Friday 07 Dec 2018
7 December 2018
For immediate release
The Financial and Consumer Rights Council (FCRC) today condemned the actions of the Federal Department of Social Services (DSS) in leaving vulnerable Australians
in South East Melbourne without financial counselling services in the lead up to Christmas.
“Following on from the Foodbank disaster, the Department had served up another Christmas special, using an ill-run tender process to defund a range of
financial counselling services just before the festive season, while being unable to tell anyone where the money to replace these services had gone”,
said Dr Sandy Ross, FCRC Executive Officer.
The Minister for Social Services stepped in and extended funding for defunded services for 12 months to help manage transitions.Now it turns out that financial
counsellors in Dandenong and Narre Warren do not have access to the funding extension and will lose their jobs at the end of the year, leaving their
clients in hardship with nowhere to turn.
“DSS has purely bureaucratic and technical arguments why these services cannot have their funding extended, unlike every other financial counsellor defunded
by DSS,” said Dr Ross. “If the principle is not to leave clients without services, we do not understand why the Minister has failed to consistently
apply the funding extension to these services – Salvation Army in Dandenong and Lifeline in Narre Warren.” There is also a Lifeline financial counsellor
in WA affected the same way.
Families in hardship needing the assistance of a financial counsellor to manage creditors and to access financial support are being told that in a few
weeks their service will be gone. No one can say where any replacement services are being located or when they will be able to fill financial counsellor
Case Studies like the three below demonstrate the human costs of the Minister’s failure to act:
61 year old Client, an Afghan immigrant, who ran a market stall business until forced to close it to care for his ill wife and live on a carers allowance. He has a 350K mortgage and 85K credit card debt, and has been relying on support from his children. Hardship arrangements were put in place with the bank for 6 months, expiring in March 2019. The hope is that the children will be able to negotiate to buy the house from him and then arrangements could be made to pay or reduce the debts. These issues are complex and he will need assistance to negotiate these matters in coming months, but there is nowhere to refer him once the service closes.
A female client separated from her husband due to family violence with two children (aged 12 and 14). She is a nurse with casual employment. There is a property with400K in mortgage debt jointly held but her husband is refusing to cooperate with any mediation or family law processes and there is an AVO in place. In addition she has credit card and school fee debts. The bank has granted hardship until January but joint mortgage issues are very complicated and will take a long time to resolve. Meanwhile there are some options to get assistance with the school fees, but access to a package for relief will not be clear until late January, when the financial counsellor will no longer be available to assist.
72 year old client with breast cancer, who lost her husband and son in the last two years. Now owns a half share in a property with a tenant in common (friend). She has debts with a finance company of over 30K and the company has taken court action to recover this and istrying to take her house. Court proceedings have been stayed, and the financial counsellor is attempting to negotiate with the creditor but this will take until late January, as medical evidence and other things need to be collected. In 2019 the debt moratorium will expire and hopefully debts can be renegotiated; otherwise potentially the client will be made homeless. Again there is nowhere to refer this case.
“We are calling on the Government to consistently apply transitional funding arrangements, and ensure families in need can access support,” Dr Ross concluded.
FCRC is the peak body for Financial Counsellors in Victoria.
Financial counsellors provide information, support and advocacy to people in financial difficulty.
Dr Sandy Ross
Financial and Consumer Rights Council
0417 557 420