Caution greets rates delay plan

Hawke's Bay's Grey Power and Age Concern groups are asking their members and clients to be cautious regarding a tempting scheme allowing retired people to postpone their rates bill.

The consortium scheme, offered by a private company, enables people who own their own homes to delay their rates and pay the bill when the home is sold or have it paid from their estate.

Hawke's Bay councils were not among the 14 signed up to the scheme but the Local Government Act allowed all councils to adopt any rates postponement policy they considered the best fit for their ratepayers.

The consortium, on its website, said the scheme was aimed at ratepayers 65 years and older, as this group was recognised as having "a high level of equity in their homes" but were on limited incomes.

"Older ratepayers can postpone their rates indefinitely if they choose. The accrued rates and charges are then paid back from the person's estate when they die."

The scheme was not new but those working with senior citizens are worried it may become popular as annual rate increases continue to affect retired people on fixed incomes.

Flaxmere Age Concern president Neil Hatcher said the scheme should not be looked at as a way to escape rates.

"We say it is like spending the kids' inheritance," Mr Hatcher said. "We may think our children are old enough, they are adults and own their own properties. But it could leave them with nasty thoughts later on if they feel they have been left out as a result of the estate being used to pay back the rates."

Seniors needed to think about whether they might want to sell their homes to move into a smaller flat and whether they'd have enough capital after paying back their deferred rates, Mr Hatcher said.

Hastings and Districts Grey Power president Ted Duffill said the scheme should cover a couple if they were joint owners of the home.

"If mum moves into a retirement home and dad stays in the house and dies later on, is mum going to be left with nothing because the estate's been used to pay back the rates bill?" Mr Duffill said.

Hastings Mayor Lawrence Yule, who is also Local Government president, said that nationally rates would rise to 4 or 5 per cent a year in the next 10 years.

The average increase in Hastings for the 2012-13 year was 3.4per cent and in the 2013-14 year 3.8 per cent. Mr Yule said he had met Grey Power a few years ago and learned there wasn't support for the scheme. "I was told they didn't want to get into more debt. We're not against looking at it later on but, at the moment, there doesn't seem to be a demand for it."