Hardship threshold
The manner in which the hardship threshold is determined has now changed to
a “floating threshold” to reflect the current cost of new houses
in the Australian property market.
These changes to the Regulations became effective from:
- 5 November 2004 in: Queensland, Victoria, New South Wales, Northern Territory
and South Australia;
- 31 December 2004 in: Western Australia; and
- 20 July 2005 in: Tasmania.
Prior to these changes to the Consumer Credit Code Regulations, the threshold
for credit relief applications and stay of enforcement proceedings were set
at $125,000. This meant that people with mortgages or other consumer loans
of more than $125,000 were previously not eligible to apply for hardship relief
or postponement of enforcement proceedings. This figure was originally set in
1996 and was generally recognised as not having kept pace with current home
mortgages.
The threshold will now be a floating threshold linked to an Australian Bureau
of Statistics (ABS) index of the cost of new houses in Sydney. The hardship
threshold will be equal to 110% of the average loan size for the purchase of
new dwellings in New South Wales (table 10(c) of catalogue 5609). This figure is released monthly by the ABS
and set out in the Table of Housing Finance Commitments in the publication entitled
Housing Finance Australia. Note that the figure released by the ABS is based
on the most recent data, which is usually about 2 months previous.
The What's New section of this
web-site will update the hardship threshold figure as it is released by the
ABS.
The increase in the threshold from $125,000 to the current threshold takes
into account the dramatic increase in house prices over the past eight years.
The hardship threshold applies when a consumer cannot make loan repayments due
to hardship, such as illness, unemployment or other reasonable cause, but could
pay the debt if the terms of the contract were changed.
The following is the historical data on the hardship threshold:
| 10 July 2008 - 8 August 2008 |
$336,050 |
| 11 June 2008 - 9 July 2008 |
$278,457 |
| 13 May 2008 - 10 June 2008 |
$306,350 |
| 15 April 2008 - 12 May 2008 |
$308,440 |
| 12 March 2008 - 14 April 2008 |
$336,680 |
| 12 February 2008 - 11 March 2008 |
$320,100 |
| 17 January 2008 - 11 February 2008 |
$327,470 |
| 11 December 2007 - 16 January 2008 |
$311,960 |
| 8 November 2007 - 10 December 2007 |
$308,880 |
| 11 October 2007 - 7 November 2007 |
$317,240 |
| 11 September 2007 - 10 October 2007 |
$341,330 |
| 9 August 2007 - 10 September 2007 |
$346,940 |
| 11 July 2007 - 8 August 2007 |
$322,190 |
| 9 June 2007 - 10 July 2007 |
$305,690 |
| 15 May 2007 - 8 June 2007 |
$316,140 |
| 12 April 2007 - 14 May 2007 |
$317,240 |
| 12 March 2007 - 11 April 2007 |
$300,850 |
| 10 February 2007 - 11 March 2007 |
$310,860 |
| 15 January 2007 - 9 February 2007 |
$309,760 |
| 9 December 2006 - 14 January 2007 |
$315,480 |
| 8 November 2006 - 8 December 2006 |
$298,100 |
| 11 October 2006 - 7 November 2006 |
$301,950 |
| 9 September 2006 - 10 October 2006 |
$325,600 |
| 10 August 2006 - 8 September 2006 |
$312,620 |
| 11 July 2006 - 9 August 2006 |
$327,910 |
| 6 June 2006 - 10 July 2006 |
$317,790 |
| 12 May 2006 - 5 June 2006 |
$323,840 |
| 7 April 2006 - 11 May 2006 |
$325,710 |
| 10 March 2006 - 6 April 2006 |
$319,990 |
| 14 February 2006 - 9 March 2006 |
$325,710 |
| 17 January 2006 - 13 February 2006 |
$330,330 |
| 6 December 2005 - 16 January 2006 |
$310,970 |
| 10 November 2005 - 5 December 2005 |
$325,160 |
| 10 October 2005 - 9 November 2005 |
$350,570 |
| 6 September 2005 - 9 October 2005 |
$342,540 |
| 11 August 2005 - 5 September 2005 |
$295,790 |
| 11 July 2005 - 10 August 2005 |
$305,910 |
| 8 June 2005 - 10 July 2005 |
$302,830 |
| 11 May 2005 - 7 June 2005 |
$303,820 |
| 11 April 2005 - 10 May 2005 |
$298,100 |
| 12 March 2005 - 10 April 2005 |
$323,180 |
| 11 February 2005 - 11 March 2005 |
$323,290 |
| 17 January 2005 - 10 February 2005 |
$330,080 |
| 11 December 2004 - 16 January 2005 |
$330,550 |
| 10 November 2004 - 10 December 2004 |
$340,670 |
| 5 November 2004 - 9 November 2004 |
$324,940 |
Download the Consumer Credit
Amendment Regulation 2004 in PDF format (size: 190KB).
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