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Indigent Policy 2021/22

News & Blog

INDIGENT POLICY  2021/2022

ABBREVIATIONS

IDP: Integrated Development Plan

LED: Local Economic Development

DLG: Department Local Government

RDP: Reconstruction and Development Programme

CDW: Community Development Workers

FBS: Free Basic Service

RSA: Republic of South Africa

UIF: Unemployment insurance fund

MFMA: Municipal Finance Management Act 56 of 2003

DEFINITION OF TERMS

“Responsible Official” an official duly authorised by the municipality, or an employee of a service provider appointed by the municipality, who is responsible for the following:-

  1. To ensure that applications for indigent support are received, assessed, and submitted for consideration and approval,
  2. To ensure that approved applications are captured on the Financial Management System; and
  3. To ensure that information on applications is verified and that regular audits are executed.

“Household” means a registered owner or tenant with or without children who reside on the same premises.

“Indigent” means any household or category of households, earning a combined gross income, as determined by the municipality annually (Tariff List) in terms of a social and economic analysis of its area, which qualifies for rebates/remissions, support, or a service subsidy, if child support grants are not included when calculating such household income.

“Municipality” means the KOPANONG LOCAL MUNICIPALITY, established in terms of Section 12 of the Municipal Structures Act, 117 of 1998, and includes any political structure, political office bearer, Councillor, duly authorized agent or any employee acting in connection with this by-law by virtue of a power vested in the Municipality and delegated or sub-delegated to such political structure, political office bearer, councillor, agent or employee,

‘Occupier’ means the person who controls and resides on or controls and otherwise uses immovable property, provided that,

  1. the spouse of the owner of immovable property, which is used by such spouse or owner as a dwelling at any time, shall be deemed to be the occupier thereof,
  2. where both spouses reside on immovable property and one of them is an occupier thereof, the other shall also be deemed an occupier,

‘Owner’, in relation to immovable property, means,

  1. the person in whom is vested the legal title thereto provided that, the lessee of immovable property which is leased for a period of not less than fifty years, whether the lease is registered or not, shall be deemed to be the owner thereof; and the occupier of immovable property occupied in terms of a servitude or right analogous thereto shall be deemed the owner thereof.

If the owner is absent from the Republic or if his or her address is unknown to the Municipality, then any person who as agent or otherwise receives or is entitled to receive the rent in respect of such property,

  1. If the owner is deceased, insolvent, has assigned his or her estate for the benefit of his or her creditors, has been placed under curatorship by order of court or is a company being wound up or under judicial management, then the person in whom the administration of such property is vested as executor, administrator, trustee, assignee, curator, liquidator or judicial manager, as the case may be; OR
  2. If the Municipality is unable to determine who such person is, then the person who is entitled to the beneficial use of such property,

‘Premises’ includes any piece of land, the external surface boundaries of which are delineated on,

  1. A general plan or diagram registered in terms of the Land Survey Act, 1997 (Act No. 8 of 1997) or in terms of the Deeds Registries Act, 1937 (Act No. 47 of 1937); or
  2. A general plan registered in terms of the Sectional Titles Act, 1986 (Act No. 95 of 1986), and
  3. Situated within the jurisdiction of the municipality.

‘Rates’ means any tax, duty or levy imposed on property by the Council.

  1. INTRODUCTION

3.1 The Municipal Council must give priority to the basic needs of the community, promote the social and economic development of the community, and ensure that all residents and communities in the Municipality have access to at least the minimum level of basic municipal services in terms of Section 152(1) (b) and 153(b) of the Constitution.

3.2 Basic services are generally regarded to be access to electricity, access to clean water within a reasonable distance of one’s dwelling, basic sanitation, solid waste removal and access to and availability of roads.

3.3 The Constitution recognises Local Government as a distinct sphere of Government and as such also entitles Local Government to a share of nationally raised revenue, which will enable it to perform their basic function of providing essential services to the community within their boundaries.

3.4 The key purpose of an indigent subsidy policy is to ensure that households with no or lower income are not denied a reasonable service, and on the contrary the Municipality is not financially burdened with non-payment of services. Provided that grants are received, and funds are available, the indigent subsidy policy should remain intact.

3.5 To achieve the purpose it is important to set a fair threshold level, and then to provide a fair subsidy of tariffs.

3.6 The customer, to qualify as an indigent, needs to complete the necessary documentation as required and agree to regulations and restrictions stipulated by KOPANONG LOCAL MUNICIPALITY.

LEGISLATIVE FRAMEWORK

This policy is designed and implemented within the framework of the following legislation,

4.1 The Constitution of the RSA, Act 108 of 199

4.2 Local Government Municipal Systems Amendment Act, 2003, Act No 44 of 2003;

4.3 The Local Government Municipal Finance Management Act 2003, Act no 56 of 2003;

4.4 The Promotion of Administrative Justice Act, 2000, Act no 3 of 2000.

4.5 The Promotion of Access to Information Act,2000, Act no 2 of 2000; and

4.6 The Local Government Municipal Property Rates Act, 2004, Act no 6 of 2004.

4.7 FBS Policy, all other sectors policies

4.8 White Paper on Local Government

POLICY BACKGROUND

The policy seeks to guide KOPANONG local municipality to address poverty, unemployment, and inequality. The triple challenges are determined by KOPANONG local municipal economic profile extracted from the municipal IDP.

MUNICIPAL ECONOMIC PROFILE

The status of the municipality’s economy epitomizes the legacy of apartheid thought its skewed development among former white areas and townships. All communities are affected in terms of poverty and development deficit. Upliftment of the local economy has therefore been identified as a key focus area for the municipality.

6.1 Unemployment

On average 22.3% of the population in KOPANONG is unemployed, with the highest rate of unemployment being in rural areas. This high unemployment rate has serious repercussions on the ability of the residents of KOPANONG to pay for their daily needs. Unemployment is more than 21% in all the areas and is the highest in Springfontein at 32%.

6.2 Household income

Household income is a parameter which is, amongst others, also indicative of poverty levels within a community. A financially healthy community’s household income usually displays a so-called “normal” income distribution pattern where the income is spread over a wide range of income categories, and the income of the bulk of the community is situated within the first half to two thirds of the income category range. Females are more likely to be unemployed and looking for work more than males.

Poor communities are sometimes highly dependent on the environment for coping and survival purposes.

POLICY PRINCIPLES

It is against the above background that the KOPANONG LOCAL MUNICIPALITY undertakes to promote the following principles, to ensure that the portion for free basic services allocated as part of the equitable share received annually will be utilised for the benefit of the poor only and not to subsidise rates and services charges of those who can afford to pay,

To link this policy with the Municipality’s Integrated Development Plan (IDP), Local Economic Development (LED) initiatives and poverty alleviation programmes,

To promote an integrated approach to free basic service delivery; and

To engage the community in the development and implementation of this policy.

POLICY OBJECTIVES

In support of the above principles the objectives of this policy will be to ensure the following:

8.1 The provision of basic services to the community in a sustainable manner within the financial and administrative capacity of the Council,

8.2 The financial sustainability of free basic services through the determination of appropriate tariffs that contribute to such sustainability through cross subsidisation,

8.3 Establishment of a framework for the identification and management of indigent households including a socio-economic analysis and an exit strategy,

8.4 The provision of procedures and guidelines for the subsidisation of basic charges and the provision of free basic energy to indigent households,

8.5 To ensure co-operative governance with other spheres of government; and

8.6 To enhance the institutional and financial capacity of the municipality to implement the policy.

SCOPE OF APPLICATION

Any household which is responsible for the payment of services and rates, earning a combined gross income equivalent to or less than two times the Government pension grant as prescribed by the National Department of Social Development or in line with the National Indigence Framework issued by the Department Local Government (DLG), who qualify, according to the policy, for rebates/remissions or a services subsidy. Examples hereof include pensioners, the unemployed and child-headed families who are unable to fully meet their obligations for municipal services consumed and property taxes on their monthly accounts. Any other Government grants received by such households will not be considered as additional income.

TARGETING OF INDIGENT HOUSEHOLDS

The effective targeting of indigent households and the implementation of this policy will depend largely on the social analysis included in the IDP, the LED initiatives and other poverty relief programmes of the KOPANONG LOCAL MUNICIPALITY. The socio-economic information and performance indicators contained in these documents must form the basis for the targeting of indigent households. Against the background of such socio-economic analysis, the municipality must within its financial and institutional capacity decide which targeting approach or option should be applied.

10.1 The municipality may apply the following targeting methods,

Targeting approach Application        
Service levels   Lowest service levels normally in informal settlements and rural areas.
Property value   Applicable only to registered indigents in respect of subsidised or RDP housing to determined in addition to the R15 000
in terms of the Property Rates Act, 2004.
Household Income   Threshold shall be determined in terms of socio-economic analysis.
Equalling two state pensions grants (As per Tariff list)) per Indigent household or an amount determined by the Council  from time to time.
Geographical (Zonal) Specific areas (rural or urban)  where households are regarded as poor targeting, Irrespective of service level.  
   

10.2 For every financial year the municipality will use household income (as indicated in Tariff List) as the targeting approach for the registration and verification of indigent customers.

QUALIFICATION CRITERIA

Qualification criteria for indigent support shall be determined by the municipality from time to time, provided that until the Kopanong Local Municipality determines otherwise, the following criteria shall apply:

11.1 The applicant must be a resident within the Kopanong Municipal area.

11.2 The applicant must be in possession of a valid South African identity document.

11.3 The total monthly gross income of the registered owner/ tenant and his/her spouse or life companion is not more than an amount as determined by Council from time to time. This amount will be determined at the beginning of every financial year and will be applied for the duration of that particular financial year. Currently the income amount is deemed to be less or equal to the amount received by two state pensioners as determined annually by the Minister of Finance.

11.4 The applicant must be the owner or tenant who receives municipal services and is registered as an account holder on the municipal financial system,

11.5 Any occupant or resident of the single household referred to above may not benefit in more than one property in addition to the property in respect of which indigent support is provided.

11.6 A tenant can only apply for the benefits in respect of the charges he/she is billed for while the landlord remains liable for all ownership related charges such as rates.

11.7 The current account of a deceased estate may be subsidised if the surviving spouse or dependants of the deceased who occupy the property, applies for assistance. Relevant supporting documentation need to be submitted as part of the application in order for the municipality to assist with the costs of transferring the property (e.g. Housing permit, Court order or letter of Authority).

11.8 Child headed families will be assisted and costs of transfer of the property will be waived.

11.9 The applicant whose total monthly household exceed the threshold, but the circumstances are such that the applicant is not able to pay for services (e.g. When the applicant uses most of the monthly income towards payment of medication) may apply. Their applications will be considered by Council on merit.

APPLICATION PROCESS

12.1 Application/Registration

  1. A person applying for indigent support must complete a formal indigent support application form approved by the municipality such forms will be available at approved registration points provided by the municipality.
  2. Applications for the indigent subsidy must be accompanied by the following documentation:
  3. The latest municipal account/ account information for the household,
  4. Proof of the identity of the account holder; and

iii. Proof of the income of all occupants on the property, i.e. a letter from his/her employer, salary slip/ envelope, pension grant receipt or bank statement showing the grant transferred unemployment insurance fund (UIF) card or a certificate that confirms registration as “looking for employment”.

  1. Bank Statement for the last three months certified by the bank and a statement from the applicant that no other bank accounts exist.
  2. In the absence of any proof to be submitted either through paragraphs 12.1(a)(iii) and 12.1(a)(iv) an affidavit must be submitted together with the documentation required in terms of paragraph 12.1(a)(iii).

12.2 Applications

The indigent application form should be completed in full and then captured onto the relevant indigent register and system.

Applicants must give permission that the information submitted may be verified by a credit bureau or similar agency.

All proof of income affidavits must be sworn by the SAPS or a Commissioner of Oaths on signing.

12.3 Publication of Register of Indigent Households

Names of indigent beneficiaries must be open for public perusal and comment.

The applicant must give permission to the municipality to publish his/her name and address on a list of account holders who receives subsidy in terms of this Policy.

12.4 Right of Appeal

An applicant who feels aggrieved by a decision taken in respect of his or her application may lodge an appeal in terms of section 62 of the Municipal Systems Act, Act no 32 of 2000.

12.5 Complaints Management

Written objections from the public must be referred to the responsible official who will be responsible for investigating the validity of the complaint and referral to the Indigent Committee for appropriate action.

PENALTIES AND DISQUALIFICATION FOR FALSE INFORMATION

Indigent Support will be terminated under the following circumstances:

  1. Upon death of the registered indigent customer for that particular property.
  2. Upon sale of the property in respect of which support is granted.
  3. When circumstances in the indigent household have improved to the extent where the income threshold as determined is exceeded.
  4. If the applicant is found to have lied about his/her personal circumstances or has furnished false information regarding indigent status, in which case the following will apply:

13.1 All arrears will become payable immediately,

13.2 Stringent credit control measures will apply,

13.3 The applicant will not be eligible to apply for indigent support for a period of five (5) years.

13.4 Applicants will be required to sign and submit a sworn affidavit, to the effect that all information supplied is true and that all income, i.e. from formal and/or informal sources, is declared. Non-compliance will make the application invalid.

13.5 Any person who supplies false information will be disqualified from further participation in the subsidy scheme and be liable for the immediate repayment of all subsidies received and all debts including arrears that have previously been written off. Council may furthermore institute criminal proceedings, as it may deem fit.

13.6 The onus also rests on indigent support recipients to immediately notify Council of any changes in their indigence status.

EXIT STRATEGY – EXIT MECHANISM

Members of households registered as indigent should be prepared to participate in exit programmes coordinated by the municipality in collaboration with other Government Departments and the Private Sector. The expectation of this clause excludes pensioners and child-headed households. Empowerment of indigent households through, job opportunities, especially the youth.

MONITORING AND EVALUATION

Once the verification has been completed the responsible official must submit the application and recommendation to the Chief financial officer for review and submission of a batch the Accounting Officer who will then submit the batch to Council for approval.

To ensure credibility Councillors, Ward Committees, will be consulted as part of the verification process.

VERIFICATION OF THE INDIGENT REGISTER

Upon registration of an application, all information will be verified by the responsible officials.

COMMUNICATION

17.1. The municipality will develop a communication strategy in terms of which communities will be informed and educated to have a clear understanding of this policy and its implementation.

17.2. Regular information dissemination and awareness campaigns must be undertaken to eliminate unrealistic expectations both in terms of qualifying for subsidy as well as service delivery in general and methods of communication may include, but will not be limited to:

  1. Ward committees,
  2. Community Development Workers (CDW’s),

iii. Local radio stations and newspapers

  1. Municipal accounts
  2. Imbizo’s and road shows; and
  3. Sector department road shows (sharing resources promotion of access to services)

vii. Government and municipal officials are made available to assist residents with applications such as ID applications, pension- and social grant applications, etc.

CONTACT PERSON IN TERMS OF THE CONTRACT

Office of the Chief Financial Officer
Contact Numbers: 051 – 0114951
Email address: CFO@Kopanong.gov.za

ADDITIONAL INFORMATION/ITEMS COVERED

19.1 Institutional Arrangements

The Municipality must designate existing staff or appoint officials or engage appointed Community Development Workers who have been trained in terms of the municipality’s directions to assist with the implementation and development of this policy and must establish appropriate registration points in its area, the cost of which may be funded through the equitable share allocation.

19.2 Indigent Applications submitted by Councillors and Ward Committees

All application forms collected or completed by Ward Councillors and Ward Committees on behalf of the beneficiaries will be submitted to the responsible official.

19.3 The extent of the Indigent Support

Within the abovementioned budgetary process and in striving to create the situation where poor households will be granted access to a full social package, assistance and support to households may be granted as set out below.

19.3.1 Electricity

All registered indigents will receive 50 kWh of electricity per month fully subsidised or an amount to be determined by Council on an annual basis.

Unused free electricity units will not be carried over to the next month. Any meter tampering will result in the subsidisation to be withdrawn. In the event of the electricity supplied by Eskom directly the Municipality will pay over an amount to Eskom equal to 50 kWh of electricity per month based on the customers registered with the KOPANONG LOCAL MUNICIPALITY as indigents and not based on any indigent records submitted by Eskom.

19.3.2 Water

All registered indigents will receive 6 kilolitres of water per month fully subsidised or an amount as determined and provided for by the Council in the annual budget from time to time.

The subsidy shall not be more than the applicable tariff for that year and will be applied for the duration of that particular financial year. The subsidy shall form part of the tariff policy applicable for the financial year.

19.3.3 Sanitation

All registered indigents shall be fully subsidised for sanitation charges calculated on the bases of the market value of the property. The subsidy shall not be more than the applicable tariff for that year and will be applied for the duration of that particular financial year. The subsidy shall form part of the tariff policy applicable for the financial year.

19.3.4 Refuse Removal

All registered indigents shall be fully subsidised for the basic levy for refuse removal for one service connection as provided for by Council in the annual budget from time to time.

The subsidy shall not be more than the applicable tariff for that year and will be applied for the duration of that particular financial year. The subsidy shall form part of the tariff policy applicable for the financial year.

19.3.5 Property Rates

All registered indigents shall be fully subsidised for the payment of property rates provided for by Council in the annual budget from time to time and subject to the provisions of the Municipal Property Rates Act.

The subsidy shall not be more than the applicable tariff for that year and will be applied for the duration of that particular financial year. The subsidy shall form part of the tariff policy applicable for the financial year.

19.3.6 Burials

In the event of the death of a member of a registered indigent household, the municipality will exempt the household from the cost of digging and preparation of a grave, provided that the burial takes place in a municipal cemetery.

Such application must be accompanied by a certified copy of the Death Certificate, Burial Order, and an affidavit regarding the relationship of the applicant.

In the event of the dead of a member of a registered indigent household, the municipality will follow the processes outline in the “Guidelines for the burial of indigent persons and unidentified bodies” which forms part of this policy attached hereto as an annexure, Council also subsidises the cost of a coffin within limits determined annually.

19.3.7 Validity Period

The validity period of assistance will be for the duration that the applicant remains indigent. Households, in terms of the audit and review process, will be subjected to scrutiny to determine any change in status.

Households may have to periodically re-apply. The period of validity will be determined by the municipality from time to time. Re-application must be done at least once a year as determined by the municipality.

Pensioners and disabled person will remain in the indigent register and there is no need for this group to re-apply since their status is regarded as permanent. However, the periodic verification must be performed to ascertain that the right people are enjoying the benefit.

19.3.8 Death of Registered Applicant

If the approved applicant passes away the heir/s of the property must re-apply for indigent support, provided that the stipulated criteria are met.

19.3.9 Arrears and Excess Usage of Allocations

Upon registration as an indigent household, the arrears on the account of the applicant will be written off.

Where restriction of consumption applies to a particular service, applicants may not refuse to be restricted in terms of Council Policy. Where restrictions are not possible the account holder will be responsible for the consumption more than the approved subsidy.

Current policy requires that upon approval of indigent status the customer’s meters for electricity and water will be converted to pre-paid meters at the cost of Council.

If a pre-paid meter cannot be installed immediately, the customer may be subjected to restriction measures to only allow for the monthly minimum free basic services.

The writing-off of any arrears is strictly subject to the provision that the property may not be sold within a period of three years from the date that the owner qualifies as a registered indigent. In the case of the property being sold inside a period of three years the arrear debt, excluding any further accumulated interest, will be recovered before a clearance certificate is issued.

Costs for operation and maintenance of infrastructure at indigent households to be borne by the municipality (Align it with Water Conservation and Demand Management Plan)

19.3.10 Audit and Review

The municipality may conduct regular audits of the indigent register about the information furnished by applicants, possible changes in status, the usage of allocations and debt collection measures applied and where necessary review the status of applicants.

The frequency of audits will depend on the institutional capacity of the municipality to do so. Targeted audits and reviews should be undertaken to ensure the verification and reregistration of each qualified indigent customer at least once in a three (3) year cycle.

Council reserves the right to send officials or its agents to premises/households receiving relief from time to time for the purpose of conducting an on-site audit of the details supplied.

Where any doubt exists regarding the status of a registered indigent customer, the matter should immediately be referred to the responsible official for verification at any time.

19.3.11 Drafting and maintenance of an Indigent Register

The Municipal Manager or his/her delegate will be responsible to compile and administer the database for households registered in terms of this policy. Registration will take place on a continuous basis and in accordance with the programme of quarterly targeted audits and reviews. The Municipality may decide to launch special registration campaigns from time to time.

The Municipal Manager or his/her delegate will aid persons who cannot read or write, at such times and places as are specified in the notices published to indicate that the registration programme is to take place.

LIST OF STAKEHOLDERS

20.1 National Treasury

20.2 Provincial Treasury

20.3 Cogta

20.4 Eskom

20.5 Department of Water affairs

20.6 Kopanong Local Community

APPROVAL BY COUNCIL

This policy shall be implemented once approved by Council. All future applications for indigent registrations must be considered in accordance with this policy.

In terms of section 17(1) (e) of the MFMA this policy must be reviewed on annual basis and the reviewed policy tabled to Council for approval as part of the budget process.

This policy has been approved by the municipality in terms of resolution no.  _____________ dated

_______________ and comes into effect from 1 July 2021.

 

Adoption of Policy

________________________

Municipal Manager

Date: ___________________

 

KOPANONG LOCAL MUNICIPALITY

 

________________________

Mayor

Date: ___________________

 

KOPANONG LOCAL MUNICIPALITY

COUNCIL RESOLUTION NUMBER: __________________

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