Not all financial hardship is the same, and the distinction between temporary and long-term hardship affects how we assess a request and what arrangements are most appropriate.
Temporary hardship is a short-term financial difficulty caused by a specific, identifiable event — for example, a period of illness, an unexpected large expense, a temporary reduction in work hours, or a gap between jobs. The expectation is that circumstances will improve within a defined period and the debtor will be able to resume normal payments or pay in full once the event has passed.
For temporary hardship, common arrangements include:
- A short payment pause or moratorium (for example, one to three months).
- Reduced instalments for the period of difficulty, reverting to the full amount when circumstances improve.
- A short extension to a payment deadline.
Long-term hardship is an ongoing financial difficulty with no clear end date — for example, a permanent disability, a chronic illness affecting work capacity, long-term unemployment, or a fixed income that simply does not allow for meaningful debt repayment. The assessment is more detailed because the arrangement needs to be sustainable over a much longer period.
For long-term hardship, arrangements typically involve:
- A substantially reduced ongoing payment amount aligned with actual disposable income.
- A longer repayment term.
- Periodic reviews as circumstances are reassessed over time.
The National Debt Helpline (1800 007 007) can help you describe and document your hardship situation, which makes the assessment process faster and more likely to produce the right arrangement for you.
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