Councils to be banned from harassing ratepayers

Councils will be banned from using debt collectors or pursuing legal action against homeowners under new protections for struggling Victorians.

Councils will be banned from using debt collectors to harass ratepayers, except in extreme circumstances.

Councils will no longer be able to send debt collectors after ratepayers except in extreme circumstances, under new protections to ensure struggling Victorians are not driven out of their homes.

The Andrews Government has introduced legislation into parliament this week which will force councils to be fairer on ratepayers who are finding it difficult to make payments.

It will spell out a clearer definition of financial hardship and require local governments to deal with ratepayers early to address stress on their household budgets.

Councils will be banned from using debt collectors or pursuing legal action unless all other options have exhausted and ratepayers refuse to work with them.

The laws have been designed to prevent legal fights which could force Victorians to sell their homes just to pay back council debts.

It builds on the findings of a damning investigation by the Victorian Ombudsman which found some councils had hardship policies that were worse than those provided by major banks.

One pensioner interviewed was bankrupted over $30,000 and the report flagged concerns with the use of debt collectors, lawsuits and high interest rates for late payment.

Under the changes, Local Government Minister Shaun Leane will consult the Essential Services Commission to set a maximum on the amount of interest added to unpaid rates and charges.

“We know that many Victorians are doing it tough and that’s why we are working to reform the rating system,” Mr Leane 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.”