When the ends won’t meet – new research on the financial crisis impacting lower income families

New research by the Brotherhood of St. Laurence (BSL), Making ends meet: fostering security and dignity in tough times, has shed light on the compounding financial crises impacting lower income households and their economic security.

For the study, the co-authors interviewed over 40 low to middle-income people across Victoria who were then asked to complete detailed financial diaries over a 10 week period. The research examined how the cost-of-living crisis coupled with the lingering effects of the pandemic has collided with the long-term drivers of financial stress.

To better understand financial stress in times of crisis, the study analysed income, credit and debt, day to day money management and subjective feelings of financial wellbeing. The research shows that people trapped in poverty and insecurity are unable to budget their way out of financial crisis, despite their best efforts. The impact of these shocks on the most vulnerable can be viewed as an ongoing crisis that has been decades in the making.

The study found that housing insecurity was common among participants, with some living in fear of losing their homes and others having to live in unsuitable accommodation at a significant emotional and physical cost. Almost half of the renters in the study had been unable to pay rent on time in the past 12 months.

Low and uncertain incomes, resulting from low wages, unpredictable work hours, unreliable child support and inadequate social security, created significant stress for participants, leaving families struggling to make ends meet.

Making ends meet also found that:

• Over the 10-week survey period, 27 of 43 participants reported borrowing money or delaying paying a bill
• Over half of those employed reported that their income varied at least once during the 10-week survey period
• Income support payments have not kept up with the rising cost of essentials, leaving recipients struggling to afford the basics, cutting back on food or heating, rationing medication or taking on debt
• Complex requirements and confusing administrative arrangements when accessing social security payments lead to confusion and the risk of debts for many participants

BSL is calling for bold and meaningful policy changes to ensure that the foundations of economic security – affordable housing, decent work and a fair and adequate social safety net – enable all people in Australia to live with security and dignity.

Immediate reform options to address the drivers of economic insecurity include:

• Investing in housing affordability and protections, including national rental standards with stronger protections for vulnerable renters in the private market, and urgently reviewing the adequacy of Commonwealth Rent Assistance payments
• Supporting people to gain secure employment – specifically rebuilding the broken employment services system, building on the momentum of the Rebuilding employment services report recommendations
• Removing traps in the social security and family assistance systems by increasing Jobseeker and related working-age payments, significantly decreasing newly arrived resident’s waiting period for welfare payments (currently four years) and removing barriers and expanding eligibility for the Disability Support Pension

“This research highlights the daily battle low and middle-income families face to try and make ends meet, often to the detriment of their mental and physical health,” said Dr Dina Bowman lead-author of the Making ends meet report.

“The cost-of-living crisis coupled with the aftershocks of the pandemic has caused a financial disaster for our most vulnerable that has been decades in the making. Now is the time for bold and urgent policy reform to ensure support and change for the people that need it most,” she said.

 To read the full Making ends meet report, visit www.bsl.org.au/research/our-research-and-policy-work/projects/making-ends-meet/

Making ends meet data was collected in late 2022, with analysis completed in 2023.

For media enquiries:
Steph Jones,
BSL Communications and Media Manager
0482 163 395