The Royal Commission into Family Violence identified economic abuse as a mostly hidden but highly prevalent method for exerting power and control. In response, the Economic Abuse Reference Group (EARG) was established to ensure that a holistic response to economic abuse is embedded across government, industry and essential services. In today’s post, Dr Madeleine Ulbrick (@MaddyUlbrick) of Good Shepherd Australia New Zealand (@GoodAdvocacy) and Carolyn Bond AO (@carolynLBond) of EARG (@EconomicAbuseRG) share highlights from their recently-released report, Responding to Financial Abuse.

What is economic abuse?

Economic abuse is a form of family violence, which, at its core, is a pattern of power and control. Like other forms of family violence, it has a gendered dimension whereby women are predominantly the victims and men the perpetrators. Economic abuse involves behaviour that is coercive, deceptive, and/or behaviour that is unreasonably controlling of another person in a way that denies economic or financial autonomy or withholds the financial support necessary to meet reasonable living expenses.

It involves a broad range of tactics, including preventing a victim from earning money (or studying), or forcing a victim to perform unpaid labour in the family business. It can involve handing over wages or money earnt to a family member. It can also involve coerced social security fraud, or coerced debt in a victim’s name.

Shining a light on the problem

Crucially, economic abuse is abuse that is ongoing. It is part of a complex web of abuse, which keeps the victim financially dependent and socially isolated and its impacts can be devastating and debilitating. Economic abuse is often inextricably linked to other forms of violence present in a relationship characterised by family violence. However, it is also one of the forms of family violence that can occur after separation, keeping the victim tied endlessly to the perpetrator, with no accessible remedy for victims to extricate themselves. And ultimately it is a leading cause of women returning to unsafe relationships.

In 2016, the Royal Commission into Family Violence (RCFV) recommended action by government, regulators and business to address economic abuse. The chair of the Victorian essential services commission reflected on what many regulators and businesses were likely to have thought at that time: “We’re economists. What do you want me to do about an issue as pervasive and complicated as family violence?” However, the RCFV led to major changes in thinking and in practice.

This recent report on responses to economic abuse is written on behalf of the Economic Abuse Reference Group (EARG). The EARG is made up of 20 community organisations who work collectively to influence industry and government responses to reduce the financial impact of family violence.

Family violence victim-survivors suffer financially from the impact of physical violence and economic abuse. Physical violence can lead to additional health costs, being unable to work, destruction of property, or costs to escape and become re-established. Physical and sexual violence are also closely linked with economic abuse, as ‘denial of material security corresponds with denial of physical security’.

The report focuses on the response by industry and government to the 15 recommendations from the Royal Commission into Family Violence (Victoria) (RCFV) that address financial security and economic abuse. These recommendations are designed to:

Enhance the ability of community organisations to prevent and respond to financial stress;
Change business processes to reduce the financial impact of family violence on customers; and
Change infringement and tenancy law to better support survivors.

Victoria is making strides

In response to these recommendations, the Victorian Government funded family violence training for all financial counsellors, appointed 21 specialist family violence financial counsellor positions, and funded the EARG to co-ordinate community input to government and business reforms.

One step at a time, Victoria is improving understanding of and responses to economic abuse. Photo by Lindsay Henwood on Unsplash

Financial counsellors have extensive knowledge of a range of areas of law and policy, including consumer credit law, debt enforcement practices, the bankruptcy regime, industry hardship policies and government concession frameworks. The financial counsellors who specialise in family violence have close links to family violence services and can support clients to take advantage of relevant laws and business processes. They also influence laws and policies through broader system advocacy informed by their casework.

Since 2017, financial counsellors have reported better responses from financial institutions, increased understanding of family violence by businesses, release from payment of some fines and debts for survivors and, in some cases, tailored responses to complex situations experienced by their clients. For many clients, these responses have improved their personal safety and allowed them to re-establish their lives.

The report describes how many larger industry organisations across banking, insurance, utilities and telecommunications, have demonstrated leadership with commitment to dedicated policies and often dedicated staff.

Reforms include family violence guidance published by the Australian Bankers Association and the Insurance Council of Australia, obligations for Victorian energy and water businesses to have effective family violence processes for customers, and a process for seeking release from fines that are incurred as a result of family violence.

What needs attention now?

More remains to be done, however. While many large businesses have established effective teams to respond to these customers, there is a need for broader staff awareness to ensure that customers who don’t have an advocate receive a similar response to those who do. At the moment, while some large debt collection firms have someone who can resolve cases when contacted by an advocate such as a financial counsellor, when an unrepresented person contacts the call centre the response does not result in a resolution.

The report outlines issues requiring further attention including local government’s response to rates, car registration transfer, and credit reporting. There is also a need for other states to catch up with Victoria by resourcing specialist family violence financial counsellors, and reforming tenancy, fines, energy and water laws.

Circumstances related to the COVID-19 pandemic are likely to lead to an increase in family violence and increase the risks of economic abuse, as well as problems in accessing assistance services.

Community services will play a vital role in identifying and responding to, new economic abuse risks. At the same time, the community sector and industry must ensure we don’t “drop the ball” on our ongoing work to reduce financial harm experienced by family violence victim-survivors.

The report makes 3 recommendations for future priorities:

Continue to encourage awareness of and commitment to responsiveness to family violence;
Embed good practice across businesses, to ensure all customers can achieve a consistently good outcome without the need for a third-party advocate; and
Encourage consideration of potential family violence risks when designing products and processes and when granting credit.

Importantly, the report identifies specific business processes that would assist supporting family violence survivors experiencing economic abuse in a respectful and timely manner.

This post is part of the Women's Policy Action Tank initiative to analyse government policy using a gendered lens. View our other policy analysis pieces here.

Posted by @SusanMaury @GoodAdvocacy

Holistic responses to economic abuse: Reporting on progress