THE Victorian Government says it has introduced legislation to ensure people struggling to pay their council rates are not “driven further into debt or out of their homes”.
Minister for Local Government Shaun Leane on Wednesday introduced legislation into Parliament which will support Victorian property owners by ensuring councils implement fairer financial hardship policies.
The Local Government Amendment (Rating Reform and Other Matters) Bill 2022 will explicitly define financial hardship and require early engagement from councils with ratepayers.
Councils will also no longer be able to use debt collectors or pursue legal action – which can result in homes being sold to pay back debts to council – unless ratepayers refuse to engage and all other options have been exhausted.
Mr Leane said during the coronavirus pandemic, many councils, including Swan Hill and Gannawarra, expanded their hardship policies to provide relief to those doing it tough and started engaging earlier with ratepayers who fall into debt.
“This Bill ensures councils do not revert to past practices,” he said.
Swan Hill Council Mayor Jade Benham said this was already happening in the organisation and was in the process of reviewing its current policy.
“We do offer payment options under our current policy,” Cr Benham said.
“It is positive that the State Government is looking at this, as many face hardships, especially with more rate rises.
“All ratepayers can apply for special consideration, due to individual circumstances.
“Council considers all applications for financial hardship,in a respectful, compassionate, fair, sensitive and confidential manner.”
It comes following the release of the Local Government Rating System Review and the Ombudsman’s investigation into how local councils respond to ratepayers in financial hardship report, with recommendations relating to greater support for ratepayers in financial hardship.
The Ombudsman’s report found that people who were struggling to pay their rates were often met with debt collectors, high penalty interest and in some cases, costly litigation.One pensioner interviewed was bankrupted over $30,000 and the report flagged concerns with the use of debt collectors, lawsuits and high interest rates for late payment.
“This creates more stress and fear for those who are already struggling financially and or dealing with a range of compounding issues, including family violence and mental health,” Mr Leane said.
The Bill would allow the minister, in consultation with the Essential Services Commission, to set a maximum amount of interest levied on unpaid rates and charges, and ministerial guidelines to assist ratepayers experiencing financial hardship will be developed for councils to follow.
Councils will also be limited in using magistrate court orders for recovering unpaid rates in situations where rates or charges have not been paid for two years or more.
“We know that many Victorians are doing it tough and that’s why we are working to reform the rating system,” Mr Leane said.
“Good hardship relief schemes strike a balance where the rate burden is shared while ensuring people in hardship are not driven further into debt or out of their homes.”
