Reducing your debts and expenses

Thursday 1 October, 2015

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On this page: Utility bills | Council rates | Loans and credit cards | Medical and pharmaceutical expenses | Transport expenses | Income tax | Education expenses | Finances and stress


The first step in balancing your budget is to look at all your debts and expenses and investigate ways to reduce them. It can feel overwhelming to face a pile of bills, but if you are having trouble paying, assistance is available.

Utility bills

If you are finding it difficult to cover the cost of your utilities, such as electricity, gas, water, phone or internet, you can explore the following options.

Apply for hardship programs

Most essential service providers are required to assist customers who are having trouble paying their bills. Check whether your utility companies have hardship programs that allow for flexible payment options. How a hardship program works will vary according to the individual service provider. The details are usually available on the company’s website, or you can call them and ask for a copy to be sent to you.

Once you register with a hardship program and are actively participating (e.g. by paying something off your bill), your supply cannot be disconnected.

To register with a hardship program, contact your service provider to tell them that you are having trouble paying. They will try to help by setting up a payment plan that may allow you to pay later (deferring the payment) or to pay several smaller amounts over a period of time (paying by instalments).

”I was embarrassed to ask for help, but it was a bad time for me to get sick. Getting help paying my water rates was much appreciated. I’m now on the mend and the future looks good.” – George
Check if you can get a rebate or concession

Rebates and concessions can reduce the amount you owe on your utility bills. They are usually available to customers on low incomes, people receiving certain Centrelink payments, and some concession card holders. Special rebates and concessions may be available to customers who are medically unable to regulate their body temperature, or who use an eligible life support machine (such as a dialysis machine) at home.

Contact your provider to apply for a rebate or concession on your electricity, gas or water bill.

Ask about payment vouchers and grants

In most states and territories, customers in financial hardship can receive payment assistance vouchers or grants to put towards their utility bills. These may be distributed through community welfare agencies such as the Salvation Army, or directly by the relevant state or territory government department.

Get in touch with a participating community organisation or the relevant government department – for contact details, see the MoneySmart list of rebates and vouchers.

Register for an energy efficiency program

If you use less power and water, you will also reduce your bills. Some states and territories offer free energy and water efficiency assessments to help customers reduce their usage. They may also offer assistance with energy-saving or water-saving repairs and modifications, such as a reduced fee for a plumber to fix your leaking taps.

Visit Your Energy Savings for energy-saving tips and to see what assistance is available in your state or territory.

For more information on rebates, concessions, vouchers, grants and energy efficiency programs download our Help with bills factsheet or call Cancer Council 13 11 20.

Council rates

Many local councils have a rate assistance or rebate policy for people in financial hardship. You may be able to:

  • claim a concession rate – available to holders of a Centrelink Concession Card or Department of Veterans’ Affairs Gold Card
  • negotiate a payment plan – you may be able to pay your rates by instalments.

Contact your local council to find out how they might be able to help you manage payment of your rates.

Loans and credit cards

If you are worried about keeping up with repayments on your loans (such as a home loan or car loan) or on your credit card, don’t wait until you have fallen behind. Take action early, before a lender or credit card provider begins legal proceedings. If debt collectors are chasing you, ask a financial counsellor for advice.

Talk to your loan provider

Tell the organisation you owe money to (the creditor) that you are experiencing financial hardship because you or a family member has cancer. The creditor may agree that you can:

  • stop making repayments for a short time, such as 6–12 months
  • make lower repayments for a short time
  • change to interest-only repayments for a specified period
  • pay by instalments
  • reduce the total amount owing
  • extend the term of the loan.

Making a payment arrangement as soon as possible can protect your credit rating. Your credit history and rating are recorded in a ‘credit report’ by a credit reporting agency. If you apply for a loan in the future, the lender will usually ask your permission to check this credit report before approving the loan.

Contact the creditor to make a payment arrangement. Make sure you get it in writing and check what interest and fees you’ll need to pay. Speak to a lawyer or financial counsellor if you need help understanding the documents. If you cannot reach an agreement, see 'Apply for a hardship variation' below.

Apply for a hardship variation

Another option for repaying loans and credit cards is to apply for a hardship variation. This is a formal process where you ask your credit provider to vary the terms of your loan contract.

Depending on when and where you entered into the loan and the amount, you may be able to seek a hardship variation if:

  • your loan is for a personal purpose, not a business loan (home loans, personal loans and car loans usually qualify), and
  • you can reasonably repay the amounts agreed under a varied loan contract (maybe you are planning to return to work after treatment, or you can pay off your debt over a longer term), and
  • you can’t make your repayments at the moment because of illness, unemployment or some other reasonable cause.

When you apply for a hardship variation, you can ask for reduced repayments or a complete hold on repayments until your situation has improved. Your credit provider may ask you for further information about your finances to help them with the decision.

Work out what you can afford to pay before you talk to creditors. If you agree to an amount, it is difficult to go back and change it to a smaller amount, but you can always pay more if you find you can afford to. Remember the creditor is only focused on the amount you owe them. You may have other creditors to pay back as well.

Getting a hardship variation can protect your credit rating. If you get a variation agreement early and you are up to date with the lower repayments, the bank can’t record it on your credit report.

If your financial hardship is long term and you won’t be able to reasonably repay the loan, you may need to consider other options, such as a compassionate grounds debt release (see below), selling assets or – as a last resort – bankruptcy.

Write to or call your credit provider and explain that you are unable to meet the current repayments. You can also ask a financial counsellor to negotiate on your behalf. The credit provider must respond to your request, usually within 21 days. If your application is refused, the credit provider must give written reasons. If you think the reasons provided are unfair, you can complain via an external dispute resolution scheme.

External dispute resolution schemes

Almost all credit providers belong to an external dispute resolution (EDR) scheme. EDR schemes allow you to have disputes resolved by an independent party without any cost to you and without going to court.

Both the Financial Ombudsman Service (FOS) and the Credit and Investments Ombudsman (CIO) provide EDR, but you can only use the one that your credit provider has joined. To check if your credit provider is a member, you can visit FOS or call them on 1800 367 287, and visit CIO or call them on 1800 138 422.

You can also find more information on the EDR process at MoneySmart.

”When I got cancer, I was too sick to work. I thought I’d be able to go back to work once I was fixed up, so I kept using my credit card. That’s how I got caught in the credit trap.” – Vincent
Get advice before refinancing

You may be considering rolling all your loans into one to manage your repayments. This is called consolidating or refinancing.

Be careful of businesses advertising debt agreements to avoid bankruptcy. Sometimes, unscrupulous lenders take advantage of people in financial difficulty. They might offer refinancing or debt consolidation deals that can lead to more problems. They charge very high establishment fees and interest rates, and make the loan term very short, even for a big loan. This is called predatory lending.

Before you refinance, get independent advice from a financial planner or financial counsellor. If you think you have a loan with a predatory lender, it’s important to seek legal advice immediately.

Ask about credit card repayment protection

You may have credit card repayment protection, which will help cover repayments if you’re not able to work due to illness, permanent disability or death.

Check your credit card statement or speak to your credit card provider to find out if this applies to you.

Ask if you’re eligible for debt release

In some special circumstances, your creditor can decide to write off (waive) your debt altogether. This is known as debt release on compassionate grounds and is rare. It is usually an option only for people who have been on Centrelink benefits for a long time and who have no assets except household goods and tools of trade.

If you think you may be eligible, ask a financial counsellor or a community legal centre to help you apply to have your debts released. Debt release can affect your credit rating, so discuss this with them before proceeding.

Is the debt secured or unsecured?

When you owe money, the debt may be secured or unsecured. This affects what action the lender (creditor) can take to get their money back if you stop making repayments on the loan.

Secured debt

This is a debt that is secured against a particular asset. When a bank lends you money, they may take ‘security’ for the debt. That means that if you stop making repayments, the bank can take certain property (called the ‘security property’) and sell it to recover the amount you owe. A home mortgage or car loan is a secured debt.

Unsecured debt

With this type of debt, if you stop making repayments, there is no particular asset the creditor can take and sell. They must go to court (see below) and get an order for your valuables to be taken and sold to pay off the debt. Credit cards and personal loans are usually unsecured debts.

What to do if a creditor takes you to court
Get professional advice straightaway

If you receive an official court document, such as a statement of claim, you will have only a limited time (usually 21 or 28 days) to file a formal response at court. If you disagree with the claim, you need to lodge a defence. If you need legal help, you can search for your nearest community legal centre by postcode at National Association of Community Legal Centres, or ask your financial counsellor to refer you.

Check whether you can make a payment arrangement

If you do owe the amount in the claim but are not in a position to pay it, you can try to negotiate with the creditor. You may also have the right to get the statement of claim put on hold and bring the dispute to an external dispute resolution (EDR) scheme. This may give you an opportunity to make a payment arrangement. You should seek the advice of a financial counsellor or lawyer if you think the dispute could be referred to an EDR, or if you are unsure.

Never ignore a statement of claim

If you don’t file a formal response or appear at the hearing, the creditor can get default judgement against you. This means that the court will order you to pay the money to the creditor. If you don’t, the creditor may be able to take some of your income or assets to repay what you owe.

Check the statement of claim is genuine

Sometimes, debt collectors can give you documents that look like a statement of claim, but aren’t. This is fraud and is against the law. If you are not sure whether the statement of claim you have received is genuine, check with a lawyer.

Medical and pharmaceutical expenses

The Australian Government offers several benefits that can help you pay for medical treatments, tests, prescription medicines and other medical supplies.

Register for the Medicare Safety Net

Cancer treatment can mean that you are paying for many private medical appointments and tests. Medicare will usually contribute a certain amount towards these expenses, but you’ll need to pay the difference out of your own pocket.

Through the Medicare Safety Net, once you reach a set threshold of out-of-pocket expenses, Medicare will pay a higher benefit for many services until the end of the calendar year. This may mean that you receive more money back from Medicare for your appointments and tests.

If you are an individual, you do not need to register for the Medicare Safety Net as Medicare automatically keeps a total of your expenses. If you are part of a couple or family, you do need to register even if you are all on the same Medicare card. You download the form, or call Medicare on 132 011.

Receive Medicare benefits for allied health services

If you have a chronic health condition (one present for at least six months or that is terminal), you may be able to get Medicare benefits for allied health services, such as physiotherapy and counselling, that help manage your condition. Under the Chronic Disease Management plan, your doctor can refer you to appropriate allied health practitioners for your condition, and you can claim at least part of their fees on Medicare.

Talk to your GP about whether this plan would be helpful for your condition. If so, the GP will prepare a GP Management Plan and Team Care Arrangements, and can then refer you to the allied health practitioners listed in the Team Care Arrangements.

Get a PBS Safety Net card

The Pharmaceutical Benefits Scheme (PBS) subsidises the cost of prescription medicines for all Australian residents with a current Medicare card. The PBS Safety Net further reduces the cost of prescription medicines once you or your family has spent a certain amount on prescription medicines. This amount is known as the Safety Net threshold.

There are two PBS Safety Net thresholds – one for general patients and one for concession card holders.

If you are part of a couple or family, ask your pharmacist to combine the amounts for your family Safety Net total so you can reach the threshold sooner.

Use your concession card

Some medicines will be cheaper through the PBS if you have:

  • a Pensioner Concession Card
  • a Commonwealth Seniors Health Card
  • a Health Care Card
  • a Department of Veterans’ Affairs health card.

The card may also entitle you to free medicines once you reach the PBS Safety Net threshold, as well as more refunds for medical expenses through the Medicare Safety Net. Some doctors offer bulk-billing to concession card holders, although this is up to the doctor.

If you have one of the eligible cards, show it to your pharmacist when you are getting a script filled. You can also ask your doctor if they will bulk-bill your appointments.

Use the Pharmaceutical Allowance

The Pharmaceutical Allowance is a small amount that helps some people cover the costs of medicines. People receiving the Sickness Allowance and some other Centrelink payments automatically receive this extra allowance with their main payment each fortnight. For people receiving the Disability Support Pension, Age Pension or Carer Payment, the allowance is included in the Pension Supplement.

You do not need to make a claim for the Pharmaceutical Allowance or the Pension Supplement, as Centrelink will automatically assess your eligibility and pay you with your regular fortnightly payments if you qualify.

Receive help with the cost of continence aids

If the cancer or its treatment has left you with permanent or severe incontinence (difficulty controlling your bladder or bowel movements), you may be able to receive help with the cost of continence products under the Continence Aids Payment Scheme (CAPS) through Centrelink. For most cancers, this is available only if you hold a Pensioner Concession Card and meet other criteria. For a small number of neurological conditions, including brain and spinal tumours, you can receive the payment without a Pensioner Concession Card.

Check with your doctors if you meet the CAPS criteria, then complete an application form and send it to Medicare. For forms and more information, call the National Continence Helpline on 1800 33 00 66 or visit Continence Aids Payment Scheme.

Be reimbursed for external breast prostheses

An external breast prosthesis is an artificial breast worn under clothing to imitate the shape of the breast. Women who have had a mastectomy because of breast cancer can access the External Breast Prostheses Reimbursement Program if they hold a Medicare card. The program reimburses you for new or replacement external breast prostheses purchased after 1 July 2008. You can usually make only one claim for every two-year period.

Call Medicare on 132 011 or visit the Department of Human Services to see if you are eligible for reimbursement and to get a claim form. You will need to send the completed form with the receipt to Medicare.

Receive free stoma supplies

In some cases, surgery for bowel or anal cancer can result in a temporary or permanent stoma, an opening in the abdomen that allows faeces to be collected in a stoma bag. Stoma bags and other supplies are available free under the Stoma Appliance Scheme if you hold a Medicare card and belong to a stoma association.

Your stomal therapy nurse can help you join an approved stoma association and you will then be able to obtain free stoma appliances and products. For more information, go to the Department of Health Stoma Appliance Scheme, or visit the Australian Council of Stoma Associations.

For people with gastrointestinal cancers (such as bowel, stomach or liver cancer), the John Logan Cancer Treatment Foundation offers grants to help pay for prescribed treatments that are not subsidised on the PBS. For more details, visit John Logan Foundation.

Transport expenses

Seeing a medical specialist can require a lot of travel, particularly if you live in a rural or regional area. There are several ways you can save money on travel costs to and from your hospital appointments.

Make a patient transport claim

Every state and territory has a government scheme that provides financial help to people who need to travel long distances to access specialist medical treatment that is not available in their local area. Many schemes also cover accommodation.

The eligibility rules are different for each scheme. In general, you must be a permanent resident of the relevant state or territory, and you must need to travel a significant distance to the closest available specialist treatment.

Most patient transport assistance schemes are not means tested. The schemes are usually subsidy schemes – they pay a portion of your travel and accommodation costs, but you will often still need to pay the rest.

In some cases, benefits may be paid for interstate referrals if treatment for your condition is unavailable in your home state or territory. Subsidies may also be available if you need an escort or carer to travel with you to your treatment.

If you meet the eligibility criteria, you and your doctor will need to complete a form. You may also need to provide original tax receipts and medical certificates to support your application.

If you are the holder of a pension or health care card, you may be able to apply for assistance before paying for your travel and accommodation, rather than covering the costs yourself then seeking reimbursement later.

Forms and further information are available from the patient transport scheme in your state or territory. For contact details, call 13 11 20, see our patient transport factsheet or visit Rural Health Australia.

Use your Pensioner Concession Card

If you receive certain Centrelink payments, you will automatically receive a Pensioner Concession Card. This may mean you can get:

  • reduced fares or free travel on public transport
  • reductions on car registration.

You can check what concessions are available in your state or territory.

Carry your card with you and ask for the concession fare when you use public transport. When renewing your car registration, claim the concession rate if you are eligible – this may be checked electronically.

Check if you’re eligible for the Mobility Allowance

If you are receiving certain Centrelink payments and the cancer or its treatment means you are unable to use public transport without a lot of assistance, you may be eligible for the Mobility Allowance.

This applies only if you are travelling to work (paid or voluntary), study or training, or to look for work. It is a regular extra amount that will be paid with your main payment each fortnight.

You can check if you are eligible and submit an online claim by visiting the Department of Human Services. You can also call Centrelink on 13 27 17. You will need to provide a medical report from your doctor.

Income tax

If you owe tax, but are worried about being able to pay it on time, contact the Australian Taxation Office (ATO) on 13 11 42 as soon as possible. It is still important to lodge your tax return or business activity statements (BAS) on time even if you know you can’t pay the tax. This avoids late lodgement penalties and shows you are trying to meet your obligations.

Depending on your circumstances, the ATO may decide to give you more time to pay or agree to one of the following measures.

Pay your tax debt by instalments

If you have a tax debt and you cannot pay it in full, you may be able to pay by weekly, fortnightly or monthly instalments.

Depending on the amount you owe, there are different ways to make a new payment arrangement with the ATO (see table below). For further details, visit the Australian Taxation Office, or ask a financial counsellor to help you.

How to pay tax by instalment

Whichever method you choose, have your tax file number (for income tax debt) or Australian business number (ABN, for activity statement debt) ready.

Call the automated phone service Tax debt of less than $25,000 Call 13 28 65 (individuals) or 13 72 36 (businesses) and follow the prompts. You can suggest a payment arrangement, and if the ATO accepts it, they will send you a confirmation letter within 15 days.
Use the online service Income tax debt of less than $50,000 Visit myGov and link your myGov account to ATO. (MyGov is a secure way to connect various government services – you can create a new account if you don’t have one already.)
Call the ATO Activity statement debt over $25,000, or income tax debt over $50,000 Call 13 11 42 to speak to someone at the ATO. They will ask about your financial situation, such as why you haven’t been able to pay and how you plan to pay the debt.
Ask for interest charges to be reduced

The ATO usually charges interest on unpaid tax debts. This General Interest Charge (GIC) applies from the original due date, even if you enter into a payment arrangement. If you are facing financial difficulties because of cancer, you can ask for some or all of the GIC to be waived. This is known as the remission of GIC.

Contact the ATO on 13 11 42 and explain why your payment was delayed and any steps you took to avoid the delay. For larger amounts, you may be asked to put your request in writing.

Apply for a release of your tax debt

You can apply to be released from some tax debts if paying the debt would cause serious hardship. You will need to show that it would leave you unable to provide food, housing, medical treatment or other necessities for yourself or your family.

To apply to be released from your tax debt, you need to complete a detailed form (available from ATO on 13 11 42) and provide documents such as pay slips and bank statements. A financial counsellor or accountant can help with this application.

Education expenses

If cancer has caused you financial hardship, it may be possible to delay (defer) repayment of your education debt. You may also be able to come to some arrangement regarding school fees if your children attend a non-government school. Special grants can help young people to continue their education.

Defer HECS or HELP debts

If you have a Higher Education Contribution Scheme (HECS) or Higher Education Loan Program (HELP) debt and you are in financial difficulty, you can apply to defer your repayments.

You will need to show that making the repayments at this time would cause you serious hardship (i.e. would leave you unable to provide food, accommodation, clothing, medical treatment, education or other necessities for you or your family) or that there are other special reasons.

To apply to defer your HECS/HELP repayments, complete the application form (available from the Australian Taxation Office or 1300 650 225), and send it to the ATO. If your application is successful, you will still need to pay back your debt, but you won’t need to make any repayments until the next financial year. If you want to defer your repayments for another year, you will need to reapply.

Negotiate school fees

Many private schools are willing to make arrangements for parents who are experiencing unexpected hardship and are unable to pay school fees in the short term. Ask for written confirmation of any changes you negotiate.

As soon as you become aware that your financial situation has changed, contact the school principal to discuss your options. These may include:

  • investigating scholarships or bursaries that cover school fees and other expenses
  • negotiating a payment arrangement
  • requesting a temporary suspension of your fees.
Apply for an education grant

Young people affected by cancer may be able to access special grants to help them pursue tertiary study.

Redkite provides grants to young people aged up to 24 years. Visit Redkite or call 1800 REDKITE (1800 733 548). Ronald McDonald House Charities offer the Charlie Bell Scholarship program.

Finances and stress

Financial issues represent the leading cause of stress for Australians. People with cancer face not only the extra expenses associated with treatment, but also the income lost from taking time off work. They may struggle to balance their budget, possibly for the first time in their life, and some can be tipped into financial crisis.

This financial stress adds to the worry of being diagnosed with cancer and may feel overwhelming. For some people, it can lead to depression, anxiety, and conflict with family members.

Getting help with your finances can take a great weight off your mind, but if you are finding it hard to cope emotionally, try talking to your GP as well. Counselling and/or medication – even for a short time – may help. You may be able to get a Medicare rebate for sessions with an accredited counsellor or a psychologist. You could also check whether you can talk to a psychologist or social worker at your cancer care centre.

You may find it helpful to read our Emotions and Cancer section or see what support services are available.

The organisation beyondblue has information about coping with depression and anxiety. Call 1300 22 4636 to order a fact sheet. Lifeline offers 24-hour crisis support – you can call them on 13 11 14.


Reviewed by: Sarah Penman, National Pro Bono Manager, Cancer Council; Mary Bairstow, Senior Social Worker, Cancer Centre, Fiona Stanley Hospital, South Metropolitan Health Service, WA; Catherine Beavan, Consumer; Jeanne Potts, 13 11 20 Consultant, Cancer Council Victoria, VIC; Alka Bisen, Financial Counsellor and Project Coordinator – Financial Assistance Services, Cancer Council NSW, NSW; Rebecca Wu, Associate, and Brenton Priestley, Senior Associate, Minter Ellison Lawyers, SA; Robert Simon, Technical Strategy Manager, AMP Advice – TapIn and Technical Capability, AMP Advice – Channel Services. We acknowledge the contribution of Louisa Fitz-Gerald, writer of the first edition of this booklet.

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