Domestic and family violence is a scourge on society, and financial abuse is a form of domestic and family violence.

The national domestic and family violence counselling service, 1800 RESPECT, defines financial abuse as "someone using money in ways that can hurt you".

The latest figures from the Australian Bureau of Statistics (ABS) show 1.6 million women have experienced economic abuse since the age of 15.

Julie Barrow, family violence and professionalisation lead at Financial Counselling Victoria (FCVic), says FCVic has also seen these two forms of abuse being entwined.

1.6 million women have experienced economic abuse since the age of 15

"Financial abuse is a form of family violence, but it always sits alongside … other forms of family violence such as coercive control or physical abuse," she says.

The recent Parliamentary hearings on financial abuse have cast new light on its prevalence. Super funds, like other financial service providers, play an important role in identifying and responding to financial abuse in super. This is because they have visibility and approval over account transactions, and often need to communicate with their members about their personal and financial circumstances. 

What is financial abuse in super?

Experts and advocacy groups have spoken out about different types of financial abuse in super and make the point that there may be more. Organisations working with victim-survivors have identified some of the key types of abuse:

• misuse of the system in family law proceedings to prevent victim-survivors getting their fare share of their abuser's super, or to unfairly access a victim-survivors' super
• abusers coercing victim-survivors to illegally withdraw their super early and hand it over
• elder abuse, including forcing retired people to hand over their super.

Bad customer service at super funds can worsen the impact of this financial abuse. As we've previously covered, complaints about account administration problems at super funds have been rising sharply.

When funds aren't responsible, flexible of following best practice for customer service, these problems may disproportionately impact members experiencing domestic/family violence.

There are examples where this has occurred. In one case at the Australian Financial Complaints Authority, a fund refused to let a member change her super investment option verbally or in writing after she disclosed she had no internet access due to domestic/family violence.

 It can be difficult to contact super funds, which makes getting help harder

Alex Kelly from the Financial Rights Legal Centre (FRLC) says it can be difficult to contact super funds. "For someone in a financial abuse situation, this makes getting help even harder," she says. 

In light of these ongoing examples, experts and advocacy groups say we need an industry-wide customer service standard to ensure funds are monitoring, recording and preventing financial abuse.

Is the family law system enabling financial abuse in super?

Experts say abuse perpetrators can misuse the family law system when a court divides up super as part of a property settlement when spouses or a de facto couple split up. Super funds must transfer a member's money where the court orders.

The Centre for Women's Economic Safety (CWES) says the current law doesn't prevent a perpetrator from getting some of their partner's super, even if they have a domestic or family violence-related conviction.

Not only is it unfair that a perpetrator can benefit from their victim-survivor's super, it can also be a barrier to the victim-survivor recovering financially from the abuse and obtaining financial independence.

It's impossible to get back to where I was

Financial abuse survivor

CWES quotes from a panel member of their organisation who has lived experience of financial abuse. "The thing that really got me was that I had to pay him half my super. After everything I endured, all the police reports and everything, family law was just horrendous," the member said. "It's impossible to get back to where I was."

CWES calls for changes to the relevant family law and super legislation to prevent this type of financial abuse.

The current law doesn't prevent a perpetrator from getting some of their partner's super, even if they have a domestic or family violence-related conviction.

When perpetrators coerce victim-survivors to access their super

Coerced access to super is another major form of financial abuse in the system. Generally, you can only withdraw your super once you retire. There are limited exceptions to this rule: 

• people were allowed to withdraw two amounts of up to $10,000 each due to the disruption of COVID-19
• you can withdraw super on compassionate grounds (including to pay for medical treatment, to modify your home due to a medical condition or to prevent foreclosure on your home) or if you have a terminal medical condition.

Making a false claim to access your super early is illegal, and you can be penalised for it. 

Multiple advocacy groups working with victim-survivors told Super Consumers Australia that they're aware of perpetrators abusing early access to super by pressuring someone into making an illegal request to withdraw their super. The perpetrators may then take the money for themselves.

Coerced early access of super costs victim-survivors of financial abuse dearly. A relatively small amount of money taken out of a victim-survivor's super can leave a much bigger hole in their retirement income years down the line because of compound interest. 

It's also possible for perpetrators to force retired people to withdraw and hand over their super.

"Superannuation can be seen by perpetrators as an easy source of funds they can coerce a victim into accessing," says Alexandra Kelly from FRLC.

"Demands to access super are usually one of many demands for money that ultimately do not benefit the person being pressured to provide it."

One woman approached CWES and reported her partner withdrew $20,000 from her account without her knowledge

Rebecca Glenn, chief executive officer at CWES, says the organisation has helped women who were coerced to withdraw their super. Glenn says one woman approached CWES and reported her partner withdrew $20,000 from her account without her knowledge. FCVic also saw cases of perpetrators coercing victim-survivors into taking out their super during COVID-19.

People can only withdraw super early on the grounds of financial hardship once every 12 months. In its submission to the financial abuse inquiry, industry body Super Members Council (SMC) identified a problem with this: funds can't see whether a member has withdrawn money from their super while at a previous fund. The submission concluded this situation "is likely being exploited by perpetrators of abuse"who could pressure victim-survivors to change funds and withdraw more money. 

The SMC recommends that the government develop a tool so funds can check whether someone has previously withdrawn money, or let the Australian Taxation Office take responsibility for these withdrawals so there is greater visibility on repeat withdrawals. Either change will "reduce the ability of abusers to manipulate the system and gain access to the super of victim-survivors", the submission says. 

What are funds doing to support victim-survivors? 

We contacted the five biggest super funds (by member numbers) to ask them what they were doing to ensure best practice in working with fund members who are experiencing domestic or family violence and or financial abuse.

We also asked whether the funds have procedures to identify suspicious transactions when an abusive partner may be coercing somebody to withdraw their super early.

The five funds we contacted were:

• Australian Super
• Australian Retirement Trust (ART)
• HESTA
• Rest
• Hostplus

Hostplus declined to comment but referred us to a submission to the parliamentary hearing on financial abuse they had contributed to (made by industry body Super Members Council). 

Some funds, for example HESTA and Rest, did report having measures in place to deter financial abuse, such as:

HESTA noted they train frontline staff and refer members experiencing domestic/family violence to an organisation who supports victim-survivors. 

Unfortunately, these measures don't appear to be widespread, and still leave loopholes that financial abuse perpetrators can exploit. For example, the responses didn't show that every fund has in place: 

• a system for recording and responding to any abuse disclosed
• specific measures to protect the privacy of victim-survivors
• protocols to avoid re-traumatising members by minimising the need for victim-survivors to repeat their experiences to multiple staff members at the fund 
• risk assessments to ensure abusers can't misuse new products. 

Australian Super referred us to their submission to the financial abuse hearing. This document outlined the fund's general approach to monitoring and preventing fraudulent transactions.

Super Consumers Australia policy manager Rebekah Sarkoezy says super funds need strong and consistent measures to identify and prevent all types of financial abuse, not just those that overlap with fraud, where a perpetrator impersonates the member.

"It's concerning that there appear to be gaps in adopting best practice, even at the funds who have taken some steps towards supporting victim-survivors.

"What we're hearing from those working with victim-survivors is that there's much more to be done," says Sarkoezy. 

"We need robust, mandatory standards across the board to ensure super funds are protecting all Australians from the scourge of financial abuse in super," she says.

How other sectors are responding to financial abuse

Consumer organisations noted that other finance industry sectors, such as banking, are doing more than super funds to identify and minimise financial abuse.

Amanda Chan, advocacy coordinator at FCVic, says other sectors are better supporting victim-survivors. "Super has been left behind in this overall industry push towards better standards and better approaches to working with people who've experienced family and domestic violence," she says.

The Australian Banking Association (ABA)'s guidelines set out what financial abuse can look like and provide a framework for banks to identify and counter suspected incidents of financial abuse. Instead of just confirming banks' legal obligations, it "sets a higher standard than the law", in places.

The document identifies types of transactions banks should look for that may be connected to financial abuse, such as:

• unusual requests for large amounts of money
• paper withdrawal forms where the member's signature doesn't match the handwriting on the rest of the documents
• transactions where the person withdrawing money seems fearful or withdrawn
• requests for money where the person seems to be taking instructions from someone else 
• digital transactions from a location where the person isn't likely to be.

The testimony of victim-survivor Cathy Oddie at the recent financial abuse enquiry shows the difference that a well-organised and empathetic institution can make to a person facing financial abuse.

"The amazing (bank) employee told me that there was a range of ways that I could be supported," Oddie said. 

The employee told her that she didn't have to have any additional documentation to verify her identity. 

"It was such a relief, in that moment, to not be asked to do any more work at a time when I was feeling so distressed and emotionally depleted."

It was such a relief, in that moment, to not be asked to do any more work at a time when I was feeling so distressed and emotionally depleted

Victim-survivor Cathy Oddie

Advocacy groups also note some banks have helped improve the system for victim-survivors by gathering and sharing information on financial abuse.

For example, one bank identified thousands of customers who received deposits of tiny amounts with potentially abusive messages in the transaction descriptions. The bank shared this insight with financial counsellors and women's safety organisations, helping the broader industry learn more about this disturbing abuse and move towards stopping it.

Some banks have helped improve the system for victim-survivors by gathering and sharing information on financial abuse.

Other sectors are also working to prevent financial abuse. For example, the Energy Retail Code of Practice is mandatory for all companies selling electricity and gas to Victorians.

This code requires these energy retailers to have (and regularly review) a domestic and family violence policy that people can easily access and print from the company's website. This rule addresses concerns from advocates that super funds may not have policies that victim-survivors can access at a safe time, or may not have policies at all.

It can be traumatising to victim-survivors to repeat their story to different staff

Another relevant section of the code states retailers must provide a "secure process designed to avoid the need for an affected customer to repeatedly disclose or refer to their experience of family violence". 

This section is important as it can be traumatising to victim-survivors to repeat their story to different staff. Further, it can place them in greater harm if the perpetrator monitors their calls.The industry developed this code after consultation with domestic/family violence specialists, community groups and victim-survivors.

How a Customer Service Standard could help

So, what is the way forward? While there are gaps in the law that need to be addressed by the government, those working to support victim-survivors say a detailed, mandatory industry-wide customer service standard could ensure the super funds are doing everything they can to address financial abuse.

Sarkoezy says the government must introduce industry-wide customer service standards that compel super funds to identify and respond to financial abuse in line with best practice. Other industries like energy and banks have already introduced guidance on preventing and responding to financial abuse. 

Glenn says funds could do more to help victim-survivors by developing policies and procedures to identify and prevent transactions linked to abuse and wants to see funds introduce more checks and balances at the key moments when people can withdraw their super early. She says these measures would make it harder for perpetrators to take super from victim-survivors. 

More checks and balances ... would make it harder for perpetrators to take super from victim-survivors

"These 'key moments' when people can access their super include when someone transfers money out of a super fund into a self-managed super fund, early access due to hardship and entering the retirement phase, where people can withdraw their super."

Glenn suggests that super funds could sign the Respect and Protect campaign, which aims to curb financial abuse through better design of financial products.

Kelly suggests all funds publish their domestic and family violence policies and procedures on their websites so victim-survivors can access this information at a safe time. 

"Improving customer accessibility – including dedicated First Nations members with culturally competent staff – will make getting help a lot easier for people in difficult circumstances," Kelly says.

There are other important business practises a mandatory customer service standard could include to protect financial abuse victim-survivors. Funds could be required to:

• protect the privacy of victim-survivors
• minimise the need for victim-survivors to repeatedly disclose that they have experienced abuse
• record and report any financial abuse 
• undertake risk assessments for new products to identify whether these products can be misused and taking steps to address this misuse
• introduce measures to identify and prevent financial abuse (rather than general fraud or identity theft).
• train anyone who has contact with members on recognising signs of financial abuse and supporting those experiencing this abuse. 

How to design a better system

FCVic's Chan made the point that financial abuse is a complex issue that requires holistic, rather than piecemeal, policy solutions.

Advocacy bodies and casework organisations working in this field also stress that any new code must incorporate lived experience with financial abuse. 

Barrow agrees that the government must engage with lived experience to design a system to support victim-survivors better.

"Co-design is particularly important given that no two experiences of family violence are the same," she says. 

"A diversity of input should be sought as part of any process of creating a code of conduct, especially ensuring that any [consultation] includes the voices of those who don't get a say – women, people from culturally and linguistically diverse communities and women with disabilities."

Glenn agrees. "We must listen to victim-survivors about their experiences to learn more," she said.

This content was produced by Super Consumers Australia which is an independent, nonprofit consumer organisation partnering with CHOICE to advance and protect the interests of people in the Australian superannuation system.

Stock images: Getty, unless otherwise stated.

Join the conversation

To share your thoughts or ask a question, visit the CHOICE Community forum.

Visit CHOICE Community