The Albanese Labor Government is committed to a strong financial counselling sector to ensure Australians who need support have greater pathways to access it.
The Government has partnered with the financial counselling sector and industry stakeholders to establish an independent body to oversee the Industry Funding Model for Financial Counselling.
The Financial Counselling Industry Fund will be responsible for collecting and distributing industry funding secured by the Albanese Labor Government, and will boost financial counselling services who assist Australians experiencing financial difficulty.
A total of $1.5 million is being invested to support the initial set up the Model’s oversight body which will have seven members, including former CEO of CHOICE Peter Kell, former ASIC Commissioner Greg Tanzer and current Deputy CEO of the Australian Banking Association Vanessa Beggs.
Under the new Industry Funding Model for Financial Counselling, the Government has secured agreement for three-year funding commitments from industry, totalling around $35 million.
This includes a $600,000 contribution by Optus as the Fund’s newest contributing member, with an MOU signed by the telco this week.
Industry funding is in addition to the almost $50 million per annum for financial counselling services that the Commonwealth provides, and around $30 million contributed annually from state and territory governments.
Approximately 125,000 face-to-face clients are helped each year by financial counsellors and more than 130,000 calls are made to the National Debt Helpline. Financial counsellors provide free and independent advice to vulnerable Australians in financial stress.
In response to the Hayne Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, a review into the coordination and funding of financial counselling services was undertaken by Louise Sylvan AM. It found funding is the largest impediment to more Australians in financial hardship being able to access financial counselling and that industry should help to meet the gap in unmet demand.
The Industry Funding Model for Financial Counselling was launched by the Government, industry and financial counselling sector in November last year.
Minister for Social Services Amanda Rishworth said the collaboration in establishing the Model and subsequent Fund will have an impact on the lives of vulnerable Australians.
“Our priority is to improve access to financial counselling services for Australians in need – and ensuring industry plays their part,” Minister Rishworth said.
“The Fund does exactly this – it works to receive and distribute voluntary industry contributions, to ensure the coordination of industry funding.
“We estimate the extra $11.7 million a year flowing to financial counselling services as a result of the Industry Funded Model could help around 30,000 people access services like face-to-face appointments with financial counsellors or the National Debt Helpline. I’m excited to see what impact it will have.”
The newly established, not-for-profit independent oversight body will be responsible for decisions regarding funding allocations and prioritisation.
Financial Counselling Australia has been tasked with establishing and implementing the new oversight body, in consultation with industry stakeholders, recognising the longstanding role the organisation has made to the development of the Industry Funded Model.
Chair of Financial Counselling Australia, Anne Crouch, said the oversight body and establishment of the Fund was an important step in improving access to financial counselling services.
“The Financial Counselling Industry Fund comes at a pivotal time in Australia. The demand on financial counselling services is increasing along with the rising cost of living and our sector must be funded appropriately, in order to meet those needs,” Ms Crouch said.
“FCA thanks all the participating industry organisations who are contributing to the fund. It will mean our sector is better equipped to assist people struggling with debt and financial hardship.”
Inaugural Chair of the Financial Counselling Industry Fund, Peter Kell, said the additional funding would see “thousands” more Australians in financial hardship get access to financial counselling services that will make a real difference to their lives
“The Financial Counselling Industry Fund is an innovative model that involves both the financial counselling sector and industry stakeholders. It has the potential to support much greater access to vital financial counselling services for the community,” Mr Kell said.
“The Fund will work with the financial counselling sector and industry participants to ensure this funding drives greater access to financial counselling right across Australia”.
Vice President Government and Regulatory Affairs at Optus, Andrew Sheridan, said the telco’s contribution to the new funding model would help support the vital work of financial counsellors.
“Optus is committed to keeping our vulnerable customers connected and protected. We also recognise the important role financial counsellors play in helping Australians impacted by financial hardship,” Mr Sheridan said.
“We are pleased to confirm our contribution to the new funding model which will support the vital work of financial counsellors and the services they provide to vulnerable Australians”.
The National Debt Helpline provides a single contact point for people to access financial counselling. Help is available on the National Debt Helpline website where individuals can chat online with a financial counsellor.
