Financial Counselling Victoria’s (FCVic) 2024 Summit, ‘The Changing Face of Hardship’, was held on 20 March 2024 and aimed to explore how the broader financial industry and financial counsellors are adapting to the evolving landscape of hardship as a consequence of the cost-of-living crisis. Over 300 attendees came together for a day of stimulating panel discussions, with a commitment to finding solutions, creating connections, and uniting as a sector to work towards better outcomes for all Victorians.
In the wake of economic shifts including a series of interest rate hikes and growing inflationary impacts on costs of life essentials, a noteworthy trend emerged. Not only were those on low incomes continuing to seek financial counselling assistance, but an additional demographic was finding itself grappling with adversity – individuals who had never encountered financial hardship before. These were people employed full-time and categorised as ‘middle-class’ who were navigating the intricacies of the financial system, grappling with debt, and seeking assistance from financial counsellors for the very first time in their lives.
At the Summit we ran four panel events, titled –
- The cost of living – A new normal or short term crisis?
- Climate change and hardship
- Responding to the housing crisis
- Complexity and intersectionality
The full conference program has been included in the Appendix of this Actions Report.
Following the Summit, FCVic has prepared this ‘Actions Report’ using discussions and presentations on the day, attendee contributions through the sli.do Q&A function with responses from panelists, and post-event feedback from attendees.
This report focuses on actions for each stakeholder group which attended on the day: 1) for financial counsellors and other community sector workers; 2) for industry hardship teams; 3) for regulators and 4) for government and policymakers. The purpose of this is to assist everyone to take realistic steps to do what they can to address this ‘changing face of hardship’ and the cost-of-living crisis.
Actions for each group are diverse and multi-faceted. In summary:
For financial counsellors and community sector workers: Focus on education for clients and themselves, and be steadfast in their commitment to advocacy
For financial counselling agencies: Promote financial counsellor wellbeing with allocation of time, resourcing and funding for supervision, development and peer support
For industry and service providers:
- Dedicate time and investment into improving hardship practices including through staff training, accessibility of communication, tailoring of responses, and system and process reviews;
- Review external expert reports on industry practices and commit to transparent communication on planned actions in response to recommendations;
- Review product offerings to ensure that they are designed for inclusion, and meet the requirements of customers; and
- Play an active role as an industry leader to influence positive change in other providers, systems, legislation and regulations.
- Take an active role in advocacy through systems review and formalising recommendations for reform through regular government engagement;
- Proactive regulatory enforcement of systemic issues; and
- Transparently communicate about regulatory operations and making datasets readily available to assist governments, consumer bodies and industry to make informed policy and advocacy decisions.
For government and policymakers:
- Address the inadequacy of existing social security payments and barriers to accessing concession schemes;
- Supplement and invest in essential supports and services through socialisation and regulation where products and services are lacking or inaccessible;
- Invest in housing all Australians in adequate housing through a range of methods addressing both affordability and suitability; and
- Actively promote consumer protections in a changing marketplace.
FCVic acknowledges that the above summary actions require multi-party approaches. Though we have reported specific actions for each group, it is only by combining these actions collaboratively that we will create the changes needed for a real positive impact for vulnerable Victorians. FCVic also commits to working collaboratively with all stakeholders to reflect on and advance the actions identified at our Summit.
To quote a Summit participant “just because the model is the model today, doesn’t mean it has to be the model tomorrow.” We can all play a part in systemic change.
This report was prepared by Amanda Chan, FCVic Advocacy Coordinator. If you have comments or questions regarding this report, please contact [email protected].
Actions for the Financial Counselling and Community Sectors
Financial counsellors and other community services are at the very frontline of addressing the cost-of-living crisis. Financial counsellors do not just deal with numbers – they work with people. They know that money is only one aspect of a person’s struggle. People also have families, jobs, experiences of family violence or gambling harm, poor health, and more. By making the money aspect of clients’ lives as easy as possible, financial counsellors equip clients to better manage everything else.
Below, we provide specific actions for financial counsellors, community sector workers, and financial counselling agencies. In summary, these include:
- For financial counsellors and community sector workers: Focus on education for clients and themselves, and be steadfast in their commitment to advocacy
- For financial counselling agencies: Promote financial counsellor wellbeing with allocation of time, resourcing and funding for supervision, development and peer support
Action 1: Education
As noted during the Summit, a proportion of the population is functionally illiterate and digital exclusion is common for certain groups. Information may be available, but it doesn’t mean that the information is getting to the individuals who need it the most.
Financial counsellors and community sector workers can further the education of clients and themselves, including by:
- Connecting clients with existing financial capability or wellbeing training and workshops as part of holistic service delivery;
- Telling financial information providers about any client barriers to accessing information, and opportunities for improvement (e.g. translated materials);
- Ensuring that they have a working knowledge of clients’ rights, legislation, regulatory systems, and available services and schemes;
- Active participation in professional development opportunities including training, conferences, networks and working groups; and
- Registering for information updates from all relevant external agencies.
Financial counselling agencies can promote education by:
- Seeking funding opportunities to incorporate delivery of proactive financial literacy services into the service offering;
- Supporting professional development opportunities for their staff; and
- Proactively reaching out to other service providers to establish strong referral pathways and opportunities for secondary consultations on their specialist areas of expertise.
Action 2: Advocacy
A powerful reminder in the first panel of the Summit to all practitioners – “Stay strong. Your commitment as advocates for your clients must be unwavering.”
The role played by financial counsellors and other community sector workers as consumer advocates is critical to holding providers, industry, regulators and decision-makers accountable for the impact of their decisions, policies and procedures. This can include:
- Through your day-to-day work, supporting clients to self-advocate and through advocating on behalf of individual clients;
- Highlighting individual and systemic issues with regulators and government, including through:
- raising official complaints with appropriate regulators and highlighting where individual circumstances are representative of systemic issues
- responding to government inquiries and opportunities for reform with formal submissions and government engagement; and
- Connecting with and supporting sector advocacy efforts through networks and working groups, and supporting wider community-led campaigns such as #RaisetheRate and Melbourne Zero.
Action 3: Care
We heard repeatedly during the Summit how the increasing demand for financial counselling services and increased case complexity is negatively impacting the wellbeing of financial counsellors. Financial counsellors need to have protective and supportive work structures in place to best assist their clients, with a focus on quality of service rather than just quantity served.
Financial counselling agencies have a responsibility to look after their financial counsellors.
They can do this by actively supporting their financial counsellors to participate in:
- External professional supervision
- Learning and professional development conferences, seminars and workshops
- Networking and peer support opportunities
Support needs to be both in time and resourcing (e.g., time allocated to attend professional development seminars), and financial (e.g., funds to attend an annual sector conference).
This responsibility for agencies connects with Action 2 above – agencies have an additional responsibility to continue to advocate on behalf of the sector, to continue highlighting the sustained unmet demand, and the community need for a properly funded and resourced sector.
Actions for Industry Hardship Teams
Industry and service providers play a powerful role in supporting people in financial hardship. In choosing empathy in the way they respond to hardship and by meeting their moral, ethical and social responsibilities, providers can have a profound impact on the trajectory of that individual’s path through life.
Importantly, discussion on the day highlighted that improved hardship practices are better not just for customers, but for businesses too. As Yarra Valley Water reports on their WaterCare program: ‘good customer care not only has a measurable impact on our customers’ lives, it’s also brought a positive financial benefit to our business.’
Full details of recommended actions are below. In summary, industry and service providers can and should:
- Dedicate time and investment into improving hardship practices including through staff training, accessibility of communication, tailoring of responses, and system and process reviews;
- Review external expert reports on industry practices and commit to transparent communication on planned actions in response to recommendations;
- Review product offerings to ensure that they are designed for inclusion, and meet the requirements of customers; and
- Play an active role as an industry leader to influence positive change in other providers, systems, legislation and regulations.
Action 1: Improving hardship practices
- Invest in quality expert training at an appropriate level for all staff members, not just hardship teams. This could include being able to identify hardship triggers, trauma-informed practice, understanding of lived experience of hardship, and having good quality conversations in Plain English.
- Ensure that you are delivering a genuine hardship response for all clients, regardless of whether financial counsellors are involved.
- Ensure that your hardship response is tailored to each client’s unique circumstances – for example, where a client is experiencing family violence, understanding that requiring multiple reviews and documentation may not be possible and could exacerbate their trauma, negatively impact their mental health, and extend their financial hardship.
- Engage experts from the social and community sectors, including financial counsellors, to review all your communications to ensure that they are accessible and use Plain English.
- Embed an empathetic understanding of the many ways that people can experience hardship and the stigma of financial hardship. Consider ways to offer proactive assistance to clients rather than waiting for official requests for hardship assistance.
- Consider funding a comprehensive external system and process review of your hardship policies in partnership with experts from the financial counselling or community sectors. Translating external feedback into actionable internal system and process change can be difficult. Engaging a sector expert to coordinate an effective system and process review of hardship policies can provide insights and concrete action plans that cannot be achieved by a provider alone.
- For bank and other creditors, consider offering hardship-informed credit products or services that include as appropriate:
- Deferral of scheduled loan repayments, including a set amount of repayment holidays of six months, available on request and capitalised into the loan
- Waiving fees and charges
- Debt consolidation
- Restructuring existing loans
- Deferring interest payments
- Additional finance
Action 2: Accountability and transparency
- Read ASIC’s ‘Supporting consumers experiencing financial hardship’ open letter to lenders of 30 August 2023, review your company’s performance, and publicly report back.
- Read Financial Counselling Australia’s Rank the Banks report of December 2023. Review and benchmark your performance against others in the same sector, publicly report back on how you are taking action, and seek opportunities to become a leader in the field.
- Commit to transparency in all your pricing, products and services, including decision-making frameworks. Consider how to communicate this in an open and accessible way – for example, component pricing on insurance policies or historical price-tracking on household grocery essentials.
Action 3: Design for inclusion
- Review payment policies for poverty bias – for instance, charging more incremental payments vs annual payments. Any additional charges should only be connected to the cost of the transaction, otherwise people on smaller incomes are discriminated against and forced to pay more for the same service.
- Design product offerings that are flexible and responsive to changes in people’s financial circumstances – such as the examples provided above in Action 1.
- Design your customer service touchpoints for inclusion – this might mean offering multiple communication methods to best suit the communication needs of customers (e.g., phone, SMS, email, online chats, in person).
Action 4: Influence change in others
- If you are doing good work in your industry, then share your experience and knowledge with others through existing sector events, including through formal, ongoing and remunerated opportunities for dialogue with financial counsellors with a firm commitment to action.
- Review all the contracts you have entered into with other companies and consider if those companies align with your and your community’s values. Where there is a gap, you can choose to educate and influence change in those providers or choose alternative providers.
- Industry can play an influential role in legislative, regulatory and social change. Use your influence to champion innovative responses to social and environmental challenges – for example, investing in social and community housing or embedding minimum environmental and social responsibility requirements in procurement policies.
Actions for Regulators
Most regulators already play an important role in reactively regulating the industry in which they work, within the bounds of legislation. However, when regulation is reactive the damage is already done for vulnerable consumers . Debts have increased, housing and access to essentials may already be compromised, and, often, there have already been negative impacts on both physical and mental health.
Conversations on the day of the Summit, and subsequent feedback from presenters and attendees alike, has made it clear that reactive regulation is not enough. Proactive regulation and vocal advocacy to decision-makers about gaps in existing legislation should be a role taken by regulators. They are in the unique position of seeing systemic issues in current systems, and having access to both consumer insights and industry responses.
Recommendations for regulators include:
- Take an active role in advocacy through systems review and formalising recommendations for reform through regular government engagement;
- Proactively enforce regulation to target systemic issues; and
- Transparently communicate about regulatory operations and making datasets readily available to assist governments, consumer bodies and industry to make informed policy and advocacy decisions.
Action 1: Take an advocacy role
- Conduct ongoing reviews of current systems including regulatory barriers to identify where opportunities lie for reforms that enhance consumer protections and assistance, or where exemptions may apply for certain groups.
- Formalise recommendations for these reforms (legislative and otherwise) and actively communicate these including through direct conversations with government and other policy decision-makers.
Action 2: Proactive enforcement
- Where proactive regulatory powers do not exist in legislation, advocate with government to change the legislation to provide greater powers or to expand the framework in which you work.
- Through the ongoing reviews of current systems and engagement with consumer advocates, identify systemic issues and where there is a need to actively engage with providers to enforce legislative requirements.
Action 3: Communicate
- Where permitted, consider making datasets available for the public on a regular (quarterly, or half-yearly) basis. Take feedback on these datasets, and consider where additional data (e.g., demographics, geography etc.) can be provided into the future for more informed decision-making.
- Communicate proactively with providers to promote best practice in different scenarios (e.g., family violence, natural disaster, English as a second language), illustrated by case studies, and informed by regulatory guidelines and Codes of Practice.
- Communicate proactively and regularly engage with consumer advocates on complaint or dispute resolution pathways and systemic issues in the sector.
- Create communication and referral pathways with other regulatory agencies to ensure a no-wrong-door approach to regulation for consumers.
Actions for Government and Policymakers
Discussion during and after the Summit has created several recommendations for government and policymakers across different areas. An overarching theme is that of human rights, and whether government policy at all levels is contrary to Australia’s commitment to the Universal Declaration of Human Rights (UDGR), Article 25 of which states that:
Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
As financial counsellors know, for many clients the standard of living is not adequate for maintaining good health and wellbeing because the government is not adequately supporting those who need the most help.
FCVic also refers to our submission to the Select Committee on the Cost of Living for further recommendations for government and other policymakers: https://fcvic.org.au/publications/submission-to-the-select-committee-on-the-cost-of-living/
While the recommendations for government and policymakers are diverse, in broad terms they encompass:
- Address the inadequacy of existing social security payments and barriers to accessing concession schemes;
- Supplement and invest in essential supports and services through socialisation and regulation where products and services are lacking or inaccessible;
- Invest in housing all Australians in adequate housing through a range of methods addressing both affordability and suitability; and
- Actively promote consumer protections in a changing marketplace.
Action 1: Social security and services
- The increase in cost of living must be supported by an increase in income support. During the COVID-19 pandemic when the JobSeeker rate was increased, it instantly lifted 425,000 Australians out of poverty – but then Government chose to remove the COVID-19 Supplement and put these people back into poverty. The Federal Government is urged to #RaisetheRate of JobSeeker and other income support payments to ensure that everyone can keep a roof over their head,food on the table, and to ease pressures that the cost-of-living crisis is placing on overstretched social and community services.
- Access to energy is critical. Stronger regulations relating to service disconnections or outages and access to affordable services must be considered with a human rights lens to minimise the risks of the most vulnerable not being able to access these essential services.
- In areas of acute societal need, government needs to step in to socialise supports and ensure a baseline standard of living. Discussions on the day of the Summit indicate that socialisation of home insurance in high-risk areas must be seriously considered in the short term, combined with major investment in disaster risk mitigation and adaptation strategies for the longer term.
- Remove legislative, technological and administrative barriers from people automatically accessing eligible concessions, grants and relief schemes on their essential services – e.g., digitally sharing concession information from Services Australia with energy providers to automatically apply eligible concession rates.
Action 2: Health
- Bringing down the price of healthy staple foods can ensure that people can continue to feed themselves and their families. Studies have shown that fresh food can often be the first to go from the household budget when financial hardship is experienced, leading to negative health outcomes. Implementing the Greek concept of the “household basket” where staples are sold at fixed prices, is one option to address the rising cost of goods, as is proactively and quickly implementing any recommendations arising from different ongoing inquiries into the supermarket duopoly.
- Financial hardship and mental health are interconnected, where experience of financial hardship can create poor mental health outcomes, and the challenges of managing poor mental health can lead to increased financial instability. Greater investment into wraparound mental health services that integrate with financial counselling services can help to address this vicious cycle.
Action 3: Housing
- Increasing funding for development of public and community housing to increase housing supply overall, meeting dollar cost recommendations of leading housing advocacy groups including Everybody’s Home, Launch Housing and the Council to Homeless Persons.
- Implementation of a mandatory requirement of inclusionary zoning for new developments across all states and territories can increase numbers of affordable dwellings.
- Increasing funding to the Private Rental Access Program can help to protect an existing tenancy for vulnerable tenants, reducing the risk of homelessness and the associated costs of securing new tenancies.
- Addressing the suitability of rental properties including through minimum requirements for thermal capacity can help to reduce ongoing energy costs for those who are already financially vulnerable. This can be coupled with requirements for disclosures of ongoing energy running costs being advertised in rental properties.
Action 4: Consumer protections
- Embrace the opportunities available in pursuing simple changes, as these can be the most effective – e.g., a requirement that the relevant consumer protection or complaints agency is listed on any correspondence from a service provider can help to raise awareness of consumer rights.
- Quick-response regulation to keep up with new innovations in consumer products to ensure that new service providers or products are always regulated by at least one consumer protection agency – e.g., new and innovative energy or credit products.
- Where alternative dispute resolution processes do not work, opportunities to establish dedicated simplified self-representative court or tribunal pathways for determinative outcomes can assist – e.g., a Federal Small Business and Codes List in the Federal Circuit and Family Court of Australia.
Further notes on practical improvements to regulating the insurance industry:
- Efforts made to rewrite, simplify and update wording in a contemporary context, and consolidate relevant legislative instruments and Acts.
- Re-professionalise the industry with a requirement for claims officers to hold, at a minimum, a Certificate 4 in General Insurance given the complexity in decision-making.
- The concept of vulnerability to be explicitly included in the Insurance Contracts Act 1984 and to be made more explicit in the Corporations Act 2001 with associated standards built into law to provide a consistency of approach.
- Make it clear in statute that there are requirements and caveats in relation to cash settlements. For instance, requirements to fund a project manager for cash settlements of larger rebuilds, or a caveat for a claim to be reopened within a certain time period if a cash settlement proves inadequate for a rebuild.
Appendix 1: Summit Program
Click here to download the Summit Program as a PDF.
Appendix 2: Links to Summit presentations
There were a number of Powerpoint presentations delivered by our expert panellists during the Summit. Links have been provided below to PDFs of these presentations.
Panel 1: The cost of living – A new normal or short term crisis?
- Dr Craig Latham, Australian Small Business and Family Enterprise Ombudsman
- Hannah Cook, recoveriescorp
- Professor Kathryn Backholer, Global Centre for Preventive Health and Nutrition
Panel 3: Responding to the housing crisis