This research sheds a light on the compounding financial crises impacting lower income households and their economic security.

For the study, the co-authors interviewed over 40 low to middle-income people across Victoria who were then asked to complete detailed financial diaries over a 10 week period. The research examined how the cost-of-living crisis, coupled with the lingering effects of the pandemic, has collided with the long-term drivers of financial stress.

The research shows that people trapped in poverty and insecurity are unable to budget their way out of financial crisis, despite their best efforts.

Key findings:

• Over the 10-week survey period, 27 of 43 participants reported borrowing money or delaying paying a bill 
• Over half of those employed reported that their income varied at least once during the 10-week survey period  
• Income support payments have not kept up with the rising cost of essentials, leaving recipients struggling to afford the basics, cutting back on food or heating, rationing medication or taking on debt 
• Complex requirements and confusing administrative arrangements when accessing social security payments lead to confusion and the risk of debts for many participants.