Auxiliary on Electricity Purchases

Auxiliary as a debt collection mechanism in compliance with municipal policy, was not recently instituted but has been part of Overstrand Municipality’s debt collection method on accounts in arrears, FOR MANY YEARS. Hereby 60% of the purchase amount for electricity is credited to the person’s arrears account, as a method to reduce the outstanding balance that is owed to the municipality.

At the start of lockdown at the end of March 2020, it was decided not to apply the Auxiliaries (if an account is in arrears, 60% of the purchase amount for electricity will be allocated to the municipal account to reduce the arrears) for a period of 3 months, in order to be lenient to individuals who could not honour the payment of their municipal accounts.

Information was then advertised in the media with the request that the municipality be contacted to apply for an extension of payment of accounts, allowing the public to then have ample time to apply for an arrangement to be made between the parties. Since this announcement, there has been an acceleration of unpaid accounts across all areas.

With the announcement of level 3, the municipality again informed the public that the auxiliary on electricity purchases will be re-instated as of 30 June 2020. If your account was up to date OR ARRANGEMENTS HAD BEEN MADE AND HONOURED, the auxiliary would not apply. This decision was necessitated due to the municipality’s careful financial considerations since implementation of lockdown to take care of the sustainability of the municipality, and also to consider the financial strain on the public, due to the COVID-19 pandemic.

The public is once again urged to not just stop paying their accounts but to contact the municipality in order to make arrangements to settle the arrears.

IF ARRANGEMENTS ARE HONOURED, THE AUXILIARY CHARGE OF 60% WILL NOT APPLY.

Another positive is, that in applying for a payment arrangement your information could assist the administration with assessing whether you possibly qualify for indigent support and if the application is successful, you could receive an indigent subsidy.