Joburg is writing off municipal debt, find out if you qualify

Member of the mayoral committee (MMC) for Finance in Johannesburg Funzela Ngobeni has approved a debt-rehabilitation programme to aid residents that have unpaid municipal debt.

Municipal debt a problem for years

According to Ngobeni the city has been struggling for a long time with non-payment of municipal bills and previous attempts to help residents have clearly not had much impact.

“For years, residents existing on the fringes of the active economy have struggles to pay for municipal rates and services,” read the statement from Ngobeni.

“Several promises have been made – but in the absence of a proper mechanism to deal with the issue, consumer debt has continued to rise.

“This situation was left unmanaged and resulted in a large debtors book and an insurmountable debt burden on the purse of our residents, who are already stretched and battling to keep abreast during these hard financial times.”

The application process

Residents can start applying from September based on several criteria with the hopes the city will finally be able to bring defaulting customers back into good standing, even if it costs them a bit of money in the short term.

“The broad concept of the programme hinges on an application process that will allow for strained household owners to apply for municipal debt rehabilitation,” he added.

“Qualifying customers will receive immediate relief through a 50% 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 regular inspection of metered services, then the remaining outstanding debt will be written off over a three-year period.”

Qualifying criteria

The criteria for debt rehabilitation with the city of Johannesburg seem to be pretty well thought out.

Qualifying residents will see half of the debt erased instantly and will have to ‘earn’ the remaining discount over the next three years by keeping their account in good standing going forward.

According to the approved report the criteria for the programme is:

• Write-off is only applicable to residential account holders
• The account holders account balance is 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
• The market value of the property and all properties owned by the applicant must not exceed R600 000

“Tough economic times, calls for an innovative approach to mounting municipal debt” – this is the sentiment shared by Cllr Funzela Ngobeni as the City of Johannesburg approved a break-through debt-rehabilitation programme at today’s Council sitting.@CityofJoburgZA @FunzelaZA pic.twitter.com/pesBzxyvVF

— Herman Mashaba (@HermanMashaba) June 13, 2019