• Rates and charge notices
  • In addition to the requirements under s 158(4) of the 1989 Act and regulation 6 of the Local Government (General) Regulations 2025, Councils are encouraged to include information on:
    • flexible payment options;
    • any concessions that are available;
    • where to go for further information (including Council’s hardship policy); and
    • how to contact Council by phone, email or in person.
• Flexible payment options
  • Councils are encouraged to continually review and revise payment methods that keep up with advances in technology, including:
    • in person at Council offices (cheques, money orders, EFTPOS, credit/debit cards and cash);
    • direct debit for periodic payments/bill smoothing (on instalment due dates, monthly or fortnightly);
    • Centrepay;
    • BPAY;
    • Australia Post (over the counter, phone and on the internet); and
    • by mail (cheques and money orders only).
• Current discounts and subsidies
  • The Guidelines provide that, when developing hardship, financial hardship, and debt management policies, Councils must consider any current discounts or subsidies on rates notices, as recipients of these may be more vulnerable to hardship.
  • Currently, eligible pensioners and veterans can claim rebates on their principal residence.
  • Under section 168 of the LG Act 1989, Councils may  offer early payment incentives, which must be clearly disclosed on the rates notice.
• Measuring Council performance
  • All Victorian Councils report under the Local Government Performance Reporting Framework, which includes 59 service measures and a checklist of 27 governance items.
  • Although not mandatory, the Guidelines strongly encourage Councils to record and report on outstanding rates and charges to support transparency and improvement.

Hardship and financial hardship in the Local Government Act 1989

The Guidelines also encourage Councils to adopt innovative and responsive approaches to supporting ratepayers. 

• The Guidelines discourage Councils from applying interest in circumstances of “hardship” or “financial hardship”.
• The Guidelines define both “Hardship” and “Financial Hardship”, which are distinct terms under the 1989 Act. The definitions given in the Guidelines are broader than the common law meanings of these terms.
• For deferral of rates, a ratepayer must show that payment would cause “hardship” in their current circumstances.
• For a waiver of rates or interest, the ratepayer must demonstrate that payment would likely result in “financial hardship”.
• Section 170 of the 1989 Act empowers Councils to defer rates or charges (in whole or part) where hardship is shown, and no interest can be charged during the deferral period until a new notice is issued. 

Applying for a payment plan in section 171B of the LG Act 1989

The Guidelines require Councils to offer accessible, flexible payment plans and outline the application, approval, reminder and scheduling processes. 

• Payment plans must be available for unpaid rates and charges, regardless of a ratepayer experiencing hardship.
• The Guidelines specify the requirements for application forms (including, that the form must be clear as to what Council requires the ratepayer to submit, that Council may seek more information and timeframes for a response), the approval process (including that a decision must include the duration of the plan, amount of each payment, and any other terms) and the requirement for reminder notices and payment schedules.
• The Guidelines emphasise collaboration with the ratepayer, ensuring that payment plans reflect the ratepayer’s actual capacity to pay, and in circumstances where a payment plan may be cancelled, ensuring the ratepayer is made aware of other support options that are available (such as financial counselling).

Assessing applications of hardship or financial hardship

Part 7 sets out the expectations for Councils to fairly assess hardship applications using information relevant to each ratepayer’s circumstances.
Councils must make information about hardship assessments, decision making, contacts and resources easily available online and in person.

• In assessing applications, Councils may consider evidence of hardship, whether payment would affect basic living needs, receipt of benefits, low or fixed income, referrals from support services, or past difficulty making payments.
• Applicants may also be referred to financial counsellors, community lawyers, government funded assistance programs or family violence support services, and Councils must provide details of these services on request. Councils must not, however, require a person to engage a professional to support the preparation or verification of an application.
• The Guidelines also require Councils to make a decision, in writing with reasons, in a reasonable timeframe. Councils are encouraged to fix a timeframe in which a decision is to be made following an application.
• The Guidelines also state that Council should provide an internal merits review process for ratepayers whose applications are refused, to be determined by a person who was not involved in the original decision, but who has authority to fully review and decide the application.

Council Hardship and Financial Hardship policies 

The Guidelines set out that Council is required to maintain clear and accessible hardship and financial hardship policies so ratepayers can easily understand how to seek support and how such applications are assessed.

In addition, the policy must include information on how Councils assess hardship applications, how decisions are made, and how to contact Council.

Other Matters 

The final part of the Guidelines address several additional matters that shape how Councils manage unpaid rates and charges, interest, and debt recovery. 

• S 172: Interest on Unpaid Rates: Councils may charge interest on unpaid rates and charges, but are encouraged to consider hardship before doing so.
• S 180: Unpaid rates or charges: If a ratepayer is notified of unpaid rates and the available payment options but no option is agreed, it may recover the debt through the Magistrates’ Court or other recovery action, but Council policies must clearly set out when such recovery will occur.
• S 181: Sale of land or recover unpaid rates or charges: Where rates remain unpaid for over three years and no current arrangement exists, Councils may sell or transfer the property after obtaining a court order.

Section 181AA requires Council to comply with guidelines made under that section. A failure to comply with the Guidelines may lead to:

• Ministerial direction and supervision under Part 7 of the Local Government Act 2020; and
• an aggrieved person seeking judicial review of a Council policy (or decision made pursuant to a policy) that is not compliant with the Guidelines.

Next steps for Victorian Councils 

Broadly, the Guidelines require Councils to be more flexible and transparent in their approaches to providing rate relief for people facing hardship or financial hardship and to collecting outstanding rates and charges. 

Councils should review their current hardship and debt management policies in light of the new Guidelines to ensure compliance.