Sunday 27 Jan 2019

FCRC Submission to the Royal Commission into Mental Health (Terms of Reference)


The Financial Counselling and Consumer Rights Council Inc. (FCRC) welcomes the establishment by the Victorian Government of the Royal Commission into Mental Health. The Royal Commission provides an opportunity to explore how best to address the complex array of factors affecting the mental health of Victorians and improve the overall mental health of our community through identifying good practices and a support infrastructure that can implement effective prevention and treatment strategies.

FCRC submits that the Terms of Reference should pay due regard to key mental health comorbidities as part of effective holistic response to risk factors and real client/patient needs, and in particular to financial vulnerability. The experience of financial counsellors is that financial difficulties, debt and vulnerability are an important and under-estimated comorbidity which practical and feasible assistance can reduce as a contributing factor to mental health harms.

In addition, we note and support the submission to the Royal Commission from Consumer Action Law Centre.



  1. That the Royal Commission’s terms of reference be sufficiently broad to enable it to examine the interrelationship between mental health, debt, and financial vulnerability and consider a role for financial counselling as an integral part of a cohesive suite of interventions to best support those impacted by mental health issues and their families.
  2. That the Royal Commission investigate the development of practice models that embed teams of financial counsellors to work within health settings alongside mental health professionals, therapeutic counsellors and social workers. 

Financial issues and mental health

A deterioration in a person’s financial position can cause situational distress and left untreated can be a major trigger in a mental health crisis. At the same time, long term mental health
conditions can contribute significantly to the likelihood of a person living in poverty, along with other co-morbidities such as harms from substance use or gambling.

The Public Trustee of West Australia provides a powerful description of the comorbidities between financial vulnerability and mental health challenges:

Mental illness (comorbidity) can lead to a sufferer developing other problems that can have a severe impact on their financial well-being such as substance abuse or gambling. Anxiety and stress caused by an inability to pay debts or as a result of pressure from debt collectors can cause a person to borrow to pay off some of what they owe, increasing their overall debt. Depression can lead to buying items on credit to elevate a black mood. The depressive state can make it arduous for the person to attend to their day-to-day commitments, such as paying bills. The elevated mood of a manic phase of bipolar disorder often causes a person to buy items using savings or credit, followed by being unable to face managing finances in the depressive phase. Borderline personality disorder can typically cause a person to act impulsively or with poor judgment, thereby incurring significant debt. Psychosis can result in people incurring debt when they are in a delusional or hallucinatory phase. Schizophrenia can severely impair a person’s ability to manage their day-to-day affairs due to disordered thoughts, poor concentration and memory, periods of confusion and inappropriate behaviour. Impaired social awareness may prevent them from seeing the true intentions of others or being taken advantage of. Isolation and/or vulnerability can make people with mental illness easier targets for scams and financial abuse.1
More generally, the last Australian Psychological Society survey, Stress and Wellbeing in Australia, found that finances were a source of stress for 44% of males and 55% of females interviewed.2 Rural financial counselling services report that more than 50% of farming clients being seen are experiencing mental health issues in connection with extreme financial distress.3

Financial vulnerability

Commonly acknowledged causes of financial vulnerability are loss, or change to employment conditions, marriage breakdown, ill health, natural disasters, family violence (including elder abuse), harms from gambling or use of alcohol or other drugs, and overcommitment from the sale of inappropriate credit products such as payday lending.

Financially vulnerable people are under considerable stress, but at the same time often having to make significant decisions about their financial situation. Mild to severe mental health issues often have a significant impact on capacity to make sound financial decisions, and this can create a spiral of a worsening financial situation that itself contributes to worsening mental health.

At the same time, mental health issues are not sufficiently acknowledged by Government, credit providers or debt collectors as factors to take account of when dealing with people in hardship.


About financial counselling

Financial counselling is a free and independent advice and advocacy service for people on low incomes, or, more generally, those whose debt or income circumstances have put individuals and families in financial hardship.

Financial counsellors provide information, support and advocacy to enable their clients to gain control of their financial situation. Services are free, confidential and impartial. Most financial counsellors are located in not-for-profit community organisations, primarily funded by state or federal governments. In Victoria about 75% of the sector is state government funded, primarily through Consumer Affairs Victoria and, to a lesser degree, the Victorian Responsible Gambling Foundation.

Financial counsellors are NOT financial planners or financial advisers, but are regulated by ASIC. Financial counsellors operate as either generalists or as one of two types of specialists:
  • gambling specialist financial counsellors work with people affected by gambling related harms;
  • family violence specialists have been trained and funded to work specifically with people affected by family violence, alongside other family violence services (the significance of their role was identified in the recommendations of the Royal Commission into Family Violence).
In addition, rural financial counsellors are funded through 4 specialist agencies in Victoria to work with farmers and rural small business in financial difficulty.

Financial counselling and mental health

Financial counsellors undertake interventions and advocacy to stabilise a person’s financial position; beyond that, financial counsellors work to support, educate and inform clients about their options finding a way forward from the current situation, based on community development principles.

By establishing financial stability and reducing the fear and anxiety associated with debt and contacts with creditor collections processes, financial counselling is an important intervention for people in situations where their mental health is at risk from financially related comorbidities.

Partnerships between financial counsellors and therapeutic counsellors are now well established as best practice in Gamblers Help services in assisting clients with gambling related harms and associated co-morbid mental health conditions. Experience in Gamblers Help services has been that financial counselling, amongst other benefits, helps provide the mind space for therapeutic interventions to be more effective.
However, there are no specialist or dedicated financial counselling services funded into the mental health service area. At present there are low levels of awareness in mental health services of the roles and functions of Financial Counsellors and the kinds of work they can do that improve client outcomes.

Demand on each of the mental health and financial counselling service sectors plays a role in this lack of awareness, as integration and collaboration is not encouraged through current funding models. Current funding levels for Financial Counselling services mean that even clients in crisis situations face wait periods from 2 weeks to 6 months for access to a financial counsellor. Variation in wait times occurs across geographic regions, depending on local issues and needs. Financial counselling practitioners are not, generally, in a position to advertise their services due to the risks from creating new sources of demand.

Even where financial counselling is available, current mental health service delivery models often position financial counsellors at the referral end of service delivery. Critical interventions by a financial counsellor are often left until well after a critical episode has occurred, or as part of a referral process once medical stabilisation has occurred. In many cases, this can mean the person’s financial position has deteriorated further, but, in any case, the person remains likely to be troubled about financial matters until meeting with a financial counsellor takes place. Simple interventions, such as placing accounts on hold, or obtaining access to utility relief grants, can have profound impacts on a person’s state of mind, but often do not take place when they can have the greatest beneficial impact.

About Financial and Consumer Rights Council

The Financial and Consumer Rights Council Inc (FCRC) is the peak body for Financial Counsellors in Victoria. Our purpose is to:
  • advocate for vulnerable Victorians who are experiencing financial difficulty
  • support the work of financial counsellors through fostering and leading system advocacy to reform laws, codes, government and industry practice in relation to vulnerable people
  • support the development of financial counselling as a profession by setting and maintaining professional standards, including a professional development program and structured professional supervision



1 Understanding the Financial Impacts of Mental Illness. Video and transcript are available. Transcript page 5. Last update 11/10/18). Found here.
2 2014-NPW-Key-findings-survey-stress-and-wellbeing. PDF available at Accessed 23/01/19
3 Personal communication with Rural Financial Counselling Service Network, 25/1/19.