In New Zealand, financial hardship occurs when individuals or families are unable to meet their financial obligations, such as paying for housing, utilities, or groceries, due to unforeseen circumstances. These might include job loss, health issues, or rising living costs.
Causes of Financial Hardship in New Zealand
- Job loss or reduction in hours: Changes in employment status, including layoffs or reduced hours, can severely impact household income.
- Unexpected medical expenses: Even with public healthcare, costs for private treatments or emergencies can cause financial strain.
- Rising living costs: Increases in rent, utility bills, and everyday expenses can lead to difficulties in covering basic needs.
- Debt and loans: Unmanageable debt from personal loans, credit cards, or mortgages.
Signs You Are Experiencing Financial Hardship
- Difficulty paying rent or mortgage on time
- Missed payments on utilities, loans, or other bills
- Over-reliance on credit cards or borrowing to meet daily expenses
- Struggling to cover essential needs like food or healthcare
Steps to Manage Financial Hardship
1. Assess Your Financial Situation
Start by reviewing your income, expenses, and debts. Creating a clear picture will help you understand where you stand and identify areas for change.
2. Create a Budget and Reduce Unnecessary Spending
Using a budget is essential to manage your expenses. Prioritize essentials like rent, groceries, and medical costs. Free budgeting tools are available online, such as the Sorted Budgeting Tool from the Commission for Financial Capability (CFFC).
3. Contact Your Lenders Early
In New Zealand, lenders such as banks and utility providers often have hardship policies. Contact them early to discuss your options for deferring or reducing payments. Most providers are willing to negotiate repayment plans.
Government Support for Financial Hardship in New Zealand
Work and Income (WINZ) Support
Work and Income offers several forms of financial assistance:
- Unemployment Benefit: If you have lost your job or cannot work, WINZ offers Jobseeker Support.
- Emergency Grants: For urgent situations such as food, housing, or medical needs, Special Needs Grants are available.
- Accommodation Supplement: If rent or mortgage costs are overwhelming, you may be eligible for an Accommodation Supplement to assist with housing expenses.
Visit the Work and Income website or call 0800 559 009 for more information.
Kainga Ora – Housing Assistance
For those struggling with housing, Kainga Ora offers public housing options and rent subsidies for eligible families. They also provide Tenancy Services to help you understand your rights as a tenant and avoid eviction.
Solutions for Managing Debt During Hardship
Debt Counselling and Financial Advice
In New Zealand, there are several non-profit organizations offering free financial advice and debt counselling, such as:
- MoneyTalks: A free helpline providing budgeting advice and debt counselling (0800 345 123 or visit moneytalks.co.nz).
- NZ Budgeting Services: Free, confidential advice on managing debt, budgeting, and financial recovery plans.
Debt Relief and Hardship Variations
Banks and credit providers in New Zealand offer hardship variations under the Credit Contracts and Consumer Finance Act. You can apply for changes to your loan terms if you are facing financial difficulties due to illness, job loss, or other hardships.
Debt Consolidation
Consolidating your debt into a single loan with a lower interest rate might be an option to manage repayments. Check with your bank or financial advisor to explore whether this option suits your situation.
Legal Rights and Protections in Financial Hardship
In New Zealand, you are protected from unfair treatment by creditors under the Credit Contracts and Consumer Finance Act (CCCFA). If you feel harassed by debt collectors, there are legal avenues to stop this behavior. For more information, you can contact the Citizens Advice Bureau (CAB) or the Community Law Centre for free legal advice.
Accessing Financial Resources and Support in New Zealand
Foodbanks and Community Support
If you’re struggling to afford groceries, you can access support from foodbanks and charities:
- Auckland City Mission: Provides emergency food parcels and support services (aucklandcitymission.org.nz).
- Salvation Army: Offers food parcels and practical assistance across New Zealand.
Utility Bill Support
If you are struggling with energy costs, you can reach out to your electricity or gas provider to discuss hardship plans, payment extensions, or the Winter Energy Payment if you qualify.
Financial Hardship Grants and Subsidies
Several local councils provide emergency grants or subsidies for residents facing financial hardship. Check with your local council to see what support is available.
FAQs: Financial Hardship in New Zealand
Q: How do I apply for financial hardship assistance in New Zealand?
A: Start by contacting your lender or service provider to discuss hardship options. You can also apply for government benefits through Work and Income (WINZ) or seek advice from financial support services like MoneyTalks.
Q: What if I can’t pay my rent due to financial hardship?
A: Contact your landlord as soon as possible to discuss temporary payment options. You may also be eligible for an Accommodation Supplement from WINZ.
Q: Can I get help with paying my utilities?
A: Yes, many energy providers in New Zealand offer hardship plans, and the Winter Energy Payment can help if you qualify.
Reach Out for Help Today
If you’re experiencing financial hardship, it’s important to take action sooner rather than later. Reach out to your bank, financial advisors, or government services for support. There are many resources in New Zealand that can help you regain control of your finances and move forward.
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