Avoid court over rate debts, councils told

Local government actions to recover unpaid rates make up almost a third of NSW’s local court civil matters.

The NSW Government wants councils to “work better” with people who have unpaid rates rather than taking them to court, releasing new guidelines today on debt management and hardship.

Councils should offer discounts and tailored repayment plans to encourage repayment, under the guidelines.

Local Government Minister Gabrielle Upton and Attorney General Mark Speakman called on NSW’s councils to review their policies and procedures “to treat ratepayers more fairly.”

The state’s 128 councils collect more than $4 billion in rates each year which fund a range of infrastructure such as roads, footpaths, libraries, parks and swimming pools.

Minister Upton said that while local government undoubtedly had to recover unpaid rates, the guidelines say councils must work better with ratepayers on payment terms without initially going to court.

This is especially the case for ratepayers experiencing financial hardship such as loss of employment, illness, separation or death in the family, the government says.

“While many councils have good practices to support ratepayers in hardship, I want all councils to do this. The new guidelines give a fairer go to ratepayers,” Ms Upton said.

Mr Speakman urged councils to take court action as a last resort:

“Council actions to recover debts for unpaid rates make up 30 per cent of local court civil matters. More than 80 per cent of these claims involved amounts less than $2,000 and a high proportion were settled, paid or written off by councils before judgement.”

This adds to costs suffered by both councils and ratepayers through legal fees, Mr Speakman added.

The guidelines promote a range of strategies and actions councils can use to help ratepayers pay on time including:

  • a ‘stop the clock’ approach to suspend debt recovery, legal action and interest accrual while a ratepayer’s hardship application is awaiting determination or while they are complying with a payment plan;
  • tailored plans and flexible payment options including weekly, fortnightly and monthly instalments;
  • promoting Centrepay as a voluntary way for people to pay their rates directly from their Centrelink payments;
  • discounts to provide incentives for prompt payment in full;
  • greater discounts for pensioners facing hardship;
  • options for ratepayers to receive their rates and pay their rates electronically; and simplified rates notices including information in relevant languages.

The State Government says that all NSW councils must take the guidelines into account when developing and implementing debt management and hardship policies and procedures.

The guidelines, issued by the Office of Local Government, are available here.

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