High household debt and cost-of-living pressures causing depression, suicide attempts

Updated

Sudden unemployment led to spiralling household debt that drove one Melbourne man to attempt suicide three times, but a new approach to supporting families through financial crisis has helped him see a future.

Tony De Gregorio worked as a cleaner for more than 20 years, and he and his wife built a house in the outer Melbourne suburb of Mill Park.

There they raised three children, but when Tony lost his job a year ago, he lost his will to live.

"The bills kept getting bigger and bigger and bigger, and then we got default notices and we got third warnings and then we got disconnected," he said.

"Then I came to the point where I couldn't handle it anymore, and I attempted my life three times."

Utility bills that started at $200 became $400, and then $600 as the family struggled to keep up. Debt from unpaid rates soared into the thousands.

With no money coming in, making payment arrangements with the council and the companies was difficult.

People find themselves really falling behind in lots of different ways and the dream they're sold about moving into an outer growth suburb with a new house and a garden, it very quickly deflates. Jemal Ahmet, chief executive Whittlesea Community Connections

"Nobody would listen when I said to them, 'can't we go on a plan?'. No, we can't go on a plan because 'you're not working'," Mr Gregorio said.

He struggled to see a way out and, at the age of 55, found it all but impossible to get another regular job.

Support agency Kildonan Uniting Care called it a perfect storm of issues that it was seeing more and more.

Loss of a job, marital breakdown or illness trigger extreme financial stress because of generally high levels of household debt and rising costs.

Capacity to cope with crisis is low.

For those who seek help, utility and telecommunications-related debt that sat at around $900 five years ago is now commonly around $2,000, and mortgage repayments are up about 10 per cent.

There is also increasing social isolation among those living in distant housing estates, with no easy access to family and friends.

Low-income families not the only ones struggling

In their recent report On the Fringes: Tale of Two Cities, the Victorian Council of Social Service and outer Melbourne councils pointed out the "high car dependency and long commutes, which increase the strain on family relationships".

Tellingly, it was no longer only low-income families already dependent on Centrelink experiencing such financial stress that they could not cope.

The new 2014 household survey from the City of Whittlesea in Melbourne's north showed 14 per cent of respondents in the middle-class areas of the municipality were, at times, struggling to afford food.

Alecia Murphy and husband Troy moved to the Melbourne fringe suburb of Doreen nine years ago to raise their three children.

They love the area but she said the lack of local facilities and transport created extra costs and pressure.

"That is enormous when you have more than one child to deal with as well as your own pressures of living, with your utilities and your food bills and your mortgage stress and all that sort of stuff," Ms Murphy said.

"I work part time and if I didn't work part time we wouldn't be able to live off my husband's wage."

Support service Whittlesea Community Connections has seen a 40 per cent increase in demand for emergency relief from so-called middle-class families in the past six months.

Sorry, this video has expired Video: Jemal Ahmet says his organisation has seen an increase in demand for emergency relief (ABC News)

Chief executive Jemal Ahmet said some people were over-extending for a lifestyle that did not materialise.

"People are under stress," he said.

"The mortgages that they've entered into are also increasingly difficult for them to maintain, particularly if there's a downturn in the employment market and they've had reduced hours or periods of unemployment.

"So people find themselves really falling behind in lots of different ways and the dream they're sold about moving into an outer growth suburb with a new house and a garden, it very quickly deflates."

New project to 'triage' finances

Kildonan Uniting Care has partnered with utility companies and Swinburne University in a pilot program called CareRing, working with 200 households.

The Australian-first project aims to "triage" financial issues and to facilitate debt relief and payment plans with councils and corporates.

Swinburne University's Professor Jo Barraket said it was innovative because it involved direct information-sharing between business and the NGO and it bypassed government.

"I think that it's quite an innovative program in that it's being initiated by the not-for-profit sector ... working directly with business," she said.

"Typically what we see in these kinds of collaborations is government playing a leading role."

For Tony De Gregorio, help negotiating payment plans with those he owed enabled him to regain some control.

"I was very negative ... everything was negative and if you can get just that one person to start you in the right direction, everything will work out," he said.

He is now working a few hours a week, chipping away at the debt a few dollars at a time.

Anyone looking for help with their finances can call Kildonan Uniting Care on 1800 545 366 or 1800 KILDONAN or email CareRing@kildonan.org.au. Lifeline provides 24-hour counselling on 13 11 14.

Topics: consumer-finance, social-policy, suicide, mill-park-3082, doreen-3754, melbourne-3000, whittlesea-3757, vic

First posted