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Dealing with financial hardship

What to do when you're doing it tough.

While many Australians stress about money, those experiencing financial hardship are under severe pressure to make ends meet. Typical situations that can put you under financial hardship include losing your job, having to deal with large medical expenses, experiencing a relationship breakdown, struggling to meet debt repayments or just finding it hard to deal with everyday expenses.

This guide will take you through what financial hardship is and what to do when you're experiencing it.

What is financial hardship?

Financial hardship is when you are unable to, or are finding it extremely difficult to, pay your bills and everyday expenses. Financial hardship usually occurs after a change in your personal circumstances. This can include losing your job, a personal relationship breaking down, the death of a loved one or having to cover unexpected medical expenses.

When you experience financial hardship, you may find yourself struggling to pay rent or mortgage payments, credit card or loan bills or even your everyday expenses.

What do I do if I'm experiencing financial hardship?

If you are experiencing financial hardship it's important to utilise the services available to you. If you have any type of credit contract with a lender, such as a home loan, personal loan or credit card, you can apply for hardship variation.

Check the date you signed your credit contract before you call your lender. If you entered into your credit contract before March 2013, your credit provider needs to consider your hardship application if the amount that you borrowed is less than the threshold that applied on the date you signed your contract. You can check these thresholds on ASIC's website.

If you entered into a credit contract on or after March 2013, you can apply for a hardship variation whatever the value of your loan.

Rates last updated February 26th, 2018
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How to apply for hardship with your bank or lender

Banks and lenders have hardship programs in place to help you if you are experiencing financial hardship. Here's how the process works:

  • You notify the bank about your financial hardship. This can be verbally or in writing and simply involves telling the bank you cannot, or think you cannot, afford your repayments.
  • The bank will ask you for information. This may include a statement of your financial position (income, expenses), details of your employment and income and evidence of your medical circumstances if relevant.
  • The banks will assess your application. It will take into account the reason for your hardship, your finances, your ability to rehabilitate your circumstances and whether you have received hardship in the past.
  • You will be notified of the outcome in writing. If the bank agrees to provide hardship assistance you need to comply with the terms of the agreement. If your hardship application is not approved your credit contract will not be altered.
  • If your application isn't approved. The bank may suggest alternatives such as accessing early release of your super, government support programs or financial counselling.

What to do if you can't pay your utility bills

If you are struggling to pay your electricity, phone or gas bills you need to contact your utility supplier. Similar to your credit provider, your utility provider will have a hardship process in place.

Once you call your provider you can ask to speak to a hardship officer. The officer may help you work out a plan to pay the bill in instalments or help you apply for emergency utility bill vouchers. These vouchers can help you meet minimum payments. You can also consider calling a financial counsellor or taking up options such as bill smoothing, whereby you make fortnightly or monthly payments to a future energy bill to make it easier to manage.

If you are not happy with the response of your energy company to your application for hardship, you can lodge a complaint with your state ombudsman.

Alternatives to applying for financial hardship

If your application for financial hardship isn't accepted or you don't want to apply just yet, there are alternatives to consider.

  • Financial counselling. If you're unsure what to do about your finances you can make a free call to a financial counsellor. You can call the National Debt Hotline on 1800 007 007 between 9:30am and 4:30pm Monday to Friday.
  • Free legal advice. If you're in debt and are also experiencing legal issues you can access free legal help in every state.
  • No interest loans. The no interest loan scheme (NILs) is an initiative of community organisation Good Shepherd Microfinance. You can apply for a loan of between $300 and $1,200 for 12–18 months. They are for people on low incomes or who receive Centrelink payments and are designed to purchase essential goods and services.
  • Early release of super. There are certain situations where you can access your superannuation early. Find out everything you need to know in this guide.

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4 Responses

  1. Default Gravatar
    LynDecember 8, 2014

    I have been in financial hardship position for the last 18 months due to my husband being unemployed due to his work closing down because of flooding and his ill health being crohn’s disease. I only work part time working 8 days a fortnight with home mortgage and personal loans and credit card debt with yous of $8700. I have approached the anz branch in Victoria and explained my financial position . She rang credit services to speak to them for help as l have borrowed money to consolidate money owing. I offered a sum of $7000 to clear my debt as a payout as this is all I can afford. They ate asking for doctor’s certificates and such can they asked for this personal information? Also why make it so hard when I’m trying to pay this money with what l have so I don’t have bad credit rating against my name. I an even more stressed now and want this sorted would appreciate your advice as I could pay this $7000 today and clear it and be done. Regards Lyn

    • Staff
      ElizabethDecember 8, 2014Staff

      Hi Lyn,

      Thanks for your question.

      According to the Credit Ombudsmen Service, ‘It will not be necessary or appropriate for us or your financial services provider to ask for your entire medical file’ but they may request you to provide them with some medical information if they feel it is necessary to your case. If you feel that they have requested sensitive information you can lodge a complaint. As for your situation, it may be best to get in touch with a free financial counsellor who may be better able to advise you. You can call them on 1800 007 007.

      I hope this has helped.



  2. Default Gravatar
    carolNovember 20, 2014

    im trying to get in touch with hardship team

    • Staff
      ElizabethNovember 20, 2014Staff

      Hi Carol,

      Thanks for your question.

      You’ve come through to, not a specific provider. If you could let me know the name of the bank or lender you’re trying to locate the hardship number for I’d be happy to email it to you.



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