Many of AnglicareSA’s community services support individuals and families who are experiencing some type of financial stress.
The flow-on effect of financial stress onto housing instability, family relationships and specialist services such as drug and other alcohol, mental health and domestic and family violence services is significant. And since systemic issues such as inadequate income and poor financial literacy are a key feature of so many of our clients’ stories we decided to sign up to Good Shepherd Microfinance’s The Financial Inclusion Action Plan (FIAP).
This groundbreaking social justice initiative aims to realise greater equality and inclusion by encouraging government, corporate and not-for-profit stakeholders to ‘take action’ and champion for better financial inclusion.
We collated data on 450 of the customers who recently used our financial counselling services to create a snapshot of financial security in South Australia. Here are 7 fascinating findings from that research.
Demand for financial counseling assistance is sky high
In 2017/18 we received 3,800 requests for our financial counselling services. However, due to resourcing constraints, and higher than expected demand, we were forced to turn away approximately 830 of these customers.
This is an increase of 50 per cent from 555 in 2016/2017.
36% of participants live in a private rental
A significant portion (36 per cent) of our financial counselling participants live in private rentals, while 16 per cent live in Community Housing Properties, and 4 per cent identify as homeless.
The 22 per cent of people who classified their housing arrangement as “other” included living with family/friends (couch surfing), and residing in domestic violence shelters, safe-houses or rehabilitation facilities.
Rising electricity costs are the most common presenting issue
The rising cost of utilities is by far the most common presenting issue, experienced by 47 per cent of our customers.
Most people accessing financial counselling are on Newstart
Over 85 per cent of the people accessing these services were in receipt of some type of Centrelink benefit – 36 per cent Newstart and 21 per cent the Disability Support Pension. 9 per cent were in paid employment (4 per cent full-time) which demonstrates that financial hardship is not limited to people in receipt of Centrelink benefits.
The top five sources of income for our financial counselling recipients is a Government Benefit:
Women disproportionately suffer financial exclusion
More than 60 per cent of the customers who presented to us looking for financial counselling assistance were women.
Comorbidities: 90% of customers are experiencing two + issues such as housing instability or harassment from creditors
Our experience on the ground reinforces Financial Counselling Australia’s position that the main causes of financial stress are usually unemployment, illness, relationship breakdown and poverty.
Financial stress rarely occurs in isolation, and so it is with the customers who use our financial counselling services, with 90 per cent of them experiencing two or more other associated comorbidities.
Financial Counselling is an essential Anti-Poverty Strategy
According to the ACOSS’ Poverty in Australia Report (2016), 57% of those living in poverty rely on Government Benefits as their primary source of income. With 89% of people accessing financial counselling support receiving a Government benefit (36% access Newstart), it can be extrapolated that a significant portion of those seeking financial counselling assistance are living in or on the fringe of poverty, which was defined in 2016 as living on an income of approximately $400 per week.