The success of not-for-profits and small businesses is often
built on a relationship of trust, loyalty and mutual reassurance
with their client base. A strain in this relationship can form when
a customer is unable to meet their financial commitments due to
unexpected situations, such as:
Loss of employment of a customer or a family member.
Illness; including physical incapacity, hospitalisation or
mental illness of the cusomer or a family member.
A death in the family of the customer.
Thereby, through no fault of their own, individuals are often
left in a positions where their economic capacity to meet their
financial commitments is greatly diminished, due to either a
reduction in income or increase in expenditure.
Not-for-profits and small businesses are faced with the dilemma
that on the one hand they don't want to abandon a valued
customer in their time of need and, on the other hand, they need to
maintain the economic viability of their institution.
A financial hardship policy could be implemented in those
circumstances so as to provide a framework to the giving of
assistance to customers who are temporarily experiencing genuine
There is no established legislation articulating what is
required under a financial hardship policy.
Ultimately, socio-economic disadvantage is not a protected
attribute (such as age, sex, marital status, race, disability etc)
under Anti Discrimination Legislation at the State or Federal
level. As such, the scope for the development of terms and
conditions of financial hardship policies can be flexible, and
often dependant on the nature and set up of the institution to
which they relate.
Forms of financial assistance include reducing fees and amending
billing payment arrangements for people experiencing genuine
Key issues to include in when formulating financial hardship
Defining what is considered to be genuine "financial
hardship" entitling eligibility – both long term and
Details of evidence of "financial hardship" required
to prove status.
Generally accepted codes/practices of conduct - the policy is
following (where applicable) including guidelines, minimum
Types of "financial assistance" offered.
Who determines eligibility and the nature of assistance
provided – Director, Board, Executive?
Method of implementation and management of the policy -
including enforceability, breach of policy, termination.
As you would appreciate, it is essential to provide uniformity
in the application of any financial hardship policy so that
customers and stakeholders know they are being treated fairly and
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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