Hi Penny
We experienced this very same dilemma back in October 2013 when bushfires destroyed a large number of homes in the Blue Mountains Council area.
The approach we took was to leave the pensioner rebate intact until the end of the financial period and cease it from the start of the next financial period.
We also made adjustments to the waste management service charges as well by changing them back to a vacant charge.
I think Bega Council went through a similar experience not that long ago with the township of Tathra. I can recall sending some information through to them at the time so am happy to share that with you.
Hope this helps.
Regards
Trevor