Illness And Debt | Reduce The Risk Of Debt Due To Sickness
How to control your finances during illness despite medical bills and loss of income
Preventing and improving financial trouble during medical treatment so you can focus on getting better
Illness is one of the main reasons for debt and financial trouble in Australia. And this is unfortunate for so many reasons.
It’s another thing piled on top of the trouble people already have with their illness And, it’s a cause that can only be treated at the root medically. Financially, we can only try to manage it.
Regaining control of your finances doesn’t make your illness or your loss of money fair in the first place, but it’s the best thing that can be done given the circumstances. And, whereas wealth is crucial to your living standards, you must keep in mind that health is your number one priority (despite this being a debt article).
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What happens when paid sick leave runs out
When you are forced to take time off work due to an illness in Australia, you are entitled to sick leave equal to the amount that you have accumulated. You will have accumulated sick leave if you are an employee who isn't casually employed. The amount you have accumulated is:
For full-time employees: 10 days each year.
For part-time employees: a proportion of 10 days depending on how much they’ve worked compared to a full-time employee.
After your paid sick leave runs out you will be on unpaid sick leave. This is unfortunate for your finances, but thanks to government regulation, your job isn’t in jeopardy for some time. An employee can’t be fired because they are sick unless they have been away for over 3 months. If an employee suspects they were fired unlawfully, they can take legal action.
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How Much Will My Disease Cost In Australia?
As expected, the answer is that it can vary dramatically between illnesses. We can provide you with factors that influence how much your illness will cost you however, and you can use this information in budgeting.
Will Medicare Cover My Treatment?
Whilst Australia does have free healthcare, you should ask your doctor whether your treatment has upfront or gap costs that you will need to cover yourself.
Are There Other Costs Not Covered By Medicare?
These uncovered costs may potentially exist. In fact it is almost certain that you will sustain some expenses relating to your illness that aren’t covered by the Australian government. The most common examples of these expenses are:
Medication. Medication is often an ongoing cost. Many medications are subsidised by the Pharmaceutical Benefits Scheme (PBS), but many are still quite expensive.
Equipment. Equipment is not always provided for free and many types can be quite dear. A walking brace for instance can cost over one hundred dollars.
Specialists. Specialist medical services often are only partly covered by Medicare.
Transportation costs. These can be significant if you have to travel a long distance for treatment.
Private medical services. If you opt for the private sector for your treatment, the costs can be much higher, as you are forgoing government support. Of course, if you believe there are medical advantages to this then by all means.
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By building savings and repaying debt while you’re healthy, you can safeguard against financial trouble in the face of illness
This section is obviously not applicable to those already afflicted by an illness. It is not intended to make them feel guilty and they are excused for skipping it. But for those who are healthy and reading this, this could be the section that saves your financial future. It would be hard not to imagine that most people in financial disarray due to illness didn’t wish that they had saved more money when they were able to.
The actual information here is generic, you’ve heard it before: save more and spend less on non-necessities. But the reasoning may be something that you don’t think of often: if in the worst case you do get sick, you will be able to fight your illness much more effectively without financial worry on your mind. And you will be less likely to end up in financial ruin, bankruptcy and spiralling debt which will stay with you long after recovery.
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Reducing debt due to illness and avoiding insolvency
If you have an illness, all hope is not loss for your financial situation. There are several things that you can do to maintain financial stability.
Prepare A Budget
This really is a must for managing your finances. We recommend it in most of our articles on the subject. This should be done as soon as possible and adjusted depending on new developments like concessions and treatment procedures.
Reducing Utility Bill Expenses
If you are ill, you may be able to claim some benefits to reduce your utility expenses. Some of the benefits you could be entitled to include payment vouchers and grants, reduced council rates, rebates and concessions from your utility companies and hardship variations due to sickness. These concessions can go a long way to helping you to stay in the black and keep your finances afloat during sickness. Talk to your doctor or counsel about accessing these benefits as soon as possible, as the sooner it starts the better off you’ll be in the long run.
Reducing Loan And Credit Card Debts And Repayments
Making sure you stay on top of your pre-existing debts should be a top priority and you should attempt to pay these off as soon as possible. If you are struggling to manage the debt while you are ill, you might want to consider talking to a debt counsellor about helping you to reduce your debts and get them payed off faster. A debt counsellor can negotiate an agreement with your lenders, reducing the amount of debt you should pay and getting you better circumstances to pay off the debt.
A debt counsellor will also be able to help you plan your budget, allowing you to balance your finances through this difficult time. Your creditors will normally accept deals they believe to be fair and talking into account your personal situation. Your debt counsellor can handle all communications with your creditors, helping you to stay on top of your bills and payments to creditors.
Reducing Medical And Pharmaceutical Expenses
Reduce your medical expenses by acquiring a PBS Safety Net card that reduces the amount you have to pay for prescription medications. If you don’t have health insurance it can be hard to keep on top of all your medical bills. Make sure you pay a visit to Medicare/Centerlink and see what benefits you might be able to access. They may be able to provide you with a pensioner concession card or a pharmaceutical allowance for medication if you don’t already have a PBS card. Also, make sure you talk to your financial adviser about any potential benefits that you could be missing out on.
Get Access To Emergency Funds
There are several ways to not just decrease expenses, but increase revenues when you have a serious illness. Some of the Medicare/Centrelink benefits you could be able to benefit from include:
Carer Pension and Carer Allowance
Disability Support Pension
You also have other options for accessing funds and can access some of your reserve funds or make a claim for compensation.
Claim your insurance
Access your superannuation
Make a worker’s compensation claim
Get a no-interest loan scheme (NILS) loan
If you have been afflicted by an illness, then firstly we wish you a swift recovery and minimal discomfort. Secondly we wish you a stable and succesful financial future. Thankfully due to the country that we are fortunate to live in, there are numerous ways to reduce the financial burden of your affliction. We hope they work for you.