The JobKeeper tap has been turned off and up to 150,000 people may soon find themselves without a job.
As a result, tens of thousands of Australians will transition from the JobKeeper wage subsidy – which was reduced from an initial $1500 a fortnight to $1000 – to the JobSeeker unemployment benefit.
That payment will fall to $620.80 a fortnight from Thursday.
For many, it could be the first time they have ever lived on the unemployment benefit, which at its reduced rate is well below the poverty line.
The combination of those changes and the withdrawal of other support – including eviction bans and mortgage pauses – has prompted Financial Counselling Australia (FCA) to soon launch its first paid advertising campaign, to remind those in financial stress that help is close at hand.
FCA’s director of community engagement Maura Angle told The New Daily that people in financial distress should seek support sooner rather than later.
“Don’t suffer in silence, pick up the phone and call someone on the National Debt Helpline because financial counsellors are qualified and will give you free, independent and confidential assistance to get through this tough time,” Ms Angle said.
“A lot of people [coming off JobKeeper] have never had to seek this sort of help before. They’re not used to being in financial hardship. They’re not used to facing these sorts of obstacles.”
Ms Angle said financial counsellors:
- Offer guidance on debt management
- Advocate on consumers’ behalf to arrange reduced payments or payment plans with banks and utility providers
- Help clients understand government grants and hardship provisions specific to their circumstances.
Fox and Hare financial adviser Glen Hare told The New Daily households should prepare for the financial hit by working out their non-negotiable payments and adjusting their spending behaviours accordingly.
He said negotiating on the essentials, such as asking a credit card provider for an interest-free period, or requesting a pause on insurance premiums, could help dampen the financial blow.
“They need to ensure their spending behaviours are adjusted [to match the income hit], because the worst thing that could happen is they don’t adjust those behaviours and … fall into a fortnightly deficit,” Mr Hare said.
“The cliff isn’t nearly as big as it would have been back in September, but for up to 150,000 people who are set to lose their jobs, it’s going to be a difficult landing,” Ms Tindall said.
“If you don’t think you can make your monthly [mortgage] repayments, pick up the phone and tell your lender before it’s due. They don’t want to see you default any more than you do.”
According to the consumer comparison site, negotiating a 0.5 percentage point reduction on a 30-year, $500,000 mortgage would reduce monthly repayments by roughly $130.
What to do if your finances are under stress
- Speak to a financial counsellor – services such as the National Debt Helpline, which are free to access, can be a great starting point
- Negotiate with your utility providers – internet, phone and energy companies may provide you with a better deal or a new payment plan
- Talk to the bank about your mortgage – switching to a lower interest rate or an interest-only loan can be useful, but make sure your lender does not increase your interest rate
- Make budget cuts where possible – cutting or putting a pause on non-essential items, such as subscriptions or gym memberships
- Find out what government assistance you are eligible for – in addition to JobSeeker, some unemployed Australians can access rental support, carers payments or the Youth Allowance. The level of assistance you can access will depend on your income, assets and living circumstances.
The National Debt Helpline: 1800 007 007, ndh.org.au