Pensioners to be pursued over $1M in unpaid rates

LISMORE Council are set to close the loophole which has allowed hundreds of pensioners to get away with not paying their rates.

PENSIONER LOOPHOLE: Lismore City Council's elected representatives will debate closing a loophole which allows pensioners to get away with not paying rate debts. Currently more than 340 pensioners owe council more than $1million. Picture: Supplied

PENSIONERS owing Lismore Council money will no longer get a free ride if a motion goes through at tonight's meeting.

In the past, if a pensioner did not pay their rates, other then receiving reminder notice, Lismore Council did not chase them for the monies owed, which had led to several hundred people owing a significant sum.

According to the business papers which will be debated at the council meeting on June 12, more than 300 pensioners have outstanding debt and owe the city coffers more than $1 million in total.

While the number of pensioners with debt has reduced slightly (down 14 from 357 to 343) during the 2015-2016 financial year, the total amount owed has increased significantly from $835,518 to $1,030,561.

Mayor Isaac Smith said it's all about people being resposbile.

"Once you owe council a significant amount of money it triggers a process where you are notified of this arrears and payment plan is suggested," he said.

"We are encouraging people to not have the large backlog and it is irresponsible of them for us to have to cover this lost income."

Cr Smith said there was no danger of people having their homes sold out from under them.

But he urged any residents who owed council money on their rates to make contact with staff.

"We are trying to find the balance between notifying people and giving them time to clear their debts," he said.

"The community ends up covering their debt and this lack of income means we have to cut projects from council."

Cr Smith said the current process meant there was currently little incentive for a pensioner to make an arrangement to pay or pay the debt as they are not pursued legally.

He said in regards to debt recovery practices of other local councils for their pensioners, Lismore City Council was the only council who exclude pensioners from their normal debt recovery process

The view was the council's current practice, which was to not pursue pensioners past the "Reminder Letter" stage, has contributed to this trend.

Another consideration for the council relates to the impact of s712 of the Local Government Act 1993.

It provides that the council can only recover rates up to 20 years from the original due date and once the 20 year date was reached that portion of the debt must be written-off.

Considering a number of pensioners have debts approaching 15 years, the current practice was likely to result in some part of the debts being written-off in the foreseeable future.

Cr Smith said the situation cannot continue.

"Council is operating on a very tight budget at the moment," he said,

"The last thing we want is someone who inherits a house and they have no idea there's a $30,000 or $40,000 outstanding debt to council on the property."

Currently the total amount outstanding as a percentage of the total amount outstanding by all rate payers increased from 15.8 per cent as at 30/6/14 to 19.30 per cent as at 30/6/17.