Key elementsWorking families under financial pressure will benefit from the Rudd Government's commitment of $20 million over four years for increased financial counselling and support for people under financial stress.
- Funding for the Commonwealth Financial Counselling program, a free financial counselling service, will be increased by $10 million over four years, doubling the size of the program. This will increase the capacity of existing counsellors and establishing new services in high need areas, helping more families facing financial stress.
- In addition, $10 million over four years will be provided to develop and distribute easy to understand and practical financial management information products, including on issues surrounding mortgages, credit cards, hire purchase usage and similar financial issues. These products will be designed to assist people in, or at risk of, financial stress, to be distributed through Centrelink's Financial Information Service and other providers of financial information and counselling.
BackgroundThe Commonwealth Financial Counselling program (CFC) is one of the Government's key strategies for helping people who are experiencing personal financial difficulties, including due to circumstances such as mortgage stress, unemployment, sickness, credit over-commitment and family breakdown. Currently, 41 community based organisations are funded through CFC ($2.5 million per annum) to provide generalist financial counselling services. Under this measure, funding will now double.
Under CFC, accredited financial counsellors employed by community and local government organisations provide free, independent advice and assistance, using casework, advocacy/negotiation, referral and community education.
Across Australia, government funding supports around 150 community organisations to provide generalist financial counselling services. (State and territory governments contribute around $12 million for generalist financial counselling services.)
In 2006-07, Commonwealth Financial Counselling services saw more than 11,000 people, less than the previous year. More families are struggling with financial pressures from rising interest rates, credit card debts, and housing costs, and financial counselling services are unable to meet existing demand.
Financial counselling complements a range of government and non government financial literacy and money management activities (e.g. basic budgeting, savings strategies), problem gambling services, rural financial counselling services for primary producers, fishers and small rural businesses, fee-for-service financial planning and the Financial Information Service (FIS).