- The City of Johannesburg and the City of Cape Town have extended their debt rehabilitation programmes to the end of June 2022.
- Cape Town has written off R2 billion of historic debt so far and has another R2.1 billion if more residents apply.
- Johannesburg will quantify the value of debt written off when its programme ends, but more than 20 000 residents applied, and 16 393 were successful.
Municipalities are not always the favourite service providers among South African consumers, at times coming under fire for shoddy service delivery; billing errors which can cost account holders hundreds of thousands of rands in lawyers’ fees to resolve; or sometimes frustrating experiences at service centres.
But some of the country’s big metropolitan municipalities are showing humanity, too. At the height of the pandemic, the City of Cape Town, the City of Johannesburg and eThekwini embarked on campaigns to write off millions of Rands owed by struggling residents.
eThekwini Municipality quickly resumed credit control and debt collection processes as soon as SA moved down lockdown levels in July 2020.
But residents of Johannesburg and Cape Town still have a chance to get some of their historic debt written off, as long as they keep up with their current municipal payments.
The City of Joburg
The City of Johannesburg initially introduced its Debt Rehabilitation Programme in May 2021. It has extended it twice. The latest leg started on 1 March 2022 and will end on 30 June 2022.
Residential account holders with a combined gross income of between R4 750 and R22 000 per month to qualify. But even households whose incomes exceed R22 000 a month can still get a percentage of their debt that’s been outstanding for more than 90 days written off if they settle their accounts in full. But for everyone, the market value of the property owing money to the municipality must not exceed R1.5 million.
Small businesses and faith-based organisations have been invited to apply. Qualifying customers will receive a 50% debt write-off, with an additional write–off on the outstanding debt over a three-year period.
The City’s director of communications and stakeholder management, Kgamanyane Mapholo, said between 1 May 2021 and the fourth week of March 2022, the municipality received 20 043 applications for its debt rehabilitation programme.
Of all the customers who applied, 16 393 were approved, and they had some of their debts written off in line with the terms and conditions of the programme.
But Mapholo said the City of Johannesburg will confirm the total financial relief provided to customers when the programme ends and once the concerned customers are fully rehabilitated.
The City of Cape Town
The Mother City’s municipality said it has put in place a has a comprehensive suite of financial relief options for struggling Cape Town residents. These include a R4.1 billion debt write-off incentive for tenants and R3.4 billion for indigent relief and “no-interest” payment arrangements with customers in arrears.
The debt write-off incentive programme began in May 2021, and almost R2 billion has been written off thus far. Another R2.1 billion will still be written off if more qualifying residents apply before 30 June 2022.
Customers who make arrangements to settle their debt can have outstanding debt older than 1 July 2018 written off. But the City of Cape Town (CoCT) will reinstate that debt if a customer defaults on their instalment plans.
The CoCT’s mayoral committee member for Finance, Councillor Siseko Mbandezi, said the incentive isn’t plunging the municipality into financial hardships. But it is helping the CoCT show struggling residents that it cares. He said the 12-month municipal account payment ratio stood at 97.4% on 28 February 2022.
“[This] indicates most ratepayers are able to pay their municipal accounts. Those who are unable to pay are encouraged to approach the City for assistance,” said Mbandezi.
He said while instilling a culture of payment for municipal services was key, “showing that the City cares for its residents” was also vital.