Cost of living is making hardship more common in WA

A recent report by the Financial Wellbeing Collective, collated from its 12 partners including Anglicare WA and Uniting WA, has shown that financial hardship is now being experienced by families and individuals it has never touched before due to rising cost of living.

“Across our services, we are seeing clients needing hardship assistance for the first time, as many battle with today’s cost of living,” Financial Wellbeing Collective General Manager Helena Jakupovic explained.

New client cohorts are emerging through the Financial Wellbeing Collective’s services, including people in employment and higher-income brackets. “We are experiencing an emergence of working families needing hardship assistance for the first time,” she said.  

There has been a 111 per cent increase in employed clients accessing emergency relief in the past three years, and an 85 per cent increase in financial counselling clients with a household income of $100,000 or more in the last five years experiencing financial stress, The Financial Wellbeing in WA Snapshot 2024 revealed.

There has been a 27 per cent increase in couple households, where at least one person is employed, seeking financial support over the past three years.

“As hardship becomes more common, we are seeing increases in employed clients, mortgage holders, and higher income brackets reaching out for help over the past three years,” she said.

As WA’s largest service provider network of financial hardship programs, the Financial Wellbeing Collective supported 29,000 Western Australians through its hardship intervention services in FY 23/24.

The Financial Wellbeing Collective’s financial counsellors provide free support including assistance with debt negotiation, advocacy with lenders, money management strategies, applications for no-interest loans and referrals to supportive services.

With a mission to empower Western Australians to achieve financial stability, resilience, and wellbeing, the FWC supported over 5,700 people across the Perth metropolitan area who are struggling with debt, overwhelmed with financial situation, and seeking support with budgeting and money management over the last financial year.

More than 10,000 people across Western Australia who were struggling to afford basic necessities such as food, fuel, medication, rent or school supplies, were supported by the Financial Wellbeing Collective’s Emergency Relief and Food Access Service.

The Financial Wellbeing Collective supported over 13,000 people across Western Australia who were three months or more in utility bill arrears, or disconnected, or at risk of being disconnected, from an essential utility service, with the support of the Hardship Utility Grant Scheme Service Centre in FY 23/24.

“Cost of living is now the main reason for financial hardship in the clients we support. Prior to the pandemic it was unemployment, debt or illness. With cost of living making hardship more common, what we are experiencing is an emergence of new clients needing hardship assistance for the first time,” Ms Jakupovic said.

^{Financial Wellbeing Collective General Manager Helena Jakupovic.}

Women, single-income households, and government-benefit recipients are the three groups struggling the most, and it is estimated that around 34,000 children are impacted by hardship.

“Single mothers have always been an economically disadvantaged group, but today’s cost of living has pushed single mums raising children into new levels of financial, food and utility stress, deepening the experiences of poverty for these families,” she explained.  

“Income has not kept up with rising inflation and cost of living. Those on fixed or low incomes like government benefits are struggling to afford basic necessities such as rent, food, fuel and utilities.”

The spike in housing insecurity has seen the proportion of financial counselling clients experiencing homelessness and living in shared housing double in last five years – with a 45 per cent increase in mortgage holders accessing emergency relief in the last three years.

“Lack of affordable housing is putting pressure on many household budgets. Today’s rent or mortgage prices is leaving families very little money to afford other life necessities such as food, medical care and transport costs. Our clients are making very tough decisions every day to simply keep a roof over their heads,” she said.

“Inflation has pushed previously financially secure families and individuals into financial hardship. Those who were already struggling have been pushed into levels of poverty where they are making very tough decisions everyday just to survive.”