Energy Customer Hardship Policies Explained

While Australia is known as the lucky country, there are many of us who are battling financially. With the cost of living skyrocketing in recent years, juggling your finances to pay household utility bills can be a headache at times. Fortunately, those struggling to keep up with their energy bills may have more options than they realise. In this guide, we’ll discuss your rights as a customer as well as the power companies’ obligations around financial hardship if you’re having trouble paying your bills on time.

What are Customer Hardship Policy Guidelines?

Customer Hardship Policy Guidelines are aimed at strengthening protection for vulnerable energy customers who are experiencing financial hardship. These guidelines are set and enforced by the Australian Energy Regulator (AER), which outline a range of responsibilities power companies must adhere to, as well as the rights a consumer has if facing financial hardship.

All electricity and gas retailers must provide a Customer Hardship Policy, which can normally be found on the company’s website. Within this document, the AER states that energy providers must address the following areas:

  • Have processes in place to identify customers experiencing financial hardship, including self-identification by the customer
  • An early response from retailers to assist customers in hardship
  • Provide flexible payment options, including payment plans for customers paying energy bills
  • Steps in place to identify and notify customers of their eligibility for government concessions and relevant financial counselling services
  • Alternate programs offered by the retailer to assist hardship customers
  • Reviewing the suitability of a hardship customer’s market retail contract against the retailer’s hardship policy
  • Assisting customers with strategies to improve household energy efficiency

Where to find the Customer Hardship Policy

Depending on your energy provider, this document can usually be found on the company’s website by typing ‘hardship policy’ into the search bar. If your retailer does not have a search bar, check the frequently asked questions (FAQ) section or contact them directly. Here’s an example of what Alinta Energy has published on its website.

Alinta Energy Hardship Policy website

What does the energy regulator say?

The Australian Energy Regulator (AER) encourages customers in financial hardship to know their rights, and use them where appropriate. Not only does the regulator advise customers to get in contact with their energy provider, but also to seek the protection they are legally entitled to.

Acting AER Chair Jim Cox said energy retailers are obliged to implement customer hardship policies that provide clearer and better assistance to customers experiencing financial difficulty.

“It can be tough to start a conversation about payment difficulties, and hard to know where to turn to help. If you expect to have trouble paying an upcoming bill, or your debt is mounting, call your retailer and ask them to help you. As long as you are in a hardship program and meeting its conditions, you cannot legally be disconnected,” he said.

“Retailers are obliged by law to assist vulnerable customers experiencing payment difficulties. Protection for people having trouble paying their energy bills is a right, not a privilege. It’s important that customers know these rights and take early action if they can. But we recognise this is not always possible when people are experiencing hardship and vulnerability.

“The Guideline obliges retailers to work harder to quickly identify customers struggling with their bills, and to meaningfully engage with them to help them manage their bills on a continuing basis.”

Will my power be cut off if I don’t pay my bill?

In accordance with the National Energy Retail Law, there are multiple steps that electricity and gas retailers have to take before disconnecting power to your home. Here’s what to expect:

  • Your energy retailer will send you a bill outlining the amount payable, the due date and payment options
  • If you fail to pay your bill by the due date, or do not comply with the agreed payment plan, you will be issued a reminder notice by your retailer
  • Once the reminder notice timeframe has lapsed, you will be issued a disconnection warning notice
  • After the disconnection warning notice, your energy retailer must attempt to contact you if you haven’t already contacted them

Cutting power to your home is the last resort for energy retailers, and disconnection numbers have reduced dramatically since the COVID-19 pandemic. Although disconnections are down, you shouldn’t bury your head in the sand if you’re struggling to pay your power bills.

How to ask your energy provider for help

Asking your energy provider for help may seem a little intimidating, however it’s your right as a consumer to seek assistance. Rather than sitting in the dark, it’s best to talk to your electricity or gas company about your options. By doing so, your energy retailer is legally obligated to help you, and large penalties apply to those companies who fail to do so.

If you’re currently undergoing financial adversity, chances are you’re not alone. During 2020-21, roughly 180,000 residential customers in Australia were paying off some form of energy debt. Out of these households, the average debt for electricity customers on a hardship program was $1,584.

When contacting your energy provider, just make sure you clearly explain your situation, and that you are seeking help. It’s also a good idea to take note of when you made contact, detailing the particulars of what you discussed with your retailer. This way there is no confusion down the track about your, and your energy retailer’s, responsibilities. Lastly, remain calm and be polite, as your power company’s staff should be trained to competently deal with such situations.

Switching energy providers if you’re in debt

You may believe that your last power bill is too high or something doesn’t look right, however this normally isn’t the case. If you’re in debt with your current energy provider, then you may be able to switch companies, however any outstanding amounts will still need to be settled. It’s also important to remember that energy retailers can carry out credit checks at their discretion, meaning that your financial situation may not fulfil the credit requirements of a new provider.

You can learn more by reading our guide on switching energy providers in debt.

You can check your credit score for free here

The final word on customer hardship policies

Unlike many expenses we amass in our lives, paying for power is an overhead we can’t avoid. While there are many ways to reduce your energy costs, you’ll still receive that dreaded bill every month or quarter. And if you’re struggling to keep your finances in order, it’s good to know there is help readily available.

Although seeking assistance won’t miraculously wipe away your debt, it can give you peace of mind knowing the power will be on at home. Remember, your energy retailer is only one phone call away if you’re unsure about what help is on offer or would like to know more.

Image credits: PuiPhotoman/, AlexLMX/, fizkes/, Zerbor/

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