Hardship Loan Centrelink

Centrelink gives special grants and loans to people whenever they’re going through a challenging financial situation and needs something to tide them over, called hardship loans. Here are all the aspects you need to know about these loans.

What Is a Hardship Loan?

hardship loans centrelink

A hardship loan is granted based on the person’s need for financial aid due to a certain hardship. The waiting period for loans on benefits may be reduced or completely waived if the person applying meets the hardship criteria.

What Is Considered a Hardship?

There are plenty of things that make someone eligible, including national health emergencies, extreme domestic violence or family circumstances, humanitarian entrants, release from prison or psychiatric confinement, and other extreme circumstances.

To be eligible, you have to be in severe financial hardship, be eligible or already receive income support or a living allowance, or be going through an extreme situation.

Who Is Eligible For a Hardship Payment?

There are several extreme circumstances that make someone eligible for a payment, including the following:

  • If someone under your care has entered self-isolation or quarantine as an effect of COVID-19
  • If there’s an incident in the family and domestic abuse
  • If your house has to be evacuated due to a natural disaster or other disasters that the disaster relief payment doesn’t cover
  • You’ve entered Australia for the first time as a Humanitarian Entrant
  • After release from psychiatric confinement or prison

Who Can Apply?

If what you have in liquidity doesn’t meet the set amount you need to handle the financial situation or if you’ve had to spend money on something unavoidable or with unreasonable amounts, you’ll be considered in severe financial hardship. Taking in your costs of living, you could very well be eligible to get a reduced waiting period or even no waiting period at all for your financial hardship.

A liquid asset is considered any funds that are readily available for your or your partner’s (if any) disposal. If your maximum fortnightly payment, including pharmaceutical allowance and rent assistance, exceeds your liquid assets if you’re single. Or your liquid assets are less than twice your maximum fortnightly payment if you’re in a couple, then your situation will be categorised as a severe financial hardship when applying for centrelink laptop loans.

What Are the Types of Payments Available?

hardship centrelink loan

There are plenty of payments that are granted for people in crisis situations or extreme circumstances, which include:

Additional Child Care Subsidy: This is given for temporary financial distress and is targeted at helping with the costs of caring for a child.

Crisis Payment: This is a one-off payment granted for those going through extreme circumstances of financial hardship.

Carer Adjustment Payment: This one-off payment is given to the carers of children under 7 if they have major disabilities or severe illnesses that occurred due to a significant catastrophe.

Pension Loans Scheme: This is a payment given biweekly as a virtue of owned equity in Australian real estate assets.

Advance Lump-sum Payment: A grant you can get if you already receive income support payments.

Special Benefit: This is given to those who care for and provide support for dependents and is provided if you don’t get any other income payments or benefits.

How Are the Expenses/Income Calculated for Judgement?

hardship centrelink loans

When you apply for a hardship emergency loans for unemployed single mothers, you’ll need to provide receipts of your various expenses as well as any sources of income you have. Then, they’re examined for any unreasonable or unavoidable expenses, including:

  • A waiting period for a liquid asset
  • Maintenance period for an income
  • Preclusion period for seasonal work

The expenses taken into consideration are as follows:

  • If any essential white goods around your house need repair or replacement
  • Essential car repairs or home repairs
  • Essential costs of medical treatment
  • Paying for schooling
  • Registration of a vehicle (motorbike, car, etc.)
  • Costs associated with children (giving birth, adoption, etc.)
  • Insurance premiums on a home or vehicle
  • Essential household good in the case that they were stolen or lost as a result of a natural disaster

While the expenses that aren’t taken into consideration are as follows:

  • Instant cash payday loans repayment or lump-sum early repayments of credit cards and mortgage
  • Costs associated with a holiday
  • Non-essential pieces of furniture, such as patio furniture and outdoor settings
  • Costs of entertainment
  • The installation or purchase of a swimming pool
  • Costs associated with driveways, including paving it

What Are the Things Considered in the Reasonable Costs of Living?

crisis centrelink loan

The following are the costs that are taken into consideration when calculating the income and the eligibility of a person for a Centrelink hardship loan:

  • Costs of food and nutrition
  • Payments of mortgage or rent
  • Regular costs of medical treatments
  • Costs of sewage, water, and rates
  • Costs of electricity, gas, and telephone
  • Costs of public transportation
  • Costs of providing your vehicle with petrol

Illustrative Example

crisis centrelink loans

A person might have, for example, $9,000 in savings after finishing a job, and they request a JobSeeker payment with a 6-week waiting period for liquid assets. Then, they have to make a $1,400 payment to replace car tyres and $1,200 for registration; this reduces their liquid assets to $6,400.

However, this amount still exceeds the maximum fortnightly rate for a single person’s threshold to get a Jobseeker Payment, and that’s why they’re not categorised as a person with severe financial hardship for receiving a business loan. They’d have to wait for the 6-week period to be over.

If that person communicates 4 weeks later that they’ve had a car accident, paid $5,200 on repairs and had expenses that add up to $1,000 on costs of living, then this person has to live on less than $200. This is considered a severe financial hardship, which results in the reduction of the waiting period starting from the date on which the person communicated their hardship.

Final Thoughts

If you’re going through a very rough patch in terms of handling your finances, have had to make extremely hefty car loans for people on centrelink payments, or have experienced exceptional circumstances, you can use the Centrelink hardship loan to navigate the situation. 

Ensure that you apply as soon as you realise that the eligibility criteria fit you, so your reduction or waiving of the waiting period to receive centrelink student loans can be granted as soon as possible.

About the Author

Lucy has over a decade of experience in finance. She is currently the content curator here at Perfect Payday.

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