Low-income households face increasing financial stress due to a ‘perfect storm’ of stagnant wage growth, inadequate income support payments, housing stress, rising energy costs, and high household debt levels. Almost two-thirds of low-income households experienced financial stress in 2015-16. Compared with 2009-10, low-income households are spending higher proportions of their income on essentials such as housing, food and energy. Half of all households reliant on income support report four or more financial stress indicators, such as not being able to pay bills on time or raise emergency funds.
While financial literacy and capability programs are only one factor in achieving financial wellbeing, they help reduce vulnerability to financial stress and other problems, such as family violence.
This submission outlines some issues raised by VCOSS members in response to the consultation paper.