Your 8-step financial hardship survival guide

Financial hardship can be a source of great stress, whether you’ve found yourself out of work, or your circumstances have changed. If you’re doing it tough, you’re not alone, as there are options available that can help you through, depending on your needs and situation. Here are eight things you could consider to ease the burden:

1. Get free financial advice

The National Debt Helpline (NDH) provides free, independent, confidential financial counselling to anyone in Australia. Its counsellors can help you map out a budget, prioritise which debts to pay back first and understand your rights. The NDH can be contacted at 1800 007 007 or via its website. There are also specialised helplines for First Nations people (Mob Strong Debt Helpline: 1800 808 488) and those whose small business may have caused the financial hardship (Small Business Debt Helpline: 1800 413 828).

2. Reach out to your lender for assistance

Under the National Credit Code, you have a legal right to ask your lender for help if you can’t meet your loan or credit card repayments. You can notify them either verbally or in writing. Most banks and credit providers have dedicated teams that are designed to help you through this process, and they may be able to offer options from a temporary repayment deferral to a reduction in your repayment amount to an extension of your loan term.

Once you’ve made contact, your lender has 21 days to respond, and they may request additional information from you to help them with their process. While they are considering your hardship application, they cannot list a default on your credit report. This can stop your credit score from being damaged, as a default is usually a large negative mark on your history and can stay on your credit file for 5-7 years depending on the severity.

3. Try to get on top of your debt

If you have multiple forms of debt from multiple different creditors, there may be services that can assist you with establishing a payment plan. Way Forward is a free, non-profit service that can act as a single point of contact for your lenders and negotiate a pro-rata payment plan across all of your debts. It works by you making one payment to Way Forward, which is then distributed to your various creditors.

You may also be able to consolidate your debts into a singular personal loan, which could provide you with a fixed payment amount and schedule to help you pay down your combined debt. Debt consolidation loan providers do work for a profit, generally through the interest and fees charged, so it’s important to consider this when determining whether this form of loan would be right for you.

4. Ask your energy provider or telco about their hardship programs

Energy and telco providers are also required by law to provide hardship programs to customers. Some of these programs can stop your services from being cut off while you’re on a payment plan, as well as offer to move you to a cheaper plan without you having to pay exit fees.

Depending on the state or territory you live in, you may be entitled to concessions, grants and rebates to help with overdue utility bills:

• Electricity, Gas and Water Rebate (ACT): An annual rebate of $800 for eligible concession cardholders to help cover electricity, gas and water bills.

• Energy Accounts Payment Assistance (NSW): Assists eligible residents facing a short-term financial crisis or emergency with their energy bills.

• Electricity and water concessions (NT): Members of the Northern Territory Concession scheme may be able to receive concessions on both electricity and water.

• Home Energy Emergency Assistance Scheme (QLD): Can provide a one-off payment of up to $720 every two years for eligible households in a short-term financial crisis.

• Utility Relief Grant Scheme (VIC): Can provide eligible residents up to $650 for each utility (electricity, gas and water) every two years, or up to $1,300 if you only have one energy source (e.g., all-electric).

• Hardship Utility Grant Scheme (WA): Depending on where you live in Western Australia, you may be eligible for help up to $1,060 per financial year.

Eligibility criteria applies to all of these schemes. It’s often worth contacting your energy provider directly and asking whether these grants could apply in your circumstances.

5. See what government support is available to you

Depending on the nature of your hardship, you may be able to access certain payments from the Australian Government via Services Australia:

• Crisis payments: A one-off payment if you’re forced to leave your home due to extreme circumstances (e.g., natural disaster, domestic violence etc.).

• Advance payments: If you receive Centrelink payments you may be able to get a portion of your future payment early to help cover urgent costs.

• Centrepay: A free service that lets you pay bills directly from your Centrelink payment, making it easier to manage your costs.

Depending on your situation, it may also be worth applying for a Low Income Health Care Card, as it can give you access to cheaper healthcare, some discounts and the ability to apply for certain grants if you’re on a low income.

There may also be housing and rental specific support available, depending on your location:

• Mortgage Relief Loans (ACT and QLD): Offers interest-free loans to help people catch up on mortgage arrears if they’ve hit a temporary rough patch.

• Rental Support Schemes: Most states have ‘Brokerage Funds’ that can provide one-off payments to stop an eviction or cover a week’s rent in a crisis.

• Rentstart Bond (NSW): This initiative can help eligible NSW tenants with an interest-free loan to cover the cost of a rental bond.

There may be other concessions available in your location, so it’s often worth contacting your state or territory government directly or visiting their websites for more details.

6. Explore the no interest loan scheme (NILS)

The No Interest Loans Scheme (NILS) can help you borrow money for essential household and living expenses. The scheme was created to support eligible low-income individuals and families with access to affordable credit. It offers:

• Up to $2,000 for essentials such as appliances, furniture and car repairs

• Up to $3,000 for the bond on a new rental property or costs associated with a natural disaster

NILS loans have no interest, fees or charges, meaning you only repay what you borrow. You would still need to prove that you can repay the debt though and the full loan amount must also be repaid in 24 months or less. For eligibility requirements and to contact your local NILS service provider, visit the NILS website or call 13 NILS (13 6457).

7. See if you can access income protection through super

If your financial hardship is the result of not being able to work due to an illness or injury, you may be able to access income protection insurance through your super. The Federal Government’s Moneysmart website suggests that some super funds will automatically provide you with this form of default insurance, which can pay you a regular income (generally a percentage of your current salary) for a specified period of time while you recover.

It’s important to check your super to see if it provides you with this form of insurance. If it does, check how much it can cover you for and for how long, as well as if any exclusions apply.

8. If you feel you’ve been treated unfairly – speak up

If a lender or service provider refuses to assist you with your financial hardship or offers you an arrangement you cannot afford, you aren’t left without options. You can contact the Australian Financial Complaints Authority (AFCA) if you wish to make an official complaint. If you lodge a dispute with AFCA, the lender must stop all debt collection action while the case is being reviewed.