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Victorians in grip of bill shock as the average unpaid power bill debt spikes to $2500

Source: Herald Sun, 2023

Author: Ian Royall

Victorian households suffering financial hardship and struggling to pay their energy bills have average utility debts of almost $2500, a new report has found.



Customers in economic difficulty were missing out on government cash help and were often burdened with unaffordable repayment schemes, according to the Energy Assistance Report.



Gas and electricity retailers were urged to improve their support for people in financial hardship, the report by the Victorian Consumer Action Law Centre said.



Householders were missing out on the help they are entitled to and often retail companies were not meeting their obligations, centre acting director Luke Lovell said.



“Thousands of Victorians will be turning off their heating and shivering through this winter as energy prices are set to soar,’’ Mr Lovell said.


“Retailers are doing better but there are still some areas where they are not.


“Disconnections have gone down, which is good news, but there has been a big increase in average debt.’’



The average debt of those enduring financial crisis was $1718 in September 2021 but that has now spiked to $2459, a 43 per cent spike in less than two years.



The analysis is based on the thousands of calls made to the National Debt Helpline and before increases of up to 25 per cent had kicked in from July 1.



The report was also critical of retailers’ inconsistent application of repayment schemes.


“In many instances, people were pressured to accept a payment arrangement because their retailer refused to accept anything less, even though the plan was never affordable for that person.’’


In some cases, customers were asked for large, lump sum payments, which they clearly could not afford to pay.


Households were also not always offered cash help from the Utility Relief Grant Scheme which can provide up to $650 for each utility.


“Retailers are the gatekeepers for this scheme so people need to be informed.’’

The centre detailed the example of one Melbourne pensioner with an $11,000 gas bill but hadn’t been able to make a dent in the debt because of cost-of-living pressures.


In another case, the energy debt of a couple with three kids had ballooned to $20,000 but their provider did not offer any assistance.


The report recommends that the state regulator, the Essential Services Commission, takes more compliance and enforcement action to hold energy companies to account.


Analysis by peak industry body the Australian Energy Council said that the most vulnerable customers on retailer hardship programs were doing it tough.


“The 2023-24 financial year will no doubt be a challenging one for energy consumers, with regulated energy prices rising by around 25 per cent, at a time when the broader cost of living crisis is reaching its peak,’’ it said


“Monitoring these indicators, and considering where extra support might be needed will be a critical role for both regulators and governments alike.


“Similarly, there will be pressure on retailers to ensure their support programs are targeted and effective.’’