9 December 2005 Press Release CITY ANNOUNCES ARREAR WRITE-OFFS TO END IN JANUARY 2006 The writing off of arrear debts owed by customers who have qualified for the Municipal Services Subsidy scheme will end on 31st January 2006. According to the Member of the Mayoral Committee (MMC) responsible for Finance, Strategy and Economic Development Cllr Parks Tau the decision to end the write-offs associated with the subsidy scheme is as a result of the excellent subscription to the Municipal Services Subsidy. "When we launched the registration programme for the subsidy, we estimated that around 100 000 households in the City would qualify for the scheme, and that we could write off around R1,5 billion rand in total. There was an immediate and significant response and by October this year we had already registered more than 88 000 households and written off more then R1,1 billion in arrear debt," he said. "We have noticed that the daily average of the number of people registering for the subsidy has declined substantially, from a high of just more than 1 000 people per day in June to 161 people per day in October. This is a key indication that we have almost reached our limit in terms of the number of people who qualify for the scheme and who have or want to register for it," he says. Tau says the introduction of the writing off of arrear debt as part of the Municipal Services Subsidy scheme was a deliberate attempt to incentivise customers who had long been frustrated by their inability to pay off large debt that had accumulated over long periods of time, and as a result were subject to credit control action by the City. He says this was an incentive to the poorest of Johannesburg's customers to resolve their historical outstanding debt, create a culture of payment by requiring members of the scheme to pay their account monthly without missing a payment and finally assist them to manage their budgets by introducing pre-paid meters. Anyone who feels that they may qualify for the scheme should apply at any of the City's regional offices before 3:30pm on 31st January 2006. After that customers will still be registered for the scheme on application but they will not have their arrears written off, says Tau. BACKGROUND INFORMATION: Municipal Services Subsidy WHAT IS THE MUNICIPAL SERVICES SUBSIDY? In its mandate to provide free basic municipal services to vulnerable groups, the City of Johannesburg is currently providing the following services: Free 6kl of water per month to all residents; free 50 kw of electricity to residents who receive electricity supply from City Power; no charge for assessment rates for properties valued less than R20 001. The Municipal Services Subsidy will cover the remaining charges of refuse removal and sanitation. In addition, successful applicants will have their arrears written off. The rules of the subsidy are contained in the Special Cases Policy (approved in October 2004 with amendments approved by Council in May 2005). WHO CAN APPLY? An account holder who is a beneficiary of a National Social Security Grant and has a total household income of less than two government pensions plus R1 (for example, pensions and people with disabilities)' An account holder receiving a National Social Security Grant and who lives with a partner also in receipt of a National Social Security Grant where the total family income is not more than the total of two government pensions plus R1 (for example two or more pensioners living in the same house); An account holder with a total household income of less than two government pensions plus R1 (for example someone who is unemployed or are part-time employed or have a low income); HIV/Aids breadwinners and/or their orphans who are account holders and receive a National Social Security Grant and have a total household income of less than two government pensions plus R1. WHAT DOCUMENTS DO I NEED TO BRING WITH ME WHEN I APPLY? You must bring original or certified copies of: South African ID book Copy of latest municipal account Proof of earnings; Affadavit from SA Police Services confirming employment status if unemployed; National Social Security Grant card (if applicable) Letter from SA Revenue Service confirming tax status; Copy of the death certificate of the account holder (where applicable) No applications will be considered without the relevant documents. HOW LONG WILL IT TAKE BEFORE I KNOW IF I QUALIFY FOR THE SUBSIDY? Applications will be considered and approved while you wait. WILL I GET A RECEIPT? Yes. You must be given an official receipt printed out by a computer as proof of your application. ARE THERE ANY CONDITIONS THAT APPLY TO THIS SUBSIDY? All applicants have to sign a declaration form that commits them to the following: having random home-assessment done for verification of information provided on the application form; receiving a free pre-paid water and free pre-paid power meter in line with the plans of City Power and Joburg Water in line with their operational plans; paying all current charges until the free pre-paid meters are installed; The subsidy and the write-offs are conditional on the information being provided being true. HOW LONG IS THE SUBSIDY VALID FOR? The subsidy is valid for a period of 36 months after which the account holder will have to reapply. Should the status of the applicant change during this time, the applicant is obliged to report this to the Council immediately. WHAT WILL HAPPEN IF I DON'T COMPLY WITH THE RULES? If it is found that the application is fraudulent or any information provided is false, then the application will be reversed; all arrears become payable immediately; credit control actions will be immediately reinstated; all avenues of legal action will be pursued; you will not be allowed to reapply for the subsidy for 5 years. WHERE CAN I APPLY? Anyone who thinks they may qualify should present themselves during office hours at any municipal pay point where registrations for the Municipal Services Subsidy are being done: ENDS For more information please contact: Mandy Jean Woods GM: Revenue Marketing and Communications City of Johannesburg Phone: 359-3420 Fax: 358 3423 Cell: 082 553 4211 (Please send sms if urgent) Email: mandyw@joburg.org.za Kirsten Edwards Account Executive Magna Carta: Financial Tel: (+27) 11 784 2598 Fax: (+27) 11 783 4735 Cell: (+27) 76 191 4878