CPSA rings triple zero on Fire and Emergency Services Levy

In breaking news, the NSW Government has announced it will hold off on the Fire and Emergency Services Levy pending further consultation.

With the Fire and Emergency Services Levy (FESL) set to commence on 1 July 2017, CPSA has been on the front foot campaigning for a fair go.

The FESL will be collected by local councils on behalf of the NSW Government. Property owners pay the levy individually.

Currently, insurance companies each pay one big levy based on their market share. The individual levy shown on insurance policies is an estimate only. There is no separate levy paid by the policy holder.

The FESL has a fixed component and a component based on the unimproved land value. The fixed component of the FESL is $100 a year. The land value component is $21.90 per $100,000 of unimproved land value. Concession card holders get a discount of $50.

The NSW Government has promised insurance premiums will go down by the amount of the estimate shown on current policies.

CPSA has spoken to a country pensioner whose FESL will be more than $100 lower than his current estimated levy.

CPSA has also spoken to a metropolitan pensioner whose FESL will be much higher than her current estimated levy.

Then there are people whose insurers do not provide them with an estimate of their levy.

And spare a thought for pensioners in recently gentrified areas. Their land value has exploded. Council rates have become a killer and now the FESL.
CPSA is also concerned that the introduction of the FESL will result in a double-dip.

For example, someone whose insurance policy falls due on 1 January 2017 and expires on 31 December 2017 has already paid twelve months' worth of emergency services levy through their insurance policy. Now 1 July 2017 comes along and this person has to pay the new levy for 2017-2018, doubling up on six months.

The NSW Government claims that the old levy, part of this person's insurance premium paid on 1 January 2017, is for the 2016-2017 year. In other words, this person paid the levy in arrears.

This is nonsense.

The old levy is paid by insurance companies based on their market share. The policy holder does not pay the old levy. Instead, insurance companies recover the cost of the levy through the premiums they charge. But these premiums are for the twelve months from the start date of the policy. These premiums are paid prospectively, not in arrears.

The FESL double-dip affects every home insurance policy holder in NSW whose policy doesn't commence on 1 July. If your insurance policy starts on 30 June 2017, you pay 364 days double. If your insurance policy starts on 2 July 2017, you pay one day double.

The FESL information line can be reached on 1300 78 78 72.