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Poverty in Australia

What is poverty in Australia?

Poverty is defined as having a lack of money for immediate basic needs – such as food, housing, clothing – and for long-term savings or wealth.

There are over three million Australians living in poverty (ACOSS and UNSW ‘Poverty in Australia’). Recent research into Salvation Army clients accessing emergency assistance (that is, help with life’s essentials) in November 2020 to January 2021 revealed a single person was left with $7.50 per day to live on, after paying housing costs.

In practical terms, someone living in poverty or experiencing financial hardship may:

  • Be struggling with debt
  • Find it difficult to pay their rent or mortgage
  • Not pay household bills such as electricity, water, internet, phone
  • Be unable to buy fresh or healthy food
  • Be unable to afford medication or medical treatments
  • Be unable to heat or cool their home
  • Avoid social situations due to financial constraints
  • Be unable to buy new clothes or school supplies
  • Be unable to afford necessary repairs for their house or car

Find out about The Salvation Army's role in Anti-Poverty Week.
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What is the difference between poverty and financial hardship?

Poverty refers to the poverty line, as defined by individual countries. The poverty line in Australia is generally defined as 50 per cent of median household income. In 2017-2018, this was $457 a week for a single adult, $731 for a sole parent with two children or $960 for a couple with two children. If someone is earning less than these amounts (including a government income), they are below the poverty line.

However, if a person cannot meet their basic physical needs (somewhere safe to sleep, food and electricity) then they are living in poverty no matter what measure is used.

Someone experiencing financial hardship refers to someone finding it difficult to keep up with their bills and other payments. This includes struggling with paying rent or mortgage, utility bills, credit cards and other loans, school expenses and/or insurance premiums or claims excesses (health, car, life, home).

What causes poverty or financial hardship?

There are lots of reasons why someone may find themselves facing money problems. Illnesses, job losses, global economic impacts, the rising costs of housing, sudden changes to family circumstances or natural disasters can all lead to financial hardship.

At The Salvation Army, we also see a lot of victim-survivors of family and domestic violence experiencing poverty after escaping. Read the story of Diya, who escaped domestic violence in serious debt but found support through the Salvos.

When someone is experiencing financial hardship and they do not seek help early to get on top of their money problems, it can spiral into a situation of poverty and homelessness.

Who is experiencing financial hardship or money problems?

The largest age group below the poverty line in 2017-18 was of working age – 25-64 years at 45 per cent.

However, children and young people also represent a large number of people living in poverty: one in six are living in poverty. Almost 1.2 million Australians under the age of 24 are living in poverty.

According to a report by ACOSS and UNSW Sydney, women are more likely to live in households below the poverty line than men (14 per cent for women and 13 per cent for men). The poverty rate for households with a female reference person or main earner is almost twice as high as when the main earner is male (19 per cent versus 10 per cent, respectively).

The Salvation Army has also found an increase in certain population groups accessing its urgent financial assistance (Doorways emergency relief) from 2020 to 2021:

  • People who are working: nine per cent of clients, an increase from three per cent
  • International students: 17 per cent of clients, an increase from two per cent
  • People aged 18-24: 14 per cent of clients, an increase from eight per cent

Source: ‘Anti-Poverty Week 2021’, The Salvation Army Research and Outcomes Measurement Team – PRSJ

What impacts do people in poverty experience?

Mental health, social isolation and loneliness affect many Australians however these issues are highly prevalent among people experiencing poverty.

Of those surveyed in The Salvation Army’s Social Justice Stocktake (covering 151 electoral areas and almost 15,000 Australians), 54 per cent said mental health is a major issue for them. ‘Social isolation and loneliness’ was also rated as a significant issue for one in five.

Specifically, of those seeking assistance from Doorways (urgent financial assistance and emergency relief), one in six had health issues – including mental health issues. Of those seeking assistance from Moneycare (financial counselling and coaching), 32 per cent had a probable serious mental illness and 37 per cent had below normal levels of personal wellbeing scores.

For children, growing up in poverty can limit their chances of thriving at school. This in turn affects their potential and limits overall life outcomes, continuing the cycle of disadvantage.

How has COVID-19 impacted poverty and financial hardship in Australia?

In the early stages of the global pandemic, there was government support, deferrals from the banks and utility providers, and moratoriums on evictions. This led to a temporary drop in the number of people reaching a point of financial stress. However, everyone thought the lockdowns were going to be much shorter.

As the government subsidies dried up and the banks and utility providers eased off deferrals, the levels of debt returned. And in fact, many people found themselves in greater debt as the interest kept accumulating even when they were temporarily relieved from the payments.

As a result, The Salvation Army found in the first four months of 2021 (January to April), our Moneycare financial services provided more than 1900 additional sessions of counselling than in the same time period for 2020 [source: The Salvation Army, SAMIS client data 2021 and EMC data summary report June 2021].

Even before COVID-19, 35 per cent of Australians found dealing with their finances overwhelming.

Across the country as a result of COVID-19, Australians struggle with financial confidence [source: ‘Australia Now’, 6 August 2021, Quantum Market Research]. One in two experience some form of bill stress, with two-thirds of 18-29-year-olds struggling to pay at least one bill.

Females are also more likely than males (54 per cent compared to 47 per cent) to be struggling with bills. Family households are also significantly more likely to be under pressure (61 per cent struggling to pay bills).

How is The Salvation Army helping people in poverty and financial hardship?

For over 140 years, The Salvation Army has been coming alongside Australians facing hardship and crisis with support and care.

Through our local financial assistance service – Doorways we meet people’s basic needs such as food or household bills.

In the 2020/21 financial year, more than 121,600 unique individuals accessed The Salvation Army’s Doorways service. This is an increase of over 4300 from the previous year.
Source: ‘Anti-Poverty Week 2021’, The Salvation Army Research and Outcomes Measurement Team – PRSJ

Pleasingly, out of over 1000 surveyed respondents who had engaged with Doorways emergency relief, over 80 per cent said the assistance from Doorways helped provide food for their families, gave an increased sense of hope, and led to less stress and anxiety. More than half also reported they were able to pay their rent and bills (55 per cent) and 62 per cent said they were helped to manage their budget.

The Salvation Army also offers a free financial counselling service called Moneycare. Our professional counsellors help people manage their debt and loans, and offer support with budgeting.

In the 2020/21 financial year, over 54,000 financial counselling sessions were provided by Moneycare to almost 13,000 individuals.

Salvation Army survey respondents who were supported by Moneycare showed a significant improvement in their:

  • Ability to meet living expenses
  • Ability to repay debts
  • Capacity to raise emergency funds ($2000) in a week
  • Financial knowledge and behaviour
  • Personal wellbeing

Source: Anti-Poverty Week 2021, The Salvation Army Research and Outcomes Measurement Team – PRSJ

The Salvation Army Moneycare National Facilitator, Tony Devlin, is pleased to see these increases in people’s wellbeing as a result of engaging with Moneycare.

“We’ve helped people build social capital,” he says. “Building social capital is encouraging people to become connected to community and, in doing so, having people to go to when you’re in trouble, for serious support, or just a phone call and a bit of support. It’s having individuals in your life, and also groups in your life that bring connection.

“We are so pleased to see substantial increases in people’s mental health, their sense of wellness, after they have connected with Moneycare,” he adds. “We suspect that often our financial counsellors are the first helper that people reach out to when they are under financial stress.

“What they find when they come to us is someone who listens and wants to help them in a holistic, non-judgmental manner. By the end of the session, they can see some light at the end of the tunnel. We suspect that relieves a great deal of pressure, quite quickly. We are really encouraged that there is such an increase in people’s mental outlook after coming to Moneycare.”

What help is there for people experiencing poverty or financial hardship?

If you or someone you know is experiencing poverty or financial hardship, please contact us today for urgent financial assistance. Our Salvation Army financial assistance Doorways team is able to support you with meeting your basic needs.

To take proactive steps and get on top of your finances today, please contact our Moneycare financial counselling team or access our free resources. We also can support you with access to the No Interest Loans Scheme.

To find out which Salvation Army service is right for you and your situation, complete our quick quiz or learn more about each service.

What can Australians do about poverty?

  • As a nation, we can ensure that welfare levels match the actual cost of living and looking for work. Importantly, we also need to make sure they never fall below the level where a person reliant on them can live with dignity.
  • As a nation, we can keep our responsible lending laws and we can also regulate the short-term credit industry and increase protections against predatory lending practices.
  • As individuals, we can recognise that hard times can come to anyone and that no one chooses to find themselves without sufficient income. We can fight against the stigma of seeking help by accessing and promoting services like financial counselling and emergency relief services.

Read more in A Pathway to Social Justice.

We can all work together to help people experiencing poverty and financial crisis. You can speak out for financial freedom for all Australians. And you can have a conversation with your family, friends or community to let them know The Salvation Army Moneycare can help people facing money problems early on – before poverty hits.

What other resources exist for people experiencing poverty or financial hardship?

Moneycare Financial Counselling Line – to access financial counselling call 1800 722 363

Australian Financial Complaints Services – complaints and disputes related to financial services

Moneysmart – for free financial tips and resources

Ask Izzy – for a location-based search tool for a variety of services

National Debt Helpline – support with your debt

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