Age Pension

Loophole allows 300 pensioners to get away with $1m in unpaid rates

Jun 13, 2018

Mayor Smith says the loophole must be closed. Source: Getty.

A council in New South Wales has been left with more than $1 million in outstanding unpaid rates, after a policy loophole allowed pensioners to get away without paying.

Lismore City Council are now moving to rectify the issue after it was revealed that more than 300 pensioners had been able to escape without paying their rates bills. During the 2015-16 financial year, a total of 343 pensioners racked up an astonishing $1,030,561 in monies owed to the local authority.

The situation arose as council bosses had previously made the decision to exclude the demographic from their standard debt recovery practices, meaning they had little incentive to actually settle their debts as they would not be pursued legally for failing to pay.

Mayor Isaac Smith discussed the situation at a council meeting on Tuesday and told The Northern Star that the situation could not continue as the council is “operating on a very tight budget”.

Lismore City Council are believed to be the only council to have followed this model which meant that pensioners, other than receiving an initial reminder notice, were not chased up or pursued legally by the council in order to recover the outstanding debt.

Following Tuesday night’s meeting, the council confirmed they would be writing again to the pensioners who have not yet repaid their debts, with a spokesperson confirming: “All pensioners with arrears will be written to again advising of the change in Council’s debt collection practice. They will be asked to contact Council to set up an acceptable payment arrangement.”

However, the council did state that any pensioners “suffering financial hardship” will be able to submit a Rates and Charges Hardship application, with the potential of having any interest charges written off or payment periods extended.

The news comes as self-funded retirees in Canberra are preparing to appear before a parliamentary inquiry to talk about the impact of recent rates rises, after it was revealed that single pensioners in the national capital’s inner suburbs have been hardest hit by the increases.

A Legislative Assembly committee investigating the change in rates calculations for people living in units and apartments held its first meeting on Wednesday. One couple scheduled to give evidence at the hearing told Fairfax Media that the rate rises are making it “very difficult” for people who do not receive any financial support from the government.

Peter and Carol Dunnet, who own three properties, said: “The increases in electricity and gas as well as rates and land tax are making it very difficult for people on fixed incomes, who get no government handouts because they have lived within their means and invested wisely. We are the ones who are just above the pension line.”