Fury of Cyclone Alfred marks vital importance of financial counselling for disaster recovery and preparedness

As the damage caused by Cyclone Alfred continues to affect families, Australians are being reminded of how important disaster preparedness is, particularly for their finances.

Natural hazards, such as floods, fires and cyclones, can lead to unexpected financial stress and trouble. Free financial counselling is available to all those affected by disasters and is a vital part of the disaster-resilience ecosystem in Australia.

Financial counselling is a free, non-judgemental, confidential and independent service provided by qualified professionals, that can help individuals, families and small businesses prepare financially for disasters. When disasters do occur, it can support their financial recovery for as long as they need.

Recognising the importance of financial counselling in both disaster preparedness and recovery, the Centre for Social Impact at the University of Western Australia (CSI UWA) and the Financial Counsellors Association of Western Australia (FCAWA) have conducted new research to develop the WA Financial Counselling Disaster Preparedness, Response and Recovery Framework outlining how the financial counselling sector can respond locally, and as a sector, in a coordinated way to natural hazard disaster events.

Some of the key recommendations in the Framework include considering insurance options, disaster-proofing document storage, familiarising yourself with available support services, and creating an emergency plan and fund.

The framework divides the role of financial counselling in disaster contexts into four categories: preparedness, early response, recovery and learnings and makes several recommendations for best practice within each category at the organisation, community and client levels.

Lead researcher Dr Mariana Atkins , Senior Researcher Fellow at CSI UWA, stressed the importance of financial counselling in Australia’s disaster recovery support system.

“Too often the focus is placed on the immediate response to a disaster,” said Dr Atkins.

“However, the recovery process is equally critical to future outcomes and resilience, and supporting people to be well prepared must not be overlooked either.

“Individuals and families who are affected by disaster can face devastating financial impacts and stress. These financial stressors can have ripple effects on mental health and increase the likelihood of conflict or domestic and family violence.

“Our framework, which was developed through extensive consultation, aims to increase the visibility of financial counselling services, so that more people can access both essential information ahead of time and effective support when disaster strikes.”

FCAWA Chair Gary Newcombe agreed there was a need to raise awareness among communities and residents about the support available following disasters, particularly once the immediate clean-up effort is completed.

“We know that people affected by disasters often need extra support for months or years after the event,” he said. “Recovery is long-tailed; it’s not simply business as usual –- rebuilding your life takes time and resources, so there is also a clear need for funding that gives communities that vital support over the medium to long term.

“As the peak body for financial counsellors in Western Australia, we’re pleased to share this framework so it can be used around Australia as a tool to help build local and sector responses.

“Strengthening the financial counselling sector is vital, especially for assisting Australia’s most vulnerable families and communities to weather these uncertain times.”

FCAWA CEO Melanie Hopkinson emphasised the emotional impact of disasters and the importance of ensuring best-practice and trauma-informed approaches to financial support.

“Financial counselling plays a vital role in disaster preparedness, response and recovery. Apart from offering practical assistance, financial counsellors also provide emotional support, and connect clients with essential services and community organisations,” said Ms Hopkinson.

“This work with CSI UWA highlights the importance of a trauma-informed approach to financial counselling, to ensure that all those affected by disasters are fully supported through their recovery and that ultimately the community is more resilient in the future.”

The framework will be officially launched on 2 April.