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This report by the Parliamentary Joint Committee on Corporations and Financial Services examines financial abuse as a pervasive but underacknowledged form of domestic violence. It underscores the urgency for systemic reforms and provides 61 recommendations aimed at addressing the issue across financial, legal, and social systems.
Key Findings
1. Definition and Scope: Financial abuse encompasses controlling a victim's access to financial resources, employment, education, and economic independence. This form of abuse often traps victims in cycles of dependency and hardship, persisting even after separation.
2. Prevalence:
- According to the ABS, 27% of Australian women (approximately 2.7 million) have experienced violence, emotional abuse, or economic abuse from a cohabiting partner.
- Specifically, 16 per cent or 1.6 million women have experienced partner economic abuse. Comparatively, 7.8 per cent or 745,000 men in Australia have experienced partner economic abuse.
- Women with a disability were more likely than women without a disability to have experienced economic abuse by a partner (4.6 percent compared with 2.4 per cent).
- Financial abuse disproportionately affects women, particularly those with disabilities or from culturally and linguistically diverse backgrounds.
- Elder financial abuse is increasing due to generational wealth transfers and economic pressures on younger generations.
3. Impact:
- The financial toll on victims is estimated at $5.7 billion, far exceeding the annual losses to scams.
- Financial abuse has been estimated as costing the economy $5.2 billion annually, resulting in a total estimated cost of $10.9 billion.
- Financial abuse exacerbates poverty, limits victims' ability to leave abusive relationships, and often results in severe mental and physical health consequences.
4. Systems Enabling Abuse:
- Financial institutions and government services sometimes fail to detect or address financial abuse.
- Loopholes in laws related to superannuation, insurance, and joint accounts often disadvantage victims and benefit perpetrators.
5. Specific Vulnerabilities:
- Women in rural areas, Aboriginal and Torres Strait Islander women, older individuals, and victim-survivors in defence communities face unique risks and challenges.
Recommendations
The report proposes comprehensive reforms, including:
1. Legislative Changes:
- Amend the National Consumer Credit Protection Act and Family Law Act to provide safeguards for victims of financial abuse.
- Introduce provisions to prevent perpetrators from benefiting financially from abuse, including through superannuation death benefits.
2. Industry and Financial Institutions:
- Develop industry-wide standards for identifying and responding to financial abuse.
- Implement "Safety by Design" principles in financial products and online platforms to minimise coercion risks.
- Require financial institutions to offer specialised support for victims, including anonymous reporting mechanisms and financial literacy programs.
3. Government Initiatives:
- Establish a co-design mechanism with victim-survivors to shape legislative and policy reforms.
- Form an inter-departmental task force to oversee implementation of safety measures across government services.
- Review child support arrangements to address systemic exploitation by perpetrators.
4. Support for Marginalised Groups:
- Tailor programs for culturally diverse communities and Aboriginal and Torres Strait Islander women.
- Increase training for frontline staff to identify and address financial abuse, particularly among older populations.
5. Raising Awareness:
- Promote education on financial abuse through public campaigns and professional training for legal, financial, and social services practitioners.
The report highlights financial abuse as a widespread and systemic issue, urging a coordinated response from financial institutions, government agencies, and community organisations. The testimonies of victim-survivors and input from advocacy groups underpin the recommendations, which aim to empower victims and prevent further harm. By adopting these measures, the report envisions a framework that addresses the economic and social dimensions of domestic violence comprehensively.
