Submission to the NSW Department of Water and and Energy

CPSA welcomes the opportunity to provide input into the review of Pensioner Water and Sewerage Rate Rebates. CPSA has a number of concerns with these rebates as stipulated in the Local Government Act 1993. There are a number of inequities inherent in the rebates as they currently stand, which significantly diminish their utility to many pensioners. Furthermore, CPSA is concerned that, despite significant price increases for utilities, eligibility for rebates has not been broadened to others on low incomes, such as recipients of Centrelink Allowances and Low Income Health Care Card (LIHCC) holders. Expanding eligibility will provide profound financial relief to those whose incomes are below the poverty line.[1]

As Table 2.2 demonstrates, there is a significant disparity between the annual water bills of pensioners living in metropolitan Sydney and the Hunter and those living in regional and rural NSW. As no rebates are paid for water or sewerage charges in excess of $175, the pensioner must absorb any annualised price increases.

Even considering the forthcoming pension increase, a pensioner’s low, fixed income will not increase to adequately absorb the increasing costs for water, electricity and land rates. Furthermore, hardship provisions throughout NSW are inconsistent. Payment Assistance Scheme (PAS) vouchers, for example, are only available to customers of Sydney Water and Hunter Water. These should be made available to all households in financial difficulty in NSW.

It is worth noting that Single Parent Pensioners will not receive an increase in their pension this coming September. They also do not receive the Australian Government’s Utilities Allowance. They must, therefore, pay for water usage of two or more people on an income below the poverty line if government payments are their sole source of income.

Rebate Ineligibility

Recipients of Centrelink Allowances and holders of the LIHCC are amongst the poorest and most disadvantaged people in our community. As demonstrated in Table 2, a full rate Allowee must subsist on less than $230 per week. Most Allowees are not eligible for any rebates or supplements afforded to pensioners, seniors and other cohorts in the community. Similar to the situation being faced by Single Parent Pensioners, Allowees will not receive an increase to their income above that of indexation in September. As such, water bills are consuming a significantly larger proportion of their income, further diminishing their ability to meet the costs of utilities as well as other living essentials.

CPSA is also concerned that a significant number of pensioners are ineligible for water rebates due to their residential status. Pensioners who rent privately; live in residential (caravan) parks including manufactured home estates; and homeowners who live in strata title complexes or retirement villages generally do not receive a water rebate, despite paying for their water.

The reason for ineligibility is because the pensioner is not the customer of the LWU. Park residents purchase their water from the park owner as they rent the site on which there is a water connection. This is in spite of the fact that the majority of permanent residents are individually metered for their water usage. Similarly, private tenants purchase their water from the landlord. Whether the tenant pays for water separately or as part of their rent, it is the landlord who is the customer, instead of the pensioner and therefore, the pensioner is ineligible to receive the rebate.

Park residents and private tenants are also further disadvantaged as they cannot access hardship provisions such as PAS even if they live in the Sydney Water or Hunter Water areas. For park residents, most tenancy agreements require any monies paid to the park owner as rent to first go to other charges such as utilities. As a result, apart from not being the LWU’s customer, the resident is unable to demonstrate that they are in arrears – a requirement for accessing assistance programs. This goes against the Residential Parks Regulation 2006 which indicates that residents should have access to the PAS voucher.

Ineligibility for rebates and assistance programs places people on very low incomes in an unstable position. Inability to pay utility bills means much more than potentially having that service cut. It may result in a breech of their tenancy agreement and therefore possible eviction and potential homelessness.

Similar to private tenants and park residents, homeowners in strata title complexes and retirement villages are not customers of the LWU – the body corporate is. Most, if not all, LWUs charge bodies corporate service charges on a per dwelling basis, for which the unit owners are directly charged. Many LWUs will apply the rebate to this component of the water bill. However, should part of the rebate remain available (because the full amount was not used towards the service charge), the LWU does not apply it to the usage charge because the body corporate is considered to have consumed the water, not the household. Pensioners who live in these types of accommodation are thus inequitably treated compared with owners of free standing dwellings.

CPSA is aware of two cases that highlight the great discrepancies in determinations of rebate eligibility. A pensioner living in Bega Shire Council informed CPSA that residents of strata title complexes were ineligible for the rebate on both the usage and service charges, despite the LWU charging each individual unit a service charge based on a 20mm connection. The pensioner has questioned the council several times about his household’s ineligibility for the rebate. The council has continually rejected proposals on the basis of “legal and body corporate issues”. Both the pensioner and CPSA have attempted to clarify what these issues are, however, on discussions with the Office of Fair Trading, no legislative or body corporate constraints could be found to prevent the LWU from granting the rebate.

The LWU in the Tweed Shire Council has implemented a program whereby pensioners whose water is provided through a body corporate are eligible for the full rebate. Pensioners initially have the rebate applied to the service charge and then they must show what they have been charged by the body corporate for water usage so that the LWU can apply the remainder of the rebate to that charge. This system ensures that pensioners in strata titles are not disadvantaged because of their dwelling. CPSA sees no reason why this model could not be applied across the board.

Proposals

CPSA recognises that the different charges imposed on households reflect to a significant extent the varying costs of providing water services in markedly divergent geographical and demographic locations. However, it is because of this that CPSA believes that the current rebate is inequitable for pensioners living across NSW.

CPSA proposes that the rebate provided to all NSW pensioners be aligned with that provided to pensioners serviced by Sydney Water. Pensioners will receive a 100% rebate on the water service charge and an 85% rebate on the sewerage charge. As the cost of providing these services increases, pensioners will be shielded from ‘price shocks’ as their rebate will increase proportionally. Table 3 (page 7) demonstrates how this change will beneficially affect pensioners. Pensioners would have access to more affordable water services irrespective of their location whilst also accommodating for regional differences in the cost of providing those services.

CPSA also calls on the NSW Government to expand eligibility for the rebate to those on Centrelink Allowances and LIHCC holders as a matter of urgency. As demonstrated in Table 3, expanding rebate eligibility would provide enormous relief to those struggling to get by on an income below the poverty line.

CPSA recommends that the NSW Government ensure rebates be available to all pensioners and allowees, regardless of their location and living situation. Eligibility for the water rebates should not be solely based on holding an account with the LWU. As the situation currently stands, there is a significant inconsistency around the state in who is and who is not eligible. Eligibility should be based on a pensioner’s ability to demonstrate that they pay for services and usage, regardless of whether or not it is they who hold the account.

CPSA recommends that the NSW Government establish a clear and uniform system of hardship provisions. PAS should be made available to all water customers in NSW having difficulty paying their utility bill.

Table 3

NB: Table factors in rebates where applicable.

Recommendations

1. CPSA recommends that the NSW Government expand the rebate to those on Centrelink Allowances and Low Income Health Care Card holders.
2. CPSA recommends that the Pensioner Water Rebate be reformed to replicate that provided by Sydney Water for all low income earners across NSW.
3. CPSA recommends that the NSW Government ensure rebate be available to all pensioners, allowees and Low Income Health Care Card holders, regardless of their location and residential status.
4. CPSA recommends that the NSW Government establish a clear and uniform system of hardship provisions available to all NSW customers experiencing difficulty paying their bills.

References

Download: Review of water rebates in NSW  for people on low incomes [Adobe Acrobat PDF - 59.6 KB]