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Every year Insurers insuring property in New South Wales are required to contribute to the annual budget of the New South Wales fire and emergency services. This money is used by the Government to fund vital emergency services.
In December 2015, the NSW Government announced that the collection from Insurers – passed onto you as a Fire Services Levy (FSL) in your insurance premium – will change to a property based tax collected directly from owners through their council rates. This change will result in a much fairer system where most people who might need to use emergency services help fund them, instead of insurance customers subsidising those who don’t insure their homes or premises.
This change is expected to come into effect on 1 July 2017, and as a result, the premium for insurance policies with a commencement date or renewal date on or after 1 July 2017 will NOT include any FSL (also known as ESL). From 1 July 2017 FSL/ESL will be known as Fire and Emergency Services Levy (FESL) and will be charged on council rates.
FSL/ESL on premiums paid by instalments
The funds collected from FSL charges on policies commencing during the 2016/17 financial year (1 July 2016 to 30 June 2017) are used to meet our emergency services funding obligations for that period. The amount of FSL is unaffected by whether your premium is paid in full at the time of inception or through instalments (even if instalments are due after 30 June 2017).
Therefore, if you pay by instalments for a policy taken out in the 2016/17 financial year, we will continue to collect FSL post 1 July on the remaining instalments due for that policy, and those amounts will be paid to the NSW Government.
Please note, ESL is often referred to as FSL (Fire Services Levy).