Financial hardship is becoming a reality for more Australians as living costs rise and unexpected events disrupt income. Whether you’re a long-time resident, a new migrant, or someone navigating full-time work for the first time, knowing your rights and the support available can make a huge difference. Hardship is common, confidential, and temporary — and Australia has systems designed to help you get back on your feet.
What financial hardship means
Financial hardship means you genuinely want to pay your bills, loans, or rent, but circumstances outside your control temporarily prevent you from doing so. The Australian Securities and Investments Commission defines hardship as a situation where a person cannot meet repayment terms due to a change in circumstances[1].
Banks and credit providers must consider hardship requests under the National Credit Code. Energy, water, and telecommunications companies must also offer hardship programs. These protections exist because life happens — and institutions are required to give you breathing room.
Temporary vs long-term hardship
Temporary hardship may come from job loss, illness, or a car accident. Long-term hardship may stem from chronic illness, disability, or the death of a household income earner. The type of hardship affects the support available — short pauses for temporary issues, or longer-term adjustments for ongoing challenges.
Why so many Australians are struggling
As of late 2025, around 42% of households reported financial stress indicators, with rent and mortgage costs being the top concern[2]. Inflation has hovered around 3.5%, while essentials like food, petrol, and electricity continue to rise. Natural disasters, visa delays, medical bills, and family breakdowns also push people into hardship unexpectedly.
Warning signs you may be in hardship
- Avoiding calls or emails from banks or utilities
- Using buy-now-pay-later for essentials
- Borrowing from friends or family regularly
- Credit cards constantly near the limit
- Missing due dates or paying only minimums
- Using savings to cover everyday bills
- Stress, anxiety, or fear around checking bank balances
Nearly one in three Australians had less than $1,000 in emergency savings in 2024[3], showing how vulnerable many households are to even one missed paycheck.
Your legal rights during hardship
Hardship assistance is a legal right. You can apply at any time, and providers must assess your request fairly and give you a written outcome. Energy and water providers cannot disconnect you while reviewing a hardship application. Telecommunications companies must maintain essential services during assessment.
Where to escalate complaints
- AFCA — for banks, lenders, credit unions
- EWON / EWOSA / EWOQ — for energy and water
- TIO — for telecommunications
These ombudsman services are free and can pause disconnections, remove unfair fees, or order payment arrangements.
Types of hardship support available
Banks and lenders
- Lower repayments
- Temporary payment pauses
- Interest-only periods
- Loan term extensions
- Fee waivers
Energy and water providers
- Tailored payment plans
- Bill smoothing
- Government assistance (e.g., EAPA vouchers in NSW)
- Debt waivers in extreme hardship
Telecommunications providers
- Temporary plan pauses
- Reduced service levels
- Waived late or reconnection fees
Government and community support
- Centrelink payments (JobSeeker, Parenting Payment, DSP, Carer Payment)
- State rental assistance and concessions
- Emergency relief from charities
- Food relief from organisations like OzHarvest and Vinnies
How to know if you qualify
You’re likely eligible if:
- You’ve missed or are about to miss payments
- Your income has dropped due to illness, job loss, or reduced hours
- You’re struggling to cover essentials like rent, food, and utilities
- You intend to pay once your situation improves
Documents providers may request
- Payslips showing reduced hours
- Bank statements
- Medical certificates
- Centrelink summaries
- Separation certificates
You do not need to be behind on payments to apply. Applying early often leads to better outcomes. Hardship arrangements generally do not damage your credit score.
How to apply for hardship
Contact your lender or provider directly and clearly state that you want to apply for financial hardship assistance. Explain what changed, how it affects your ability to pay, and what support you’re requesting.
Sample script
“Hi, my work hours have recently been reduced and I’m struggling to keep up with payments. I’d like to apply for financial hardship assistance. Can you tell me what documents you need from me?”
You should receive a written outcome within 14 days. Keep copies of everything and update your provider if your circumstances change.
If your request is refused
- Ask for a reassessment
- Request written reasons
- Escalate to the relevant ombudsman
- Contact the National Debt Helpline (1800 007 007) for free financial counselling
Recovering from hardship
Once your situation stabilises, rebuilding financial resilience is key.
Practical steps
- Create a zero-based budget
- Audit subscriptions and recurring fees
- Avoid payday loans and high-interest products
- Start a small emergency fund
- Review utility plans and insurance annually
Australians collectively pay over $600 million a year in unused subscriptions[4]. A simple subscription audit can free up cash quickly.
Real-life examples
Scenario 1: Job loss
A single parent loses work due to downsizing. They apply for hardship, receive a three‑month repayment pause, access Parenting Payment, and receive food relief support.
Scenario 2: Mortgage stress
A couple switches to interest‑only repayments while one partner looks for work. Their lender waives two months of fees.
Scenario 3: Migrant worker with reduced hours
A visa holder applies for utility hardship support and receives bill smoothing and EAPA vouchers.
Scenario 4: Young adult with BNPL debt
With help from the National Debt Helpline, they negotiate lower repayments and refund unfair fees, then shift to a cash‑based budget.
Final thoughts
Financial hardship is not a personal failure — it’s a circumstance millions face. Nearly one in five households is now considered financially at risk[5]. Australia’s hardship systems exist to help, not judge. If you’re struggling, reach out early, understand your rights, and use the support available. Being proactive can protect your finances, your wellbeing, and your future stability.
References
- ASIC — Financial Hardship Guidelines
- Australian Bureau of Statistics — Household Financial Stress Data
- Finder Survey — Emergency Savings Statistics
- Moneysmart — Subscription Waste Report
- Reserve Bank of Australia — Household Financial Risk Insights
