Our review of payment difficulty framework focuses on evaluating the implementation of the framework in meeting its objectives, relying on direct customer experiences, and data and information relating to the implementation of the framework. We have released our findings from the review. We found that the payment difficulty framework helps Victorian energy consumers manage their energy costs but that retailers can do more.

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.

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

Our review

Review phase 1: Engagement and insights, information, data and engagement analyses

We began the first phase of our review in September 2021, by engaging on our proposed scope and approach for the review. In doing so we confirmed that the purpose of the review was to evaluate and assess the framework’s ability to meet its objectives.

We also committed to identifying options for improving the operation of the framework.

While undertaking the first phase of the review, we sought to understand:

• the ways the payment difficulty framework has been implemented by retailers
• consumers’ experience of the framework, and
• the perspectives of community sector organisations. 

To inform this findings report, we developed our analyses using a range of inputs, data and feedback as follows:

• Analysis of customer outcomes, based on data from obtained from retailers, distributors and relevant government agencies (such as the Department of Families, Fairness and Housing).
• Stakeholder feedback from workshops and submissions.
• Customer voices through call recordings. We engaged ORIMA Research to undertake a study on these call recordings, with a study report that accompanies this review. 
• Consumer insights research drawn from publicly available sources, including direct research we conducted to develop our ‘Getting to fair’ strategy in 2021.

We also committed to not revisiting the policy rationale behind the framework, which was substantively consulted on in 2017. The review would also not consider reforms to associated government programs and policy.

Review phase 2: Better practice program

In the second phase of the review, we explored priority areas further with our stakeholders to identify and consider practical solutions to better support the implementation of the framework.

In July and August 2022, we facilitated a better practice program consisting of three virtual workshops with retailers and community service organisations, to discuss and share practical actions and ideas that can be implemented by retailers to support customers under the framework. Each workshop focused on areas for improvement identified in the findings report.

The notes from each workshop are available here and under the Review documents and submissions tab.

How we engaged and what we heard

From September to December 2021, we ran a program of engagement activities designed to inform the review of the implementation of the payment difficulty framework. 

Our stakeholder engagement focused on gathering views of the implementation of the framework – to identify aspects that are working well and areas for improvement.

September 2021: our approach

We invited submissions on our proposed approach from 2 to 19 September 2021. Our engagement focused on the appropriateness of the scope and purpose of the review. We received 11 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 the review and welcomed our proposed collaborative approach to stakeholder engagement. 

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 did not change our proposed approach to the review or our key review questions.

November 2021: our key review questions and early observations

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. 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. A report on the feedback we received during this workshop is provided as an appendix to our Findings report.

We received 15 submissions in response to our key review questions. These submissions were from customer advocacy groups, community organisations and the energy industry. 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.

April 2022: 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. A video recording of the webinar is available on YouTube. The slides and poll results are also available here.

All submissions received can be found under the Review documents and submissions tab.