Government extends national electricity rebate amid rising costs

Fact Checked

News the government will extend the national electricity rebate by $150 per household will be a welcome relief, with research from Canstar Blue showing an overwhelming 84% of Australians want the relief extended.

However, with electricity prices set to rise by up to $200 a year for an average household, the limited rebate will fall short for many struggling families.

The fourth instalment of the current electricity rebate is set to land in the majority of people’s accounts from April 1.

An extension will see the government pay two more $75 instalments into each household’s electricity accounts, which, if rolled out in the same way as the current payments, would be delivered in July and September for most households. Those on embedded networks, or in Western Australia, could receive one additional payment of the full $150.

Why the rebate extension won’t be enough for many families

On March 13, the Australian Energy Regulator (AER) announced the draft prices for the 2025 – 2026 financial year, which could see the default electricity price rise by up to $200 for the average household on a single rate plan. These prices impact people in New South Wales, south east Queensland and South Australia.

However, some families would use significantly more electricity than the AER’s annual usage rate and could see their bills rise by even more in the next financial year.

Households in Victoria are set to fare better with the Essential Services Commission (ESC), announcing its default annual prices for an average household could see their bill change by between a drop of $19 through to a rise of $68.

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Hardship debt continues to rise, despite the rebates

Rising electricity prices and a reduction of the rebate could see more households fall behind on their electricity bills.

Data from the AER released last Tuesday for the December 2024 quarter shows that even with the federal and state rebates in play last year, the proportion of customers in debt rose by 0.11 percentage points to 2.89%. The average debt for these customers also rose by $301 to $1,395.

An additional 1.60% of customers are on hardship programs with an average of $1,947 owing on their bills. While this was a decrease in the proportion of customers on hardship programs, the average debt rose by 16% from a year ago.

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How to double your energy bill relief

Shopping around for a cheaper electricity plan can potentially provide hundreds of dollars in additional relief on top of this government rebate.

Research from Canstar Blue shows the greatest relief could potentially be seen in Canberra, where, if the average household switched from an average-priced plan to one of the cheapest, they could stand to save up to $444 in the next 12 months.

Households in Sydney could see up to $385 in relief, Melbourne households up to $318 a year in relief and Brisbane households up to $437.

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What to do when the rebate falls short

Canstar Blue data insights director, Sally Tindall, says, “Families worried about rising electricity costs will be breathing a small sigh of relief on the back of the news the government’s electricity rebate will go into extra time.

“It’s great to see the government providing cost of living relief, however, for some households with higher-than-average energy bills this might not be enough to get them through winter, particularly with electricity price rises coming down the line.

“This extra $150 is unlikely to see a rise in spending at the shops – certainly we didn’t see a big impact the first time around with the $300 rebate.

“However, the government has passed up the opportunity to means-test this rebate extension, which could have delivered more targeted relief to those households that need it most.

“Data from the Australian Energy Regulator shows that despite the rebates, the proportion of customers behind on their electricity bills rose in the December 2024 quarter, compared to the year before, with the average debt hitting a concerning $1,395.

“For those on hardship policies, the average debt was even higher at $1,947.

“Australians looking for real relief on their electricity bills should look beyond these temporary government handouts and commit to checking the competitiveness of their electricity plan at least once every six months.

“Competition in electricity markets such as Sydney, Melbourne and Brisbane is helping drive prices down, but only for those households that proactively use it to their advantage.

“Don’t let the clock tick down before you take action on your electricity bills.

“The double sugar hit from the extra assistance from the government and a cheaper electricity plan could help many families keep their bill in the black this winter.

“Reducing your electricity use also has the potential to ease the financial burden of rising prices.

“Small changes such as drawing the curtains on a hot day to keep the sun out, washing in cold water and putting a lid on your pot while cooking might seem insignificant in isolation, however, if you build these steps into your daily routine they can really start to add up.”

Tips for cutting down on electricity use

• Capitalise on your curtains: rooms that catch direct sunlight need special attention. Open them up in winter to catch the sun and draw them shut when they’re baking up your house in summer
• Use your air con wisely: aim to only cool or heat the room you’re using and set it to a reasonable temperature – that’s around 23 or 24 degrees in summer and 20 in winter
• Free your filters: a full filter in your dryer, air conditioner or even the coils at the back of your fridge will slow down the efficiency of your appliance and burn through more energy
• Put a lid on it: when you’re cooking on the stove top, use a lid where you can. Not only will your dinner be cooked faster, you’ll save energy
• Keep the fridge shut tight: clean your fridge seals and apply the paper test every six months
• Shoot for the stars: when buying new appliances aim for a high energy efficient rating. They may be more expensive but they could pay off in the long run if you know you’ll use them frequently
• Insulate your home: proper insulation can significantly reduce the need for heating and cooling. Even sealing up any cracks or gaps can help keep the cool air in during summer and the toasty warm air captured during winter
• Avoid washing on a whim: run full loads in your washing machine and aim to use cold water where you can

Compare energy plans

If you are looking at cutting down your energy bills, it might be a good idea to compare your current energy plan with some of the cheapest plans on the market. A good place to start is with the Canstar Blue tool below, where you can select your state and see some of the cheapest available plans. Canstar Blue’s electricity comparison tool includes a unique value rank feature that compares plans on which offer the best overall value, not just the cheapest prices.

Compare Electricity Providers

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