The rate rise was approved at the Narromine Shire budget for 2020/21 at the council meeting on Wednesday night.

Councillor Robert McCutcheon pushed for the rate freeze to give relief to ratepayers suffering from both the COVID-19 impacts and the drought, but it didn't have full support from his colleagues.

"There's various degrees of hardship around the community from my discussions with people and I personally don't think that it's prudent that we put the rates up under these conditions," he said.

"We do have a hardship policy, [for] which I commend staff... but I still don't believe it adequately takes into account the hardships that have been experienced."

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He said if farmers have a good crop and there's water in Burrendong Dam there would be the opportunity for council to recover in the future. But at the moment, the majority of people in the district wouldn't see money start flowing until the new year.

But councillor Mark Munro was among those who had an issue with a rate freeze.

He was concerned about losing money from the budget and the affect it could have on ratepayers down the track if rates had to severely increase.

"My theory has always been that you don't want to go back in a couple of year's time and ask for double... which is what we're going to have to do to catch up, otherwise you're going to have to drop services.

Cr Munro said the "status quo" had to remain.

He also pointed out that only one submission from the public, made when the budget was open for comment, had called for the rates to be frozen.

There was division among the councillors but it was decided to increase the rates to the rate peg limit of 2.6 per cent.

However, for those suffering financial hardship, help is available.

Council has introduced a COVID-19 rates policy that allows residents to defer their rate bills for the rest of the year.

There will be no interest charged on the overdue bills.

To be eligible for the deferment, ratepayers need to be either receiving COVID-19 related income support or be a landlord whose rental income has decreased by at least 30 per cent.