NSW Emergency Services Levy

NSW Emergency Services Levy


This information page has been prepared by Liberty Specialty Markets (Liberty) in Australia to explain how the emergency services levy (ESL) continues to apply to insurance in NSW. Liberty is committed to ongoing compliance with the re-established contribution scheme, having regard to applicable guidelines issued by the Monitor.

The information relates to NSW only.

Proposed ESL reforms

On 16 November 2023, NSW Premier Chris Minns announced an overhaul to the emergency services levy (ESL) funding model which currently meets 73.7 per cent of the costs of running NSW emergency services.  Since the announcement, the government has begun consultation with key stakeholders, including representatives from the insurance sector. No timeline has been provided for implementing any proposed changes.  Liberty continues to monitor developments.

What is ESL?

The ESL is a levy on general insurers to fund the NSW emergency services organisations (NSW Rural Fire Services, NSW State Emergency Services and Fire and Rescue NSW). ESL is calculated based on the premiums for certain types of insurance policies.

What types of insurance policies does ESL apply to?

ESL applies to the following types of policies:

  • property (including consequential loss)
  • house building and/or contents
  • personal effects (including jewellery, clothing and works of art)
  • motor vehicle and motor cycle
  • marine and baggage
  • crop and livestock

Different rates of ESL contribution apply across the listed types of policies, with property and house building and/or contents insurance being subject to higher rates than the other types.

How does an insurance company contribute and charge ESL?

Each insurer pays a total contribution to the NSW Government for ESL for each emergency services funding year, which commences on 1 July. The contribution is set by the NSW Government and adjusted according to the insurer’s market share within the year.

The insurer needs to collect and fund this contribution by charging an ESL component on the applicable insurance policies, as a percentage of the base premium, which is the premium before government levies and taxes are added.

ESL and other levies and taxes are added to the base premium in the following cumulative order:

  1. ESL (where applicable)
  2. Federal (Commonwealth) goods and services tax i.e. GST
  3. NSW stamp duty (where applicable)

ESL is therefore subject to GST and stamp duty. Where a policy covers locations inside and outside NSW, the ESL will apply only to the NSW part of the overall premium.

How can policyholders find out about any ESL or base premium movement?

For most types of applicable policies ESL will be listed as a separate component together with the total estimated or actual premium.

Any ESL movement will generally be due to one or more of the following factors:

  • a change in the rate of ESL;
  • a change in the base premium, and this changes the ESL amount.

If there is a base premium movement in relation to your policy, this could be due to one or more of the following:

  • indexation of sums insured
  • mid-term changes to the policy
  • a general increase or decrease applicable to all similar policies
  • a reason specific to your policy, such as claims history

Liberty will in many cases confirm to your insurance broker the reasons for any material ESL movement or base premium movement. You can also confirm the explanation for either movement with your broker or Liberty. Liberty’s movements in ESL charged reflect its view of the amount required to recoup its ESL contribution.

Can policyholders compare renewal premiums to last year?

Yes – your insurance broker probably already does this for you. You can also request that Liberty provide a comparison of the total premium and its components, including ESL, to compare to last year.

Want more information?

For more information on:

ESL - visit the Emergency services levy | Revenue NSW or call Revenue NSW on   1300 139 817 or +61 2 7808 6915

Your insurance policy or anything else - call us or visit https://www.libertyspecialtymarkets.com.au

If you would like further information

Contact your insurance broker in the first instance, or Liberty via email if you have any questions about your policy.