What Defines Financial Abuse?
Financial abuse is a form of family violence. It can include withholding money, controlling all household spending, or refusing to include you in financial decisions. Financial abuse can happen to anyone.
“When we got married, I had some savings, a job, and a car. The marriage is over, and I’ve got nothing.”
“He controlled all the money. I had to account for every cent I spent.”
Sound familiar?
Many people do not have access to finances in their relationship. If the relationship breaks down, they often find themselves without any money or may not even know how much money they are entitled to.
The law in Victoria states that financial abuse is a form of family violence. Family violence is when one person uses power and control over another. It is a repeated pattern of behaviour and can occur between partners or other family members. Many people think of family violence as either physical injury or emotional abuse. However, withholding money, controlling household spending, or refusing to include you in financial decisions can also be defined as family violence. Financial abuse can be present with other forms of abuse, like physical or emotional abuse, but it can also occur on its own.
Financially Abusive Behaviours Include:
Controlling a Family Member’s Money:
- Taking control of someone else’s finances (e.g., being in charge of all household income and paying the other person an allowance)
- Controlling how all household income is spent
- Overly critical surveillance of how household income is spent, creating feelings of shame and guilt
- Forcing a family member to claim social security benefits like Centrelink
- Making a family member be the guarantor on a loan or taking out a loan in their name
- Making a family member take out a second credit card
- Forcing a family member to work in a family business without being paid
- Filing fraudulent insurance claims
- Forging a family member’s signature on financial documents
- Taking money out of a family member’s pension
- Selling a family member’s possessions without permission
- Misusing an Enduring Power of Attorney
- Forcing a family member to change their Will
Stopping a Family Member from Earning Their Own Money:
- Preventing a family member from getting a job or going to work
- Negatively impacting a family member’s ability to perform at work or complete work-related tasks
- Stopping a family member from studying
- Stalking or harassing a family member’s colleagues
Limiting a Family Member’s Access to Money:
- Not giving a family member access to bank accounts
- Denying a family member access to money so they can’t afford basic expenses like food or medicine
- Destroying, damaging, or stealing property
- Accumulating debt on shared accounts or joint credit cards
- Withholding financial support like child support payments
- Refusing to work or contribute to the household income
- Gambling away a family member’s money or shared money
Loss of Financial Confidence
When someone has limited your access to money or told you that you’re not good with money, it can be easy to lose confidence. It can also feel overwhelming, and you may find it hard to take the first step. Many people in similar situations feel this way. If you are concerned that you might not have money management skills, think back to when you have successfully managed money in the past. A good example might be when you worked out the household budget or paid rent and bills. WIRE research has shown that financial decision-making and money confidence can return.
Who Can Experience Financial Abuse?
Financial abuse does not discriminate. Anyone can experience financial abuse, regardless of age, location, occupation, abilities or disabilities, sexuality, gender, religion, ethnicity, residential status, education, social class, living arrangements, or relationship status. Financial abuse can also occur in other family relationships. This can be between parents and children, between relatives, or in any family-like relationship such as with carers or housemates. Although it can happen to anyone, like other forms of family violence, the vast majority of violence is perpetrated by men against women.
There are a variety of intersecting issues that mean people from some communities have a higher risk of experiencing financial abuse. For example, it is more likely that women will experience family violence than men, and even more likely if you are an Aboriginal or Torres Strait Islander person, a person with disabilities, or a transgender, nonbinary, or gender-diverse person. You might also experience discrimination from a bank or an employer. This is because patriarchy, racism, ableism, and transphobia compound your experience of marginalisation, not because of anything you have done.
Realities of ‘Relationship Debt’
Sometimes the debts you are left with due to financial abuse are referred to as ‘sexually transmitted debt’ or ‘relationship debt’. Relationship debt is common and serious – it happens when you have to pay your partner’s or ex-partner’s debts. Your partner might have forced or tricked you into signing a loan contract as a co-borrower or guarantor or signing a mortgage so they could obtain a loan.
The reality is that you may be held responsible for these debts. If your name is on the contract, then as a co-borrower you are responsible for repaying the loan. If you have more assets or earnings than your partner, or you are easier to find, you may have companies telling you that you have to repay the debt. You may even find yourself solely responsible for a debt that you know nothing about. It is important to get assistance as soon as possible — it may be possible to have some, or all of these debts waived or transferred to the person who caused the debts.
When the Penny Drops
It can be hard to recognise financial abuse in a relationship. Often people know something is wrong, but they don’t have a name for it. However, something might tip you over the edge — receiving another bill you weren’t expecting, discovering your partner’s hidden assets, or reading an article. You suddenly realise that you’ve been financially abused, and you might feel betrayed, confused, or unsure about what to do.
If you are unsure of what you are experiencing or how to move forward, you can reach out to us at WIRE, where a trained support worker will help you identify financial abuse and the ways in which you can recover. You can contact us by phone on 1300 134 130 or book an appointment here [add link].
If you want to know more about financial abuse, including elder abuse and dowry abuse, please read our information booklet. This comprehensive booklet, updated in 2020, contains information and resources for women, nonbinary, and gender-diverse people in relationships where there is financial abuse. Download the PDF.
