Reducing disability stress (Debt Relief)

Danny had to give up work some years ago, on advice from his doctor. Solvents that were part of his work environment were causing health issues. Before he left work there was not enough time to pay off a couple of debts: a credit card and a finance company loan. His damaged health and subsequent incapacity for paid employment meant he had to cope with a major shift in lifestyle.

With the change from a full-time wage to a welfare benefit,Danny made little progress in reducing his debts as he was only able to make the minimum required payments. His Budgeting Advisor (BA) reports that the debt has hardly reduced over the last couple of years. However, he has now become anxious about the debt, adding stress to his health issues, as he cannot see any way to change his situation. Danny religiously makes the repayments. Work and Income have helped by giving a Temporary Additional Support (TAS) supplement to assist in meeting his debt commitments, but with the current repayment schedule he will never be free of the debts. The situation fails to serve either Danny or Work and Income.

Danny’s BA applied for a Debt Relief loan in March 2015, and the application was approved. Now Danny is watching the debt reducing and he can see the ‘light at the end of the tunnel.’ His two debts have been consolidated into one and the repayments are coming straight out of his benefit. This has made an enormous difference in terms of reducing his stress.

He is not having to worry about the repayments at all. The BA says Danny is looking and feeling much better. His stress is relieved, and he finally feels he has control of his finances, and some control of his future.

Note: all names including those of the loan companies have been changed. Any re-publishing of these case studies need the permission of Ngā Tāngata Microfinance Ltd.

Danny’s weekly budget prior:

Income
Supported living payment$261.31
Accommodation Supplement$100.00
Disability Allowance$1.00
TAS$41.68
$404
Expenditure & Debt
Work and income$7.50
Rent$245
Groceries$70
Power$20
Medical$5
Clothing$6.50
Phone$15
Credit card$20
Finance Co$15
$404

After the DRLS was granted the TAS reduced and repayments were set at $19.50 per week.