Your Rights During Financial Hardship in Australia

Can't keep up with your bills? You're not alone — and you have more legal protection than most people realise. Here's what the law says companies must do when you're doing it tough.

What does "financial hardship" actually mean?

In Australian law, financial hardship means you genuinely want to meet your financial obligations but you're unable to do so right now. That might be because of a job loss, illness, relationship breakdown, or any other unexpected life event.

The important word is "genuinely." You don't have to be broke or homeless. If you're struggling to pay a bill because of circumstances outside your control, that's enough to trigger your legal rights.

Financial hardship protections apply across a range of services — including home loans and personal loans, energy bills, and phone plans. Each area has its own rules, but the common thread is the same: companies are legally required to work with you.

Your rights with banks and lenders

If you have a home loan, personal loan, or credit card with a bank or finance company, you're protected by the National Consumer Credit Protection Act 2009 and the rules that sit underneath it — specifically what's known as the National Credit Code (a set of legally binding rules about how lenders must treat borrowers).

Say you've missed two mortgage repayments and your bank calls you. Under the National Credit Code, you have the right to formally ask for a hardship arrangement. This is called a hardship variation — a change to your loan terms to make it easier to manage while you're doing it tough.

You can ask for things like:

• A temporary pause on repayments (sometimes called a repayment holiday)
• Reduced repayments for a set period
• An extension of your loan term so each payment is smaller

Your lender must acknowledge your request promptly and give you a decision within a reasonable timeframe. They can't just ignore you.

What lenders cannot do while your request is being assessed

Once you've formally asked for a hardship arrangement, your lender is not supposed to take certain enforcement actions against you while they're considering your request. This includes things like starting legal proceedings to recover the debt or repossessing your property.

This protection isn't a blank cheque — it applies while the assessment is genuinely underway, not indefinitely. But it does give you breathing room to have the conversation without the threat of immediate action hanging over you.

If a lender refuses to pause enforcement action while your hardship request is in progress, that's worth raising with ASIC (the Australian Securities and Investments Commission — the government body that regulates credit and financial products) or AFCA (the Australian Financial Complaints Authority — the free external dispute resolution body for financial complaints).

Your rights with energy companies

Struggling to pay your electricity or gas bill? Energy retailers in most states and territories are bound by the National Energy Customer Framework — a set of rules (often just called the NECF) that sets out exactly what energy companies must do when a customer is in hardship.

The NECF applies in Queensland, New South Wales, the Australian Capital Territory, South Australia, and Tasmania. Western Australia and the Northern Territory have their own separate rules, but similar protections generally exist there too.

Under the NECF, your energy retailer must have a formal hardship program. If you're in hardship, they must:

• Tell you about the hardship program and offer to enrol you
• Give you access to flexible payment plans
• Connect you with government concessions and grants you might be eligible for
• Not disconnect you while you're engaged with their hardship program and keeping to the agreed plan

The key word is "engaged." Staying in contact with your retailer — even if you can't pay in full — is what keeps the protections active.

Your rights with phone and internet companies

Telcos — phone and internet providers — operate under industry codes regulated by ACMA (the Australian Communications and Media Authority — the government body that oversees communications services). The main one is the Telecommunications Consumer Protections Code, which sets out how providers must treat customers who are doing it tough.

Under these rules, your telco must:

• Have a financial hardship policy and make it easy to find
• Assess your situation when you contact them about hardship
• Offer options like deferred payments, payment plans, or reduced services
• Not suspend or disconnect your service while your hardship application is being assessed, in many circumstances

Phone and internet access is essential — especially for job hunting, health appointments, and staying connected to family. The rules reflect that.

Who regulates all of this?

It helps to know who's who. Here are the key bodies:

• ASIC (the Australian Securities and Investments Commission) — regulates banks, lenders, and financial products. If a lender isn't following the National Credit Code, ASIC is the body to report it to.
• AFCA (the Australian Financial Complaints Authority) — a free, independent service for resolving complaints about banks, insurance companies, and other financial firms. If your hardship request is refused, AFCA can review the decision.
• Energy ombudsman services — each state and territory has its own energy ombudsman. For example, EWON (the Energy and Water Ombudsman NSW) handles complaints in New South Wales. Search for the ombudsman in your state.
• TIO (the Telecommunications Industry Ombudsman) — handles complaints about phone and internet providers. Free to use, independent, and has the power to direct telcos to fix problems.

What if your hardship request is refused?

If a lender or utility refuses your hardship request, you don't have to accept that as final. First, ask them to explain the decision in writing. Then, ask for an internal review — most companies have a process for reviewing their own decisions at a higher level.

If that doesn't work, you can escalate to the relevant external body — AFCA for financial products, your state's energy ombudsman for electricity and gas, or the TIO for phone and internet. These services are free to use and the companies involved are legally required to participate.

A free financial counsellor can also help. They're trained to negotiate with creditors on your behalf and know exactly what rights apply to your situation. You can find one through the National Debt Helpline at ndh.org.au or by calling 1800 007 007.

A few things worth knowing before you call

When you contact a company about hardship, be ready to briefly explain your situation. You don't need to share every detail — just enough to show the hardship is real. "I've lost my job and I'm struggling to make repayments" is enough to start the process.

Keep notes of every conversation — the date, who you spoke to, and what was said. If things escalate to a formal complaint, this record is valuable.

And remember: the earlier you reach out, the more options you'll have. Companies generally have more flexibility before accounts fall seriously overdue.