An advocacy body is calling for an inquiry into council rate rebates for NSW pensioners.
Rebates of up to 50 per cent were legislated under the Local Government Act in 1993, capped at $250 per homeowner.
Rates have soared in the ensuing years, but the cap remains fixed at $250. Water and sewage rates have also remained capped at $87.50 each.
In 2023, rates in the Greater Sydney, South Coast, Central Coast, Newcastle and the North Coast areas averaged from $1250-$1500 a year.
A lot of Anxiety
Combined Pensioners and Superannuants Association policy manager Ash Fowler said legislation which was designed to offer significant financial relief to vulnerable home owners was no longer doing so.
"We are definitely hearing from some people that they are very concerned. There's a lot of anxiety about the future," she said.
Ms Fowler said according to a recent CPSA survey, 80 percent of respondents are having a hard time keeping up with expenses, while 25 per cent are encountering "extreme difficulty".
She said the actual percentages of those doing it tough may be even higher, with those who are less tech savvy less likely to engage in surveys or know about how to access concessions.
"Expenses are rising across the board and most pensioners just don't have a financial buffer to absorb these extra costs," Ms Fowler said.
She said while pensioners were making a lot of lifestyle changes and sticking to strict budgets, they were still encountering a lot of financial problems.
Will it get worse?
Ms Fowler fears the financial pain may only get worse following changes to the Independent Pricing and Regulatory Tribunal's (IPART) methodology for setting rate pegs.
Councils generate around a third of their income from council rates. Rate pegs determine the percentage they can increase rate revenue in a given financial year.
IPART completed a review late last year due to concerns rate pegs were being set too low, were being determined based on outdated data, and the methodology did not address differences between councils. A total of 86 councils had special variation applications to increase rates in the 2022/23 financial year.
In 2023/24 the base rate peg was set at 3.7 per cent, while in 2024/25 rate pegs will range from 4.5-8.2 per cent, with final figures adjusted based on a council area's population.
"With the change to council rate pegs, it seems likely rates are going to continue to trend up," Ms Fowler said.
"It seems really timely that the government has a look at what cost of living measures it can put in place to protect ratepayers that are vulnerable to financial stress."
IPART has also recommended an independent review into council expenditure models and an evaluation of existing pensioner concessions.
The case for change
The CPSA has written to NSW treasurer Daniel Mookhey requesting an independent review into the pensioner rebate cap for council rates.
Ms Fowler said the organisation wanted a comprehensive review exploring the best options for ratepayers in the current climate.
She said if a review were to take place, the CPSA would follow findings closely and continue to make recommendations.
"At the very least we would like to see regular indexation to ensure that rebates are keeping up with actual costs," she said.
Government response
A spokesperson for the Office of Local Government said the state government has allocated more than $78 million to help councils ease cost of living pressures for pensioners this financial year.
They added councils should have strategies in place to help support ratepayers experiencing financial hardship and had "discretion" to provide concessions above the maximum rebate.
"The NSW Government has also publicly committed to an inquiry into the financial sustainability of councils to be undertaken by the Independent Pricing and Regulatory Authority (IPART)," the spokesperson said.
