Client Hardship

This procedure provides a clear and consistent approach to assessing financial hardship and establishing Financial Variation Agreements (FVAs) where appropriate.

Clients funded under the Support at Home Program are subject to separate financial hardship assessment and processes administered by Services Australia and are therefore outside the scope of this procedure.

Definitions

Financial Hardship is a term used to describe a situation where a person is unable to meet their financial commitments due to one or more factors contributing to their financial position.

The Australian Communications Industry Forum (ACIF) Credit Management Code defines financial hardship as: “A situation where a customer is unable, reasonably, because of illness, unemployment, or other reasonable cause, to discharge their financial obligations under their contract with the supplier and the customer reasonably expects to be able to discharge those obligations if payment and/or service arrangements were changed. Financial hardship can be of limited or longer-term duration.”

Capacity to Pay is a household’s ability to meet their expenses within their current level of income while maintaining a basic standard of living.

Financial Variation Agreement (FVA) is a documented agreement that temporarily or ongoingly varies a client’s required contributions or fees due to assessed financial hardship.

Triggers for Financial Hardship Assessment

A financial hardship assessment may be initiated at any point in the client journey where concerns about capacity to pay are identified. Triggers include, but are not limited to:

• A client advises staff that they are having trouble paying fees or contributions.
• A client requests a reduction, pause, or variation to their fees.
• Concerns identified during routine service discussions, reviews, or care planning.
• Follow-up action arising from accounts receivable or debt management processes that indicate ongoing difficulty meeting payment obligations, or
• Information provided by an advocate, support person, or another service indicating the client may be experiencing financial hardship.

Where a trigger is identified, staff must explore the issue with the client in a respectful and supportive manner and determine whether a financial hardship assessment under this procedure is appropriate.

If the issue relates solely to historical debt, staff are to manage the matter in accordance with the relevant debt management and repayment plan procedure, while also considering whether a prospective Financial Variation Agreement is required to prevent further debt.

Financial Hardship Assessment Process

At all times, staff should use their best judgement to determine whether the client is experiencing genuine financial hardship, rather than simply seeking to defer or dispute payment. This assessment process also identifies a proposed variation in fees or contributions where appropriate.

Main Criteria for Eligibility:

• Difficulty meeting financial obligations by the due date.
• Loss of primary income, serious illness, death, disability, domestic violence, or separation.
• Payment difficulties in the past.
• Seeking assistance from a financial counsellor.
• Financial hardship has been raised by a social welfare or consumer advocacy organisation.
• Emergency events or natural disaster.

Staff are to enter complete records of all dealings with the client into the relevant client database and upload any supporting documentation.

Historical Debt

Any outstanding debt incurred prior to the commencement date of a Financial Variation Agreement is not covered by this procedure. Historical debt is to be managed in accordance with debt management, repayment plans and write off processes.