Home owner, renter financial stress spikes

Renters experiencing at least one indicator of financial stress has increased from 50 per cent to 56 per cent.

In the June 2020 quarter, 6 per cent of owners with a mortgage reported not being able to pay their gas, electricity or telephone bill on time, compared with 3 per cent in the previous three quarters, while 4 per cent sought financial assistance from friends or family, up from 1 per cent in the previous three quarters.

Meanwhile, more renters increased the balance owing on credit cards by $1,000 or more to meet basic living expenses, up from 4 per cent to 6 per cent.

Average weekly government pensions and allowance income increased for both owners with a mortgage (by $35 to $126 per week) and for renters (by $41 to $288 per week).

The data, collected before and during the introduction of government economic responses to COVID-19, are the first in a series of quarterly releases from the ABS’ Survey of Income and Housing, according to the ABS.

Commenting on the data, ABS head of household surveys David Zago said that more households had experienced at least one indicator of financial stress in the June 2020 quarter, up from 34 per cent in the previous three quarters to 38 per cent.

“We can start to see the early effects of COVID-19 on the financial wellbeing of different types of households during the June 2020 quarter,” Mr Zago said.

“Future updates will tell us more about the full effect on household finances of responses like JobKeeper and the coronavirus supplement.”

Financial stress increased for households with employee earnings as their main source of income, with the proportion experiencing at least one indicator of financial stress rising from 31 per cent in the previous three quarters to 37 per cent in the June 2020 quarter.

Employee households seeking assistance from welfare organisations grew from 11 per cent during the previous nine months to 14 per cent in the June quarter. Employee households who drew down on savings in the June 2020 quarter grew 8 per cent to 11 per cent in the June 2020 quarter.

Meanwhile, 24 per cent of couple families with dependent children reported that they could not raise $2,000 within a week for an emergency, up from 17 per cent in previous quarters.

[Related: Housing stress rise flagged as support wears off]