Local councils must take financial hardship into account when collecting rates
Financial counsellors assist clients who are experiencing financial hardship. Most of WEstjustice’s and Consumer Action’s clients are grappling with debts and meeting the high cost of living in Melbourne. A proportion of our clients are homeowners – either outright or mortgaged – who are subsisting on Centrelink, TAC payments or other low-income sources. Rates put enormous pressure on these households and, without a fair and accessible financial hardship system run by councils, rates obligations and debts can become overwhelming and crushing, and can lead to loss of the home or other serious hardship.
In 2012, Footscray Community Legal Centre and the Federation of Community Legal Centres conducted research which showed that councils were suing ratepayers at alarming rates. Councils were the number one user of the Magistrates Court judgment order process, with most claims for unpaid rates being for less than $10,000 and representing 50% of all undefended claims under $1,000.
In our joint submission to the Victorian Government’s Local Government Rating System Review, we assert that the Municipal Association of Victoria’s (MAV) financial hardship policy does not go far enough to project Victorian families experiencing financial difficulty because it:
- does not take into account the impacts that family violence has on ratepayers;
- does not contemplate other types of hardship such as when a ratepayer has been imprisoned for a period of time; and
- does not adequately address the situation where the council is unable to make contact with the ratepayer.
You can read the full submission here [PDF].