Services which help people struggling to pay off their loans have been funded for the past several years, but that funding has now run out. File photo. Photo: 123RF
The government will not continue funding debt solution providers which help people struggling to pay off their loans, raising concerns for people's mental health in a cost of living crisis.
Time-limited funding of slightly more than $2 million from the Ministry of Social Development was made available for the country's four providers during the pandemic amid a ballooning need for their services.
The funding was due to run out at the end of June last year - and while contracts were extended until 30 June this year, they will not be renewed because there was no further funding available, MSD confirmed.
But people are still in desperate need of the services. DebtFix supported 2500 families in 2022 - and that jumped to 3000 last year, said co-founder and chief executive Christine Liggins.
While the need was growing, support was diminishing, she said.
It comes as some financial mentoring and budget advice services are facing closure after missing out on the latest round of government funding.
"And it's DebtFix... who are gonna have to pick up the slack for the [financial mentor] services closing, and yet we have no funding from the government to help us do that either, to support us in trying to help the sector, too."
The charity would stay open, but it was having to support more people with less money, said Liggins.
"We're all expected to help with this financial crisis the country's going through, but where's the support for them?"
She worried about people doing it tough and having to go without the support they needed.
"We're very concerned how it's going to affect people's mental health if they cannot find the right, suitable help because their local services have closed down."
But people could still get support from a range of government-funded services to help improve financial wellbeing and reduce debt, said MSD spokesperson Mark Henderson.
The ministry did not answer RNZ's questions about whether it considered continuing the funding given the financial pressure New Zealanders are under, or whether it believes New Zealanders have enough access to financial support.