THE most disadvantaged people are at risk of falling into further hardship following the State Government’s decision to cut financial counselling funding, according to a leading welfare provider.
Financial counselling is a free service offered to people who are struggling to pay debts and manage their money.
The State Government plans to stop funding the service in metropolitan areas by September 30 and save at least $6 million over the next four years.
But WA Council of Social Service (WACOSS) chief executive Irina Cattalini said the cuts had come at a time when the service was needed more than ever.
“The WA economy is slowing, unemployment is rising and increasing numbers of households are finding themselves in financial difficulties,” she said.
“The council called on the State Government to progressively shift investment from the most expensive, acute-end services, towards services which intervene early to prevent entrenched disadvantage. This decision flies in the face of this recommendation.”
WACOSS asked the State to invest $1.5 million into financial counselling services in its 2015-16 pre-budget submission so it could respond to long waiting lists and deal with the increased complexity of debt experienced by low-income households.
Ms Cattalini said for every one dollar invested in financial counselling, there was a direct saving to the government of five dollars.
Child Protection Minister Helen Morton said the department had to use funding to focus on services that promote safety and wellbeing of at-risk children and families, with the aim to prevent children coming into care.
“However, the Financial Counsellors Association of Western Australia (FCAWA) helpline will expand and increase its focus on metropolitan clients,” she said.
The helpline provides a financial counselling service over the phone. A web-chat option for clients is also being trailed.
Ms Morton said vulnerable people experiencing financial hardship could still access support, including no-interest loans for families and individuals on low incomes, or Centrelink income support for essential household goods and services. Hardship Utility Grant Scheme funding could also be accessed without seeing a counsellor.
“The overall saving from ending contracts for financial counselling will be at least $14.8 million over four years,” she said.
Regional financial counsellors will be funded for an additional 12 months.