DEBT INCENTIVE SCHEME
The arrear debt of the Municipality has been consistently increasing and it has become increasingly difficult to collect arrear debt of 120 plus days.

To compound the problem, the residents of BCMM have been severely impacted by the effects of COVID-19, which was declared a Pandemic by the World Health Organization. Due to the National Lockdown which came into effect on 21 March 2020, BCMM residents have faced further economic pressure as they were not able to generate or earn sufficient income as business closed as regulated. A Debt Incentive Scheme has therefore been approved by Council in order to assist the customer in settling arrear debt by means of an incentive to the customer. This will lighten the financial burden of the municipality’s customers. A Pay UP and Win Incentive has also been approved for customers whose accounts are paid up and are not in arrears.

RULES OF THE SCHEME
•    The Scheme is open to all customers, except Government Accounts, who have arrears in the ageing category of 120 days and older as at 31 December 2020 and whose accounts are still in arrears at the date of registering for the scheme.
•    Indigent customers will not qualify for Option 1 or Option 2 of the scheme, as their debt is subject to an annual write off. They will however qualify for the Pay up and Win Incentive, if they keep their accounts up to date.
•    The Scheme will run for a period of six months, from 01 January 2021 to 30 June 2021, however the actual registration will commence on the 18th January 2021 to allow consumer to register for the Debt Incentive Scheme.
•    Payments in terms of the scheme will be strictly monitored and agreements will be cancelled should the consumer default on any payment in terms of the scheme.

HOW IT WORKS
There is a monthly competition for good-paying customers who keep their accounts up to date; and two ways to benefit from the Debt Incentive Scheme for customers with account in arrears.
•    All customers with paid up accounts will automatically be entered into the Pay Up and Win Incentive on a monthly basis for the duration of the scheme.
•    Customers with arrear debt who want to benefit for a reduction in debt must register for either Option 1 or Option 2 of the scheme.

PAY UP AND WIN
•    All residential consumers who pay their municipal accounts in full (no arrangement or handed over debt) on or before the due date will automatically be entered into a draw to receive a discount equal to the value of the account paid, up to a maximum amount of R5,000.00.
•    There will be one winner per Region (Coastal, Midland, Inland). The amount will be credited to the account and can be deducted from the next payment due by the customer. 
•    Municipal employees and Councillors are specifically excluded from this competition.

OPTION 1: RAND FOR RAND INCENTIVE
•    The consumer is to settle the current account, 30-days and 60-days balance, plus 60% of the arrears balance from 90-days and older (including handed over debt and existing arrangements) and will receive a 40% discount on the arrears balance from 90-days+.
•    The handed over debt will be recalled from the Municipality’s collection agent as soon as the quote is signed, and payment made. No legal fees will be added once the quote has been accepted and paid.
•    The remaining 40% of the debt will automatically be written off once the above steps have been adhered to.

EXAMPLE
Mr X owes the municipality R12 000 and wants to enter the debt incentive scheme;
The R12 000 is made up of the following ageing categories:
R     300 -  Current               Must be paid
R     320 -  30 days                Must be paid
R     300 -  60 days          Must be paid 
R11 080 - 90 days+              60% Must be paid (R6 648)
R12 000 - Total Debt
In this instance, Mr X will pay R7 568 (R300 + R320 + R300 + R6 648) and receive a write off of R4 432 (40% of R11 080).
The account will then have a zero balance.

OPTION 2: WRITE OFF DEBT OLDER THAN 5 YEARS
•    The consumer is to pay the current debt in full and to enter into an arrangement with the municipality for the debt from 30 days to 5 years. Once this arrangement has been paid up, the debt older than 5 years will be written off. The calculations will include any handed over account and existing arrangements.
•    This arrangement may not exceed 24 months for domestic customers and 12 months for business customers.
•    The handed over debt will be recalled from the Municipality’s collection agent as soon as the quote and acknowledgement of Debt is signed, and payment made. No legal fees will be added once the quote has been accepted and paid.
•    Customers who have existing arrangements with the municipality that have been honoured will automatically form part of this option and will not have to make application to have the debt older than 5 years written off.

EXAMPLE
Mr X owes the municipality R52 000 and wants to enter the debt incentive scheme;
The R52 000 is made up of the following ageing categories:
R  2 000 -  Current             Must be paid
R18 000 -  30 days to 5 Years       Arrangement over 12 or 24 Months
R32 000 -  5 Years+                Will be Written Off once the Arrangement is paid
R52 000 - Total Debt
Mr X will pay R2 000 (Current) and will enter into an arrangement for the 
R18 000 (debt of 30 days to 5 Years). 
The R32 000 (debt of 5 Years+) will be moved to a separate account and will be written off once the arrangement has been paid up with no default. 



2020-12-26