- Getting a hardship variation will generally be trouble free. There are simple steps to take if your request does not go according to plan.
- This information is intended for Victorian consumers who have entered into a loan or lease that was for a personal, domestic or household (not business or investment purposes) purpose.
Requesting a hardship variation is trouble free in most cases. However, there is evidence to suggest that lenders do not always get it right. The following are some common problems we see and some of the solutions.
Having trouble helping yourself
Problem: Financial hardship is often accompanied by ill health or some other form of personal crisis. In these circumstances, you might struggle to assess your position and deal with your lender.
Solution: Call MoneyHelp on 1800 007 007 to get a referral to a free financial counsellor who can assist you. The worst thing you can do is ignore the problem.
Dealing with a lender who does not understand your financial hardship
Problem: Lenders will often have a collections team that works to collect money from people who have fallen behind in payments. These collections officers may not be the best people to identify or assist with financial hardship.
Solution: Ask to speak to the ‘hardship team’ and use phrases like, ‘hardship variation’ and ‘hardship notice‘. If all else fails, you can make a complaint to the Australian Financial Complaints Authority (AFCA).
The lender is making requests for information which are not clear, too hard to understand or irrelevant
Problem: The lender may ask you for information to support your hardship application. Generally, the lender is entitled to do this provided that the information is relevant to whether you are unable to meet your obligations and how to vary the contract. It is important to respond to these requests on time, because if you don’t you may risk having your application rejected. However, in some circumstances, you might have difficulty responding either because of your personal circumstances or the information provided by the bank is not clear.
Solution: Talk to the lender to see if it can simplify things. If this doesn’t work, call MoneyHelp on 1800 007 007 to get a referral to a free financial counsellor who can assist you to provide a response to the lender.
The lender is proposing a hardship variation which does not meet your needs
Problem: A lender might put forward a hardship variation which does not suit your needs. For example:
- the lender might have a bias towards short-term hardship (i.e. less than 3 months) when you need more time to get back on your feet;
- the lender might postpone payments, and expect you to catch-up at the end of the postponement period;
- the lender might ask you to increase payments to catch up on arrears.
Solution: Call MoneyHelp on 1800 007 007 to get a referral to a free financial counsellor who can assist you to assess whether the assistance you are seeking is reasonable and what your other options might be. Explain to the lender why their proposed resolution does not meet your needs and if all else fails, you can make a complaint to the Australian Financial Complaints Authority (AFCA).
The lender has said it cannot help
Problem: A lender might reject your hardship application altogether. Generally, if the lender rejects your hardship application it should tell you why. Your hardship application might be rejected because you simply cannot afford to keep the loan going, or it might be that the lender is applying irrelevant considerations.
Solution: Call MoneyHelp on 1800 007 007 to get a referral to a free financial counsellor who can assist you to assess whether what you are seeking is reasonable and what your other options might be. You can make a complaint to the Australian Financial Complaints Authority (AFCA) and get one of these services.
The lender is not responding
Problem: Sometimes a lender might fail to get back to you after you have asked for assistance with financial hardship. The laws relating to the time available to a lender to make a decision about a hardship variation are complex. At the very least, your lender should respond to you within 21 days, either giving you a final decision or asking for more information.
Solution: Talk to your lender to find out what timeframes it is working with. If you are not going to get a response within a sensible time, you can make a complaint to the Australian Financial Complaints Authority (AFCA). 
Of course, if legal proceedings (court action) have been issued, or your request is urgent, you need to get urgent legal advice and consider whether a complaint straight to the Australian Financial Complaints Authority (AFCA) is more appropriate.
Getting the arrangement in writing
Problem: Some lenders are reluctant to put a hardship arrangement in writing if it has been negotiated over the phone. Unless you’ve taken careful notes, this can make it difficult to keep track of what has been agreed to.
Solution: The law relating to whether a lender is required to put a hardship variation in writing is complex. We think it is good industry practice for a lender to confirm any hardship variation in writing. If your lender refuses to do this upon request, seek legal advice.
More information and troubleshooting tips
For more information about applying for hardship, go to:
If you have loans or leases for a small business or investment purpose, you may still have rights to get your repayments changed on the basis of hardship. For more information go to the websites referred to above.
Consumer Action Law Centre
Legal advice: (03) 9629 6300, or 1300 881 020 for country callers.
If you are deaf or have a hearing or speech impairment, you can call through the National Relay Service (NRS):
- TTY users can phone 133677 then ask for 1300 881 020
- Speak & Listen (speech-to-speech) users can phone 1300 555 727 then ask for 1300 881 020
- Internet relay users can connect to NRS on www.relayservice.com.au then ask for 1300 881 020
Financial counselling: 1800 007 007
Warning: This fact sheet is for information only and should not be relied upon as legal advice. This information applies only in Victoria, Australia and was updated on 31 March 2019. see e.g. ASIC report 152 Helping home borrowers in financial hardship, (2009) Financial and Consumer Rights Council, We rank the financial hardship policies of the ‘big four’ banks (2012); Financial Counselling Australia, Rank the Banks (2013); Commonwealth Bank of Australia v Wales  NSWSC 407; Commonwealth Bank of Australia v Larsen  NSWSC 408  see e.g. National Credit Code s 72(2)-(3)  ASIC report 152 Helping home borrowers in financial hardship, (2009) p. 26  see e.g. s 72(4)(b) of the National Credit Code for relevant contracts entered into on or after 1 March 2013, and s 72(3)(b)of the National Credit Code for relevant contracts entered into before 1 March 2013.  s 72(4) of the National Credit Code for contracts entered into on or after 1 March 2013, and s 72(3)of the National Credit Code for relevant contracts entered into before 1 March 2013  Financial Ombudsman Service Terms of Reference (as amended 1 January 2012) para 6.3(b)(i), Credit Ombudsman Service Rules (20 October 2011) r 13.3(a)  see e.g. National Consumer Credit Protection Act 2009 (Cth) s 73, National Consumer Credit Protection Regulations 2010 (Cth) regs 69A, 69B, Mutual Code of Banking Practice (Jan 2010) cl. 24.2; MFAA Code of Practice (Dec 2012) cl. 13.4, Code of Banking Practice (2013 – commence 1 February 2014) cl 28.8