In this section
The Utility Relief Grant Scheme, provides assistance for people who are unable to pay their utility bills due to a temporary financial crisis.
If the bills your client is having trouble with are for water, electricity or gas you should, in the first instance, contact their provider and let them know that the client wants to apply for the Utility Relief Grant Scheme.
The forms to apply for relief grants are available from gas, electricity and water companies or LP Gas suppliers or by calling the Department of Human Services (DHS) Concessions Information Line on 1800 658 521.
If your client meets the conditions set out below, either you or a financial counsellor can assist the client to apply for a relief grant.
The DHS website sets out that:
The application should clearly set out the circumstances that have led to the client’s inability to pay the outstanding account.
In relation to non-credit contracts (for example mobile phones, landlines, internet, gas, electricity and water), industry codes or legislation require companies to implement hardship policies, so you should contact the company directly or the relevant industry ombudsman (see Internal & external dispute resolution) in relation to these processes. For example:
You should contact the relevant company directly or the industry ombudsman (see External Dispute Resolution) in relation to these processes.
These provisions apply to both the original lender and to debt collectors (i.e. as assignees of the original the debt).
If your client finds themselves unable to meet credit repayments for a short period of time, because of illness, unemployment or other reasonable cause, you can apply to the credit provider for a hardship variation under section 72 of the Code. The client must be able to show that if the contract is varied in the way you’re requesting, they will be able to meet their obligations. The hardship variation provisions apply to loans up to:
Under the Code, the permitted variations are:
Although there is no legal obligation on the creditor to provide the following, you should also consider requesting that the creditor does one or more of:
A template letter requesting a hardship variation under the Code is available below.
You should remind your client that, if one of the above variations is accepted, the postponed payments will need to be “caught up” by doing one of the following things:
To obtain a hardship variation, it will be necessary to show that the client will eventually be able to repay the debt. You should keep in mind that, if the client’s circumstances have permanently changed, a variation of their credit contract may not necessarily be the best option because it may be postponing inevitable default and increasing default fees and interest (thereby eating into any equity a person may have if the debt relates to a mortgaged property). If your client’s financial situation is not likely to improve in the short term (three to six months), you should make an appointment with a financial counsellor.
Within 21 days of receiving the financial hardship application, the creditor is required to give the borrower a written notice stating:
If a creditor agrees to the hardship variation, the creditor must, within 30 days of the agreement, give the debtor and any guarantor a written notice setting out the particulars of the change in the terms of the credit contract.
If the creditor unreasonably refuses the hardship variation, you should (subject to considerations regarding the client’s ability to manage the credit payments in the longer term), lodge a dispute with the relevant External Dispute Resolution scheme.
If the client is able to reasonably demonstrate that a financial hardship application should have been approved by the creditor, the creditor is generally not entitled to recover default interest and fees and enforcement costs from that time. You should remind your client that, if the creditor requested documents reasonably necessary to consider the application and the client did not provide these, the creditor is not obliged to reverse these costs.
There is also an option, under section 74 of the Code, to apply to the court to change the terms of the credit contract. The court may order that the credit contract is changed and make such other orders as it sees fit.
Also under section 74 of the Code, the court may, if it thinks it is appropriate in the circumstances, stay any enforcement proceedings under the credit contract until the application has been determined.
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