“Tough economic times call for an innovative approach to mounting municipal debt.”
This is the sentiment shared by Member of the Mayoral Council for Finance, Funzela Ngobeni, as the City of Johannesburg approved a break-through debt rehabilitation programme at its council sitting on Thursday, 13 June.
The debt rehabilitation programme aims to bring about a new approach to the increasing number of debtors in the City of Johannesburg. For years, residents existing on the fringes of the active economy have struggled to pay for municipal rates and services. Several promises have been made – but in the absence of a proper mechanism to deal with the issue, consumer debt has continued to rise.
For years, this situation has been left unmanaged, and has resulted in a large debtor’s book and an insurmountable debt burden on the purses of the residents, who are already stretched and battling to keep afloat during these hard financial times.
Through the approval of the debt rehabilitation programme, the City will now be able to ensure that defaulting customers are brought back into good standing on their municipal accounts.
The broad concept of the programme hinges on an application process that will allow for strained householders to apply for municipal debt rehabilitation.
Qualifying customers will receive immediate relief through a 50 per cent debt write off. If the customer complies with all the requirements of the programme, which include keeping their current accounts up to date and allowing for regular inspection of metered services, then the remaining outstanding debt will be written off over a three-year period.
According to the approved report, the criteria for the programme are:
• The write-off is only applicable to residential account-holders
• The account-holder’s account balance must be in arrears for more than 90 days as at 30 June 2019
• The combined gross income from all activities of the account-holder/s and spouse must be between R4 750 and R22 000 per month and
• The market value of the property and all properties owned by the applicant must not exceed R600 000
Following the approval of the report, the City will embark on educational roadshows during the month of August, with the application process set to start in September.
