Dealing With The Financial Impact of Disasters
At the time of writing communities across south east, eastern Australia are being impacted by some of the most ferocious bushfires ever seen.
This piece is intended to provide practical tips & resources to help individuals, families & businesses financially impacted by disaster in two ways - sourcing financial resources & manage cash flow.
It’s certainly not an exhaustive list, but hopefully it can act as a useful starting point.
Sourcing Financial Resources
Call Your Insurance Company or Insurance Broker
Often the first place to contact is your insurance company. At the time of disasters most insurance companies will have dedicated options when you call in. Listen out for these.
Take photos of what has been lost. This will be emotional but it may prove useful for insurance purposes. Scour your phone, or those of family members & friends, for any photos & records of the assets lost. These could help the insurers help you quicker.
If you have an insurance broker, contact them. Not only can they lodge claims on your behalf, but they can also make sure you claim for everything your policy allows for. Sometimes, buried deep in your policy, there can be coverage for things you did not even know existed.
If you find your insurance company is not playing ball, there are places to go. You can try their internal complaints department, but often more useful is the Australian Financial Complaints Authority (AFCA) - https://www.afca.org.au/ - as they can advise you on next steps & investigate & decide on disputes.
Government Assistance
The Australian Government has a dedicated website that lists disaster packages by geography - https://www.disasterassist.gov.au/Pages/home.aspx#. Investigate & see what may be available to you.
Additionally, proving identity can be key to accessing government assistance. A passport is one of the most helpful documents. The Department of Foreign Affairs & Trade can assist in re-supplying passports. They’re contactable on 13 12 32 or check out https://www.passports.gov.au/lost-and-stolen-passports.
Contact Your Superannuation Fund
Superannuation funds often have insurance for members built into their management fees. Contact your superannuation fund to see if you have such coverage in place & if you can make a claim. You may have coverage for loss of income, or if you were injured through the disaster.
In extreme circumstances it may be possible to gain access to the funds in your superannuation early. Sometimes engaging a lawyer can assist greatly with this.
Managing Cash Flow
The Financial Hardship Division Of Your Bank.
Try googling the name of your bank/ finance provider & ‘financial difficulty’ or ‘financial hardship’. This area of the bank is very special because they typically can assess everything in one hit - business & personal - & provide a tailored solution.
Often this is a lot more helpful than going to your regular banking contact. Banks are departmentalised & when disaster strikes your regular contact may not be able to be as across everything as you would hope they would be.
Practically, I would suggest talking to this department. Chances are you’ll be on hold, but in my experience, this approach leads to the quickest & best outcome. Links to financial hardship departments of major Australian banks below;
ANZ - https://www.anz.com.au/about-us/sustainability/financial-hardship/
Bank of Melbourne - https://www.bankofmelbourne.com.au/contact-us/financial-hardship
Commonwealth - https://www.commbank.com.au/support/financial-difficulty.html
NAB - https://www.nab.com.au/personal/help-and-guidance/financial-hardship
Rabobank - https://www.rabobank.com.au/banking/financial-hardship/
Call The ATO
Similar to the financial hardship division of your bank, the ATO may be able to provide assistance should you have any debts owing. The ATO has a direct line for disaster impact here https://www.ato.gov.au/General/Paying-the-ATO/Help-with-paying/#Disastersandhardship.
Assistance can also apply to things like study loan payments such as HECS, so well worth investigating what you are paying to the ATO & what your options are. Communication is key with the ATO. Be proactive. Talk to them, let them know what happened, & you may be surprised just how helpful they can be.
Speak With Your Accountant
If you are paying business or individual income tax instalments, your accountant can talk to the ATO to reduce, or even remove, these amounts if a disaster will impact your income, business profitability, or cash flow.
Your accountant may be able to save you time by talking to the ATO to your behalf, provide information to recreate key documents such as passports, titles & deeds, drivers licences etc...
Recovery & rebuilding may mean financing new assets, or other kinds of loan applications via the banks or government. Having your financials ready to roll will assist in speeding this up. For instance for the ATO to help they usually require basic financial information to assess viability.
Speak With Your Utility Providers & Suppliers
Telephone, electricity, gas, internet & water providers. These companies may be able to delay billing & help you control/ reduce your expenses while you get back on your feet.
If you have a business, speak with key suppliers about payment term extensions &/or payment plans on your accounts. Particularly if you have any large, bureaucratic suppliers. Often they’re the most flexible. You may find you can pay these suppliers later, so that you can pay local suppliers (probably in the same boat as you) sooner.
Work Out A Budget
Whether a business or an individual the key is to not run out of cash. Therefore, try to work out a simple budget. Do a quick financial inventory & list out what you have. How much cash do you have available? Do you have any assets that could be turned into cash if you really needed to? Do you have any lines of credit (i.e. credit cards, overdrafts etc…) that could be used? What is your individual, household or business expenditure? How much time do you have? Are there any ways to reduce expenditure to create more time?
The aim here is to understand what you’re dealing with & plan accordingly. If you can spot a point in the future where cash flow could be strained, that gives you time to do something proactive about it. The more time you have, the more options you’re likely to have.
From a business perspective you may be able to increase your cash flow by chasing your debts, extending terms or arranging payment plans with your suppliers, & managing compliance & balance sheet payments via the ATO & your finance providers - as per points above.