‘Crippling’ debt: Struggling households Owe $37 million as Covid hits economy
Papamoa Family Services manager Janice Belgrave said the service was frequently seeing people who had lost employment with the impact of Covid-19. The situation was compounded by the “financially crippling” costs of housing, she said.
“Rental costs are crippling for people. We are working more frequently now with people who lost employment as a result of the economic impact of the Covid virus on our communities.
“We also have families who have lost both incomes in recent months and have been using credit cards to purchase food, which they expected to have been able to repay when they secured employment again.
“But with the new jobs not being forthcoming they now have a credit card debt compounding their financial difficulties.
“People who have lost their jobs have in the past had a buffer to fall back on. We are finding that people in these circumstances have used their buffer and are waiting until they have nothing left and no other options before they come and seek financial mentoring support.
“For those whose Covid-related wage subsidy is coming to an end, we anticipate that Christmas will be a challenging time.”
Belgrave said the most pressing need for many families was food.
“Purchase of food is often the only part of the budget that can be changed when the demand for debt repayment or other things are more pressing.
“Food is one way we can support our clients so they can meet their other financial responsibilities.”
In the three months from July 1 to September 30 this year, the service’s clients had resolved or repaid $19,663.54.
In the year to June 30, a total of $86,427.21 debt had been repaid or resolved.
Belgrave said the high debt figures were “very concerning”, especially heading into Christmas.
The Priority One Economic Monitor also showed the total food parcel numbers issued by Tauranga Foodbank for September rose over 100 to 514, and 75 new clients registered.
Tauranga Community Foodbank manager Nicki Goodwin said many required more permanent help than just the one-off food parcel and were
referred to the budget advisory service.
Salvation Army community ministries director in Tauranga, Davina
Plummer, said they were seeing continued trends of pressure on housing, food and living costs on people on medium to low incomes and pensioners/beneficiaries.
“We provide social support, advice, emergency food clothing, furniture, counselling, social work and advocacy, parenting courses and the Positive Lifestyle Programme.
“We have 21 transitional houses, soon to increase to 29.”
Plummer said their current financial mentoring met the needs of existing clients and they were recruiting another part-time financial mentor to respond to the demand for financial support.
Priority One chief executive Nigel Tutt said uncertain economic times and potentially changing circumstances meant people will be more concerned about debt.
“While unemployment in the Western Bay hasn’t increased by a large amount in recent months, we expect that some households will be affected by fewer [work] hours and less part-time work.”