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For more than 2.1 million Aussies, the federal government’s COVID-19 support payments offered a lifeline through the latest pandemic lockdowns. Now they’re being wound back as vaccination rates increase. If your income has been affected, here are some tips and resources to help you manage the transition.
With life slowly returning to normal post-lockdown, emergency income support from the federal government is also ending. Once your state or territory reaches 80 per cent full vaccination, the commonwealth COVID-19 Disaster Payments will end. That’s been the case in NSW and Victoria since October.
If you were receiving the income support payment and you’re grappling with a sudden change to your income, here are a few things you can do to help manage your finances going forward.
1. Check your eligibility for other income support
The government is advising anyone who still needs income support to check their eligibility for other payments using the Services Australia Payment and Service Finder.
Unfortunately, while the economy is opening up, not all industries will bounce back at the same rate. Customer density limits mean some businesses won’t return to full capacity for some time. If your working hours or income are still affected, make sure to check whether you’re eligible for any other federal income support.
2. Give your finances a health check
To get by on less income, you’ll need to have a good grasp on what’s coming and going. You can start by doing an audit of your spending. Go through a few months’ worth of debit and credit card transactions, bills and invoices. See how your income stacks up again your spending. Are there any areas where you could cut back? Think about the changes you might need to make, even in the short term, to see you through the coming months.
Once you’ve audited your spending, use an online budgeting tool, like this one from MoneySmart, or a spreadsheet to create a realistic budget. Include all of your essential and discretionary expenses. Also make sure to include a line item for savings; that’s to help boost your emergency fund in case of future uncertainty. There are lots of methods of budgeting, so if one doesn’t work for you, keep trying until you find a method you like.
If you’ve cut back on your spending and you’re still struggling to pay your bills on time, take action quickly. A growing pile of bills can feel very stressful, but there is help at hand. You can always negotiate a different repayment arrangement with your vendors, or simply find a better deal.
You can also get help from the COVID-19 Hardship support hotline. This confidential, free service is available to any Australian who has been financially affected by COVID-19.
Finally, build your emergency fund and start investing for the future. You can give your savings a boost by using the power of compound interest, or if you’re willing to take on some risk, through investment.
If you have any worries at all about making ends meet, seek the help of a financial counsellor to help you get back on your feet.