and the National Department of Social Development to hastily insource the payment of grants, to ensure that these unauthorised deductions cease.”