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Budgeting services that face closure after missing out on government money this year are pleading for an urgent review of the sector's funding.
In an open letter to the prime minister and ministers, they said a third of the free budgeting services - 44 - are losing government funding, putting more pressure on poor communities.
The letter has 62 signatories, representing 57 different budgeting services across the country, some of whose current contract ends on Monday.
Auckland Central Budgeting general manager Teresa White said they feared that desperate whānau would be left hanging and were concerned that some communities would be left without a budgeting service.
"There is a risk that we will lose experienced financial mentors, and with them the knowledge they have, and that is a worry for our sector and the communities we serve," she said.
Dunedin Budget Advisory Service had lost its government funding.
Its executive officer Andrew Henderson said that meant it had become unviable.
"It is unclear if we are being replaced by a new provider or whether they have experienced financial mentors. Where do we refer people? I am deeply concerned about the impact that this process will have on the Dunedin community," Henderson said.
Budget advisors are also asking the government to increase the overall funding for the sector.
The Ministry of Social Development (MSD) said funding for budgeting services has dropped from just over $22 million last year to $19.5m from July, due to the expiry of a time-limited cash boost during the pandemic.
It is also changing the funding model from covering sessions to employees - around 180 financial mentors will be funded nationally.
That meant MSD would no longer fund 44 of the current 132 budgeting services.
White said the collective of budgeting services was concerned funding would drastically reduce the number of financial mentors - currently 800 mentors across the country in varying part-time and full-time roles.
It also came as the number of whānau turning to financial mentors for help jumped 40 percent in a year as they grapple with growing debt, according to a report.
The second annual FinCap Voices report has laid out the financial wellbeing of those supported by financial mentors.
The 185 services across Aotearoa worked with 49,568 whānau in 2022, but that leapt to 69,807 in 2023, the report showed.
White said Auckland Central Budgeting's client numbers had more than doubled since 2021.
"We have had to take on more staff to meet demand, people are doing it really tough out there, the impacts of Covid-19 are still filtering through, add high interest rates, a recession, and the current cost of living, you get a perfect storm," she said.
The cost of living weighed heavily on people with stretched budgets - Dunedin Budget Advisory Service said almost half of the people contacting their service were facing such pressure.
"I don't see this issue going away anytime soon. It is essential that our community can reach out for support and receive help in a timely and safe manner," Henderson said.
