Severe financial hardship provisions

We may reduce or waive your waiting period if you’re in severe financial hardship because of unavoidable or reasonable expenses.

Who it applies to

If the payment you get has a waiting period and you’re in severe financial hardship, we may waive or reduce it. This applies to the:

Severe financial hardship

We consider you to be in severe financial hardship if your liquid assets amount is:

  • less than the maximum fortnightly payment rate you’d get if you’re single
  • less than twice the maximum fortnightly payment rate you’d get if you’re in a couple

Liquid assets are any funds readily available to you or your partner.

Your maximum fortnightly payment rate includes all payments you get such as:

Unavoidable or reasonable expenses

Unavoidable or reasonable expenses include:

  • repairs to, or replacement of, essential white goods in your home
  • essential repairs to your car or home
  • essential medical costs
  • school costs
  • car or motor bike registration
  • costs to do with you giving birth or adopting a child, and
  • premiums for vehicle or home insurance

Unavoidable or reasonable expenses also include replacing essential household goods your insurance policy doesn’t cover, that have been:

  • stolen, or
  • lost through natural disaster

There may be other costs we assess to be unavoidable or reasonable expenses.

Unavoidable or reasonable expenses don’t include:

  • repaying a loan, mortgage or credit card early (lump sum)
  • a family holiday
  • buying non-essential furniture, such as an outdoor setting
  • entertainment costs
  • buying or installing a home swimming pool, or
  • paving a driveway

Reasonable costs of living

We also consider reasonable costs of living for liquid assets waiting and income maintenance periods. We don’t take this into account for the seasonal work preclusion period.

The amount we can consider must be no more than:

  • the maximum fortnightly payment rate you’d get if you’re single
  • twice the maximum fortnightly payment rate you’d get if you’re in a couple

The following are examples of reasonable costs of living:

  • food
  • rent or mortgage payments
  • regular medical costs
  • rates, water and sewage costs
  • gas, electricity and telephone costs
  • petrol for your vehicle, and
  • public transport costs

There may be other costs we assess to be reasonable costs of living.

Example – waiving the liquid assets waiting period

When Jenny finished work she had $8,400 in savings. She has claimed Newstart Allowance and has a 6 week liquid assets waiting period. At her phone appointment, Jenny tells us she doesn’t have that much money any more. She has just spent $1,200 replacing the tyres on her car and $1,000 registering it. This reduced her liquid assets to $6,200. This is still above the maximum fortnightly rate of Newstart Allowance for a single person. We don’t consider her to be in severe financial hardship. Jenny will still have to wait the 6 week period.

Jenny calls us 4 weeks later to say she’s been in a car accident. She had to pay $5,000 to repair her car. She has also spent $1000 in the last 4 weeks on costs of living. This has left her with less than $200 to live on.

We now consider Jenny to be in severe financial hardship. We’ll waive her waiting period from the date she told us about her accident because:

  • her available funds are now less than the maximum payment rate for a single person
  • she gave us receipts for the tyres, registration and repairs to her car
  • her reasonable costs of living work out to less than what she would get per fortnight for her maximum Newstart Allowance rate

Page last updated: 7 August 2018

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