The Ministry of Social Development will no longer fund 44 of the current 132 budgeting services. File photo. Photo: 123RF
A third of the country's free budgeting services face closure during a cost of living crisis, after missing out on the latest round of government funding.
The Ministry of Social Development (MSD) has confirmed it will no longer fund 44 of the current 132 budgeting services, due to a change in the funding model and the end of a cash boost given during the pandemic.
Earlier this month it said the Building Financial Services funding had dropped from $22.3 million last year to $19.5 million from 1 July, but did not confirm how many services would miss out on the funding.
In Whangarei, Anglican Care's free budgeting service has run for 30 years and employs six financial mentors who currently help 520 clients.
Chairperson Angela McGregor said it was a shock to learn the service would not receive government funding for the next three years under the new funding model.
She said 30 more people were asking for budgeting help each month and they had planned to expand.
"We applied for $300,000 because of the need. We wanted to employ more financial capability mentors to give those who haven't a voice, a voice and help them and their wider communities."
McGregor called a special meeting for all staff last Friday to tell them the funding had been cut.
"I was in tears... they were absolutely devastated because they felt that things had been going so well and now, nothing," McGregor said.
"Our worry is that we won't be able to provide the services that we have been up till this point."
She said they could continue operating the budgeting service until the end of this year, if they used cash reserves.
"We do have some reserves which we are having to work really hard to access. If we have those we can last till Christmas, that's it."
McGregor said they provide wraparound services, and budgeting was an important part of their holistic approach.
"We would not diminish the service, we would either be here fully operating or we're not here."
In the meantime, she said they were praying for a miracle and looking at creative ways to find funding at short notice.
MSD said the 88 budgeting services it would be funding "have a strong connection and presence in their communities and understand the unique needs of the people they work with".
"We have consolidated funding around fewer providers, and lifted the minimum we pay on every contract. After 1 July, every provider we contract with will be funded for at least 0.5 FTE of a staff member, or $54,000 per provider."
The MSD also added that the other reason for the change was the reduction in time-limited Covid-19 funding.