What is the Fire and Emergency Services Levy?
The FESL will contribute funds to support the work of NSW Fire and Rescue, NSW Rural Fire Service and NSW State Emergency Service in protecting the community from fire, flood, storms and other natural disasters.
The Levy will help fund life-saving equipment, firefighters, staff and volunteers, training, infrastructure and community education activities of our fire and emergency services. The NSW Government and local government also make a direct contribution to funding these services. The total level of funding available for these vital agencies will not change under the FESL.
The way the levy is collected
From 1 July 2017 the Emergency Services Levy (ESL) will no longer be collected by insurance companies as part of insurance premiums. Insurance policies taken out or renewed after this time will not include the ESL.
From 1 July 2017 the FESL will be collected by local councils from property owners. Councils will clearly list the new levy on rates notices as a separate item and it will be paid in the same way as council rates.
The way the levy is calculated
From 1 July 2017, property insurance premiums will no longer include an Emergency Services Levy (ESL). The cost of an average residential property insurance policy is expected to be around $233 lower than would otherwise be the case as a result of its removal.
- A fixed charge; and
- A variable charge based on unimproved land value as determined by the NSW Valuer General (visit the 'How much will the FESL cost?' section in our FAQs for a definition of unimproved land value).
The FESL will be based on land classifications and land values. Property owners will be notified of their land classification for FESL purposes in April 2017.
Concessions will apply
Those who receive a pensioner concession for local government rates will generally also be eligible to a pensioner discount on the amount of FESL they pay.
When is it changing?
In March 2017 the Fire and Emergency Services Levy Bill 2017 was introduced into NSW Parliament. A copy of the Bill is available here on the NSW Parliament website.
The FESL rates will be published on 30 April. The Levy will appear alongside council rates from 1 July, 2017.
Why is this change happening?
Under the current insurance-based levy, everyone is able to receive assistance from our fire and emergency services, but not everyone contributes to the community levy.
Currently, the insurance-based Emergency Service Levy (ESL) is only collected from individuals and businesses that purchase insurance, despite NSW’s fire and emergency services being available to everyone in our community. Under the new system, all property owners will contribute to the FESL alongside their council rates.
It will make property insurance more affordable
The change will help address the serious issue of underinsurance in New South Wales by reducing the cost and improving the affordability of insurance. Abolishing the existing ESL levy will reduce the cost of insurance, enabling more people and businesses to protect their properties from fire, floods, storms and other natural disasters.
It will bring NSW in line with all other mainland states
The change enacts one of the recommendations of the Henry Tax Review and the Royal Commission into the Victorian Bushfires and will bring New South Wales in line with all other mainland states.
The Insurance Monitor will ensure insurance premium savings are passed on to customers
Insurers should drop residential property insurance prices, on average, by up to 20% when the Emergency Services Levy is removed from insurance policies. The cost of commercial property insurance should fall by even more, up to 30%.
The Insurance Monitor has been set up to make sure insurers do the right thing when the levy is removed. Penalties up to $10 million apply to insurers who charge unreasonably high premiums or engage in false or misleading conduct with the removal of the Emergency Services Levy. Learn more about the Insurance Monitor’s powers and how it’s protecting NSW consumers at eslinsurancemonitor.nsw.gov.au