By Staff Reporter
14/08/2016
Minister for Cooperative Governance and Traditional Affairs, Mr Des van Rooyen, in consultation with various stakeholders including National Treasury agreed with Cabinet to approve a once off gratuity to be paid to non-returning councillors’ post the Local Government Elections of 03 August 2016.
“National Treasury has already made available an amount of R309, 3 Million over the 2016 MTEF to pay the gratuity of the non-returning councillors,” said Legadima Leso, Spokesperson for the Ministry for Cooperative Governance and Traditional Affairs.
“The exact number of councillors that will be eligible for receiving the gratuity, and the amount of the gratuity, will only be finalised after all municipal councils have been constituted, as it is only after that process that we will be able to identify those councillors that will not be returning to office. “Regardless of the number of councillors not returning to office, the Department will have to stay within the budgeted amount of R309 million,” he said.
He added that it is generally acknowledged that the departure of any experienced leader from public office would, at least to some extent, be difficult. This is true with councillors who will not be returning post the 03 August 2016 local government elections.
He said the majority of councillors occupy office on a part-time basis, but serve their communities full-time, as some of them do not have formal employment. Many of the non-returning councillors, will be without any income post the elections, despite the contributions they have made during the last term of office.
The payment will take into consideration the experience in 2011 where many councillors lost their property (cars and houses) when they left office, and mostly because the gratuity was paid after many months of the existence of local government.
Some councillors were unable to service their debts, buy basic living requirements, as well as even pay school fees for their children.
“It would therefore be remiss of government not tot take into cognisance the immediate hardships that outgoing councillors and their families will be faced with. “In 2011, more than 4000 individual applications were submitted and screened and a total of R139, 337 million was subsequently paid to former councillors that served from 2006 to 2011, and the payment of this gratuity was done in an open and transparent manner, attracting no audit queries,” he said.
Within the context of the once-off gratuity payment recommendation made for MPs and MPLs post the national and provincial government elections in 2009, it was recommended that the benefit also be extended to councillors’ post the 2011 local government elections.
On 29 August 2011, the Commission recommended that qualifying non-returning councillors who had served a full-term of office during the last tenure of the office councillors (i.e. from 1 March 2006 to 18 May 2011) and did not return be paid a once-off gratuity equal to three months’ pensionable salary. This was to be paid from the national fiscus.
The same process will be followed to pay the once-off gratuity to non-returning Local Councillors post the 03 August 2016 local government elections. The payment will be based on three months of their last earned salary, and on a sliding scale, depending on the time (number of months) spent in office. That is, the longer a councillor was in office, the higher the gratuity.
Mr Leso said a gratuity is an amount that is received by an employee from his/her employer in gratitude for the services offered by the employee in the company. The main purpose and concept of gratuity is to help the workman after the retirement; it is the amount which is not connected with any consideration and has to be considered as something given freely for the service the employee has rendered to the organization.
This was to allow such councillors with a breathing space to solicit other remunerative employment of their choice.
In terms of the Income Tax Act, 1962 (Act No. 58 of 1962), the gratuity, as is the case with all other ex-gratia payments, will be subjected to taxation, in accordance with the normal tax rules that are issued by the South African Revenue Service.
