🛑 NSSA Garnishee Orders: How Businesses Can Navigate and Handle Enforcement
The National Social Security Authority (NSSA) in Zimbabwe is mandated to collect contributions for the Pension and Other Benefits Scheme (POBS) and the Accident Prevention and Workers Compensation Scheme (APWCS). When an employer defaults on these compulsory contributions, NSSA has legal recourse, including the use of Garnishee Orders, to recover the debt.
Unlike ZIMRA, which has a broad statutory power to appoint an agent (garnishee) directly, NSSA generally has to follow the formal debt collection process which leads to a court judgment before a standard civil garnishee order can be issued. However, the impact on a business is equally severe.
Here is a comprehensive guide on how businesses can proactively prevent and reactively handle NSSA Garnishee Orders.
1. Proactive Prevention: The Best Defence
The most effective way to handle an NSSA garnishee is to ensure one is never issued. This requires strict compliance and proactive engagement.
A. Strict and Timely Compliance
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Mandatory Registration: Ensure the company is registered with NSSA within 30 days of becoming an employer, and that all eligible employees (aged 16 to 65) are enrolled.
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Accurate Deductions & Payments:
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POBS: Deduct the employee’s portion and contribute the employer’s equal portion (currently 4.5% each) based on the gazetted insurable earnings ceiling.
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APWCS: This is 100% employer-funded (rate varies by industry risk factor) and is calculated on the total insurable wage bill with no ceiling.
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Payment Deadline: Pay both contributions and premiums by the 10th day of the month following the payroll run (e.g., January contributions are due by February 10th).
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Timely Returns (P4): Submit the electronic P4 Monthly Returns via the NSSA self-service portal immediately after the payroll run and no later than the 10th. The P4 is crucial for crediting individual employee accounts.
B. Proactive Engagement and Record Keeping
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Maintain Records: Keep meticulous records of all payroll runs, contribution calculations, payment remittances (ZIG slips, bank transfers), and P4 returns.
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Update NSSA: Immediately notify NSSA of any changes in business details, address, or employee cessation/termination (using the P4C form).
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Internal Audits: Conduct regular internal checks to ensure all NSSA deductions align with the official rates and ceilings published by NSSA (usually reviewed quarterly).
2. Handling the Order: Reactive Steps
A Garnishee Order for NSSA is typically issued by a Magistrate’s Court or the High Court after NSSA has successfully obtained a judgment against the defaulting employer for the outstanding contributions, penalties, and interest.
A. Steps Upon Receiving an Order
| Step | Action by the Business | Importance |
| 1. Immediate Confirmation | Verify the Order’s Validity. Check the court case number, the amount demanded, the name of the judgment creditor (NSSA), and the garnishee (your bank/debtor). Ensure it is a formally sealed court order, not just a demand letter. | A defective or expired order can be challenged immediately. |
| 2. Notify the Bank/Garnishee | Inform your bank or the appointed debtor of your intent to handle the matter. While they are legally obligated to comply, this opens communication regarding the execution date. | The bank may freeze funds equal to the debt immediately, impacting cash flow. |
| 3. Reconcile the Debt | Do a quick audit. Reconcile the amount claimed by NSSA against your own records. Determine if the debt is due to non-payment, incorrect calculation of the ceiling, or failure to submit returns. | This informs your legal and negotiation strategy. |
| 4. Engage NSSA (Crucial) | Immediately contact the NSSA debt collection or legal department. Acknowledge the debt (if correct) and request an urgent meeting to negotiate. | Demonstrates good faith and may lead to a brief suspension of execution for negotiation. |
B. Negotiation and Legal Recourse
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Negotiate a Payment Plan: The most common and effective reactive step is to request a suspension of the Garnishee Order in exchange for an Acknowledgement of Debt (AOD) and a structured Payment Plan. NSSA is often willing to agree to this to secure the full debt amount without further court action.
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Application for Suspension/Variation:
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If the debt is genuinely disputed (e.g., payments were made but mis-posted, or the calculation is wrong), you can apply to the same court that granted the judgment/order to have it varied, suspended, or set aside.
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This requires proof of genuine error or severe financial hardship that prevents the business from maintaining operations.
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The Difference from ZIMRA: Since NSSA generally secures a court judgment first, the constitutional protection against abuse of process may be slightly stronger than in a ZIMRA case, where the “Pay Now, Argue Later” rule (which is statutory) often precludes suspension. However, the need to secure the debt remains paramount.
3. The Business Impact
A Garnishee Order is an extreme measure that signals severe financial risk.
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Cash Flow Disruption: The immediate freezing and transfer of funds (often the entire amount in the account) can halt all daily operations, including paying suppliers, salaries, and statutory obligations.
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Reputation Damage: A garnishee order served on a third-party debtor (a client of your business) can severely damage your commercial reputation and credibility.
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Penalties and Interest: NSSA imposes hefty penalties and interest/surcharges on late or unpaid contributions. Recovery of arrears due to negligence or fraud also prevents the employer from recovering the corresponding employee’s share.
In summary, for Zimbabwean businesses, treating NSSA compliance with the same seriousness as ZIMRA tax compliance is critical. Proactive payment and timely submission of returns are the only true shields against the severe disruption caused by a garnishee order.
