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NALEDI 

LOCAL 

MUNICIPALITY 


INDIGENT POLICY 


DRAFT 

Created: 

May 2012 

Effective Date: 

May 2012 

Revision Date: 

May 2015 

Approved By: 

141/2012 





TABLE OF CONTENTS 


1. INTRODUCTION 3 

2. OBJECTIVE 4 

3. PURPOSE 5 

4. DEFINITIONS 5 

5. LEGISLATIVE FRAMEWORK 7 

6. SOURCES OF FUNDING 7 

7. COMMUNICATION PROCEDURES AND FREE BASIC SERVICES IMPLEMENTATION STRATEGY 8 

8. REGISTRATION OF INDIGENTS 10 

9. EXTENT OF INDIGENT SUPPORT 13 

10. INDIGENT HOUSEHOLDS INRETIREMNET CENTRES AND OLD AGE HOMES 14 

11. ARREARS ON INDIGENT ACCOUNTS 15 

12. THE NON-COMPLIANCE OF A HOUSEHOLD REGISTERED AS AN INDIGENT HOUSEHOLD 15 

13 TERMINATION OF INDIGENT SUPPORT 16 

14 EXIT PROGRAMME 17 

15 REPORTING REQUIREMENTS 17 

16 CAPACITY BUILDING 18 

17 AUDIT AND REVIEW 18 

18 DELEGATION OF POWERS AND AUTHORITY 18 

19 IMPLEMENTATION OF THIS POLICY 19 



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1. INTRODUCTION 


The provision of free basic services by local government is part of the broader social agenda and 
anti-poverty strategy of government. Naledi Local Municipality is therefore committed in 
supporting measures that assist and empower its community. 

The government at all levels has a constitutional obligation to take measures towards the 
realization of the social and economic rights of all people as contained in the Bill of rights. These 
rights include, inter alia, health care, water, education, housing, food, social security and the 
environment. 

In terms of section 27 of the South Africa Constitution Act, 1996 (Act 108 of 1996): 

"(1) everyone has the right to have access to - 

(a) Health care services, including reproductive health care 

(b) Sufficient food and water; and 

(c) Social security, including, if they are unable to support themselves and their 
dependants, appreciate social assistance. 

(2) The state must take reasonable legislative and other measures, within its available resources, 
to achieve the progressive realization of these rights." 

The integration of the indigent policy with the basic social package is part of the reasonable 
measures, within available resources, taken by the municipality in pursuance of the said 
constitutional obligations. 

The municipality must therefore at all times strive to fulfill the constitutional objectives as 
contemplated in Section 152 of the Constitution and to meet the criteria for a credible indigent 
policy as laid down in the Credible Indigent Policy Assessment Framework, 2008, provided by the 
Department of Local Government. 

The successful implementation of this policy depends totally on affordability and the social 
analysis of the area as should be included in the municipality's Integrated Development 
Planning, with regard to affordability the foundation is laid in section 74 of the Municipal 
Systems Act, 2000, which stipulates that poor households must have access to basic service 
through tariffs that cover only the operating and maintenance costs. 

The aforementioned should therefore not be viewed in isolation of measures, such as social 
grants, free primary health care, housing, promotion of small, micro and medium enterprises, 
etc. taken by other spheres of government as part of an integrated national poverty alleviation 
strategy. 


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2. OBJECTIVE 

The objective of this policy will be to ensure the following: 

i. The provision of basic services to the community in a sustainable manner within the 
financial and administrative capacity of the Council; 

ii. The financial sustainability of free basic services through the determination of 
appropriate tariffs that contribute to such sustainability through cross subsidisation; 

iii. Establishment of a framework for the identification and management of indigent 
households including a socio-economic analysis and the indigent exit strategy; 

iv. The provision of procedures and guidelines for the subsidisation of basic charges and the 
provision of free basic energy to indigent households; 

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

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

vii. To ensure that 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; 

viii. To link this policy with the municipal Integrated Development Planning, Local Economic 
Development initiatives and poverty alleviation programmes; 

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

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

Section 97(l)(c) of the Municipal Systems Act, 2000 (Act no. 32 of 2000) states that a 
municipality must provide in its policy for indigent debtors that consistent with its rates and 
tariff policies and any national policy on indigents. 

Indigent debtors to the poorest of the poor should have access to basic services in terms of the 
South African Constitution. Indigent debtors are not able to fully meet their obligations for 
services consumed and property taxes on their monthly accounts. 

The consumption of metered services by the indigent debtors must be maintained at 
manageable levels to increase affordability of service charges for them. 

Tariffs for Property Tax and services must be made more affordable for the poor. 

The poor are included in the household category of consumers, which category is responsible for 
the highest monthly escalation of arrear debt. Applications do not on all cases make full 
disclosures when application forms for indigent registration are completed and this information 
virtually impossible to verify. 

Criteria for the identification of poor households must be clear and transparent. 


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3. PURPOSE 


The purpose of the indigent policy is to: 

a) Provide basic services to the community in a sustainable manner, within the financial 
and administrative capacity of the municipality; 

b) Provide procedures and guidelines for the subsidisation of basic service charges to 
indigent households using the equitable share allocation, received from Central 
Government and other budgetary provisions; and 

c) Ensure affordability by subsidising tariffs calculated in terms of the municipality's tariff 
policy and by setting appropriate service levels in accordance with the municipality's 
service delivery plan. 

d) The Council also recognises that many residents can simply not afford the cost of full 
provision of services and for this reason the Council will endeavour to ensure 
affordability through: 

i. Settings tariffs in terms of the Councils Tariff Policy, which will balance the 
economic viability of continued service delivery; and 

ii. Determining appropriate service levels 

4. DEFINITIONS 

The purpose of this policy, the wording or any expression has the same meaning as contained in 
the Act, except where clearly indicated otherwise and means the following: 

"ACT "The Local Government Act: Systems Act 2000(Act No 32 of 2000) as amended from time 
to time 

"Indigent" means lacking the necessities of life. The following goods and services are 
considered as necessities for an individual to service: sufficient water, basis sanitation, refuse 
removal, environmental health, basic energy, health care, housing, food and clothing. 

"indigent person" a person whose household income does not exceed the minimum household 
income as predetermined by council. 

"Poverty" refer to the absence of capital such as land, access to natural resources, or to the 
importance of social and intellectual capital and even the climate of democracy and security 
necessary to enhance the capabilities of the poor and excluded; 

"Basic Refuse removal service "the removal of refuse from each property located within a 
municipality and disposal of this waste in an adequate landfill site; 

"Household" any person who occupies any property or part thereof; 

"Household income" the income accruing to all members of the household permanently 
residing at that address, including income of spouses. 

"Municipality" the institution that is responsible for the collection of funds and the provision of 
services to the customer of Naledi Local Municipality; 



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"Municipal services "those services provided by the municipality, such as 'inter alia the supply 
of water and electricity, refuse removal, sewerage treatment, and for which services charges 
are levied; 

"Municipal Manager "the person appointed as the Municipal Manager in terms of this section 
82 of the Local Government Structures Act, 1998, Act 117 of 1998 and includes any person 
acting in that position or to whom authority was delegated. 

"Council" the municipal council of the Naledi Local Municipality 

"Cycle" a period of 5 financial years 

"Defaulter "a person who owes money to the municipality after due date has expired; 

"Interest "a charge levied with the same legal priority as service fees and calculated at a rate 
determined by council from time to time on arrears monies; 

"Subsidy" subsidised services may include sewerage, refuse removal and assessment rates and 
consumption service charge; 

"Child headed household" means a household where both parents are deceased and where all 
occupants of property are children of the deceased and under the legal age to contract for 
services; 

"Indigent Management System" an electronic management system applied by other 
municipalities for the smooth and efficient management of the register of indigent households; 

"Programme officer" an official duly authorised by the municipality, or an employee of a 
services provider appointed by the municipality, who is responsible for the following; 

i. To ensure that applications for indigent support are received and assessed; 

ii. To ensure that applications are captured on the Indigent Management System. 

iii. To ensure that information on applications are verified and that regular audits are 
executed; and 

iv. To authorise expenditure with regard to indigent support. 

"Occupier" means the person who controls and resides on or control and otherwise uses 
immovable property provided that; 

i. 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; 

ii. Where both spouses reside on immovable property and one of them is an occupier 
thereof, the other shall also be deemed an occupier; 

"Indigent register" means the municipal list of indigent customers as per the municipal policy, 
which has to be updated on a monthly basis, designed to contain all the data contained within 
completed indigent application forms which contains the following 

"Owner" in relation to immovable property means: 


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i. The person in whom is vested the legal title thereto provided that - 

a. The lease of immovable property which is leased for a period of not less than fifty 
years, whether lease is registered or not, shall be deemed to be owner thereof, and 

b. The occupier of immovable property occupied in terms of a service or right 
analogous thereto shall be deemed the owner thereof; 

ii. 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; 

iii. 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; or 

iv. 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. 

i. A general plan or diagram registered in terms of the Land Survey Act, 1997 (Act No. 8 of 
1997) or 5 in terms of the Deeds Registries Act, 1937 (Act No. 47 of 1937); 

ii. A general plan registered in terms of the Sectional Titles Act, 1986 (Act No. 95 of 1986), 
and situated within the jurisdiction of the municipality; 

"Rates" means any tax, duty or levy imposed on property by the Council; 

5. LEGISLATIVE FRAMEWORK 

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

• The Constitution of the Republic of South Africa, 1996; 

• The Municipal Systems Act, 2000 (Act 32 of 2000); 

• The Municipal Finance Management Act, 2003 (Act 56 of 2003); 

• The Promotion of Administrative Justice Act, 2000 (Act 3 of 2000); 

• The Promotion The of Access to Information Act, 2000 (Act 2 of 2000); 

• The Property Rates Act, 2004 (Act 6 of 2004). 


6. SOURCES OF FUNDING 


6.1 The council will have to provide funds annually on the budget for the subsidization of 
indigent households for rates, refuse removal, electricity and alternative energy. 

6.2 The indigent subsidies will have to be financed from the equitable share contribution 
to the municipality obtained from National Treasury. 

6.3 Existing indigent arrears on rates, tariffs and services charges will be written off 
against the provision for bad debts. 

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INDIGENT POLICY 



6.4 Indigent households may be required to convert to prepayment electricity meters, 
the cost of which can be met by the equitable share fund. 

7. COMMUNICATION PROCEDURES AND FREE BASIC SERVICES IMPLEMENTATION STRATEGY 

7.1 The municipality has developed the draft free basic services communication and 
implementation strategy in terms of which communities will be informed and 
educated in order to have a clear understanding of this policy and implementation 
thereof. 

7.2 Regular information dissemination and awareness campaigns will be undertaken 
and eliminate unrealistic expectations both in terms of qualifying for the free basic 
services subsidy as well as the services that will be rendered and the qualifying for 
subsidy as well as service delivery in general and methods of communication that 
will be used, but not be limited to; 

7.2.1 Ward committees; 

7.2.2 Traditional leaders, where applicable; 

7.2.3 Community based organisations; 

7.2.4 Local radio stations and newspapers; 

7.2.5 Municipal accounts; 

7.2.6 Izimbizo's and road shows; and 

7.2.7 Jamborees where government and municipal officials are made available 
to assist residents with the following certified copies that must be 
attached; 

a) Identity document 

b) Pension grant receipt 

c) Affidavit 

d) Lease agreement form, etc. 

7.3 That CDW's, ward committees and councilors be seen as assisting in spearheading 
the programs embarked on by the free basic services unit. 


8. INDIGENT SUPPORT POLICY PRINCIPLES 


The following should be the guiding principles in implementing the Indigent Support Policy: 

8.1 The Indigent Policy is in accordance with Local Government Municipal Systems Act, 
2000, Local Authorities Ordinance No. 25 of 1974 and all other amending or related 
legislation. 

8.2 Relief will be provided by Council to registered residential owners and/or consumers 
of services. 


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8.3 The Council must, wherever possible, ensure that any relief is constitutional, 
practical, fair, equitable and justifiable to avoid alienating any group of households. 
There should be no differentiation whatsoever of any residential consumers. It 
should only differentiate in the level of service rendered. 

8.4 The subsidy for minimum service level should not result in the creation of a massive 
bureaucratic administration that would not be cost effective to implement. 

8.5 Differentiation must be made between those households who cannot afford to pay 
for basic services and those who simply do not want to pay for these services. 

8.6 The payment for services should be affordable to all consumers. 

8.7 It should be for a cycle, and reviewed annually. 

8.8 Council may review and amend the qualification for indigent support and social 
rebates, annually during the budget cycle. 

8.9 The collective or joint gross income of each household will be taken into account. 
The household income must be correctly reflected on the application form 
requesting indigent support, which may be withdrawn if the income is found to have 
been incorrectly submitted. 

8.10 The residents must formally apply on the prescribed application forms for the relief 
and will qualify for the indigent according to these prescribed criteria/principles laid 
down by Council. After the application form has been completed, an effective and 
efficient evaluation system will be used in order to obtain the outcome within a 
reasonable time determined by Council. 

8.11 If a person/household is found to be indigent, he/she will be registered on a 
database linked to the debtors system and to Council's Local Economic Development 
system. 

8.12 The onus is on the recipient to inform the Council of any change in his/her status or 
personal household circumstances. 

8.13 Disciplinary measures will be imposed on persons who misuse the system and 
provide incorrect information. These measures are: 

i. A person will forfeit his or her status as a registered indigent and will thereafter be 
treated as an ordinary residential property owner or account holder for the financial 
year concerned. 

ii. Relief may be withdrawn if a registered indigent fails to keep to the terms of the 
policy or any tampering with the installations of the municipality is detected. 

iii. A person shall be liable to repay the municipality with immediate effect all indigent 
relief received from the date of such fraudulent registration. 



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9. REGISTRATION OF INDIGENTS 


Criteria for Qualification: 

In order to qualify for indigent support the following criteria must be complied with : 


9.1.1 The applicant must be the full-time occupant on the premises within the Naledi 
Local Municipality area and may not own any other property within SA. 

9.1.2 Subsidies apply to households and not individuals. 

9.1.3 The verified gross monthly income of all household occupants over 18 years of age 
may not exceed the amount approved by Council from time to time during the 
budget process. 

9.1.4 All households that are child headed, even if they are below eighteen (18) years of 
age apply for the indigent support. 

9.1.5 All households applying for Free Basic Electricity must have electricity connected 
to the household. 

9.1.6 Consumption may not exceed a three month average of 18 kilolitres of water and 
450 units of electricity, inclusive of the free basic service grants. 

9.1.7 Where more than one household resides on the property, the following criteria 
will apply: 

a) When water and Electricity consumptions are metered separately - criteria 
9.1.6 will apply. 

b) When water and Electricity consumptions are metered through one meter, 
additional usage of 6kl water and 50kwh unit's electricity per additional 
household will be allowed. 

9.1.8 Where an owner of a property has passed away, the person who has inherited the 
property be allowed to apply for indigence assistance for the period in which the 
property is being transferred to his/her name on the following conditions: 

i. A new consumers account is opened in the name of the applicant, and 

ii. The following documents are submitted by the applicant: 

iii. Copy of death certificate. 


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iv. Copy of the identity document. 

v. Copy of the Deed of Grant. 

vi. Proof that the property was inherited by the applicant. 

vii. Certificate of appointment from the magistrate. 


9.1.9 The applicant referred to in 9.1.7 also be entitled to indigent assistance with 
regard to the assessment rates on the property, and the amount granted is 
transferred to the assessment account of the deceased. 

9.1.10 The onus for applying for indigent subsidy rest with the consumer who cannot 
afford to pay the full municipal tariff for services received. 

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


9.2 Once the above criteria has been met: 

a) The account holder or property owner must complete the official application 
form and the following supporting documents must be submitted as proof to 
the Finance department of the Naledi Local municipality: 

1) Documentary proof of income (e.g. letter from the employer, salary 
advice, pension card, declaration of profit, lease agreement etc.) must be 
presented in order to qualify for a subsidy. 

2) Identification documents 

3) A sworn affidavit to the effect that all the information supplied is true and 
correct and that all income from formal and/or informal sources has been 
declared. 

4) NB If a person supplies false information he/she will be disqualified from 
the subsidy scheme, and she/he will be held liable to repay the Council all 
the subsidies received. The Council serves the right to recover the lost 
monies through the court intervention. 

b) The application for subsidy will be considered upon receipt of the required 
documentation mentioned in 9.2 (a) above. 

c) The application forms will be processed and information provided will be 
assessed and screened by the Financial Service Directorate within the council. 

d) Council reserves the right to send officials to premises/households receiving 
relief for the purpose of conducting an on-site audit of the details supplied. 



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e) The indigent officer on recommendations by the Chief Financial Officer will 
approve or disapprove the submitted application form and also as per the 
indigent policy determine subsidy amount granted. 

f) The account holder must reapply for the subsidy each cycle. The council 
reserves the right to visit the premises through the appointed ward committee 
members, amongst others, to assist to verify the correctness of the 
information supplied in the application. The onus is on account holder to re¬ 
apply for relief each cycle, failing which the assistance will cease 
automatically. 

g) The indigent register will be updated annually and on a day to day basis as 
applications are processed and the verification process is undertaken through 
the year for any change of circumstances. 

h) The Indigent register after approval will be distributed to all the Municipal 
pay-points for public perusal. 

i) The re-application for indigent support will not be approved if the consumers 
account for water and electricity exceeded the free basic services approved by 
the council is not paid up to date, according to the Credit Control and Debt 
Collection by-laws. 

j) An indigent customer must immediately request de-registration if his/her 
circumstances have changed to the extent that he or she no longer complies 
with the requirements set out in the definition. 

k) All applicants will be informed about the outcome of their applications, and 
the validity of the assistance which also included the date of commencement 
and termination of the assistance. 

l) All approved beneficiaries for the indigent support automatically qualify for 
Free Basic Electricity whether on 20Amps or 60Amps supply. 

m) Alternative water supply (water tanks) will be provided to areas where there is 
no infrastructure within the Municipal jurisdiction. 

n) Funds are already allocated to the municipality to fund the implementation of 
free basic services and for the free basic alternative energy program through 
the equitable share grant disbursed by the National Treasury to municipalities. 

o) These funds are classified as free Basic Electricity/ Alternative Energy, where 
no electricity infrastructure exist, these funds must be channelled to fund free 

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basic alternative energy, the municipality will supplement the free basic 
electricity grant from its own income in ensuring that indigent households 
receive the free basic alternative energy. 

p) The municipality will make provisioning for alternative energy for cooking and 
lighting, to all the identified households where there are no immediate plans 
to electrify, including areas where energy poverty is prevalent. 

q) The application is approved, the assistance will be valid until the end of the 
cycle or a shorter period as prescribed by the Council, or if the consumer does 
not qualify as indigent any longer. 


10. EXTENT OF INDIGENT SUPPORT 

10.1 Subsidies will be limited to rates, water-, refuse removal-, electricity-, sewerage 
disposal- and alternative energy services. 

10.2 Subsidies will be determined during the compilation of the annual budget. 

10.3 The source of funding of the indigence subsidy is that portion of the equitable share 
contribution received from National Treasury and any additional provisions made by 
council and provided for in the annual operating budget. 

10.4 The subsidy will only be credited to the qualifying customer's accounts until the 
amount provided on the budget has been exhausted. 

10.5 In respect of property rates, approved indigent households are fully subsidised for 
property rates as provided for in the municipal annual budget and subjected to the 
provisions of the Municipal Property Rates Act 2006. Approved indigent households 
accounts will have the interest indicators flagged. 

10.6 In respect of water, a 100% subsidy up to 6kl per household per month will apply. 

10.7 In respect of electricity, a 100% subsidy up to 50kWh per month will apply. 

10.8 In respect of refuse removal services a 100% subsidy will apply. 

10.9 In respect of sewerage disposal services a 100% subsidy will apply. 

10.10 In respect of alternative electricity, where the municipality cannot connect 
electricity to grid or it's too expensive for the municipality to connect to the grid, the 
municipality will make provision for alternative energy source. When the area is 
identified for alternative energy, an investigation will be done to determine the best 
possible energy source to be used for the area. 

10.11 If consumption per metering period (month) exceeds any of the norms stated in 9.6 
above and 8.1.6 usage will be restricted. 

10.12 If a customer's consumption or use of municipal service is less than the subsidised 
service, the unused portion may not be accrued and the customer will not be 
entitled to a cash rebate in respect of the unused portion. 



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10.13 Annual service charges on the indigent's account will automatically be converted to 
monthly instalments. 

10.14 The accounts of indigent households will be exempted from interest. 

10.15 Where it occurs that consumers are minors due to circumstances, the support will 
be determined as per Council decision from time to time. 

10.16 Where water leakages occur at indigent households, such leakages can be repaired 
at Council's expense and the cost thereof recovered from the equitable share grant. 
The above recovery can only take place while sufficient equitable share fund are 
available. 

10.17 Where electricity meter problems occur at indigent households, such problems can 
be repaired at Council's expense and the cost thereof recovered from the equitable 
share grant. The above recovery can only take place while sufficient equitable share 
fund are available. 


11. INDIGENT HOUSEHOLDS RETIREMENT CENTRES AND OLD AGE HOMES 

11.1 The onus will be on the Board of Trustees/Managing Agent (hereinafter referred to 
as the representative) to apply to the municipality, for indigent status to be granted 
in respect of water Consumption on behalf of the owners of those units, who meet 
the criteria and conditions for qualification. Indigent consumers living in retirement 
centres or old age homes are eligible to qualify for assistance and support in terms 
of this policy, subjected to the following rules and procedures. 

11.2 The onus will be on the unit owner to apply to the municipality for indigent status to 
be granted in respect of property rates related charges. 

11.3 The representative will submit applications to the Chief Financial Officer. 

11.4 The free basic services sub-directorate will verify all applications and he or she must 
notify: 

a) The representative, whether an application was successful or not, with regard to 
the water consumption and electricity; and, 

b) The unit owner whether an application was successful or not, with regard to the 
property rates and other related charges; 

c) The Chief Financial Officer will credit the monthly municipal charges as; 

i) Water account of the Retirement Centre or Old Age Home with water, 
electricity where the municipality serves as an electricity provider and 
sewerage charges, the amount of which will be calculated by dividing the 
total number of kilolitres of water consumed by the number of units in the 
complex, but up to a maximum of 200 litres of water per day for each unit 
that qualifies for assistance. 


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ii) Rates and refuse charges account of the unit owner with the amount 
determined by the municipality. 

11.5 The representative must, in respect of monthly water credits allowed under indigent 
support, ensure that such credits are off-set against the monthly levies of the 
relevant individual units; such representative also being required, once every six 
months, or at such intervals as may be determined by the municipality, to provide 
proof to the Chief Financial Officer that the monthly levies of poor households which 
qualify for assistance, have been adjusted by the amounts credited to the account of 
the Retirement Centre or Old age Home. 


12. ARREARS ON INDIGENT ACCOUNTS 

12.1 Upon registration as an indigent household, the arrears on the account of the 
applicant will be kept pending for a period of at least 1 month after which it may be 
written off, Interest may be calculated on the arrears as contemplated; 

12.2 If the applicant exits from the indigent support programme within the six (6) months 
period the arrears will be re-introduced in the account and will be subject to the credit 
control and debt collection policy of the municipality; 

12.3 Arrears related to housing instalments or rent will be recovered through the electricity 
prepayment meter; 

12.4 Customers who qualify for an equitable share subsidy will be placed on restricted 
service levels in order to limit further escalation of debt; 

12.5 Where a qualifying customer's account is paid in full at the date of application, or 
regularly maintains a paid up monthly account including any arrangement for arrear 
debt, after receiving the subsidy, the restriction on service levels will be waived up to 
the maximum levels specified . 

12.6 Customers who qualify for equitable share subsidy and are still in arrears, will be 
placed on the pre-paid services system whereby 40% of electricity purchases be 
allocated to the arrear debt. Where a qualifying customer's account is paid in full or 
regularly maintains a paid up monthly account, after receiving the subsidy, the levy on 
the pre-paid services will be removed. 

13. THE NON-COMPLIANCE OF A HOUSEHOLD REGISTERED AS AN INDIGENT HOUSEHOLD 

13.1 Failure to comply 

When an indigent consumer fails to comply with the arrangements made to receive subsidy, 
they will be dealt with in terms of the Council's uniform credit control procedures. 


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It may happen that even the introduction of the indigent policy, certain households may be 
in arrears on the amount due by them. These consumers will have to make arrangements 
with the Municipal Manager to pay off owing in reasonable time, and also at the time of 
claiming the monthly subsidy. 

13.2 Withdrawal and non-qualification of Indigent subsidy: 

The subsidy will be withdrawn at the discretion of the council if: 

a) The customer who qualified for the subsidy fails to keep to terms of the policy 
agreement or 

b) If it is found the information provided in incorrect and fraudulent 

c) Any tempering with installations of the Council is detected 

d) Arrangements for repayment of arrear accounts have not been made. 

e) Any tempering with the installation of the council and Eskom is detected and 
that the customer will be liable for the payment of such tempering. 


13 TERMINATION OF INDIGENT SUPPORT 

Indigent Support will be terminated under the following circumstances: 

13.1 Upon death of the account-holder or the head of the household where no accounts 
are rendered; 

13.2 At the end of the indigent cycle, except in the case of pensioners and disabled; 

13.3 Upon sale of the property in respect of which support is granted; 

13.4 When circumstances in the indigent household have improved to the extent where 
the income threshold as determined is exceeded; 

13.5 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; 

i. All arrears will become payable immediately; 

ii. Stringent credit control measures will apply; and 

iii. The applicant will not be eligible to apply for indigent support for a period of 
2 years; 

13.6 Upon death of the indigent, If the indigent had dependents the dependents will need 
to re-apply for the support as subsidies are not transferable; 

13.7 When the indigent disposes his /her property; 

13.8 When the indigent's circumstances change or the indigent criteria for approval 
changes to the extent that approval no longer applies; 

13.9 If the indigent fails to pay the account of his/her consumption or use of a municipal 
service in excess of the subsidized service or fails to honour any arrangements made 
by him/her for payment for outstanding accounts. 


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14 EXIT PROGRAMME 


The proposed exit of indigent's beneficiaries from the approved indigent register would be; 

14.1 The continuous verification of the register. 

14.2 The involvement of all stakeholders namely, Councillors, Community Development 
Workers and Ward Committee members. 

14.3 Members of households registered as indigent will be prepared to participate in 
exit programmes co-ordinated by the municipality in collaboration with other 
government departments, stakeholders involved, sector departments and the 
private sector. 

14.4 As part of its broader poverty reduction programme the municipality undertakes to 
provide for the participation and accommodation of indigent persons in its Local 
Economic Development initiatives and in the implementation of integrated 
development programmes where possible. 

14.5 Naledi Local Municipality will promote exit from indigence by; 

a. Identifying indigents for inclusion in public works projects; 

b. Initiating local job creation projects such as cleansing operations, small 
infrastructure projects etc.; 

c. Facilitation of opportunities to enter the informal trade market 

d. Facilitation of food security projects 

e. Liaison with National and Provincial departments to include indigent customers 
in their public works programme. 


15 REPORTING REQUIREMENTS 

15.1 The municipal manager shall report on a monthly basis to the mayor for the month 
concerned and by municipal ward: 

1. The number of households registered as indigents and a brief explanation 
of any movements in such numbers; 

2. The monetary value of the actual subsidies and rebates granted; 

3. The budgeted value of the subsidies and rebates concerned; and 

4. The above information cumulatively for the financial year to date. 


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The mayor shall submit the above reports on a quarterly basis to the council and to the 
municipality's ward committees, or monthly frequently to any ward committees, when 
applicable. 

Performance against targets set in respect of indigent support and poverty relief and in 
particular with regard to the following: 

a) Number of applications for indigent support dealt with; 

b) Time taken to process and finalise applications; 

c) Site visits undertaken; 

d) Awareness initiatives; and 

e) Exit initiatives. 

f) Changes in the registered status of indigents. 


16 CAPACITY BUILDING 

The municipality will ensure that all officials and councillors are appropriately capacitated in 
Free Basic Services in terms of the following key areas: 

1. Database management 

2. Demand and revenue management 

3. Policy and by-law implementation 


15.2 


15.3 


17 AUDIT AND REVIEW 

i. The municipality will conduct regular audits of the indigent register with regard to 
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 the applicant. 

ii. The frequency of such audits will depend on the institutional capacity of the 
municipality to do so; it is proposed that at least monthly targeted audits and 
reviews are undertaken, with a completed review scheduled for at least every five 
(5) years cycle. 


18 DELEGATION OF POWERS AND AUTHORITY 


a) Delegation 


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This policy should be applied with due observance of the municipality's policy with regard 
to delegated powers. Such delegations refer to delegations between the Council and 
Municipal Manager as well as between the Municipal Manager and other responsible 
officials. All delegations in terms of this policy document should be recorded in writing. 

b) Authority 

Any deviation from this policy for whatsoever reason must be authorized by the 
Municipal Manager and in the case of the municipal manager, the Mayor will authorize. 


19 IMPLEMENTATION OF THIS POLICY 

a) This policy will be effective from the date the policy is approved per council resolution. 

b) The implementation of this policy cannot be backdated and all sections thereof will only 
be implemented from date of approval. 


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