Did you know 2/2005 by DOd6Xt70

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									Attachment of Pension Fund Benefits to Satisfy a Maintenance Order

Section 37A of the Pension Funds Act protects pension fund benefits from
claims of creditors. However, there are exceptions to this protection which
includes certain claims under the Maintenance Act. The judgement in the
case of Magewu v Zozo [2004] 3 All SA 235 (C) bears discussion to
determine the extent to which the courts will go to enforce rights under the
Maintenance Act.


Facts: The applicant (Ap) and the respondent (R) had a child together. When
the relationship ended Ap had trouble obtaining compliance with the
maintenance award against R for R1800 per month for the child. Ap first
obtained an emoluments attachment order against R’s employer, Telkom but
when he was retrenched, Ap had difficulty obtaining maintenance from R.
The pension fund benefits amounted to R126 000. Ap sought a court order for
the pension fund to withhold the withdrawal benefit to secure future
maintenance claims of the minor child. At the date of the hearing R was not in
arrears having made up the arrears in order to appear innocent before the
court.

The Law:
The question to be decided is whether our law allows for the securing of
pension fund benefits to secure the future maintenance obligations of a
person.

Section 37A of the Pension funds Act provides for no cession, pledge,
attachment or any form of execution of pension fund money except under the
Income Tax Act or the Maintenance Act. The section also allows the fund to
pay a benefit or part thereof to any one or more of the dependants of the
member or beneficiary; or to a guardian or trustee for the benefit of such
dependant during such period as it may determine.

Section 26 (4) of the Maintenance Act provides that “notwithstanding anything
to the contrary in any law, any pension, annuity….shall be liable to be
attached or subjected to execution ….. in order to satisfy a maintenance
order.”

Section 15 of the Maintenance Act codifies the common law duty of parents to
support their children. The provisions of the Act may not be interpreted as
allowing any person from being excused from doing so.

An important consideration in this case was that the Maintenance Act
provides a mechanism to deal with the recovery of arrear maintenance
whereas at the date of the hearing, there was no arrear maintenance owing.

In a previous case, the Mngadi case, which dealt with future maintenance, the
court acknowledged that the common law has always recognised the right of
a creditor to bring an interdict to stop the intentional dissipation of funds to
frustrate the creditor’s claims. In that case the court granted an anti-
dissipation order to restrain the pension fund from paying pension benefits to
an intentionally recalcitrant father who was likely to dissipate the funds with
the intention to defeat the maintenance claim. However, in this case, there
was no evidence that R intended to dissipate the funds.

Application of law to facts

The judge noted that the Maintenance Act and the Pension Funds Act work
together to provide relief to an applicant who has a maintenance order that
has not been abided by the judgement creditor. The Maintenance Act was
designed to alleviate the manner and conditions under which the maintenance
system was previously run, in that it opened up new avenues of dealing with
recalcitrant fathers. It does not create a closed list of mechanisms available in
law to assist children. The fact that Maintenance was not in arrear at the time
of the hearing does not spell the end of the matter for the Ap.

Section 28(2) of the constitution provides that in every matter concerning a
child, the child’s best interests are paramount. Children have the right to be
properly cared for. While the duty rests primarily on the parents the state has
a duty to provide the legal and administrative structure to do so. The
Maintenance Act is seen as part of the state’s infrastructure designed to
provide speedy and effective remedies at minimal cost. Often the system fails
to enforce orders which discredits the justice system and the promise of
human dignity and equality. The constitutional court has recognised that the
function of the state is not to just create a framework to ensure children’s
rights are protected but to create a system that gives effect to it.

 The custodial parent is usually the mother. This creates an additional
financial burden on women and inhibits their ability to find employment.
Enforcement of maintenance payments is not only a measure to secure the
rights of children but also to uphold the dignity of women and to promote the
value of equality and non-sexism. Therefore, the Maintenance Act should not
be read narrowly and the court’s duty is to develop new mechanisms of
granting Ap with a mechanism to secure her constitutional rights.

In this case although R is not in arrears now, he has often been and Ap has
no security that his future maintenance payments will be met. It is clear that
without the constant operation of the law to enforce payment, R would fail to
abide by his obligations.

Ap fears that in R’s vague business dealings the pension fund might be lost
and she will have no claim against R to ensure that her child’s maintenance
will be paid. The attachment of the pension fund benefits in respect of future
maintenance claims is a direct an effective way of ensuring that the rights of
the child and the dignity of women are upheld.

The order: The pension fund was directed to withhold the withdrawal benefit
in order to secure the future maintenance payments of the minor child.
Comment: This is an important judgement in that the court invoked the
principles of the constitution in order to arrive at a decision. It also sounds a
warning for recalcitrant parents who fail to honour maintenance orders. If a
pattern of failure to honour maintenance orders is shown, their pension
benefits may well be attached and the pension fund may be ordered to make
payment of the maintenance order. It may well create an administrative
burden for trustees and administrators of funds who will need to have an
infrastructure, which can give effect to these orders. The taxation of these
payments by the fund is also uncharted territory

								
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