A LAW preventing councils from using debt collectors or legal action to collect overdue rates is being considered.
The state government’s local government minister, Shaun Leane, has introduced a bill to parliament which limits the methods councils can use to chase debts. In addition to banning the use of debt collectors, a maximum amount of interest levied on unpaid rates and charges will be set by the minister. Council will also be restricted in its use of the Magistrates Court to collect unpaid rates when they have not been paid for more than two years.
Leane said that the bill would make sure councils implement fairer financial hardship policies. “We know that many Victorians are doing it tough and that’s why we are working to reform the rating system,” he 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.”
An Ombudsman’s report on council responses to financial hardship released last year found that Kingston Council used legal action to collect unpaid rates 334 times in the 2018/2019 financial year. That number was an increase on the 63 times it used legal action to recover rates during 2010/2011. The Ombudsman used Magistrates’ Court data to make its assessment.
In response to the COVID-19 pandemic, Kingston Council did not charge interest on overdue rates during the 2021/2022 financial year. Council’s website states that it intends to continue charging interest on overdue rates from this year forward.
When the pandemic first struck in 2020, Kingston Council agreed to allow residents to defer paying rates until June 2021 under its hardship policy.
First published in the Chelsea Mordialloc Mentone News – 15 June 2022