Health is one of the key socio-economic factors that strongly influence a person’s financial wellbeing. An estimated 4.4 million Australians live with disability and more than eight million Australians are dealing with at least one long-term health condition such as arthritis, diabetes, mental illness and heart disease, according to the Australian Bureau of Statistics.
As part of ANZ’s ongoing research exploring financial capability, literacy, attitudes and behaviours, our latest report delves deeper into the quantitative findings of the 2021 Financial Wellbeing Survey to better understand how living with disability impacts financial wellbeing. Financial wellbeing is defined as the extent to which someone is able to meet their current commitments and needs comfortably and has the financial resilience to maintain this in the future.
"The research showed a marked difference in the average financial wellbeing scores of people with and without disability and/or chronic health conditions with the biggest gap found in working age Australians living with and without disability.”
Of the 3,552 adults randomly selected to participate in ANZ’s 2021 Financial Wellbeing Survey, one in four (24 per cent) reported having “a long-term health condition, impairment or disability that has lasted, or is likely to last for at least six months and restricts them in their everyday activities”.
The research showed a marked difference in the average financial wellbeing scores of people with and without disability and/or chronic health conditions with the biggest gap found in working age Australians living with and without disability.
Australians with disability or long-term health conditions had an average financial wellbeing score of 54 (out of 100). This was well below the national average of 64 (out of 100) as well as the average for those who did not report having a disability or long-term health condition (66 out of 100).
They found it harder to meet everyday commitments, build financial resilience and felt less comfortable about their current financial situation and future financial security.
The 2021 Financial Wellbeing Survey showed in addition to health, unemployment, earning potential and life stage were the strongest socio-economic influences on financial wellbeing. Other socio-economic factors such as access to social support from family, friends and community, financial stability, gender and providing financial support to dependents were all significant influences on financial wellbeing.
Four dimensions of financial wellbeing
Reduced earning potential is having an impact
The findings from Financial wellbeing: people with disability or long-term health conditions demonstrated reduced earning potential and employment opportunities are particularly evident amongst working age Australians with disability or long-term health conditions.
Earning potential encompasses those key elements that contribute to an individual’s ability to earn a higher income such as their level of post-secondary education, whether they are a professional or senior manager and their household income.
One-sixth (16 per cent) of working age survey respondents with disability or long-term health conditions had a university degree, compared to 28 per cent of other working age Australians. Almost two-fifths (38 per cent) earned less than $35,000 per annum, with 36 per cent having a government benefit or allowance as the main source of income (compared to 9 per cent of those without a condition).
They were also much less likely to be employed full-time than 18-64-year-olds without a condition (22 per cent versus 52 per cent) and more likely to be either looking for part-time work or not looking for work at all.
These factors, combined with physical and mental health, clearly impact the capacity of Australians with disability or long-term health conditions, particularly under 65s, to build financial confidence, resilience for the future and overall financial wellbeing.
Twice as many people with disability or long-term health conditions had no savings (22 per cent) than those without a condition (11 per cent). This was even higher amongst 18–64-year-olds with disability, 27 per cent of whom reported having no savings.
And only half of 18–64-year-old Australians with disability or long-term health conditions felt confident in their ability to plan their financial future compared to two-thirds of other working age people.
Pioneering financial wellbeing researcher Professor Emeritus of Personal Finance and Social Policy Research Elaine Kempson attests to how detrimental low or unstable income are to financial wellbeing for people struggling with health, mental health and unstable employment. “Those are the people that are really at risk,” she says.
“The lower level of financial wellbeing amongst people with disability or long-term health conditions is a complex problem,” says Prescience Research’s contributing researcher David Blackmore. Improving the situation isn’t straight-forward either. He highlights factors that improve financial wellbeing for those aged 65 years plus with disability/health condition including:
“For people under 65 with disability and/or health conditions, potential financial wellbeing improvement seems likely from facilitating access to higher education and workforce participation, support for increased levels of home ownership, support for savings programs (particularly matched savings programs like Saver Plus),” Blackmore says.
“Also adequate access to treatment for mental and physical health conditions and, for parents, discussion of financial management issues with any of their children living with a disability or long-term health condition.”
To address the significant gaps in financial wellbeing for people with disability or long-term health conditions, reducing barriers to employment, social support and housing security all have a role to play.
Programs to develop financial confidence and positive saving and spending habits, such as MoneyMinded and Saver Plus, can provide skills to improve financial wellbeing, however further support is critical. Key contributors to building financial wellbeing for Australians with disability are the structural supports that enable their full inclusion.
“What is clear is we all have a role to play in supporting people with disability to build financial wellbeing,” says ANZ Group Executive Australian Retail Maile Carnegie. “This includes helping people build financial confidence and resilience and ensuring the supports are in place to enable people with disability to participate to their full potential in the workplace and the broader community.”
Read the full research report here. ANZ’s latest Accessibility and Inclusion Plan can be found here.
Natalie Paine is ANZ’s Social Impact Research and Reporting Lead.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
02 Dec 2022
13 Apr 2022