Energy customer hardship policies explained

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In this Canstar Blue guide, we’ll discuss your rights as a customer as well as power companies’ obligations if you’re having trouble paying your bills on time.

With the cost of living skyrocketing in recent years, juggling your finances to keep on top of household utility bills can be difficult at times. Fortunately, those struggling to keep up with their energy bills may have more options than they realise. Below we explain what an energy hardship policy is, how to access it and what to do if you’re struggling to pay your bills.

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) under the National Energy Retail Law. The guidelines 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 as well as the AER. Within the policy, 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.
• Steps in place to identify and notify customers of their eligibility for government energy 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.

Major energy providers’ hardship policies

Origin Energy hardship policy

Origin’s hardship program offers customers payment extensions, tailored payment plans, information on government grants, energy-efficiency tips and access to financial counselling. 

AGL hardship policy

AGL provides customers with financial assistance through its Staying Connected program, including a tailored payment plan as well as information about government assistance, financial counselling, support services and advice on how to reduce your energy bill. 

Energy Australia hardship policy

Energy Australia’s energy hardship policy is called EnergyAssist, and offers hardship customers financial counselling, resources explaining what energy rebates you may be eligible for, assistance with comparing your plan and a free in-home or phone energy efficiency audit for some customers. 

Ergon Energy hardship policy

Ergon Energy’s Customer Assist program includes developing a personalised payment plan, providing information on further financial assistance including government rebates and services as well as energy usage advice. 

Red Energy hardship policy

Red Energy helps customers struggling to pay their energy bills through their Customer Care Program. This program provides a customised payment plan over a maximum of 24 months, help with switching to a more affordable plan, energy saving advice and information on services or programs that could help you with your finances. 

Where to find your provider’s customer hardship policy

Depending on your energy provider, the customer hardship policy 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, the help and support tab or contact them directly. Alternatively, check the AER website for a complete list of approved hardship policies. 

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, always contact your provider if you’re struggling to pay your power bills.

Can I switch energy providers while in debt?

If you’re in debt with your current energy provider, then you may still be able to switch companies, although  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.

Looking to change energy providers but not sure if your credit score or debt balance is up to scratch? See what you may be eligible to do with Canstar Blue’s switching energy providers whilst in debt guide.

Worried about your energy costs? See if you are missing out on a better price from these cheap power plans in NSW, VIC, QLD and SA

How to ask your energy provider for help

Asking your energy provider for help may seem 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 companies that fail to do so.

If you’re currently undergoing financial adversity, chances are you’re not alone. The AER found that from January to March 2024,  the number of Australian residential customers with energy debt increased from 2.78% to 3.04% when compared to 2023 figures. Out of these households, the average amount owed by energy customers with outstanding debt for more than 90 days was $1,093, up from $999 the previous year.

When contacting your energy provider, make sure you clearly explain your situation, and that you are seeking help. Whether you’ve lost your job or you’re struggling with the cost of living crisis, your provider is required to help you and keep your information confidential in accordance with the law.

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 handle such situations.

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 want to know more.

Image credits: PuiPhotoman/Shutterstock.com, AlexLMX/Shutterstock.com, fizkes/Shutterstock.com, Zerbor/Shutterstock.com, Alinta Energy website