A guide to the Australian Energy Regulator Hardship Policy Guidelines, what it means for you

Hardship policies refer to the programs put in place by energy retailers to assist customers struggling to pay their bills. But recent concerns around the fairness of these policies have prompted the Australian Energy Regulator (AER) to investigate further.

In 2017 the (AER) was asked to review hardship policies in response to a number of electricity disconnections across Australia, which at the time had reached 64,926 (excluding Victoria) and saw Aussies enter hardship programs with an average debt of $1,241.

Then on February 4 2019, the AER released a draft of its new Customer Hardship Policy Guidelines that would come into effect on April 2.  

But what do these new Customer Hardship Policy Guidelines look like and what will it mean for Aussies experiencing financial hardship with their energy bills? Read on to find out.

The Customer Hardship Policy Guidelines is a document that outlines instructions and responsibilities energy retailers must follow when submitting new or altered customer hardship policies to the AER.

Its goal is to provide greater protection for Aussie customers experiencing financial hardship with their energy bills.

When reviewing hardship policies, the AER found that there were no rules for what energy retailers were expected to offer, which left Aussies with a lack of support where they really needed it. The regulatory body also noticed a gap between a retailer’s policy and what was actually put into practice.

AER Chairman, Paula Conboy said:

“We know that more people are going into these [hardship] programs, but fewer people are successfully completing them. This is why the AER is doing more work in this area to establish a 'hardship guideline' to further strengthen the protections available to consumers.”

The new guidelines will provide clarity to consumers in terms of what your rights are and what you can expect from your retailer. Retailers will also have to be more transparent when it comes to crafting their policies and practises, so that you’re ensured to get the support you need in a timely fashion.

Getting more specific, the Customer Hardship Policy Guideline will provide instructions for retailers in four key areas, they are:

Identification, training and information

When dealing with a customer experiencing financial hardship, retailers must take into account all circumstances they’re aware of before acting in a timely and fair manner to inform the customer they’re entitled to assistance. 

Staff must also undergo training so they’re able to answer customer queries and identify customers who require assistance, so you’ll always be dealing with a professional. 

A description must also be provided for its eligibility process and should not included unreasonable conditions that would exclude customers. 

Communication of customer rights

Customer hardship policies must be made available to either through the website or postage if customers are unable to access the website for any reason. 

The policy should be easy to understand, simple, short and must outline customer rights. 

Processes and timeframes

The AER must approve a retailer’s customer hardship policy and can request an amendment or change, meaning your best interests are always a priority. 

A retailer’s policy must also align with retail law and established timeframes when seeking approval from the AER. 

Standardised statements

This refers to the wording and types of statements retailers must use in their policies. 

In a retailer’s hardship policy, a general statement must be made to outline the contents of the policy, followed by a standardised statement, which details how a retailer plans to comply with sections of Retail Law. 

If you’re struggling to keep up with your energy bill, you might be paying more than you need to. Our energy comparison tool can help you compare some of the plans available in your area.