Policy

Victoria: since 1 October a retailer cannot disconnect you over an energy debt under $1,000, and customers in payment difficulty are moved to their cheapest plan unless they opt out

If you buy electricity or gas from a Victorian retailer, three rules changed on 1 October. The minimum debt you can be disconnected for rose from $300 to $1,000. Retailers must now switch customers in payment difficulty to their cheapest plan, the “best offer”, unless the customer opts out. And the saving that triggers a best offer message on your bill rose from $22 to $50 a year.

15 October 2026 6 primary sources, read 15 Oct 2026

The short answer

Can I be cut off over a $600 debt? Not in Victoria, not for non-payment, since 1 October. The code bars disconnection where the customer’s arrears is less than $1,000 (inclusive of GST). The debt is still owed.
Will I be moved to a cheaper plan? Yes, if you are entering or receiving tailored assistance, or have been in arrears for at least three months and owe $1,000 or more, and the cheaper plan saves more than $50 a year. You get a notice first and 10 business days to opt out.
Can I go back afterwards? The retailer does not have to return you to your old plan if you miss the opt-out window. Opting out lasts 12 months.
Does this apply in NSW or Queensland? No. Victoria has its own code. Elsewhere on the national framework the minimum disconnection amount is $500, since 1 July 2026.
What should I do if I am behind? Ask your retailer for tailored assistance. Entering it makes you eligible for the automatic switch.

What changed on 1 October

The Essential Services Commission, Victoria’s energy regulator, announced the changes on 1 October, saying that the minimum debt a consumer can be disconnected for increases from $300 to $1,000. They are the third tranche of reforms the Commission decided on 30 September 2025, made as version 7 of the Energy Retail Code of Practice. Earlier tranches in February and July 2026 put the ombudsman’s number on the front of bills and required retailers to check that customers on contracts older than four years pay a reasonable price.

$1,000

Minimum debt for disconnection for non-payment in Victoria from 1 October 2026, up from $300.

Energy Retail Code of Practice v7, clause 187(2)

$500

The minimum disconnection amount in NSW, Queensland, South Australia, Tasmania and the ACT, up from $300 on 1 July 2026.

AEMC final determination RRC0075, p. 18

What	Before 1 October	From 1 October 2026
Minimum debt for disconnection	$300	$1,000, including GST, for electricity and gas. The clause binds exempt electricity sellers as well as retailers.
Cheapest plan for customers in payment difficulty	No automatic switch.	Retailers must switch eligible customers to the best offer unless they opt out, and check everyone in arrears at least every six months.
Best offer message on an electricity bill	Shown when another plan saves more than $22 a year.	Shown when another plan saves more than $50 a year.
Ways to pay	Not required by the code.	Every new plan accepts payment in person (including at Australia Post), by phone, by mail, by direct debit and by electronic funds transfer.
Switching to the best offer yourself	Not required by the code.	Retailers publish instructions on their website and let you switch online or by phone.

From the Commission’s 1 October 2026 fact sheet and release, its 30 September 2025 final decision, and the version 7 code text. The “before” column for ways to pay and switching reflects the fact sheet listing them as new obligations from 1 October. Wording condensed by us.

Why $1,000, when everywhere else is $500

The Commission first proposed $500, matching the Australian Energy Regulator’s figure for the national framework. It went to $1,000 in its final decision for two reasons it gives. One is to make sure that disconnection is a last resort measure. The other is a loophole it wanted closed. Consumer groups and AGL had warned that with the floor at $300, a retailer could disconnect a customer before the customer’s debt reached the $1,000 that qualifies them for the automatic switch, and so avoid moving them to a cheaper plan. The Commission noted the gap would remain at $500. Setting both numbers at $1,000 removes it.

Most retailers opposed an increase; Powershop and EnergyAustralia supported matching the national figure. Those opposed argued many customers do not engage until disconnection is threatened, and that a higher floor would let debts grow. The Commission answered with retailers’ own practice: the average debt at disconnection in 2024 was $2,547, and in 2024–25 about 14 per cent of residential electricity customers disconnected for non-payment owed less than $1,000 (1,559 of 11,356). That is the group the new floor would have protected.

How the automatic switch works

The release says retailers must move customers onto their cheapest plan if they are receiving payment difficulty support, or have been in debt for more than three months and owe more than $1,000. The code is more precise. You are eligible if you are receiving tailored assistance, or have been in arrears for three months or more with arrears of $1,000 or more, per fuel. That $1,000 is a default the Commission can change by guideline; the $1,000 disconnection floor is written into the code itself.

Your retailer checks everyone in arrears at least once every six months.
If you are eligible and a plan would save you more than $50 a year, it sends a notice that it intends to switch you.
You have 10 business days from the notice to opt out. An opt-out lasts 12 months.
If you do not opt out, you are switched. The retailer does not have to move you back later, and the check repeats within six months, so you can be switched again if a cheaper plan appears.

In its final decision the Commission estimated the switch could move up to 75,000 electricity and 60,000 gas customers to their best offer, with total average annual savings of up to $16.8 million for electricity and $11.0 million for gas. That is an estimate made a year before the start date, not a count.

Our view

This is opinion, built on the documents above. Victoria’s floor against disconnection for debt is now twice the figure in the five national framework jurisdictions, and the Commission’s reason for going past $500 is the right one. A protection that starts at $1,000 is worth little if a retailer can disconnect you at $500 first. Matching the two numbers is good rule design.

The automatic switch is the bigger change. Inertia keeps people on expensive plans, and the households least able to shop around are the ones in arrears. It moves the work of finding the cheaper plan from them to the retailer, which already has the information. The 12-month opt-out and the lack of a way back are fair trade-offs for a switch that saves at least $50; read the notice when it arrives.

The $50 threshold is a closer call. The Commission’s case is that savings under $50 rarely get people to switch, which its 2018 testing supports. The Consumer Action Law Centre and Financial Counselling Victoria opposed it because $22 matters on a low income. Both are right. For the automatic switch, where the customer does nothing, we would have kept the lower number.

The Commission’s acting chair, Elly Patira, said These reforms build on those safeguards and strengthen support for households experiencing payment difficulty. None of it cancels a debt. If you are behind, ask your retailer for tailored assistance now; if that does not help, the Energy and Water Ombudsman (Victoria), whose number is now on the front page of your bill, is the next call.

Sources

Where this came from. Researched, written and kept up to date by AI systems run by a small Australian team, and built from the primary sources below. We checked 5 quotations against our stored copies of their sources with a script, and each matched exactly. How The Electric Household works.

Essential Services Commission, New energy rules to help Victorians stay connected (media release, 1 October 2026, read 15 October 2026): the $300 to $1,000 increase, the cheapest plan obligation as the release words it, payment methods, the $22 to $50 threshold and the acting chair’s quote.
Essential Services Commission, Updated energy consumer protections, 1 October 2026 (fact sheet, PDF, 2 pages, read 15 October 2026): eligibility for the automatic best offer, the opt-out, the $50 threshold as it applies to bills and to switching, the five payment methods and the switching instructions.
Essential Services Commission, Energy consumer reforms 2025 (web page, read 15 October 2026): the 1 February, 1 July and 1 October 2026 tranches and the 1 October tranche as version 7 of the code.
Essential Services Commission, Energy Consumer Reforms: Final Decision (PDF, 30 September 2025, 94 pages, read 15 October 2026): the 75,000 and 60,000 estimate and savings (PDF page 7); the 10 business day opt-out (PDF page 17); the 12-month opt-out, the six-monthly repeat and no post-switch reversal (PDF page 30); the 2018 testing and the consumer groups’ opposition to $50 (PDF pages 33 and 34); the $500 draft, the AER’s $500 and retailers’ opposition (PDF page 35); the perverse incentive concern (PDF page 36); the last-resort reason, the $2,547 average and the 1,559 of 11,356 figure (PDF page 37).
Essential Services Commission, Energy Retail Code of Practice (version 7), tracked changes (PDF, read 15 October 2026): the eligible customer definition and the $1,000 per fuel default, and clause 187(2), the $1,000 disconnection floor for retailers and exempt electricity sellers.
Australian Energy Market Commission, Rule determination: Streamlining payment difficulty protections (PDF, 10 September 2026, read 10 October 2026): footnote 84, the national minimum disconnection amount rising from $300 to $500 from 1 July 2026 (p. 18).

Methodology. All five Commission documents were read on 15 October 2026 from its own pages and PDFs; the AEMC determination was read for our 10 October story. Page numbers for the final decision are PDF page numbers, not printed ones. Where the release and the code word eligibility differently (“more than three months” and “more than $1,000” against “three months or more” and “equal to or more than”), we follow the code. The 75,000, 60,000 and savings figures are the Commission’s September 2025 estimate, not an outcome. We did not read the AER’s own minimum disconnection amount decision or the 2018 consumer testing. “Our view” is our analysis, honestly held, built on the sourced facts above and labelled as opinion.

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