Residents of New Lambton displaced by a devastating landslip are facing escalating financial and psychological distress as they approach a second year away from their homes. With a critical deadline looming, the City of Newcastle will this week consider a push for special state government support for the 16 affected households.
Clock Ticking on Temporary Accommodation
The situation for the displaced families is becoming increasingly desperate. Insurance-funded temporary accommodation is set to cease no later than May 2026. After that point, residents will be forced to cover full market rent while also potentially bearing mortgage or other costs for properties they cannot enter, repair, or live in.
Councillors will decide whether to formally urge the NSW Government to seek special disaster funding, arguing these residents have received "no practical assistance" compared to other communities affected by the same natural disaster declaration. A council motion states that existing state support packages, including a $50 million Housing Support Package, do not apply to the New Lambton situation.
Compounding Trauma and Financial Ruin
The human cost of the prolonged displacement is severe. According to the council motion, residents are enduring ongoing psychological stress, exhaustion, and trauma. The disruption has severed community connections, impacted children's education and stability, and created profound uncertainty about the future.
Practical hardships compound the emotional toll. Insurance delays have left many unable to retrieve essential belongings from their homes, forcing them to repurchase personal items while their possessions remain locked in storage. Fifteen homes were evacuated on May 23, 2025, with an additional property vacated in late August. Neighbours living nearby also live in fear, worried the landslip could engulf their homes, leading to concerns about future evacuations, soaring insurance premiums, and plummeting property values.
A Plea for Category D Disaster Funding
The council's proposed solution is to apply for an assistance package under Category D of the Australian Government Disaster Recovery Funding Arrangements (DRFA). This category is designed for tailored support when standard disaster funding is inadequate or unavailable.
The motion highlights a stark inequity: other local government areas impacted by the May severe weather event have received Category D-style support, including temporary housing programs, demolition aid, waste-levy exemptions, and flexible financial packages. New Lambton residents have received none of these measures, despite being part of the same official disaster declaration.
The council argues the NSW Reconstruction Authority's refusal to consider tailored support is inconsistent with its actions in other landslide events and its own policies. The motion states, "This inconsistent approach by the RA raises clear equity concerns."
If approved, a potential support package could include:
- Housing assistance to offset rental costs after insurance stops.
- Financial support to reduce mortgage stress or dual-housing costs.
- Access to extended temporary accommodation programs.
- Funding for demolition, clean-up, waste removal, and crucial geotechnical assessments.
The City of Newcastle has emphasised that it lacks both the legal authority and the financial capacity to resolve the crisis without state-led recovery intervention. A final decision from councillors is expected on Tuesday.
