Families falling thousands of dollars in debt on skyrocketing electricity, gas and water bills

VICTORIA’s Energy and Water Ombudsman has uncovered families struggling with utility debts as high as $26,000 as skyrocketing charges and unforeseen expenses bite hard.

STRUGGLING families are racking up electricity, gas and water debts as high as $26,000.

The shocking size of unpaid bills has been uncovered in ­investigations by Victoria’s Energy and Water Ombudsman.

The sick, unemployed, and big households with teenagers or adult children are among those reporting massive utilities debts due to financial hardship.

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“It’s an awful situation to try to dig their way out of,” ombudsman Cynthia Gebert said.

“For some customers, it is hard to imagine how they will ever pay that off.”

Consumers often contact the free dispute resolution service when facing disconnection or an “unaffordable” repayment plan.

Advice to ease financial stress can include adult children living at home contributing to expenses, and applying for income-support benefits.

An affordability report revealed 512 cases of arrears exceeding $3000, mainly for energy, were investigated last year. Eighteen involved “extreme” debt of at least $10,000.

Households are struggling with massive utility bills, one as high as $26,000.

Cases examined include:
A HOMEOWNER on Melbourne’s fringe owing $20,500 for gas and electricity and about $6000 for water;
A CUSTOMER in Melbourne’s north battling health problems and a combined energy debt of $25,890; and
A GIPPSLAND resident owing $18,500 for electricity and gas, and up to $3000 for water.

Some customers in poorly insulated homes and public housing with inefficient appliances copped big heating bills.

Electricity costs are one of the biggest expenses for households.

Some had suffered a crisis such as a legal dispute, house fire or family violence and had other large debts such as outstanding rates, fines, or taxes.

Ms Gebert said high debts accumulated over an extended time and involved “a lot of compounding factors” not limited to price rises.

In trying to determine “fair and reasonable” repayment plans, some assessments involve identifying ways to reduce spending and power use, and to improve income.

Those struggling to pay for essential services should contact companies early to discuss hardship programs.

Retailers also needed to act before debts got “out of control”.

The problem is leaving Victorians on the brink of financial ruin.

Victoria’s energy retailers must adopt new rules designed to avoid ballooning debts by January next year.

The reforms include offering easier bill payment options, allowing debt repayment plan suggestions, and putting those in the worst situations on a cheaper tariff.

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@KarenCollierHS