Understanding Financial Hardship
Experiencing financial hardship can happen to anyone, and it can feel overwhelming. Whether it’s due to job loss, unexpected medical bills, family responsibilities, or other challenges, financial hardship can affect your ability to meet essential needs like housing, food, or bills. If you are struggling, it’s important to know that help is available, and you don’t have to face these difficulties alone.
Financial hardship is not a sign of failure, and seeking help is the first step towards regaining control of your financial future. By understanding your rights, exploring available support options, and taking practical steps to manage your situation, you can reduce stress and begin working towards a more secure financial future.
What is Financial Hardship?
Financial hardship occurs when you are unable to meet your financial obligations due to circumstances beyond your control. This could include situations such as:
- Losing your job or experiencing a reduction in income
- Unexpected medical expenses
- Difficulty keeping up with debt repayments
- Family changes, such as separation or caring for a family member
- Natural disasters or emergencies
Financial hardship is more common than many realise, and you have the right to seek help and support during these challenging times. It’s important to take action early before the situation worsens.
Signs You May Be Facing Financial Hardship
You may be experiencing financial hardship if:
- You are frequently worried about money or avoiding bills
- You are missing payments or struggling to pay basic living expenses
- You rely on credit cards or loans to cover day-to-day expenses
- Your debt is growing and feels unmanageable
- You have difficulty accessing essential services like healthcare, utilities, or housing
If you recognise these signs, it’s important to seek support as soon as possible. There are many resources available to help you manage financial hardship and take steps toward recovery.
The Financial Rights Legal Centre (FRLC) offers a sample letter generator that can assist you in writing to creditors, insurers, or ombudsman. The FRLC provides several letter templates tailored to different financial situations where you believe your rights have been affected. Once you’ve chosen the appropriate letter, you can easily copy and paste it into an email or Word document to send to the relevant party.
This service can help ensure your concerns are communicated effectively and professionally, giving you the support you need when dealing with financial difficulties.
Financial Hardship and Your Rights
In Australia, individuals facing financial hardship are entitled to specific rights and protections under consumer credit laws and banking regulations. These protections are designed to ensure that people who are struggling financially receive fair treatment and appropriate support. If you or someone you know is experiencing financial difficulties, understanding these rights and seeking professional advice can help:
The Right to Request Financial Hardship Assistance
Under the National Consumer Credit Protection Act 2009 (NCCP Act), individuals who are experiencing financial hardship have the right to request changes to their loan or credit contract. Lenders are required to consider hardship requests and may offer solutions such as reduced payments, temporary payment pauses, or extended loan terms.
Protection from Unfair Debt Collection Practices
The Australian Consumer Law (ACL) and ASIC’s Debt Collection Guidelines protect consumers from harassment or unfair treatment by debt collectors. Creditors must follow ethical practices, including giving individuals reasonable time to respond to repayment requests and refraining from using aggressive or misleading tactics.
Access to Free Financial Counselling Services
Australians who are experiencing financial distress can access free and confidential financial counselling services, such as those provided by the National Debt Helpline (1800 007 007). These services help individuals understand their rights, negotiate with creditors, and create manageable repayment plans.
Right to Dispute Unfair Credit Decisions
If you believe you’ve been treated unfairly by a lender, you have the right to lodge a complaint through the lender’s internal dispute resolution process. If your complaint isn’t resolved, it can be escalated to the Australian Financial Complaints Authority (AFCA), which offers free and impartial dispute resolution services.
Protection from Eviction and Utility Disconnection
If you’re struggling with rent or mortgage payments, there are hardship assistance programs available from landlords, banks, or government housing support services. Additionally, utility providers must offer hardship programs to help prevent the immediate disconnection of essential services such as electricity, gas, and water.
The Right to Superannuation Hardship Access (in Limited Circumstances)
In cases of severe financial hardship, Australians may apply for early access to their superannuation, but this can only be done under strict conditions, such as being unable to meet essential living expenses. This option should be carefully considered as it can have long-term effects on your retirement savings.
Learn more about early release of superannuation due to severe financial hardship
Ombudsman and Dispute Resolution Services
Australian Financial Complaints Authority (AFCA)
AFCA is the national ombudsman for disputes involving financial services, including banks, insurance companies, superannuation funds, and financial advisers.
What Can You Complain About?
- Banking issues – Disputes about loans, credit cards, fees, and transactions.
- Insurance claims – Denied or delayed claims for car, home, life, or travel insurance.
- Superannuation disputes – Issues with early access, fees, or unfair decisions.
- Financial advice and investments – Misleading advice, fraud, or unsuitable recommendations.
- Scams and fraud – Unauthorized transactions or financial institution responses to scams.
How to Lodge a Complaint
- First, contact the financial institution directly to open an internal dispute resolution case.
- If the issue is unresolved, you can submit a complaint via AFCA’s website www.afca.org.au or call 1800 931 678.
Telecommunications Industry Ombudsman (TIO)
The TIO resolves disputes between consumers and telecommunications providers (phone and internet services).
What Can You Complain About?
- Billing disputes – overcharging, unexpected fees, or incorrect invoices.
- Poor service or network issues – slow internet, frequent dropouts, or unreliable coverage.
- Connection and disconnection problems – delays in setting up or cancelling services.
- Faulty equipment – issues with modems, routers, or other telecommunication devices.
- Customer service failures – poor response or failure to act on complaints.
How to Lodge a Complaint
- Try to resolve the issue with the service provider first, and if this doesn’t work, proceed to the TIO.
- If unresolved, submit your complaint via the TIO website www.tio.com.au or call 1800 062 058.
Energy and Water Ombudsman Queensland (EWOQ)
EWOQ handles complaints about electricity, gas, and water providers in Queensland.
What Can You Complain About?
- Billing errors – unexpected charges, high bills, or incorrect meter readings.
- Disconnections and payment difficulties – unfair disconnections or lack of hardship assistance.
- Poor customer service – failure to respond or resolve issues satisfactorily.
- Supply issues – problems with power outages, water pressure, or quality.
- Incorrect fees or contract disputes – hidden charges or misleading sales tactics.
How to Lodge a Complaint
- Contact the service provider first to try and resolve the issue.
- If this doesn’t work, submit your complaint via the EWOQ website www.ewoq.com.au or call 1800 662 837.
Office of Fair Trading (OFT) – Queensland
The Queensland Office of Fair Trading enforces consumer protection laws to ensure fair treatment by businesses.
What Can You Complain About?
- Faulty or unsafe products – goods that don’t work as promised or are hazardous.
- Misleading advertising – false claims or deceptive marketing.
- Unfair contract terms – hidden fees or disputes about contract conditions.
- Refund, repair, or replacement issues – refusal to honour warranties or consumer guarantees.
- Scams and fraud – unfair business practices or fraudulent activities.
How to Lodge a Complaint
- First, try to resolve the issue directly with the business.
- If unresolved, lodge a complaint online at www.qld.gov.au/fairtrading or call 13 QGOV (13 74 68).