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Change is coming for victim-survivors of financial abuse.
Action needed on financial abuse
06 March 2025
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14 minute read
An insidious scourge
An insidious scourge affecting millions of Australians is finally starting to gain attention thanks to the efforts of those who are tirelessly advocating for change. Financial abuse is a form of family and domestic violence (FDV) and coercive control that can have lifelong impacts for victim-survivors and perpetrators.
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Financial abuse, also referred to as ‘economic abuse’, occurs when a person is subjected to certain behaviours or actions by another person aimed at preventing or controlling their ability to earn, spend or maintain their money or economic resources. The behaviour is intended to manipulate, control, isolate or intimidate the person and almost always occurs alongside other forms of domestic violence, including physical, sexual, psychological and emotional abuse. The behaviour may be brazenly displayed in front of other people but is often covert and is generally recurring.
In the context of FDV, the perpetrator exerts coercive control over their partner as part of the abusive behaviour. In this article, the term ‘partner’ refers to a legally married spouse, former spouse, de facto partner and includes a same-sex spouse or partner. This article does not discuss other forms of familial financial abuse such as elder abuse or involving a family member other than a partner, where the impacts can be no less severe.
Statistics released on 22 November 2023 by the Australian Bureau of Statistics (ABS) on partner violence, emotional and economic abuse for the 2021–22 financial year reveal the chilling extent of the problem:
- - 16% of women and 7.8% of men have experienced what the ABS terms ‘partner economic abuse’; and
- - Around 1.6 million women and 745,000 men in Australia have been subject to economic abuse.
This costs the national economy more than $10.9 billion annually.
Unfortunately, financial abuse disproportionately affects women, who are financially insecure and may feel trapped within an abusive relationship, that they cannot leave or that they have no choice but to keep returning to their abuser. Women who leave abusive relationships often do so with reduced assets and superannuation, insecure housing and longer-term economic insecurity.
What does financial abuse look like?
As outlined by the ABS, financial abuse can take on many forms but commonly involves one or more of the following:
- - Controlling or trying to control:
- - Them from knowing about, having access to, or making decisions about household money;
- - Them from working or earning money;
- - Their income or assets;
- - Them from studying;
- - Depriving them of basic needs (such as food, shelter, sleep, assistive aids);
- - Preventing them from opening or having their own bank account;
- - Forcing them to deposit income into their partner’s bank account;
- - Manipulating or forcing them to cash in, sell or sign over any financial assets they own;
- - Pressuring or forcing them to sign financial documents;
- - Racking up significant debt on shared accounts, joint credit cards or in their name;
- - Damaging, destroying or stealing any of their property;
- - Refusing to contribute financially to them or the family, or not providing enough money to cover living expenses;
- - Refusing to pay child support payments when required to (former partners only); and
- - Deliberately delaying property settlement after the relationship ended (former partners only).
Abuse using the tax system
Sadly, the design of our tax system can enable perpetrators to financially abuse their partners by:
- Arranging for preparation and lodgment of their income tax returns without verification of their written consent;
- Arranging for amendments to their prior year tax returns which creates a Centrelink debt for overpayment of Family Tax Benefit;
Existing tax law and administration requires the victim-survivor to repay these debts — even if these debts are not rightfully theirs. Existing tax laws compel the Australian Taxation Office (ATO) to pursue victim-survivors for these tax debts through two- to three-year payment plans, offsetting future tax refunds, engaging external debt collectors or initiating bankruptcy proceedings.
Concerningly, ATO-initiated bankruptcy as a result of financial abuse by partners can have sweeping, unintended consequences and profound implications. In addition to the obvious financial difficulties, it can also cause adverse mental health outcomes, restrict access to housing and the ability to obtain credit, mean higher interest rates, prevent international travel and inhibit the establishment of a business. Even more far-reaching, ATO-initiated bankruptcy can affect the victim-survivor’s prospects of success in child custody disputes before the Family Court.
How can tax professionals respond?
Advisers and tax practitioners can disrupt perpetrators by identifying and supporting victim-survivors. If you think one of your clients or their partner is a victim-survivor of financial abuse or might be experiencing coercive control, the subject should be approached with the victim-survivor’s safety front of mind, without the perpetrator being made aware. The victim-survivor’s safety comes first.
Do not feel the pressure to provide any additional expertise or support beyond simply identifying the problem and believing the victim-survivor. You might be the first person to whom they disclose this and you have the potential to change their trajectory.
If you are unsure how to approach your client or their partner, you could say something like: ‘I think you might possibly be experiencing financial abuse. Specialist services are available that can help you for free. Would you like us to connect you with one of these services?’
Crisis support: 1800 Respect
Provides free counselling, safety planning and information (available 24/7)
Redfern Legal Centre’s Financial Abuse Service NSW — provides free legal advice to people across NSW who have experienced financial abuse:
Phone: 0481 730 344
Email:
National Debt Helpline on 1800 007 007
Clients anywhere in Australia can call for free and confidential advice about debts
Small Business Debt Helpline on 1800 413 828
Small business financial counsellors can provide free, independent and confidential advice to someone you know is struggling with their business finances
Remember that registered tax practitioners must have in place adequate arrangements to manage conflicts of interest with their clients under the Code of Professional Conduct in the Tax Agent Services Act 2009.
What efforts are being made to take action?
Against the backdrop of International Women’s Day on Saturday 8 March 2025, the work of three remarkable women is to be commended and celebrated. Their efforts in advocating for reform to assist victim-survivors of financial abuse are gaining traction with those who have the power to effect real and meaningful change.
Ruth Owen, Inspector-General of Taxation and Taxation Ombudsman (IGTO)
Ms Owen has commenced her investigation on the topic of financial abuse which, within the existing scope of the legislation, will:
- Examine how the ATO current systems, policies and processes identify and deal with financial abuse within the tax system; and
- Recommend improvements to better support victim-survivors.
Ms Owen said:
I have been really shocked by the prevalence of financial abuse within the tax system. My review has looked into what practical steps can be taken by the ATO to identify where the tax system is being manipulated by perpetrators to impose a tax debt on their partner, and what support or relief is available for those victim-survivors who were not responsible for the debts for which they are now liable.
There is real momentum across government and other institutions to understand and address all forms of financial abuse, including some aspects that are outside of my remit but which offer a very positive way forward for more systemic reform.
Dr Ann Kayis-Kumar, Associate Professor, School of Accounting, Auditing and Taxation | Founding Director, UNSW Tax and Business Advisory Clinic
Associate Professor Ann Kayis-Kumar and her colleagues have gained valuable insights from their frontline casework and grassroots research on how the profession can identify and disrupt financial abuse.
At the UNSW Tax and Business Advisory Clinic, one of 15 clinics funded by the National Tax Clinic Program, more than 80% of the female clients in 2024 self-reported experiencing financial abuse, up from an average of 58% in the Clinic’s four-year study of this issue.
Associate Professor Kayis-Kumar said:
We know that perpetrators are deliberately weaponising legal and tax systems to inflict financial harm as a further tactic of domestic abuse. We also know that financial instability drives women back into abusive relationships.
So, we have an urgent imperative to take action—governments, policymakers, and the tax profession must work together to disrupt perpetrators’ misuse of the system.
Julie Dal Pra, Small business financial counsellor and Advisor – financial abuse in business
Julie’s valuable work at the coalface supports victim-survivors through resolving complex financial abuse, avidly advocating for reform and spearheading a national response to financial abuse in business.
Julie explains that:
abuse in business is an insidious form of domestic violence that hides in plain sight. Each organisation in which I am involved is proud to be establishing the National centre for financial abuse in business. The Centre is creating a critical safety net for victim-survivors and collaborates with government agencies, industry professionals and community organisations, to build a comprehensive response focused on both resolution for survivors and prevention of future abuse.
The Centre will help to break the cycle of this type of abuse. There is a disturbing trend of tax systems and business structures being weaponised to control and harm victims, leading to devastating consequences including bankruptcy, homelessness, and generational poverty. It has to stop.
The tireless work of these three women is creating an incredible momentum for change and is helping to shine a light on this devasting form of financial abuse.
What are the policy solutions?
The National Plan to End Violence Against Women and Children 2022–2032 identifies that all government services and systems, including the tax system, have a role to play in ending gendered violence. Coercive control, including economic abuse, has recently been criminalised in New South Wales, Queensland and Tasmania, with Western Australia and South Australia following suit.
The Final Report (December 2024) of the Parliamentary Joint Committee Hearing on Corporations and Financial Services Inquiry into financial services regulatory framework in relation to financial abuse (inquiry) made 61 recommendations, of which 15 are relevant to tax law, administration and policy. All 61 recommendations were adopted unanimously. Many of the recommendations from the inquiry are directly relevant to the ATO’s administration of the tax system.
Excitingly, the inquiry called for law reform to ensure victim-survivors of financial abuse will not be held liable for paying the tax debts of perpetrators (Recommendation 54):
That the Australian Government develop a tax relief model for survivors of financial abuse similar to the United States IRS ‘innocent spouse relief’ provisions.
The United States is the first and only country worldwide to grant such relief for tax debts on grounds of financial abuse. Their innocent spouse relief provisions have been in place since 1971 and offer tax relief for victim-survivors of intimate partner financial abuse.
Adopting this reform in Australia would be a game-changer. This approach recognises that victim-survivors with tax debts resulting from financial abuse should not bear financial responsibility — rather, the tax liability should shift to the perpetrator.
Finally, the Final Report of the Federal Government-initiated Rapid Review of Prevention Approaches to End Gender-Based Violence, included Recommendation 16:
The Commonwealth and state and territory governments to undertake an immediate audit of how DFSV perpetrators are weaponising government systems, and to respond to these findings. This audit and subsequent plans for reform should be informed by Safety by Design principles.
This in turn catalysed the Commonwealth Systems Audit being conducted by the Department of Prime Minister and Cabinet, and, crucially, conceptualising abuse of the tax system as within scope.
Where do we go from here?
Only by working together can key advocates and stakeholders from across the community sector and academia meaningfully engage with government to build on the momentum and effect real change.
Current deficiencies in the system exacerbate the cycle of abuse and underscore the urgent need for legislative, regulatory and administrative change to disrupt perpetrators and support victim-survivors. There is now momentum to shifting the dial on the national conversation around financial abuse.
About the Author
Robyn Jacobson is the Senior Advocate at The Tax Institute.
About The Tax Institute
The Tax Institute is the leading forum for the tax community in Australia. Our reach includes membership of over 10,000 tax professionals from commerce and industry, academia, government and public practice and 40,000 Australian business leaders, government employees and students. We are committed to representing our members, shaping the future of the tax profession and continuous improvement of the tax system for the benefit of all, through the advancement of knowledge, membe›r support and advocacy.
Read more at taxinstitute.com.au
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