Energy and Water Debt
Utility companies are businesses that supply gas, electricity and water. Those that operate in Victoria are legally obliged to adopt hardship policies to support Victorians who have experienced unexpected financial hardship during the past 12 months.
What hardship programs are in place?
In general terms, financial hardship refers to the situation where a consumer wants to pay their bills but cannot afford to do so.
All utility company hardship policies must offer fair and reasonable options and payment installments to accommodate their customers’ circumstances. They must also monitor their customers’ payments including their accumulation of debt.
Each energy company is obliged to publish details of its hardship policy on its website and provide details of its policy to a customer on request.
When consumers can’t pay their gas, electricity or water bills
People experiencing difficulty paying energy or water bills can contact their energy or water retailer (the company that sends the bill), explain their situation and ask for access to hardship payment arrangements.
Victorians can get financial counselling advice from the MoneyHelp’s phone financial counselling service (1800 007 007) if they need help dealing with their energy or water retailer.
Alternatively people can download a sample letter template from the MoneyHelp website.
Utility Relief Grant
The Victorian Department of Human Services manages a Utility Relief Grant scheme for people who are unable to pay their utility bills and are at risk of having their gas or electricity supply disconnected, water flow restricted or delivery refused (for bottled gas and carted water).
Utility Relief Grants are usually paid to people with a Health Care or Concession Card, but may be available to others who are registered with their utility company’s hardship program and whose income is no more than the pensioner income rate.
Grants are available for mains gas, electricity and water, as well as bottled gas and carted water supplies. Applications (for individual utility services or combined services) can be made through the utility company or a financial counselling service.
Utility Relief Grants provide a part or full payment for outstanding gas, electricity or water bills at an applicant’s current address only. The grants are available once every two years and are usually limited to a maximum of $500.
Disconnection of gas and electricity and restriction of water supplies
Providing consumers remain in contact with their suppliers and pay their usage costs and something towards their past bills, it is unlikely they will be disconnected. There are a number of steps between a missed payment and disconnection restriction. If gas, electricity or water bills are unpaid on the due date, a reminder notice will be sent, then a disconnection restriction warning. If no payment has been made by the due date, a formal warning that provides seven days notice of the utility company’s intention to disconnect supply will be sent.
Utility companies can disconnect a consumer’s supply without the need for a court order. This means utility debts should be treated as priority debts during a period of reduced income. Re-connection charges may apply, and consumers with a poor history of payment may be asked to pay a security deposit when they sign up for a new connection.
If a supplier is threatening disconnection restriction ring the Energy and Water Ombudsman immediately as the supplier is not permitted to disconnect restrict you if you have made a complaint to EWOV and your complaint has not yet been resolved.
How can the utility company help?
Utility companies provide advice about any concessions and grants available to consumers who are experiencing financial hardship. Concessions for gas, electricity, water and sewerage costs are available to holders of Health Care and Concession cards, as is access to audits and advisory services for efficient use of services.
If you contact your utility company and explain your circumstances:
- you are unlikely to be disconnected;
- you are unlikely to have your non-payment listed on your credit report; and
- your utility company may (in some cases) partially waive the debt if you demonstrate good faith in attempting to pay.
Flexible payment arrangements
Utility companies must offer people experiencing financial hardship a payment plan that is affordable in their current circumstances. Payments may be expected to cover current usage as well as an amount towards the arrears.
Consumers may be able to negotiate a delay to the start of repayments for the arrears, or a repayment by installment plan.If a consumer finds paying smaller amounts regularly less difficult than finding a lump sum under quarterly billing arrangements, they may make fortnightly or monthly payments online or at a Post Office. People receiving Centrelink payments can arrange automatic utility bill payments through Centrepay.
If a utility company refuses to offer or accept an affordable repayment plan, complaints can be lodged with the Energy and Water Ombudsman service (1800 500 509), www.ewov.com.au
MoneyHelp 1800 007 007
Consumer Affairs Victoria 1300 558 181
Energy and Water Ombudsman Victoria 1800 500 509
Consumer Action Law Centre 1300 881 020
Uniting Care manual financial first aid (2009)
Concessions Victoria www.dhs.vic.gov.au/concessions
Consumer Action Law Centre fact sheet Electricity and gas debts
Consumer Action Law Centre fact sheet Water debt
The funding for this fact sheet was provided by the Victorian Property Fund and the Australian Government.
The information on this fact sheet is general and does not constitute legal advice.
MoneyHelp’s products and services have been prepared for the information of Victorians who are experiencing financial difficulty. Phone 1800 007 007 to speak to a MoneyHelp financial counsellor. A financial counsellor will discuss a range of debt payment options based on an individual’s circumstances.
© Copyright MoneyHelp and Consumer Action Law Centre
Last updated April 2012