Tammy Taylor is relying on buy now, pay later services in a desperate attempt to provide essential medication for her son with a disability.
The financial burden of caring for a child with special needs has left the Mildura mum struggling to make ends meet, highlighting the growing cost-of-living crisis across the country.
"With the cost of those medications, sometimes you just don't make enough money to pay for them all at once," Ms Taylor said.
"His medication costs me $250 a month."
"I have had to use Afterpay to pay for my son's meds."
The financial stress is forcing her to spend money she doesn't have yet, just to get by.
"If I needed medication or one of my other children needed medication, I have to use Afterpay because they wouldn't be able to afford it since the cost of living has gone up so much," she said.
And Ms Taylor was not alone.
The Australian Bureau of Statistics reported the proportion of people who delayed or did not get prescription medication when needed due to cost increased to 5.6 per cent in 2021-22, from 4.4 per cent in 2020-21.
Delaying the debt
Some experts believe the use of buy now, pay later services can be concerning, especially when individuals may be living payday to payday.
Associate finance professor Andrew Grant, from the University of Sydney Business School, said it was important to note that anyone could accumulate a considerable amount of debt, which could be overwhelming for those struggling to balance their financial obligations with other responsibilities.
He said buy now, pay later services could lead those struggling financially to "kick the can down the road".
"By allowing people to access further credit in the form of buy now, pay later might make them more in debt than they would be otherwise," Mr Grant said.
"It might also encourage them to default on the other financial products, such as credit cards or personal loans."
Mildura resident Maddy Spencer, who uses Afterpay and Zip at the chemist, described using buy now, pay later services as being "stuck in a loop".
"Most pay days I pay $200-300 off Afterpay, pay other bills and then put fuel in my car," she said.
"Then we really rely on my husband's pay each week for food, mortgage and insurances.
She said she started using Afterpay when she became a stay-at-home mum.
"I started using it to budget within my fortnightly payments to buy more costly items, like birthday presents and quality shoes, but the last year I've been using it to get through till my next pay," she said.
Fellow Mildura resident Sue Watson, who has a monthly medication bill of $120, said she felt uneasy using buy now, pay later services to pay for her medication.
"Society today requires instant gratification but forgets that the debt still needs to be repaid," Ms Watson said.
Despite suffering due to the rising cost of living, she said she was strongly against the use of such services.
"I know my health is suffering from not taking some of my medications, but that's life at the moment."
Budgeting measures
Ms Watson said she struggled to make payments on time despite the Pharmaceutical Benefits Scheme (PBS) significantly reducing her family's medical bill.
Recent changes to the scheme reduced the amount patients paid towards the cost of subsidised medicine from $42.50 to $30.
"The safety net drops it [the cost of medication] but we can only buy the basics now," Ms Watson said.
Services Australia said it had been allocated $1.2 million in 2022-23 and $1.6 million over four years to support the implementation of changes to the PBS.
According to the Australian Bureau of Statistics, two in three people were supplied with at least one PBS medication in the six months before or after National Health Survey interview.
Almost all [97 per cent] people aged 75 years and over were supplied with a PBS medication.
80.4 per cent of people with one or more selected chronic conditions were supplied PBS medication.
Late fees accrue
While buy now, pay later providers Afterpay and Zip do not charge compounding interest, customers pay late fees if the monthly minimum payment, or the remaining balance, is not paid on time.
A Zip spokesperson said more customers were using its services.
"We are finding customers are using Zip Pay more and more for everyday spend [including within the health vertical] to avoid credit card interest," the spokesperson said.
An Afterpay spokesperson said 98 per cent of all purchases with Afterpay incurred no late fees in the first quarter of 2023.
"Customers cannot use our product if they have missed a repayment," they said.
"We cap our late fees, and we don't allow customers to revolve in debt.
"If customers do not want the higher limit that's earned over time, they can contact customer service and lower the limit."
However, Dr Grant said people who did not use the services responsibly could face hardships.
"There is a proportion of the population who face particularly high risks, whether they've got multiple buy now, pay later accounts, or they've maxed out their credit card, and then they're relying on buy now, pay later to cover the gap," he said.
"These are concerning cases for people that they might feel like they're forced into using buy now, pay later for the medication."
