Victoria's 2026 rates & hardship guidelines: what councils need to know
Article
In December 2025 the Victorian Government issued new Ministerial Guidelines relating to Payment of Rates and Charges under section 181AA of the Local Government Act 1989, and the Minister for Local Government confirmed in February 2026 that they are now in effect statewide. Councils must comply — reviewing and updating their hardship and debt-management policies. Here is a plain-English summary of the mandatory principles, and how a flexible payment platform like FlexiRates helps councils respond.
Key takeaways
- The Guidelines are mandatory under section 181AA of the Local Government Act 1989 — councils must reflect their principles in hardship and debt-management policies.
- There are four mandatory principles: flexible payment options, clear and accessible communication, fair and compassionate treatment, and protecting privacy.
- They cover deferrals, waivers and payment plans for ratepayers facing financial hardship, family violence or economic abuse — with easy online and in-person access.
- General rate rises are capped at 2.75% for 2026–27; proactive, flexible payments help councils meet the principles and reduce costly debt recovery.
What are the 2026 guidelines?
The Guidelines were issued by the Minister for Local Government under section 181AA of the Local Government Act 1989, and under section 181AA(3) councils are required to comply. Developed in consultation with ratepayers, stakeholders and councils, they set clear expectations for how councils recognise and respond to hardship — fairly, compassionately and proportionately — including for ratepayers affected by financial hardship, family violence or economic abuse.
They direct councils to review and update their hardship and debt-management policies, and cover the meaning of hardship (section 170) and financial hardship (section 170A), applying for a payment plan (section 171B), deferrals and waivers, and the waiver of interest on unpaid rates. Separately, the Victorian Government capped general rate increases at 2.75 per cent for 2026–27 to ease cost-of-living pressure. For the full text, see the official Local Government Victoria guidance.
The four mandatory principles
Councils must review their hardship and debt-management policies and reflect four mandatory principles:
- Flexible, place-based approach. Councils must have "modern and flexible payment options and methods for payment of rates and charges" that align with local community needs and hardship circumstances.
- Clear and accessible communication. Provide easy-to-understand information and multiple ways to communicate about paying rates and accessing hardship help — online and in person.
- Fair, equitable and compassionate treatment. Treat all ratepayers equitably, compassionately and proportionately, including hardship and financial-hardship applications.
- Protect privacy and confidentiality. Handle applicants' information in line with privacy legislation.
Councils are also strongly encouraged to proactively manage payments to reduce debt-collection costs, commit to continuous improvement, and take a place-based approach. Flexible ways to pay noted in the Guidelines include direct debit for bill smoothing (monthly or fortnightly), alongside deferrals, waivers and payment plans for ratepayers in hardship.
What it means day to day
For revenue teams, the shift is from a reactive, recovery-first process toward earlier, more flexible engagement. That means making flexible payment plans genuinely easy to set up, spotting ratepayers who are falling behind sooner, and keeping clear records of the arrangements and support offered — without adding a heavy manual workload for staff.
How FlexiRates helps councils respond
FlexiRates is a rate payment platform, not a hardship-assessment tool or a substitute for your council's hardship policy — assessing hardship, granting deferrals or waivers, referring ratepayers to financial counsellors, and meeting the Guidelines all remain the council's responsibility. What FlexiRates does is make the payment-flexibility, access and early-visibility expectations practical:
| Mandatory principle | How FlexiRates helps |
|---|---|
| Flexible, place-based approach (modern, flexible payment options) | Card or direct debit on weekly, fortnightly, monthly, quarterly or custom schedules — including bill smoothing — configurable to each council's rates policy. |
| Clear and accessible communication | A self-service portal ratepayers reach from a link on their notice, the council website or an email — set up or adjust a payment plan online in minutes, at any time. |
| Fair, compassionate treatment (proactively managed) | The admin portal flags failed and upcoming payments, card expiry and dishonours, so the revenue team can engage early — before costly recovery action. |
| Protect privacy and confidentiality | PCI DSS compliant handling with tokenised card details, secure ratepayer authentication and privacy-aware design. |
| Reduce debt-collection costs | Automating routine payment admin lowers manual workload and frees officers to focus on ratepayers who need hardship support. |
If you're reviewing how your council collects rates in light of the Guidelines, see how FlexiRates works on the For Councils page, read our buyer's guide, or request a demo.
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