18 August 2015
You may not be familiar with the term financial abuse. But that doesn't mean you haven't experienced it.
If your spouse or partner refuses to let you see your joint bank account, or has coerced you into signing loan documents or forbidden you from working, then you are a victim.
As awareness of family violence grows, light is being shed on this often unrecognised aspect of controlling behaviour within a relationship.
In July, the Victorian Royal Commission into Family Violence brought the issue to public attention with the story of a woman who came to Australia after an arranged marriage in another country.
She hoped to continue working as a nurse, but her husband, an engineer, refused to pay for her retraining and insisted she get another job. Eventually he quit his job and insisted on her being responsible for the family's financial stability. He restricted her social contact, and was outraged if she was late home from work, even by a few minutes.
Fortunately, the woman's employer supported her in her efforts to seek counselling and training and she was able to leave the relationship. It is estimated that financial abuse occurs in about 50 per cent of Australia's family violence situations, affecting about 1.86 million Australians. It is usually gender specific, with women most likely to be controlled by their partner.
Robyn McIvor, senior manager, family violence development, Relationships Australia Victoria, says it impacts women from all socio-economic groups, ethnic backgrounds and levels of financial understanding.
Gloria (not her real name) had a 12-year relationship with a man whom she now believes was financially abusive. When they met she was earning a six-figure income from her own business. Over time her partner's constant belittling of her skills led to her letting go of her business. "I was an emotional mess," she says, adding that it was at this time that the financial abuse became most evident. "I wasn't earning income and he just handed out little bits of money to live on."
Eventually, he gave her a job in his business, but her income was just enough to cover bills. "I wasn't supposed to put anything away. If I even suggested I might put something in my account for me [he reacted] as if I was being greedy or selfish," she says.
Now, at the age of 60, she is rebuilding financially and emotionally. "Fortunately, I'm still young enough, got enough energy, that I've been creating a new life, creating a new business," she says. But she acknowledges the relationship was "destructive".
"That 10 or 12 years was when I would really have been substantially earning and putting away a lot," Gloria says.
Research by the Women's Information and Referral Exchange (WIRE) into financial abuse shows it is highly damaging to women's financial confidence and security.
Julie Kun, deputy chief executive, WIRE, says: "It's pretty clear that women leave financially abusive relationships far worse off financially and that recovery can take years or may never completely happen." Women are often left with limited super and limited access to employment and the effect is compounded if she was working in her partner's business.
Yet many women who contact WIRE are not sure whether they have been financially abused, or if they are somehow to blame.
"They see it as something that they did to themselves, rather than something that their partner did to them," says Kun, adding, "There's a lot of work to be done with women – and men – about what's an acceptable financial relationship within a marriage or partnership."
Power and control
Someone taking a more active role in managing family finances doesn't equal financial abuse. "There can be a natural division of labour in a relationship, and it can still be a very healthy relationship based on equality and respect," says McIvor.
Financial abuse occurs when an intimate partner uses money or financial issues to exert power or control over a spouse or partner. She might be questioned about every purchase she makes, or he might be non-consultative about the way money is spent.
"So sometimes it can be finding their credit card bill with expenses on it that she wasn't aware of," says McIvor.
About 40 per cent of the participants in WIRE's research could not access the information they needed to about their own finances. Women might also be forbidden from working, says Kun.
"Another quite common form is making women apply for Centrelink payments that they are not entitled to." It can also include the man getting an asset from a debt when the debt is only in their partner's name.
A 2012 report by Fiona Macdonald for Good Shepherd Youth and Family Service and Kildonan UnitingCare, contains a lengthy list of behaviours that can be used to undermine a woman's ability to work or get an education. They might include sabotaging her transport by hiding car keys; destroying documents, such as books, for study; preventing her from sleeping; or making harassing phone calls to her workplace.
Financial abuse doesn't necessarily involve physical violence. In one example described by Good Shepherd Microfinance the woman impacted is a stay-at-home mother, an arrangement that she and her husband, a lawyer, had agreed upon before having children. She stopped asking her husband about their finances, because when he was questioned about his spending or their savings he became verbally abusive and threatening.
He scrutinises her spending and humiliates her over spending choices in front of their children and other family members. The allowance he provides her barely covers groceries and essential items for the children, and he refuses to include her in major financial decisions, claiming she wouldn't understand.
Despite being a widespread problem, it is only recently that some states and territories have included economic abuse in their definitions of family violence. When the Australian Law Reform Commission published its report, Family Violence – A National Legal Response, in November 2010, Victoria, South Australia, Tasmania and the Northern Territory included economic abuse in their definitions of family violence. NSW, the ACT, Western Australia and Queensland did not. In 2012, economic abuse was included in the Commonwealth Family Law Act 1975.
Kun says several things should act as red flags: do you feel uncomfortable talking to your partner about money, and are you able to have a say in your own finances? McIvor says controlling behaviours are usually evident early in a relationship. Things that should cause concern include if your partner refuses to discuss money, or isn't open about their finances. Gloria says she still didn't know how much money her partner had after 12 years together.
"He was incredibly secretive. Initially, I thought, that's OK; he doesn't want to share that. I shared my assets with him, thinking that he would eventually share with me." Kun says discussions about saving for a house or holiday, or about stopping work to have a baby, can be insightful.
"If a partner is going to be financially abusive, they won't want to discuss it. They'll tell you that it's none of your business; they'll become aggressive; they'll start intimidating. If you can leave that relationship as early as possible, it's going to be easier to extricate yourself emotionally, psychologically and financially."
Taking steps to freedom
Leaving a financially abusive relationship is not easy. A woman's financial confidence is often severely eroded. "Even when they've left [the relationship] they can feel really unconfident in managing a budget, even though they may have that knowledge and skill," says Kun.
It takes financial resources. Almost 57 per cent of the women in WIRE's research said the major barrier to leaving an abusive relationship was lack of money. "Often they leave without any savings and needing to find new accommodation to set up again, and that takes money when they have none," says Kun.
Abuse can escalate when the relationship breaks down. "We definitely have examples of women being told by their ex-partners: 'I'm going to drag you to court so many times you won't have a penny and I'll drive you crazy'," says Kun.
Fortunately, awareness of the issue is growing. In June, Good Shepherd Microfinance launched an online training module to help its 1500 microfinance workers identify financial abuse and refer women to family violence support services.
It plans to extend the module to other organisations, too. Dr Christine Nixon, chair of Good Shepherd Microfinance, said: "Banks, telcos and utility companies all have hardship teams dealing with victims of financial abuse every day, whether they know it or not." Kun says the financial sector could do more to protect women.
"Loans get taken out, bank accounts get opened, Visa card limits get lifted and the woman's not involved. Banks think that it's not their business; that it's just a transaction."
A financial planner attending one of WIRE's professional development seminars reported that it wasn't uncommon to do a family financial plan with only the husband present, a practice she is seeking to change. "We really need to start talking more about community responsibility. If people are vulnerable to financial abuse, banks, financial planners and other financial services have a role to play in protecting women," says Kun.
If you think you may be in a financially abusive relationship, contact Relationships Australia or a specialist family violence service for help.
A counsellor can help women either: safely regain financial control, separate from a partner; or assist in seeking changes in a partner's behaviour.
If a separate bank account is required, for instance, a counsellor can help you consider whether somebody needs to be present if you decide to tell your partner, or if it's something that should be kept private for the safety of you and, possibly, your children.
For more information, see WIRE's booklet Money Problems with Your Partner? or Relationships Australia's booklet Safe from Violence.
WIRE is developing a website to help women initiate conversations with partners about money and Relationships Australia includes discussions about money in its pre-marriage and pre-coupling courses.
- Financial abuse involves the use of money and financial issues to exert control over a spouse or partner.
- It has significant negative effects on the impacted partner's financial confidence and long-term financial security.
- The warning signs are usually evident early in a relationship.
- Controlling behaviours often escalate when a relationship breaks down.
- A family violence service can help people either safely regain financial control, separate, or seek behavioural change from their partner.