Originally published in FCANs quarterly Sharkwatch Financial Counselling Journal. Written by Grace Joseph, Financial Counsellor, Financial Rights Legal Centre.

The National Debt Helpline (NDH) is a free service for people experiencing financial difficulty, providing independent, confidential financial counselling support to help manage debts and regain financial control.

The service helps clients access early intervention to prevent escalation of their debts and provides options and tools to manage their financial difficulty. Financial Rights Legal Centre operates the NDH for NSW and Chats for NSW/ACT/TAS.

Calls continue to increase across the NDH as cost of living pressures mount. Common issues we are currently hearing about include:

Mortgage/housing stress

People are struggling with increased mortgage rates, combined with other cost of living rises. Recent fuel price hikes have added to daily expenses and any buffers previously held have been depleted. Additionally, if a medical expense or a car repair bill arrives, it can tip the balance.

Hardship with council rates and strata debts (unexpected special levies as well as increases in quarterly strata levies) have added to the stress of home ownership and further reduced capacity to maintain mortgage repayments. We now receive calls from older clients who are remaining in employment into their 60s and 70s due to having significant debt.

Falling property prices when assessing mortgage hardship options/arrears and capitalisation arrangements has further exacerbated the stress for clients as banks and lenders apply stricter guidelines to these options.

ATO debt

Clients with ATO debts, most often referred to NDH by the ATO for discussion on options to pay their debt, relating to PAYG tax, interest charges and penalties.

Debts not addressed for several years (sometimes due to financial abuse/DV, physical and mental health conditions or unemployment) are increasing daily with accrued interest and penalty charges.

Clients who sold a property some years ago and not paid capital gains tax are now being chased for the debt. They don’t have access to the funds or capacity to pay due to changed financial circumstances including family breakdown.

Wage advances

We are seeing an increase in clients who have got into a ‘debt trap’ using wage advance products. With more regulatory framework around Buy Now Pay Later, clients appear to be using wage advance products to cover everyday living expenses and one-off purchases. When repayments are tight (due to an unexpected expense or temporary reduction in working hours) they take another advance to cover payments and find themselves in a cycle of debt that is hard to unravel.

Utility bills

We have callers who prioritise their mortgage and rent over other bills. As a result, they fall behind with utility bills. Callers on the NDH and Chat may have significant utility debts as high as $10-12k. Providers may have offered hardship arrangements for a while but their payment plans are not sufficient to meet ongoing usage costs and debt repayments, resulting in the debt increasing.

Year on year, since the low of 2021, enquiries to NDH have been increasing nationally. Financial counsellors remain a vital resource for all those struggling with a cost of living crisis that seems set to continue.

Check out getting help or our fact sheets for more information and help on these common issues.