Reducing your debts and expenses


The first step in balancing your budget is to look at all your debts and expenses, and explore ways to reduce them. It can feel overwhelming to face a pile of bills, but if you are having trouble paying, several options are 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 look at the following options with your service provider.

Apply for hardship programs

Most utility providers are required by law to offer flexible payment options to customers who are having trouble paying their bills. Check whether your utility companies have hardship programs.

How a hardship program works will vary according to the individual service provider. They may consider setting up a payment plan that will allow you to pay later (deferring the payment) or to pay several smaller amounts over a period of time (paying by instalments). The details are usually available on the company's website, or you can call them and ask for a copy of their hardship policy 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 find out more about registering with a hardship program, contact your service provider.

"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 may be available to customers who are medically unable to regulate their body temperature, or who need to use certain essential medical equipment (such as an oxygen concentrator) 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 list of rebates and vouchers at moneysmart.gov.au (type "utility bills" into the search bar).

Register for an energy efficiency program

You can reduce your power and water bills by changing how and when you use energy. Some states and territories offer free energy and water efficiency assessments to help customers find ways to reduce their usage. They may also offer assistance with energy-saving or water-saving repairs and alterations, such as a reduced fee for a plumber to fix your leaking taps.

Visit yourenergysavings.gov.au for energy-saving tips and to find assistance in your state or territory. You can also download the Light Bulb Saver app from the App Store (Apple phone) or Google Play (Android phones) to help you calculate how much money you can save by using energy efficient alternatives.

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 - to pay your rates by instalments
  • write off interest charges on overdue rates
  • defer part or all of your rates and charges for a period of time.

Contact your local council to find out how they might be able to help you manage payment of your rates. Most councils will ask you to put your request in writing. It may be tempting to ignore your council rates, but if you do not pay them on time, the council is entitled to charge you interest on the amount you owe.

Loans and credit cards

If you are worried about keeping up with repayments on your loans (such as home or car loans) 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

Let the organisation you owe money to (the creditor) know 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 produced 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.

"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

Contact the creditor to make a payment arrangement. If you come to an agreement, 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 change the terms of your loan contract.

To seek a hardship variation, you'll need to meet three criteria:

  • your loan is for a personal purpose, not a business loan (home loans, personal loans and car loans usually qualify)
  • you can reasonably repay the amounts agreed under a varied loan contract (maybe you are planning to go back to work after treatment, or you can pay off your debt over a longer term)
  • 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 focused only 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 you think you won't be able to reasonably repay the loan, you may need to consider other options, such as a compassionate grounds debt release, selling assets or - as a last resort - bankruptcy.

Write to or call your credit provider and explain that you are unable to meet your current repayments. You can also ask a financial counsellor to negotiate on your behalf. The credit provider is required by law to respond to your request in writing, 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 (see below).

How to resolve credit disputes out of court

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

The Australian Financial Complaints Authority (AFCA) provides EDR for all financial services in Australia. To check if your credit provider is a member, call AFCA on 1800 931 678 or visit them at afca.org.au.

For more details, visit the Australian Securities and Investments Commission consumer website at moneysmart.gov.au.

Get advice before refinancing

You may be considering rolling all your loans into one to help you manage the repayments. This is called consolidating or refinancing. Before you refinance, it is important to:

  • compare interest rates, fees and charges - make sure you will be paying less for your new loan
  • check the company is licensed - some businesses advertising debt agreements to avoid bankruptcy take advantage of people in financial difficulty. They might offer refinancing or debt consolidation deals that can lead to more problems. They may 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. To find out if a lender or broker is licensed, search the Australian Securities and Investments Commission (ASIC) professional register at connectonline.asic.gov.au. If you think you have a loan with a predatory lender, it's important to seek legal advice immediately (search for your nearest community legal centre at naclc.org.au).
  • get independent advice from a financial planner or financial counsellor.

Ask about credit card repayment protection

When you applied for a credit card, you may have taken out credit card repayment protection. This will help cover repayments if you're unable to work due to illness, permanent disability or death. There is usually a waiting period before you can make a claim.

There are conditions for using credit card repayment protection. Check your credit card statement or speak to your credit card provider to find out if these apply 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 it 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.

Check if the debt is 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. This 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 naclc.org.au, or ask your financial counsellor to refer you to a lawyer.

Don't ignore a statement of claim

If you don't file a formal response or appear at the hearing, the creditor can get a default judgment against you. This means that the court will order you to pay the money to the creditor.

If you don't pay, the creditor may be able to take (repossess) some of your income or assets and sell them to get the money you owe.

Ask 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 repayments 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 scheme, or if you are unsure.

Check that the statement of claim is genuine

Some 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.

Visit moneysmart.gov.au for more information.

Medical and pharmaceutical expenses

The Australian Government offers several benefits that can help you access medical treatments, tests, prescription medicines and other medical supplies at a lower cost.

Register for the Medicare Safety Net

A cancer diagnosis usually involves many medical appointments for tests and treatment. Medicare will usually contribute a certain amount towards these expenses, but you may 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 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 record of your expenses.

If you are a couple or family - you do need to register even if you are all listed on the same Medicare card. To download the registration form, visit humanservices.gov.au and type "medicare safety net" in the search box, or call Medicare on 132 011.

Get a PBS Safety Net card

The Pharmaceutical Benefits Scheme (PBS) subsidises the cost of most 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 have spent a certain amount on prescription medicines. This amount is known as the Safety Net threshold. It resets at the beginning of each year.

There are two PBS Safety Net thresholds - one for general patients and one for concession card holders. Once you or your family reach the threshold, you can get a PBS Safety Net card from your pharmacist. With this card, your medicines will be further discounted (or free if you also hold a concession card) for the rest of the year. Some medicines are not listed on the PBS - you will need to pay full price for these.

To obtain a PBS Safety Net card, keep a record of any PBS medicines you buy. You can use a Prescription Record Form, which you can get from your pharmacy. Your pharmacist might be able to keep a computer record for you, but if you visit different pharmacies, it is best to keep your own paper record.

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. For more information, visit pbs.gov.au.

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 practitioners, such as physiotherapists, podiatrists, dietitians and psychologists, to help manage your condition.

Under a Chronic Disease Management Plan, your doctor can refer you to at least two 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 Arrangement, and can then refer you to the allied health practitioners listed in the Team Care Arrangement.

Use your concession card

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

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

The concession card may also entitle you to free medicines once you reach the PBS Safety Net threshold, as well as further 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.

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 johnloganfoundation.com.au.

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. For more information, go to humanservices.gov.au.

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 get help with the cost of continence products under the Australian Government's Continence Aids Payment Scheme (CAPS). For most cancers, this payment is available only if you also hold a Pensioner Concession Card. 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. To find out more, call the National Continence Helpline on 1800 33 00 66. Visit bladderbowel.gov.au/caps to download the form and contact the CAPS team on 1800 239 309 for assistance completing it.

Be reimbursed for external breast prostheses

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 humanservices.gov.au to check if you're 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, after surgery for bowel or anal cancer you may need 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 are a member of 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 health.gov.au and type "stoma appliance scheme" into the search box, or visit the Australian Council of Stoma Associations at australianstoma.com.au.

Transport and accommodation costs

Having treatment for cancer can require a lot of travel to and from your medical appointments. If you live in a rural or regional area, there are several ways you can save money on travel costs.

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 include accommodation. In some cases, financial assistance may also be available if you need an escort or carer to travel with you to your treatment.

The eligibility rules are different for each state and territory. 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 subsidy schemes - they pay a part of your travel and accommodation costs, but you 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.

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 Cancer Council 13 11 20 or visit Cancer Council's Patient travel assistance schemes.

Use your Pensioner Concession Card

If you receive certain payments from the Department of Human Services (Centrelink), you will automatically receive a Pensioner Concession Card. This may mean you can get:

  • lower fares or free travel on public transport
  • reductions on car registration
  • assistance with electricity, gas, property and water rates.

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.

To see what concessions are available in your state or territory, visit the Australian Government's Government concessions.

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 Centrelink payment each fortnight.

You can check if you are eligible and submit an online claim by visiting humanservices.gov.au and typing "mobility allowance" in the search box. You can also call Centrelink on 132 717. 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 below). For further details, visit ato.gov.au, or ask a financial counsellor to help you.

Ask for interest charges to be reduced

The ATO 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 experiencing 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.

How to set up a payment plan with the ATO

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

Debt under $100,000: Use the online service

Visit my.gov.au and link your myGov account to the ATO. (myGov is a secure way to connect with various government services - you can create a new account if you don't have one already.)

Debt under $100,000: Call the automated phone service

Call 13 28 65 (individuals) or 13 72 26 (businesses) and follow the prompts. You can suggest a payment arrangement, and if this is accepted, the ATO will send you a confirmation letter within 15 days.

Debt over $100,000: Speak to a customer service officer

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.

Apply for a release of your tax debt

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

Use the debt release tool to work out if you are eligible to apply for a release of your tax debt and to access the application form. You will need to provide pay slips and bank statements. You can also call 13 11 42 to discuss other options.

Education expenses

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

Negotiate school fees

Fees are not compulsory in public schools, but it's a good idea to contact the school to discuss payment of school contributions. Many private and independent 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, get in touch with 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.

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 or pay by instalments.

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. The ATO may also ask you to provide details of your income and expenses, and a copy of your most recent pay slip.

To defer your HECS/HELP repayments, complete the application form (call 1300 650 225 or visit ato.gov.au), and return it to the ATO. If your application is successful, 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.

Apply for an education grant

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

Redkite provides grants to young people aged up to 24 years, visit redkite.org.au. Ronald McDonald House Charities offers the Charlie Bell Scholarship program to young people aged 15-20. Carers Australia provides the Young Carer Bursary Program to young people aged 12-25.

How to deal with financial stress

Financial issues are the leading cause of stress for Australians. 1 People with cancer have to manage the cost of treatment, but also the income lost from taking time off work. They may have difficulty balancing their budget, possibly for the first time in their lives, 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.

If you have continued feelings of sadness, have trouble getting up in the morning or have lost motivation to do things that previously gave you pleasure, you may be experiencing depression. This is quite common among people who have had cancer. Getting help with your finances can take a great weight off your mind, but if you are finding it hard to cope emotionally, there are several options to consider:

  • Talk to your GP, as counselling and/or medicine - even for a short time - may help. Some people can get a Medicare rebate for sessions with an accredited counsellor or a psychologist. Ask your doctor if you are eligible.
  • Check whether you can talk to a psychologist or social worker at your cancer care centre. Your local Cancer Council may also run a counselling program in your area.
  • Read Cancer Council's Emotions and Cancer.
  • To find information and support about coping with depression and anxiety, call beyondblue on 1300 22 4636 or visit beyondblue.org.au. For 24-hour crisis support, call Lifeline on 13 11 14 or visit lifeline.org.au.

Expert content reviewers:

Keith Manchester, Senior Legal Counsel, Financial Services Legal, AMP, NSW; Alka Bisen, Financial Counsellor and Project Coordinator – Financial Assistance Services, Cancer Council NSW; Patricia Dunn, Consumer; Emily Gibson, Social Worker, Mater Hospital Brisbane, QLD; Caitriona Nienaber, 13 11 20 Consultant, Cancer Council WA; Michelle Ruchin, Social Worker, Cancer Council SA; Robert Simon, Technical Services Manager, Tapln and Technical Strategy, AMP Advice, NSW; Krystyna Wisniewski, Consumer.

1. Australian Psychological Society, Stress and wellbeing in Australia survey 2015, Melbourne, 2015.

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