Appl Ex 10l

Application Exercise 10l Poverty and stress

  1. Define ‘financial stress’ and ‘housing stress’.

Someone is in financial stress if they are experiencing cash-flow problems or are unable to raise emergency funds. Housing stress occurs when a household spends more than 30% of their income on housing.

  1. Explain how financial stress can contribute to poorer material and non-material living standards over time.

Financial stress can result in people being unable to pay their bills on time, and incurring penalties or further costs as they delay those payments. It can also mean they have to pawn their belongings (i.e. go without certain valuable material possession in order to live day to day) or seek assistance from a charity of community organisation. They may also suffer physical discomfort as they cannot afford to cool or heat their home and sometimes have to skip meals.

The non-material impacts of financial stress can also be severe. It can cause family disruption and mental health issues for those suffering from it. It can lead to feelings of worthless, and a sense of disconnection from the community. Constantly living under stress is very bad for one’s physical health also, and can lead to long term poor health.

  1. Identify the differences in experience of financial stress between Indigenous and non-Indigenous Australians.

Aboriginal and Torres Strait Islander people report higher rates of financial stress compared to the non-Indigenous population. More than half of Indigenous Australians aged over 15 reported they lived in a household that could not raise $2000 within a week to deal with an emergency. And close to 40% reported that in the last 12 months their household had experienced days without money for basic living expenses.