Disasters - financial difficulty - National Debt Helpline

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

Financial difficulty may arise because you can’t work and earn an income while you recover from the disaster. You may have bills or loan repayments that you can’t pay or the costs of recovering 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 if you are experiencing financial difficulty as a result of a disaster (bushfire, flood, storm or earthquake).

01

Emergency relief

Immediately after 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.

02

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 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’re 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.

03

Insurance claims

If you have an insurance claim and you’re in urgent financial need, you may be able to get an advance payment on your insurance benefit. See our disaster insurance claims page for more information.

The Insurance Council of Australia has 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.

04

Speak to your creditor

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

Disasters are a reasonable cause for requesting hardship assistance.

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 offer 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

TIPS

When you negotiate a hardship arrangement

· Contact your creditor’s hardship department.

· Tell them how you’ve been affected by the disaster.

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

· Ask them about what hardship assistance options they’re offering.

· Only make a repayment arrangement you can afford.

· If you can’t afford to make any repayments, you can enter into a deferral arrangement where any arrears accrued are capitalised and the loan’s term is 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 long you will need the hardship arrangement. For example, it could last 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.

05

If your creditor won’t 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.

06

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.