Victorians seeking help with their struggle to pay for electricity have seen their average energy bill debts blow out to almost $2,500 – an increase of nearly $750 since 2021, a new report has found.
The Consumer Action Law Centre report, published on Thursday, found issues with energy companies not informing households of financial hardship entitlements and pressuring them into committing to unaffordable payment plans.
It found the average energy bill debt for Victorians calling the National Debt Helpline last year was $2,459 – a 43% increase from the centre’s last report, which was released in 2021.
The average fortnightly income of callers to the helpline was $967, with the centre arguing that “Centrelink payments are insufficient to cover even the most basic living expenses”.
The acting director of policy and campaigns at the centre, Luke Lovell, said people in financial hardship were often facing numerous debts.
“It’s a huge load for people to carry – financially, mentally and emotionally,” he said. “We hear about people not turning on the heater and going cold throughout winter.”
Alison*, a 68-year-old pensioner in Melbourne, accumulated $11,000 in debt from unpaid gas bills over the past five years.
She said her online account shows her gas consumption equates to the same usage as a three-person household. She is still in the dark over why her usage is high.
“It crept up on me,” she said.
“It frightened the hell out of me when they sent a letter saying I may need to increase my payments because I can’t afford it.”
She was able to access the provider’s hardship scheme through a financial counsellor, after not being offered any support from the company.
The report also detailed the experience of another woman who had a combined debt of $22,000 for her electricity and gas.
She told the national helpline she had ignored her growing debts while she was suffering family violence and the financial counsellor queried why the retailer hadn’t raised any concerns with her earlier.
Lovell said the centre was concerned about energy companies not meeting their obligations to support people struggling to pay bills.
“We want retailers to be more proactive in providing assistance rather than customers having to navigate the system and know about some of this information,” he said.
The report also documented an increase in customers who have not been referred to the state government’s utility relief grant scheme, which can provide up to $650 for each utility over two years.
Emma King, the chief executive of the Victorian Council of Social Service, said it was inexcusable for regulators to not be linking customers to financial support.
“It’s extraordinary because it’s a requirement for them to do this,” she said.
The report found marginalised groups were over-represented in the data. Those calling about energy debt were more likely to be women, single parents, rent their home and speak a language other than English at home. Indigenous Victorians and people affected by mental health challenges and family violence were also over-represented.
It found there were 6,492 calls to the debt helpline in 2022, and 697 (10.7%) mentioned an energy issue.
This comes after Victoria’s Essential Service Commission (ESC) announced an 25% increase in price of the default electricity offer.
Under Victoria’s payment difficulty framework, energy retailers are bound by strict rules to help customers manage the payments of unpaid bills. But the new report found energy retailers were not meeting their obligations for people struggling with debt.
It recommended the state’s payment difficulty framework be bolstered to better protect customers struggling to pay bills, and for the ESC hold energy companies to account on meeting their obligations to customers.
A Victorian government spokesperson said the state had the “strongest energy customer protections in the country”.
“In 2019 we introduced the payment difficulty framework, stopping energy companies from disconnecting anyone who contacts their retailer for help,” they said.
The spokesperson also pointed to the energy bill relief, offered via two rounds of the power-saving bonus since last July.
* not her real name
