In this edition:
- What we do at the Financial Rights Legal Centre: Emergency resources over the holidays
- Watch Your Nuts!
- It’s Holiday Time! Common pitfalls in Travel insurance
- Changes to Debt Recovery through NSW Courts
In every E-flyer we like to give our colleagues and readers an insight into what we do and how we work at the centre. In previous editions we have explained the role of financial counsellors, what we do about credit repair companies and notices to vacate. This month we take a look at emergency services during the holiday period.
Unfortunately the December-January holiday period is a time when some Australians find themselves in serious financial stress. This is a time when energy and food vouchers might be sorely needed, but the usual emergency services are not all open over the Christmas break.
In NSW if you or a client find themselves in serious financial stress you could call the National Debt Helpline (1800 007 007). With the exception of actual public holidays, we will be taking calls as usual throughout the December-January breaks.
We do not provide emergency vouchers or emergency relief.
We will try to assist callers by providing them any emergency relief providers that we are aware are open. However, it can be very distressing for people to learn we may not have any referrals. We try our best to help people with some alternatives, such as:
- contacting Centrelink;
- contacting their credit providers where appropriate; and
- avoiding high risk products such as payday loans.
Our Insurance Law Service will be closed, however from Monday 25 December until Monday 8 January.
It’s never been easier to get into debt. And it’s not just those on low incomes struggling to make ends meet – increasingly working people with good incomes are turning to high cost lenders for short term, fast loans.
These lenders – most of which offer instant loans online – are making fat profits off people’s desire to have something extra – especially at Christmas.
We believe these borrowers – many of them young men in their 20-30s – are a debt crisis waiting to happen.
You probably know at least one person in this situation.
So we made this video to get their attention – and yours – in the hope of breaking the cycle before it goes “nuts” …
Getting Travel Insurance? Don’t just ‘wing’ it!
If you’re travelling over the Christmas holidays (or at any time during the year) and you are considering or have already taken out travel insurance, then you need to read this article!
Here at the Insurance Law Service, we speak to a lot of people who take out travel insurance “just in case something happens”. This is a wise thing to do BUT what we often see is that people just buy travel insurance without knowing what it is they’re actually buying. In other words, they’re just winging it. This is not so wise.
Do not assume you are covered for every eventuality.
Insurance is a contract between an insurer and the insured (i.e. yourself), where the insurer on receipt of a premium agrees to compensate you for certain defined potential losses or liabilities in the event they may occur during a specified period of coverage. You really need to read your contract of insurance (called a product disclosure statement).
If you obtain your own insurance, this will be sent to you when you purchase the product and you have a 21 days cooling off period to decide if it suits your circumstances.
If you are relying on insurance attached to your credit card, you should obtain a copy of the PDS from the website or product issuer and make sure you meet the eligibility requirements. For example, whether you need to make a minimum spend on your card.
When you’re choosing your travel insurance, you need to remember that generally the purpose of insurance is to cover you for unforeseeable risks. Policies will list the risks they are willing to insure and any limitations.
- whether you have a medical condition/injury before you travel, including any symptoms of a potential medical condition, you should read your policy carefully to determine if you are covered or if you need to discuss this with your insurer to make sure that you are covered by purchasing additional cover. Existing conditions of other people can also be relevant to your insurance. For example, if you are worried you might have to cancel your holiday because Aunty Sally has a terminal illness and could get dramatically worse at any time, insurance is usually NOT the answer as most insurers will simply not cover cancellations in these circumstances.
- any exclusions under the policy for known or declared risks relating to your holiday destination eg, volcanoes, or other perils. Insurers often know more information about risks than you or I would and they can introduce cut-off dates where they exclude any claims relating to a known or declared risk if you have purchased the policy after the cut-off date. For example, recently a number of travellers were stranded or unable to leave for their Bali holidays due to the volcano eruptions. This risk was declared and raised to level 4 in September 2017. A family traveling to Bali had their trip cancelled due to the volcano eruptions. They put in a claim with their insurer but were unsuccessful as they had purchased their policy in October 2017 after the volcano risks were declared and made known. The family weren’t aware of the exclusion and they also were not aware of the volcano risk
- Insurance is not a license to be risky or behave in a way you would not ordinarily behave if you were in Australia. Most policies will have exclusions relating to alcohol and illicit drugs, and restrictions on activities for example if you are not licensed to drive a motorcycle in Australia, if you do in another country and have an accident you may not be covered.
WHAT CAN YOU DO?
- When you decide on where you are going on holidays, look into and buy insurance at the same time.
- When you pick an insurer:
- think about where you are going and look up smarttraveller.org.au
- think about what you are doing on your holiday and read the PDS to see if it covers those activities and with what limitation;
- if you have seen a doctor or have a chronic medical condition, whether physical or mental, read the policy wording to see if it covers you if your health (or a family member, travel companion’s health) deteriorates.
Here at the Insurance Law Service, we think that Insurers should do more to notify people of limitations in their policies at sales time. But, as it stands it is up to the consumer to make sure the cover suits your needs and not the other way round. You should be vigilant in making sure that their policy is right for you. Checklists can be very useful, here’s a sample:
REMEMBER: with travel insurance, don’t just wing it!
Following extensive consultation, the NSW government has passed laws that create much better protection for consumers in the court debt collection process.
From 25 December 2017, sheriffs will no longer be able to seize any items that would be protected under bankruptcy.
Previously sheriffs could seize anything except clothing, kitchen or bedroom furniture, and tools of trade up to a prescribed amount.
This change will be set out in section 106(3) of the Civil Procedure Act 2005 (“CPA”) (effective from 25 December 2017), and provides protection for all items listed under 116(2) of the Bankruptcy Act. Crucially, this will include items such as a car up to the $7,800 bankruptcy threshold and any ordinary household furniture (this includes anything reasonably necessary for the domestic use of the bankrupt’s household, having regard to current social standards and can take into account the number of people in the household, health and medical conditions etc).
Sheriffs now also have a legislated right to decline to seize any items where they believe the cost of seizing, storage and sale will be more than the value of the item (s106(4A) CPA). The sheriff must also notify a consumer about a writ before it can be enforced (s115A CPA). These provisions are in force now.
Other protections are due to come in force sometime next year (date still to be announced) and will include:
1. A minimum protected amount of $494.30 applies to debt garnishees (over a person’s bank account etc). Previously, a debt garnishee could empty an entire account, leaving a person no funds to live on (with very minimal protection for some Centrelink recipients who have any savings over the previous 4 week period). Now, everyone must be left with at least $494.30 in their account, after the garnisheed amount is taken. This is a win for consumers, though we would have liked a higher amount to be protected.
The protected amount is an adjustable figure that will increase over time in line with the workers compensation amount – in the same way the $494.30 per week protected amount increases for wage garnishees. The $494.30 is the amount applying as of 1 October 2017 and changes each April and October.
2. The court will be given a general power to vary or suspend a garnishee orders if the court considers it ‘appropriate to do so’, on application by the debtor. How this works in practice, and what criteria the court will take into account, is yet to be seen.