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Sassa has misinterpreted new laws - Grindrod

Cape Town – The South African Social Security Agency (Sassa) has misinterpreted the amended regulations under the Social Assistance Act, Grindrod Bank said on Wednesday.

The bank was responding to news that Sassa intends to charge Grindrod Bank and Cash Paymaster Services for failing to adhere to the recently amended act.

Sassa, which looks after the payment of welfare grants to more than 16 million people, maintains that these regulations prohibit the processing of debit order deductions from bank accounts held by Sassa beneficiaries.

Grindrod Bank said it has not been contacted directly by Sassa or any regulatory authority in respect of such proposed charges.

“Adhering to Sassa’s interpretation would put Grindrod Bank in conflict with the requirements of the National Payment Systems’ rules,” the company said. “Clarity is currently being sought from the courts as to the interpretation of these new regulations.”

Grindrod Bank said it is extremely sensitive to the plight of grant recipients. This “includes their right of access to financial services as well as protection from unscrupulous industry participants”.

Grindrod said it “has proactively engaged regulatory stakeholders such as the South African Reserve Bank and Payments Association of South Africa to establish a practical solution to give effect to the rights of the grant beneficiaries and the numerous parties to whom they have given legitimate payment instructions”.

It added: “Grindrod Bank is looking forward to getting clarity on its legal obligations.”

Sassa to file criminal case over grant deductions

In 2012 Sassa contracted Net 1’s Cash Paymaster Services to pay the grants into bank accounts. Grindrod’s banking unit provides the accounts into which the grants are paid.

"We sent a letter to CPS and Grindrod as soon as the new regulations were published and we got a response from them saying they didn’t agree with our interpretation of the legislation and they were not going to implement,” Dianne Dunkerley, executive manager of grant administration at Sassa, said in a Bloomberg interview.

“We’re now going to open a case because they are not complying with the new legislation.”

The government last month amended regulations to stop insurance companies from deducting funeral insurance premiums from grants the government pays out to support poor children. The government also wants to halt what it said were illegal deductions for services such as mobile phone airtime. Net 1 has filed its own legal case, challenging the amendment.

Net 1 and Grindrod didn’t answer calls made to their offices outside normal office hours. The companies also didn’t immediately respond to emailed queries.

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