Payment difficulty framework implementation review 2021

What is the payment difficulty framework?

The payment difficulty framework is a set of energy rules to better protect and support residential customers that are anticipating or facing payment difficulty. The framework was developed in 2017 in response to high numbers of residential customers being disconnected for non-payment.

It's objectives are that:

• customers are supported to pay their ongoing energy use, repay their arrears and lower their energy costs
• customers are only disconnected for non-payment as a last resort and
• customers avoid getting into arrears with their retailer.

We now have an increased awareness that the barriers to getting help are exacerbating the experience of vulnerability.

We are reviewing the framework

When we established the framework, we committed to review how it was working in practice two years after it came into effect.

As part of our review, we will:

• evaluate how the framework is meeting its objectives
• speak to customers about their experiences directly
• gather information to determine whether the framework has been effective
• draw on insights and data from the community, regulated businesses, and our partners across government.

We will then identify options for improving the operation of the framework such as:

• working with interested stakeholders to design practical solutions to the issues raised in the review
• developing guidance notes or industry education material to further support implementation of the payment difficulty framework.

Read our early observations

Our early observations come from our preliminary analysis of quantitative data submitted by retailers, and consumer insights from various case studies, surveys and research. This document was used to inform a stakeholder workshop in November 2021.

Feedback to the review

Feedback to our approach paper

We invited submissions on our proposed approach from 2 September to 19 September 2021. Our engagement focused on the appropriateness of the scope and purpose of the review.

We received eleven submissions from a variety of stakeholders including community representatives, energy retailers and energy consumers.

There was a general level of comfort across the submissions about the scope of the review and the appropriateness of our review questions. Many submissions emphasised the need to refer to both quantitative, as well as qualitative data, throughout this review and welcomed our proposed collaborative approach to stakeholder engagement. All submissions received can be found under the 'Review documents and submissions' tab of this web page. 

We also received a number suggestions of areas or issues for us to consider such as:

• other sources of information to refer to
• the application of the framework rather than the framework itself
• addressing any issues or discrepancies in the current framework
• the interaction between customer debt and customer engagement.

After considering this early feedback, and given the level of comfort expressed in submissions, we have not changed our proposed approach to the review or our key review questions.

Feedback to our key review questions

Between 19 September and 30 November 2021, we invited your feedback on our key review questions. This second engagement process focused on understanding stakeholders’ observations and experiences of the implementation of the payment difficulty framework.

We ran a large stakeholder workshop which had approximately 90 key external stakeholders in attendance, and other individual meetings with stakeholders. We received fifteen submissions in response to our key review questions. These submissions were from customer advocacy groups, community organisations and the energy industry:

• AGL
• Alinta Energy
• EnergyAustralia
• Powershop/Meridian Energy
• Origin Energy
• Tango Energy
• Anglicare Victoria
• Community Information & Support Victoria
• Consumer Action Law Centre
• COTA Victoria
• Consumer Policy Research Centre
• Energy and Water Ombudsman
• FCVic
• Uniting Victoria/Tasmania
• Victorian Council of Social Service

Some of the themes that emerged from the feedback we received in response to our key engagement questions include:

• Variability in interpretation, awareness and application of the payment difficulty framework.
• Difficulties engaging with customers about their bill payments.
• Barriers to customers receiving assistance under the framework.
• Unintended consequences of entitlements, such as increased levels of debt for customers receiving assistance.
• Impacts of COVID-19.

All submissions received can be found under the 'Review documents and submissions' tab of this web page. The information from these submissions will inform our findings report, planned for release in March 2022.

Feedback on our early findings 

On 7 April 2022, we held a webinar to present our early findings and seek participant views on priorities for focus in the next phase of the review. We had over 80 participants from government, the energy industry and the community sector. The feedback we received will inform our final findings report to be released in May 2022. 

A video recording of the webinar is available on YouTube. The slides and poll results are also available here.

If you were not able to attend but would still like to provide feedback on what was presented and discussed at the webinar, please reach out to the review team by emailing pdfreview@esc.vic.gov.au.