If you’re having difficulty paying your debts, you may want to consider ways to supplement your income.
Topics on this page:
- Centrelink benefits
- No interest loans
- Insurance claims
- Property and other assets
- Compensation for work-related cancer
- Planning for the future
No interest loans
No Interest Loan Schemes (NILS) are for people on a low income who are unable to qualify for other affordable finance and who need a household item to improve their health or wellbeing. The loan is typically between $300 and $1200, and might be used for whitegoods, furniture, medical appliances or other essential items. Generally you must be able to repay the loan over 12–18 months.
NILS loans are provided by a number of charitable organisations.
To find NILS providers, visit Good Shepherd Microfinance at nils.com.au/find, or call 13 NILS (13 64 57).
It’s important to make insurance claims as soon as possible because there may be time limits that apply to making a claim. Consider all of your insurance policies, including:
- income protection insurance
- private health insurance
- travel insurance
- trauma insurance
- consumer credit insurance
- total and permanent disability (TPD) insurance
- mortgage insurance
- life insurance.
If you are not sure whether you are covered, contact the insurer. If you think you should be covered but your claim is denied, you can get in touch with the Financial Ombudsman Service. You can also call Cancer Council 13 11 20 to see whether we can connect you with a lawyer for assistance.
Insurance attached to superannuation
People often don’t realise that they may have insurance attached to their superannuation. Many industry superannuation funds, as well as some retail funds, offer insurance by default. In many cases, you will be covered as long as you did not choose to ‘opt out’.
Common types of insurance provided through superannuation funds include:
- income protection insurance – usually paid as an income stream
- total and permanent disability (TPD) insurance – usually paid as a lump sum
- life insurance (may be called death cover) – usually paid as a lump sum, but you may need to be aware of time frames (see next section).
To find out whether you are covered and whether your situation entitles you to make a claim, check your statements and contact your superannuation fund.
In Australia, you usually need to be at least 55 years old and retired before you are allowed to access your superannuation (super). However, you can apply to access some or all of your super early in particular circumstances, such as if you need to pay for medical treatment or are facing severe financial hardship. How you can do this will vary according to your age.
Aged 65 or over, or aged 55–64 and permanently retired – You can access your super as a lump sum or as an income stream.
Aged 55–64 and still working – You can access your super as an income stream to top up your salary, but you cannot access it as a lump sum. You can receive a maximum of 10% of your super account balance each year.
Aged under 55 – You can access your super early only in certain circumstances, including:
- if you need the money to pay for medical treatment, or transport to and from medical treatment for yourself or a dependant
- if you need the money for home loan repayments to prevent the bank selling your house to pay off the debt (foreclosure)
- if you have to make home modifications for your disability
- if you need to pay palliative care, funeral, burial or cremation costs
- if you have a terminal illness with a life expectancy of two years or less
- if you are unable to ever return to work
- if you have been receiving a Centrelink payment for 26 weeks continuously and you cannot pay your living expenses.
To access super early, you will need to apply to the Department of Human Services or directly to your super fund, depending on why you are applying. There are also tax issues to consider. To find out more, download Cancer Council’s Superannuation and cancer fact sheet, or call Cancer Council 13 11 20.
Super, insurance and terminal illness
Many people have various types of insurance automatically attached to their super accounts (see above section). The premiums for this insurance are often deducted directly from the super’s lump sum (preserved amount). If you withdraw all your super, you will no longer be up to date with the insurance premiums, so your insurance cover may be cancelled.
People accessing super early because of a terminal illness might also be able to claim on their super’s life insurance. However, this insurance may use a different time frame to the super.
The law allows people to withdraw all their super if life expectancy is two years or less. Many life insurance policies allow payouts only when life expectancy is one year or less. If someone has already withdrawn all their super, they may no longer be covered by the life insurance and might not be able to make a claim.
Before you decide to access your super early, make sure you have investigated the impact on your insurance entitlements. You may be able to leave some of your super in the fund so the insurance premiums continue to be paid. If you are in any doubt, talk to your insurer or to a financial planner.
Property and other assets
You may be able to sell an asset, such as a house, car or investments, to give you more cash to meet expenses or repay debts. It’s a good idea to speak to a financial planner about which assets to try to keep and which to sell or convert into cash. If you are considering selling an asset, such as property or shares, or cashing in superannuation or other similar policies, make sure you get advice that explains tax issues and maximises your return.
If a lender has a court order allowing them to sell your property to recover a debt, ask them in writing to postpone enforcement of the order so that you can sell your asset privately. You will probably get a better price if you arrange the sale yourself or through an agent.
Planning for the future
If you have been diagnosed with cancer, you may wish to consider your wishes for future care. This is called advance care planning, and it can be started at any stage, whether you are healthy or ill.
Advance care planning mainly relates to your future medical care. but it can also involve appointing a trusted person to make financial and legal decisions for you if you are unable to make them yourself at some point in the future. The documents for appointing this substitute decision-maker may be called a power of attorney, enduring power of attorney or advance care directive.