How to write a hardship policy that actually holds up under review.
I’ve seen a lot of hardship policies. Most of them read well. Fewer of them would actually survive an AFCA case or an ASIC review, because they were written to look complete rather than to be used. Here’s what separates a hardship policy that holds up from one that just exists.
It has to reflect what your team can actually do — not an ideal version of it
A hardship policy that promises a 5-day turnaround your team can’t realistically deliver isn’t a strength — it’s a liability. Every commitment in the policy becomes something you can be held to. Write the policy around your actual staffing, systems, and delegation levels, not an aspirational version of them.
Delegation of authority needs to be specific
“A manager will review the case” isn’t a delegation structure — it’s a guess. A policy that holds up names the actual role, the actual dollar limit, and the actual escalation path. If a hardship request needs sign-off above $5,000, someone should be able to point to exactly where that’s written down, not assume it.
It has to connect to a real assessment process
Regulators and AFCA case managers don’t just want to see a policy that says “we assess hardship requests fairly.” They want to see what that assessment actually involves — what information gets collected (income, expenses, assets, liabilities), how it’s weighed, and what happens when a customer can’t provide everything requested.
Timeframes need to match the National Credit Code, not just sound reasonable
Hardship requests have specific timeframes under the National Credit Code — including tighter timelines when you’ve asked for more information. A policy that quotes generic “reasonable timeframe” language instead of the actual legislated timeframes is a policy that hasn’t been checked against the law it’s supposed to comply with.
It should say what happens when a request is declined — clearly
A hardship policy that only describes the approval pathway is incomplete. Decline decisions need their own standard: what reasoning is required, what alternatives are offered, and how the customer’s AFCA rights are explained. This is often the part regulators scrutinise hardest, because it’s where customer harm is most likely if it’s handled poorly.
The real test
Ask whether a new staff member could pick up your hardship policy and actually run a case correctly from it — not just understand the philosophy, but know what to do on day one. If the answer’s no, the policy is describing hardship handling rather than enabling it.
That’s the standard I built Groundwork’s Hardship Policy template against — written the way I’d want it written if I were still the one applying it under pressure.
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