Back in December 2015, the NSW Government announced that from 1 July 2017 onwards, the Emergency Services Levy (ESL) on all relevant insurance policies will be replaced by an Emergency Services Property Levy (ESPL) to be paid alongside council rates. The NSW Government’s rationale was that rather than relying only on property owners who do do the right thing and pay their ESL through their property-related insurances, the ESPL will oblige ALL property owners to take their fair share of responsibilities for the purposes of funding fire and emergency services, and therefore reduce the high levels of underinsurance across the state. The NSW model is based on the Victorian model which has been in place since July 2013.

Hence, from 1 July 2017 onwards, no insurance policies will feature the ESL. Instead, since 1 July 2016, insurance policy holders would see a progressive decline in the amounts of remaining ESL on their respective insurance policies issued across those 12 months. Through 1 July 2016 and 30 June 2017, there will be of course a sliding scale of decreasing amounts on all insurance policies that feature the ESL, to the point of a virtually zero amount as close to 30 June 2016. Such decreasing amounts will not be linear because of the NSW Government’s financial model to fund fire and emergency services requirements.

Consequently, towards 1 July 2017, all NSW council rates will begin to list ESPL amounts to be effective from 1 July 2017 onwards. It is expected that such ESPL amounts would be lower than their previous ESLs due to the larger pool of property owners that are now required to pay from 1 July 2017 onwards. That said, there may be for a short period of time when there are TWO amounts to be paid via the insurance policies and the council rates, but that should only be because of the tail end of the ESLs within the related insurance policies only for the period ending 30 June 2017 and the start of the on the ESPL effective 1 July 2017 onwards. Nevertheless, when combined, the total amount should still be less than the past amount(s) previously paid for under the ESL.

Finally, to ensure there is true cost savings and the actual avoidance of insurance companies double-dipping or worse, the NSW Government appointed Professor Allan Fels AO (formerly the ACCC Commissioner) as NSW’s Emergency Services Levy Insurance Monitor with powers to seek penalties from insurance companies of up to $10 million for unreasonable prices during the period December 2015 to December 2018. Professor David Cousins AM was appointed the NSW Deputy Emergency Services Levy Insurance Monitor. He was previously one of the independent panel members overseeing the 7-Eleven fiasco of backpaying potentially $100 million to exploited workers.

The NSW Emergency Services Levy Insurance Monitor can be contacted on 1300 607 723 or a complaint can be lodged electronically via this link.