The head of Canberra's financial counselling service has called on the ACT Government to index and widen concessions for low income residents, and create a "discretionary fund" for those in crisis.
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While the ACT may boast the highest average incomes in the country, the latest ABS data shows some 38 per cent of Canberrans are in the two lowest quartiles for median income.
It shows 17.8 per cent of Canberrans earn less than $21,929 and a further 19.8 per cent earn between $21,929 and $46,854, or the nation's median income - less than other states but too many, community advocates say.
CARE Financial Assistance director Carmel Franklin said it was those people who were already at the "tipping point", when circumstance often dealt them a personal financial crisis.
"It could be someone who's taken maternity leave, or suffered a relationship breakdown, or just underemployment where you lose some of your shifts but not all of them," she said.
"What we find is people come to us with debt that they could service on a higher income, but once their income is reduced, they can no longer meet (it) because they're already up to their maximum amount."
"If you're in the $20,000 to $40,000 bracket and you don't get any concessions you're already at tipping point, so if you're fridge breaks down, or car, or you have a high medical cost, even a school excursion, it doesn't have to be anything big, but that can push them over."
Ms Franklin said many people that sought help from CARE also often did not know utility providers, banks and other institutions provided "hardship arrangements", which could let people extend a payment period or make a payment plan to pay over a longer period.
"One of the things I'd suggest is for people to contact their providers as soon as it happens rather than waiting until its down the track and its harder to make those arrangements," she said.
"What happens instead is we find people will prioritise paying their debts to the detriment of paying for other things like medicine, food, insurance and school fees are probably the big ones, and sometimes even rent.
"If you've got a debt collector ringing everyday, you're more likely to pay that than say your utility provider or the landlord who's not on your doorstep or ringing you up all the time."
Ms Franklin said she supported a recent call from ACT Council of Social Services to index ACT concessions to inflation, and widen eligibility to more people.
While the ACT Government last year made several changes including increasing utilities concessions, the government has said it would consider the council's proposals as part of its coming budget.
Ms Franklin said she also wanted to see a "discretionary fund" set up for those who did not qualify for concessions, but were struggling with an unforeseen cost, such as high medical bills.
"I know that wouldn't necessarily be simple and straight forward, but I do think we need some sort of fund or provide some sort of support for people who wouldn't ordinarily be able to get it. and are only likely to need it for a (short) period of time to get them over a hump."
"Our concern is that people don't look after their health and wellbeing because they're trying to pay off their debts."
If you or someone you know are in financial stress, you can contact CARE on 1800 007 007. The ACT Government also offers no interest loans for some eligible residents in need.
