Families reduce heating, food, to pay bills

A growing number of people can no longer afford to heat their homes or buy food says one of the upper North Island’s largest social service providers Presbyterian Support Northern (PSN).

PSN Social Services GM Grenville Hendricks says that after paying the mortgage or rent, keeping up with debt repayments and paying power, water, and fuel bills, there is simply nothing left.

“People across the board are under pressure with many living from week to week. This includes those in work, an increasing number of people under mortgage stress, renters struggling with high rents, single parents, and couples.

“The only financial flexibility they have is to limit the amount of power they use for heating, slash their food budget or make a KiwiSaver financial hardship application. This exacerbates whatever other stress they are dealing with.

“Our budgeting mentors are seeing more people make second and third KiwiSaver financial hardship withdrawals to the point that they are now running out of funds to withdraw.”

Hendricks says people are entitled to make hardship applications if they can no longer meet their living expenses or pay their mortgage. Applications can also be made to buy second-hand cars on health grounds, to pay debt arrears, or if their car has been repossessed and they need it for work and can’t borrow.

PSN, whose social services include Family Works, Lifeline and Shine, works with thousands of people from Taupō to Whangārei. This region accounts for the highest number of KiwiSaver fund withdrawals for significant financial hardship[1].

With more people seeking support, the charity is appealing for financial assistance through its Family Works ‘Heat or Eat’ campaign. Funds are urgently needed to help its services meet increasing demand.

Mike* contacted Family Works because he had a $5000 credit card debt that spiralled out of control to the point that he couldn’t afford food. Family Works supported Mike with kai parcels through its Communities Feeding Communities initiative and he started working with a budgeting mentor.

Mike’s debt had accrued during COVID-19 after starting a new job was postponed until after lockdown.  This meant he had to use his credit card to pay weekly living costs. He was stressed and developed mental health issues. The situation was compounded after lockdown, when the company could only offer him part-time, instead of full-time work.

With his reduced income, Mike could pay just some of the credit card interest so his debt grew, instead of shrinking with every monthly payment. Our Family Works budgeting mentor helped Mike secure an interest-free microfinance loan to repay his credit card debt as there was no other way to repay it. He is now paying this off month-by-month and is on track to be debt-free in two years.

This has made an enormous difference to Mike’s overall stress level and mental health. He looks like a changed man and is now able to start making plans for the future.

To support the Family Works ‘Heat or Eat’ campaign, please click here.

* name changed to protect privacy.

[1] https://www.ird.govt.nz/about-us/tax-statistics/kiwisaver/withdrawals/kiwisaver-fund-withdrawals-by-region