A motion to increase councillor allowances to the maximum threshold was passed 4-2 at Wednesday night's council meeting.
Horsham Rural City Council is rated a Category Two council, each councillor could receive up $26,245, while the mayor would earn up to $81,204.
The proposal will now go to the community for residents to voice their opinion.
The central debate between councillors was that Horsham Rural City Council should be equal to other Category Two municipalities across Victoria.
Meanwhile, two councillors opposed the motion, stating the timing was inappropriate to pass due to the financial hardships many people faced in 2020 from the COVID-19 pandemic.
Councillor Penny Flynn opened the debate saying that they should be in line with other councils in the same category as a council.
"Why are we being treated differently?" Cr Flynn asked.
She said the allowance is not a salary but a recognition.
"This takes time away from family and relaxation," she said.
Cr Flynn said the allowance is a choice for a councillor to take.
She also said opting to move to the highest allowance shows that Horsham Council is equal to other councils and to show leadership.
"I am here to make decisions and we are all here to show leadership," she said.
She asked how would it look for from the outside if Horsham Rural City councillors are not receiving the same as other Category Two councils.
Councillor Claudia Haenel agreed with Cr Flynn.
"I was told councillors are expected to give 25 to 35 hours a week, it's essentially a part-time job," she said.
She said as councillors, they make decisions for a multi-million dollar budget and take on many responsibilities.
"The allowance would commemorate everyone else in the state. It's only fair," Cr Haenel said.
"We have the option not to keep it."
Councillor Di Bell disagreed with the proposal.
"I am not prepared to accept this proposal after this year," she said.
Cr Bell said she didn't deny what Cr's Flynn and Haenel said; however, she wasn't comfortable given how many people lost their jobs and businesses during the past 12 months.
Councillor Les Power said the allowance should be given as a recognition of the council's work.
"We are put in a position to make finite decisions," he said.
"It's recognising the time and effort councillors put in to support, assist and build the community.
'It's not for financial gain, but for duties as a councillor."
Councillor Ian Ross said it was inappropriate at this time.
Councillor David Bowe said both sides had strong cases.
"It's not right for now," he said.
"The effects of COVID-19 have changed our way of living.
"We don't know what's around the corner and how it will affect the community."
Mayor Robyn Gulline noted that councillors were under no obligation to claim this allowance and can even be donated to the councillors' charity.
"This motion will put us in line with all category two councils with the maximum allowance,' she said.
Mayor Gulline said the Local Government Minister said they had to go through this process.
In 2022 an independent tribunal will set the allowances.
The motion was carried with Cr Bell and Cr Ross voting against and Cr Bow abstaining.
Public submissions regarding this proposal can be lodged at hrcc.vic.gov.au/Home
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