Devastated by widespread fires, Victoria has declared a state of disaster. More than 500 structures have reportedly been destroyed and 1,000 agricultural properties have been affected. Tragically, there has also been one fatality.

On Monday, the Victorian government announced new assistance payments of up to A$52,250 to help uninsured home owners and renters “re-establish their principal place of residence”.

This builds on a joint state and federal $19.5 million package offering food, emergency housing, mental health support, a recovery hotline, agricultural support and case-specific assistance.

People in impacted areas may also be eligible for the federal Disaster Recovery Payment ($1,000 per adult and $400 per child) and the Victorian government’s Personal Hardship Assistance Program ($680 per adult and $340 per child, up to a family cap of $2,380). They may also be eligible for Disaster Recovery Allowance income support.

All of these supports and payments are important and are being rolled out rapidly. But much more can be done, especially when decision-makers recognise that treating everyone affected by bushfires the same does not actually produce fair outcomes – as our research has shown.

The divide disasters reveal

Many Australians think disaster-hit regions are all, more or less, the same if they suffer the same size of area burned or other immediate measures of fire loss.

But when viewed through a more comprehensive lens, such as key Australian Bureau of Statistics measure of disadvantage data, and for suburbs affected by the most recent fires, a different story emerges.

Harcourt and Longwood sit in the lower half of the the state’s rankings for socio-economic disadvantage. That is, on average, there are proportionally more households in these locations that have lower incomes and fewer financial buffers to cope with a shock like a bushfire.

Yet, in some cases right next door, the localities of Harcourt North, Ruffy and Ravenswood South are ranked among the top most advantaged areas in Victoria.

This isn’t to argue we shouldn’t support all impacted communities. But a uniform $1,000 disaster payment, for example, treats a renter in Harcourt the same as a property owner in Harcourt North.

Most property owners have insurance, some savings and an ability to borrow to tide them over. In contrast, a low-income renter with little or no savings risks falling into a poverty trap. For some, a week of lost wages spirals into rent arrears and long-term debt.

Australia needs to do more about underinsurance

The Victorian government’s newly announced payments of up to $52,250 will go some way to helping uninsured homeowners and renters get back on their feet. But the announcement also highlights a problem it doesn’t solve: underinsurance.

Many households did have insurance, yet their cover may fall far short of today’s rebuild costs. That shortfall will push families to run down savings, take on debt, or stay stuck in expensive rentals, despite having done the “right thing” by being insured.

Underinsurance, especially for disadvantaged households, turns short-term shocks into long-term setbacks. When policy limits don’t match real rebuild costs after years of rising construction prices, families stay in rentals longer and drain savings.

In California, repeated wildfires have pushed some major insurers to stop writing new home policies. Premiums soared, and the state’s last-resort insurance program, the FAIR Plan, ballooned.

After the Los Angeles fires of January 2025, reports documented illegal rent gouging and sharp rent spikes in nearby cities as thousands of people searched for temporary housing.

How we measure hidden costs

In Australia, we typically measure disaster impacts by insured losses and property damage. That’s because those numbers are visible, immediate and easy to collect. But they’re only part of the picture. They show where assets were lost, not where people’s wellbeing took the hardest hit.

Two studies into the 2019-20 Black Summer fires explain why focusing only on assets misses the full story.

First, fires really do discriminate. This is because socio-economic disadvantages raise exposure before the fire and widen gaps after it. More disadvantaged communities are, we found, closer to major burns.

That starting point means having fewer savings and weaker safety nets when bills arrive for clean-up and rebuilding.

Second, further losses after the fires matter. Some are non-economic and they may take time to manifest.

One year after the Black Summer fires, for example, rents in disadvantaged areas had risen by about $20–$26 per week, crowded living conditions increased, and incomes fell. Disadvantaged areas saw more households reporting zero or negative income in the years that followed, widening existing income and wealth gaps.

And fires are not gender neutral. Unpaid domestic work skyrocketed for women everywhere, but for men it rose significantly in disadvantaged, high-burn communities.

Read more: New research shows Black Summer's megafires left lasting scars far beyond property damage

What we need to get right

To prevent this natural disaster from becoming an ongoing socio-economic failure, governments need to adjust how they respond to accommodate geographic disadvantages that make it much harder to recover in some locations than others.

Evidence suggests cash support should be determined based on disadvantage and how badly areas were burned, so that economic inequality does not worsen.

Beyond cash, governments must broaden the metrics of measuring bushfire impacts. Official recovery dashboards need to track rent changes, overcrowding and the unpaid work burden for men and women.

As a country, we also need to confront a growing insurance gap by creating rebuild-gap top-ups that account for increasing construction costs and fund “build back safer” standards.

We can and must do better by explicitly considering the hidden and longer-term costs of bushfires and other disasters. If we did, Victoria could rebuild fairer and faster without leaving the most disadvantaged further behind.

If you’ve been impacted by the January 2026 Victorian bushfires, you can find out what support you may be eligible for, either online or by calling the Emergency Recovery Hotline on 1800 560 760 from 9am to 5pm. Press 9 for an interpreter or call for translation help on 131 450.