Disasters – financial difficulty

This page is about how to deal with the financial difficulty that arises when people have experienced a disaster.

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Natural disasters are devastating and traumatic and can cause financial difficulty as people’s normal lives and sources of income are abruptly disrupted.  This is a guide to the financial assistance that you can access and the steps you can take if you are struggling to meet your basic needs, pay your bills or make your loan repayments.

Financial difficulty may arise because you can’t work and earn an income for a period of time while you recover from the disaster.  You may have bills or loan repayments that are due that you cannot pay or the costs of cleaning up and recovering after the disaster are eating into your savings while you wait on your insurance claim.

This page is about the steps you can take to look after yourself and your family financially if you are experiencing financial difficulty as a result of a disaster (bushfire, flood, storm or earthquake).


Emergency Relief

In the immediate aftermath of a disaster check with the fire service, police, local council or evacuation centre to seek help with food and other essentials.

Across Australia there are more than 1,300 outlets for emergency relief run by charities and community organisations.

If you need help urgently with living expenses, charities can help you with:

  • food, transport or chemist vouchers
  • rent or accommodation
  • part-payment of electricity, gas or water bills
  • food parcels or clothing
  • budgeting or referrals to other programs.

You can find your closest service on the Ask Izzy website. The level of assistance available for electricity, gas or water bills varies between States and Territories.


Government Support

Services Australia provides specific financial support to help people directly affected by a disaster event, such as flooding, in disaster declared areas.

There are two main payments available:

  • Disaster Recovery Payment: This is a one-off, non-means tested, payment of $1,000 for each eligible adult and $400 for each eligible child.
  • Disaster Recovery Allowance (DRA): This is an income support payment to employees, primary producers and sole traders who can show they lost income as a direct result of the l disaster. If you’re eligible, you’ll get the maximum equivalent rate of JobSeeker payment or Youth Allowance depending on your circumstances.  You can get the DRA for a maximum of 13 weeks payable from the date you started losing income.   The DRA can be paid in addition to the Disaster Recovery Payment.
  • If you’re a New Zealand citizen living in Australia, you may be eligible for the New Zealand Disaster Recovery Payment and the New Zealand Disaster Recovery Allowance.

Check the claims due date for the Disaster Recovery Payment and the Disaster Recovery Allowance.  You’ll have until the due date to submit your claim.

You may also be eligible for other Centrelink payments or financial assistance from your State or Territory Government.

The Centrelink Payment and Service Finder can help you understand what Centrelink payments and other government assistance you could be eligible to receive.

If you are affected by a disaster you should apply for all Commonwealth Government and/or State or Territory Government assistance payments for which you may be eligible.

You can make your claim online using your myGov account linked to Centrelink.  If you need help or are unable to claim online through myGov, you can call the Emergency Information Line on 180 22 66

You can also get help to check your eligibility and access their payments and services your local Centrelink service centre or at one of their Mobile services that attend evacuation or recovery centres.


Insurance Claims

If you have an insurance claim and you are in urgent financial need you may be able to get an advance payment on your insurance benefit from your insurer.  See the  page for more information. The Insurance Council of Australia has also activated a special phone hotline for disasters: 1800 734 621. It also has a website at www.disasters.org.au, which provides detailed information on the support available and the process for lodging claims.


Speak to your creditor

If you have a mortgage, credit card, car loan, personal loan or other forms of credit and cannot afford to meet your normal repayments, you have the right to ask your creditor for hardship assistance.

Disasters are a reasonable cause for requesting hardship assistance from your creditor.

It may take you some time to recover financially from a disaster and your creditor may be able to offer options that will help you reduce or defer your repayments for a period of time.

During a disaster, most Australian banks and other lenders and creditors put in place extra support for individuals and small businesses that have been affected.

Depending on your circumstances, assistance may include:

  • A deferral of scheduled loan repayments, on home, personal and some business loans for up to 3 months
  • Waiving of fees and charges, including for early access to term deposits
  • Debt consolidation to help make repayments more manageable
  • Restructuring existing loans free of the usual establishment fees
  • Offering additional finance to help cover cash flow shortages
  • Deferring upcoming credit card payments
  • Emergency credit limit increases


When you negotiate a hardship arrangement

·         Contact your creditor’s hardship department.

·         Tell them how you have been affected by the disaster.

·         Tell them if you are receiving the Disaster Recovery Allowance, JobSeeker payment or other government support.

·         Ask them about what hardship assistance options they are offering.

·         Only make a repayment arrangement you can afford.

·         If you cannot afford to make any repayments, you can enter into a deferral arrangement and that any arrears accrued are capitalised and the term of the loan extended (people usually do not exit financial hardship with money for higher repayments).

·         Ask for a reduction in the interest rate, fees and charges during the hardship arrangement period.

·         Consider how much time you will need the hardship arrangement to be in place, for example, 3, 6 or 12 months.  Usually, the longer the arrangement, the more information your creditor may need from you.

·         Ask that your credit report is not affected while you keep to any agreed hardship arrangement.

·         Ask for confirmation of the agreed hardship arrangement in writing.

·         If negotiating a hardship arrangement with your lender is taking some time, keep making repayments you can afford in the meantime.

·         Some creditors are more difficult to negotiate with than others. If you are having trouble call us for support and advice.


If your creditor will not agree

If your creditor is threatening legal action or is not being reasonable with your request for hardship assistance, call and speak to one of our financial counsellors immediately on 1800 007 007 for advice.

If your creditor will not agree to a repayment arrangement in many instances you can also have that decision reviewed by a free and independent dispute resolution scheme.

Loans – Lodge a complaint with the Australian Financial Complaints Authority.  You can contact AFCA on their significant event hotline 1800 337 444 or on 1800 931 678

Phone and internet: Lodge a complaint with the Telecommunications Industry Ombudsman

Energy and water – Lodge a complaint with the Ombudsman scheme in your state or territory. See Complaints & Disputes for a full list.


Speak to one of our financial counsellors

If you’re feeling overwhelmed and need some help to deal with your financial hardship, you can speak with one of our financial counsellors.

Financial counsellors aren’t judgmental about your circumstances – they’re here to offer you free, confidential and independent advice and assistance.


To speak to a financial counsellor you can:

  • Call the National Debt Helpline on 1800 007 007 – open Weekdays from 9:30 am to 4:30 pm.
  • Use our live chat service by clicking the chat icon in the bottom right corner of your screen. Live chat is available 9:00am-8.00pm weekdays. If you send a message outside these hours a financial counsellor will get back to you.
  • Make an appointment to see a financial counsellor in your local area – Find a local Financial Counsellor.

If you are a small business owner/sole trader, call the Small Business Debt Helpline on 1800 413 828 to speak to a specialist small business financial counsellor.  More information is also available at sbdh.org.au.