City to write off some R4,1 billion in debts to help residents, organisations, businesses
27 May 2021
The City of Cape Town has been helping qualifying residents, organisations and businesses impacted by economic pressures and the Covid-19 crisis, by making relief of more than R3 billion per year over the last few years available. Now we’re taking it further with payment incentives and debt write off of approximately R4,1 billion - a first for the City. This action has been taken due to the continued severe impact of Covid-19 on lives and livelihoods and the much slower than expected economic recovery over the past year. With an anticipated Covid-19 resurgence, the City is acting to alleviate further hardship where at all possible.
- Council approval today, 27 May 2021, means debt write off actions for qualifying debtors will begin immediately, over phases.
- This is made possible by the many loyal residents and business who are able to pay and continue to do so, thus enabling the City to provide relief to struggling residents, businesses and organisations.
- The City is hoping to improve the culture of payment with the incentives offered and the debt write-off sweetener, helping debtors sleep easier at night.
- Qualifying customers should contact the City. They will be informed whether they qualify when visiting the customer interaction centres or when contacting the respective call centres with account enquiries or when wanting to make a payment arrangement.
- This is over and above the allocated rates and services relief of R3,4 billion in the new financial year.
- Covid-19 relief initiatives remain in place for those who have been paying but need help now.
‘This action, which involved an in-depth, legally vetted and well-deliberated process, is only possible because of the trust there is in the City and the resultant high payment ratio for rates and services, which is unparalleled in South Africa. This is helping to keep the City sustainable and means we are in the position to assist qualifying debtors out of humanitarian considerations.
‘It is hoped that these incentives and debt-write offs will create a stronger culture of payment, while at the same time helping our residents who have old City debt to sleep easier at night. This would make the City more resilient and sustainable going forward.
‘It is important to protect municipal income, for without it, the City will not be able to provide basic and essential services. One way of protecting income and making the City more sustainable is to provide incentives to encourage a culture of payment.
‘We can’t do this without our loyal residents and without the support of those who are able to pay and continue to do so. We are very grateful to them. Importantly, there is also assistance available to those who have been paying, but need help now due to the lingering impact of Covid-19 on their finances. These cases continue to be considered on application to the City, on a case-by-case basis via the Covid-19 relief initiatives. The City will continue to operate in a manner that is sustainable, that does not jeopardise service delivery and that sees to it that those who qualify for support are provided with relief,’ said the City’s Mayoral Committee Member for Finance, Alderman Ian Neilson.
Qualifying debts to be written off:
|
Total debt write-off per category |
Debt category |
Conditions |
|
R1,36 billion |
Outstanding interest on debtors’ accounts (residential and commercial) as at 31 May 2021. This includes all residential customers as well as commercial entities. This debt remission does not require customers to enter into a payment arrangement. |
None |
|
R2 billion |
Arrear debtors (property rates and services, including sundry charges) for debt older than three years as at 30 June 2021. The outstanding debts eligible for write-off include arrears for periods prior to and including 30 June 2018.
This benefit will also be extended to customers who currently have a valid payment arrangement with the City.
|
· Valid payment arrangement must be made for debts outstanding from 1 July 2018 to the date of the arrangement. · Debts will be reinstated if a debtor defaults on the agreed payment arrangement and the City will continue with debt management actions. |
|
R28,6 million |
Debts on all residential properties with a zero municipal valuation, which forms part of either the City’s rental stock, low cost housing initiatives or Breaking New Ground (BNG) projects. These properties are deemed as indigent, as the people staying in these properties are low income earning residents. |
This will only apply to the City’s rental properties, low cost housing initiatives and BNG project properties. |
|
R76,8 million |
Debts for the existing 20 550 pensioners who are currently registered with the City for Rates Rebates for Owners Dependent on Pension and Social Grants for their livelihood, but are still struggling to settle their accounts in full. They will receive a once-off write-off. |
Qualifiers must currently be registered as a pensioner, receiving a pensioner’s rates rebate for Owners Dependent on Pension and Social Grants for their livelihood . |
|
R162,4 million |
Write off on the accounts of religious organisations, cemeteries and crematoria, non-profit organisations, animal shelters, accommodation for the vulnerable, local community museums, old age homes, Public Benefit Organisations, social housing, youth development organisations and sports clubs as determined and registered by the City at 31 May 2021. The benefit will also be available for those entities who are in the process of being recognised as one of the mentioned entities and who will be successfully registered before or on 31 December 2021. These organisations provide a valuable service to the community, but are suffering under the current economic climate, with little assistance being received from the National Government. |
· Registered entities as at 31 May 2021. · Recognised entities who will be registered before or on 31 December 2021. |
|
R421 million |
Write off for debt older than three years linked to the City’s housing rental debtors.
This benefit will also be extended to debtors with current instalment plans. |
· Payment arrangement required. · Debts will be reinstated if a debtor defaults on the agreed payment arrangement and the City will continue with debt management actions. |
|
R57,5 million |
Debt that is older than three years for City’s Property Management lease debtors.
This benefit will also be extended to debtors with current installment plans. |
· Payment arrangement required. · Debts will be reinstated if a debtor defaults on the agreed payment arrangement and the City will continue with debt management actions. |
For more information about payment arrangement requirements visit: http://bit.ly/CCT-PaymentPlan or https://resource.capetown.gov.za/documentcentre/Documents/Procedures%2c%20guidelines%20and%20regulations/Qualifying%20debt%20to%20be%20written%20off_2021.pdf
Issued by Media Office, City of Cape town, 27 May 2021
