Lifeline Electricity Tariff: Benefits & Who qualifies

The Lifeline electricity tariff is a subsidised tariff aimed at providing support to low income households. Lifeline electricity is provided at below cost of supply and is subsidised both by National Treasury and by a range of residential and commercial electricity consumers who pay above cost of supply rates.  An enabling service, electricity contributes to the health, access to education and well being of citizens. As such, it is essential to ensure that low income households also have access to affordable electricity.  The Lifeline tariff has two components:

1 an allocation of Free Basic Electricity (FBE), and

2 a subsidized, below cost of supply tariff, up to consumption of 350kWhs (units) .

National Treasury allocates funds to local authorities for a maximum of 50 kWhs of Free Basic Electricity per low income household.  The local authorities determine how best to implement the Lifeline tariff and allocate the FBE.  Acknowledging that 50 kWhs does not go far, a number of local authorities offer more.  Cape Town provides 60 kWhs of FBE to Lifeline consumers who use less than 350 kWhs on average and 25 kWhs of FBE to Lifeline consumers who use less than 450 kWhs each month. There is a shortfall in what it costs to provide the Lifeline Tariff to lower income households and what the local authorities get from Treasury. This shortfall is made up from the revenue generated by electricity sales from the rest of the city’s consumers.

How do local authorities identify who qualifies for the Lifeline Electricity Tariff?

Three measures are used:

1 People identified as indigent by virtue of their municipal property valuation of R400 000 or less and income status.    Two categories of rebate: income of  less than R4000 and less than R6000 per month.

2 People who qualify for a senior citizen or disabled persons rebate.

3 Low income households with a monthly electricity consumption of less than 450kWhs.

Qualifying households need to have or install a prepaid electricity meter (except in the case of senior citizens).

Note that if a customer is registered as indigent in terms of the Credit Control and Debt Collection Policy, the property valuation and metering requirements fall away.  For criteria for indigent household rebate go to: https://www.capetown.gov.za/en/rev/Documents/2016-2017%20Forms/Indigent%20Benefits%20Brochure%202016-17.pdf

The requirements for a senior citizen or disabled persons rebate (including Lifeline electricity) is as follows:

A combined household income of less than R15 000 per month.

Over 60 years of age or are registered as a disabled person.

Use of less than 450 kWh per month on average, including any free electricity.

Requirements of the value of the property and a pre-paid meter are waived.

They need to apply each year for the rebate and to stay on the Lifeline tariff. This is because both the household income and the rebate conditions may change. Forms can be downloaded at: http://www.capetown.gov.za/City-Connect/Apply/Financial-relief-and-rebates/Individuals/Apply-for-senior-citizen-support 

Old age homes run by NGOs can also apply for a  `Lifeline’ electricity rebate.

Households with a monthly electricity consumption of less than 450kWhs.

This category was introduced as a simplistic measure to identify low income households.  In practice it excluded large low income households and included energy efficient affluent homes.  Middle income to affluent households are responding to rising electricity charges by reducing their consumption through energy efficient behaviour and technology and as a result are benefiting from the Lifeline Tariff.  Low consumption on its own is no longer a qualifying factor for the Lifeline Tariff and is being phased out.  It is a below cost of supply tariff and was never intended as a reward for energy efficiency.  Lifeline customers in more affluent areas with credit meters (monthly accounts) were moved to the Domestic tariff on 1 July 2014.  On 1 October 2016 Lifeline customers with a property value of over R1 million with a prepaid meter will be placed on the Domestic tariff.

Residential Electricity tariffs for 2016/17 in the City of Cape Town from 1 July.

Tariff Blocks No of Units 2016/17 incl VAT
Lifeline Block 1 (60 kWhs) 0 – 350kWhs 110.68
  Block 2 (25 kWhs) 350 + 306,44*
       
Domestic Block 1 600kWhs 187,54
  Block 2 600 + 228,06

* Note that the R3.06 per kWh in Lifeline Block 2 is a disincentive to use high amounts of electricity in this tariff. In spite of this high kWh charge, 600 kWhs of electricity on the Domestic tariff is more expensive than 600 kWhs on the Lifeline tariff.

for an explanation of the 2016 /17 residential electricity tariffs effective from 1 July 2016 go to: http://greenaudits.co.za/cape-town-domestic-electricity-2016-new-service-fee/ 

Kim Kruyshaar July 2017

 

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25 Responses to Lifeline Electricity Tariff: Benefits & Who qualifies

  1. Vivienne Amansure August 28, 2016 at 8:53 pm #

    I have left my geyser on for this,month and have gone over by 11-units thus exceeding 350 units.I used to get 60 free units.now I cannot afford the cost of electricity.if I switch my geyser off next month Will I qualify for the 60 free units again?

  2. W Liebetrau September 22, 2016 at 5:36 pm #

    Hi.
    I am totally confused now as to what my electricity per month will be. My property is worth over a million Rand but I am 70 years old and combined income is aprox R15,000.00 per month.
    What will I be paying for my units as from 1st October ?
    Would you be so kind as to answer these questions for me, by the way we use aprox 400 units per month.
    Thanking you
    W Liebetrau

  3. Fuzlin September 28, 2016 at 1:16 pm #

    I am unemployed and all of a sudden find myself on the Domestic tariff, please explain why.

  4. Jim Kohler October 25, 2016 at 4:36 pm #

    We have recently (1st April) moved to Woodside Village in Rondebosch, both over 80, prepaid meter..Previously we were given 25 free units, Now we are not given any free units and have had to buy R350 as against R250 worth of electricity.
    Would this be correct?

    • admin October 27, 2016 at 11:19 am #

      Yes it is likely to be correct. From 1 Oct the City moved all prepaid households with a rates value over R1 million from the Lifeline tariff which is subsidized and gives lower income households free units to the Domestic Tariff which does not give free units AND it has a higher kWh (unit charge). the City does however have a pensioners rebate which you should consider applying for. Criteria include: combined household income of less than R15 000 per month.
      Over 60 years of age or are registered as a disabled person.
      Use of less than 450 kWh per month on average, including any free electricity.
      The requirements of the value of the property and a pre-paid meter are waived.
      You need to apply each year for the rebate and to stay on the Lifeline tariff. This is because both the household income and the rebate conditions may change. Forms can be downloaded at: https://www.capetown.gov.za/en/rev/Pages/ApplicationForms.aspx

      Note also that for property owners on the Domestic tariff, the city intends bringing in a service fee from 1 July 2017 of R240 per month in addition to and irrespective of whether or not you use electricity that month.

  5. Michael October 26, 2016 at 8:32 pm #

    Hi admin,

    Our property is valued at under R1 million, and our usage is ~300 units per month, through a prepaid unit.

    However, R350 just bought us 186 units?

    What is considered as “more affluent areas”, and if you live in the surrounds of such an area, are you automatically bumped to the Domestic tariff?

  6. Roger Hurling November 24, 2016 at 9:03 am #

    My Mother who is receiving a state pension lives on my property in a granny flat and has her own electricity meter. I’ve being informed by the city municipal office that this meter is in my name and therefore it is assumed that it is the meter for the main house which automatically puts her on the high consumption tariff. She uses less than 200 units per month and used to spend R200 on electricity but due to the new rule she now spends a third of her state pension on electricity .

    • admin November 24, 2016 at 1:22 pm #

      If her meter an independent one, which can be assumed since she was paying less than R200 per month then she can apply for a pensioners exemption from the domestic electricity tariff so that she can go back onto the subsidized lifeline tariff. Criteria include: combined household income of less than R15 000 per month. Over 60 years of age or are registered as a disabled person.
      Use of less than 450 kWh per month on average, including any free electricity.
      The requirements of the value of the property and a pre-paid meter are waived.
      You need to apply each year for the rebate to stay on the Lifeline tariff. This is because both the household income and the rebate conditions may change. Forms can be downloaded at: https://www.capetown.gov.za/en/rev/Pages/ApplicationForms.aspx

  7. Shatha November 24, 2016 at 9:54 pm #

    Hi,

    I am a student renting a flat in Observatory. I used to pay R300 per month through pre-paid meter and get R60 or 60kwh free. But now, in the beginning of Nov I bought electricity by R200, I received 106.7 Kwh without any free units. Today, I had to buy again because the units were less than what I get every month, so I thought to buy R300 which can last to the end of next month. surprisingly, I received 160 units only!!! no free units! it’s a one-bed room flat. Would you please explain to me.

    • admin November 28, 2016 at 1:07 pm #

      Hi I am sorry to say that this is likely to be correct. From 1 Oct 2016 the City moved all prepaid properties with a rates value over R1 million from the Lifeline tariff which is subsidized and gives lower income households free units to the Domestic Tariff which does not give free units AND it has a higher kWh (unit charge). Not sure what you can do except try and use less electricity.

  8. Susan December 6, 2016 at 2:00 pm #

    Can the lifeline tariffs apply for tenants in a complex?

    • admin December 11, 2016 at 10:11 pm #

      Yes if you have your own prepaid meter. However if your complex is charged a bulk rate and you are then billed by the complex management based on a sub meter, they are unlikely to offer you the same benefits as a household which pays the City or Eskom directly as the Lifeline Tariff is a subsidized rate. The selling on of electricity to tenants by bulk buyers is governed by guidelines rather than strict rules and is generally not well monitored by the authorities. The guiding principle is that you should be paying a similar fee per unit of electricity to the body corporate or complex management that you would pay if you were directly connected to a City or Eskom supply.

  9. Patricia Fox December 16, 2016 at 9:42 am #

    Thank you for the information you have given, great website. I did not know at all about the ‘life line’ tariffs. I wonder how many pensioners actually know about this. It was only through being a member of our local FB page that I found out.

    The link to the page which give you the application form is not working, is there any other link that we can use to get the form or can you send to me please.

    https://www.capetown.gov.za/en/rev/Pages/ApplicationForms.aspx

  10. Chris February 21, 2017 at 3:33 pm #

    Why has the lifeline tariff fallen away when the property is valued at R820 000(under R1m) and average age is 250kw per month?

    • admin February 27, 2017 at 3:20 pm #

      Hi Chris, the information I received today from the City is: All NEW property owners of property valued above R400 000 are automatically shifted to the Domestic tariff irrespective of their low electricity consumption. The City is now in the process of shifting `older’ property owners who are currently on the Lifeline Tariff but who do not qualify because they do not meet the lower income criterion. They started with properties valued at over R1 million (and I was switched.) In July 2017, they propose to shift property owners whose property is valued at over R800 000. And then follow up until they get to R400 000. I was informed that each household that is shifted does receive a notice in their municipal account to inform them of their imminent shift to the Domestic Tariff from Lifeline. Note that if a household meets the lower income criterion, has a pre-paid meter and uses less than 450kWhs of electricity per month, they should apply for the indigent or pensioners subsidy as applicable to be put back on Lifeline. If they qualify then the property value criteria is waived.
      There is a curved ball coming at low energy consumers who are property owners but who do not qualify for the Lifeline Tariff. It is a new tariff called the Home User Tariff and it includes a R242 per month service fee. The City plans to implement it on 1 July 2017. There is still time to object to the City Manager as it has to be advertised in the Draft City budget. To find out how it could affect you go to: http://greenaudits.co.za/residential-electricity-tariff-with-monthly-service-fee-for-ct/

  11. Tazz April 21, 2017 at 2:32 pm #

    Hi, if you are renting and have a pre paid meter and is a pensioner, can you still qualify for life LINE? Have always been getting free units, but when I purchased last mont,I received no free units. No one could explains this to me.As I am renting I would not have been informed of any changes,probably only the owner, but I’m sure the property us over 1m.

    • admin April 25, 2017 at 9:23 am #

      The city makes provision for a senior citizens rebate. The requirements for a senior citizen rebate (including Lifeline electricity) are as follows:
      A combined household income of less than R15 000 per month.
      Over 60 years of age or are registered as a disabled person.
      Use of less than 450 kWh per month on average, including any free electricity.
      Requirements of the value of the property and a pre-paid meter are waived.

      You need to apply each year for the rebate and to stay on the Lifeline tariff. This is because both the household income and the rebate conditions may change. Forms can be downloaded at: http://www.capetown.gov.za/City-Connect/Apply/Financial-relief-and-rebates/Individuals/Apply-for-senior-citizen-support

  12. Freddie Barends April 30, 2017 at 8:41 am #

    Hi there we recently moved to atlantis (we inherited a house that belonged to a pensioner) she subsequently passed on but the house is still in the process of being transferred onto our names. I have a problem however with the electricity. Two weeks ago I could still get 40 plus units for my 50 rand but I was shocked when I discovered that I now pay almost 3 rand per unit. Which means I get 16 units now for my 50 rand. Is that correct?

    • admin May 6, 2017 at 9:41 pm #

      It sounds as if the previous owner was on the Lifeline Tariff, as a pensioner, which is why the unit cost was so low. I believe that the City has a policy of placing all new property owners on the domestic tariff. Note that if the property has a municipal valuation of over R1 million, then as of the 1st July in terms of the proposed tariffs for 2017 /18 you are likely to be shifted to the Home User tariff which includes a R8.21 per day service fee which adds up to R246 per month in addition to the kWh / unit of electricity charge. Only households registered as indigent or with pensioners or disabled owners who fall below the financial means test can apply for the subsidized Lifeline Tariff.

  13. Nthabi June 15, 2017 at 8:45 pm #

    Hi. Just bought a flat. The first time I bought electricity for R50 at the beginning of the month I got about 25 units. Where I stay previously as a tenant I user to get just over 40 units for the same price (the previous surburb that I stayed in was rather posh). I struggle to understand how a surburb of less status is charged a higher rate. Please advise on a way forward.

    • admin June 19, 2017 at 6:15 pm #

      Hi, the information I received in Feb 2017 from the City is: All new property owners of property valued above R400 000 are automatically shifted to the Domestic tariff irrespective of the low electricity consumption. It looks like you may have been on the Lifeline Tariff at your previous home. The City is also shifting existing property owners whose properties are valued at over R400 000 from the subsidized Lifeline tariff to the Domestic tariff as of 1 July 2017. to benefit from the subsidized Lifeline Tariff you would have to qualify and apply for an `indigent’ person’s subsidy.

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