Financial Abuse

Financial abuse is a recognised form of family violence. It can be subtle, and grow slowly during a relationship, or it can be overwhelming from the very start of a relationship. In any scenario it is unacceptable, and will be very relevant to family law proceedings.

What does financial abuse in a relationship look like?

Generally there are two types of behaviour that would make up financial abuse. The first occurs if your partner unreasonably denies you financial freedom or control. Has your partner done any of the following things?

1. Retains complete control of finances and money for himself.
2. Restricts your access to bank accounts.
3. Takes your income, not allowing you to access it.
4. Uses your credit card without permission.
5. Fraudulently takes out loans on your behalf.
6. Questions or threatens you repeatedly regarding amounts that you have spent.

The second category of behaviour relates to unreasonably withholding basic financial support when you are entirely or mainly dependent on your spouse for financial support. Has your partner done any of the following things?

1. Forbids you from working;
2. Provides you with spending money that is not enough to meet your needs, or the needs of the children.
3. Takes away your car or keys in an attempt to forbid you from working.
4. Refuses to work or make financial contributions to household expenses.

What are the impacts of financial abuse on an individual?

The impacts of financial abuse are varied. In a financial sense, the effect of financial abuse can be disastrous for the wealth of the family. The issue stems from the fact that the management of your family finances largely occurs without your knowledge or permission. A financially abusive partner could have increased your liabilities, and depleted your assets before you have become aware of the situation.

If the financial abuse has occurred over a long period of time, it can seriously impact the victim’s ability to protect their own interests in family law matters:

1. You may be worried about proactively negotiating property law settlements if you have had very little chance to develop your own financial literacy skills;
2. The abuser asserts a sense of control over you, which has been instilled and re-confirmed over a period of time. This can make it difficult for you to shake off the fear of asserting your independence.
3. You may have very little access to financial resources, making access to legal assistance seem even more difficult.

Steps to regain your financial freedom in an abusive relationship

Regaining your financial freedom is not as daunting as it may first sound. You will find that getting out from under your spouse’s control will boost your self-confidence and do wonders for your ability to fight for a better deal.  Taking the first steps can be very simple.

Step 1: Open a new Bank Account

If your spouse has control over your existing bank account, or if you do not have a bank account in your name, your first step to freedom is to open your own bank account. You should be the only person with access to this account. This will ensure that your income (whether it comes in the form of welfare payments or wages) will be your own.

Step 2: Divert your Income into your new Bank Account

If you are receiving income, whether that comes in the wages, dividends, pension payments, or any other type of cash injection, you are entitled to contact your employer (or bank, Centrelink, etc) and instruct them to start paying the funds into your new bank account.  This is your money, and therefore directing it to your own bank account is your right.  The sooner you stop your abusive partner from draining you of your financial support the better.

Step 3: Become aware of the Asset Pool

If you are thinking about starting property settlement negotiations, there is no way of avoiding the need for a crash course in financial literacy. You must become aware of your family’s current financial situations. What assets do you and your partner own? What do you owe? What are you superannuation entitlements?  You will need to dig up all the statements that you can find, copy them and keep them. The first step in any property settlement is to find out what the current asset pool is, and if you have been the victim of financial abuse chances are that you would have been deprived of this information for years. It is now time to rectify that.

Step 4: Get Financial Advice

We are often asked by clients: What comes next after a property settlement? Will I have an income? How will I set myself up? This is where financial advice comes in handy. Financial advice can help you understand what kind of property settlement is optimum for you, and how to make the most of what you do receive.

Book a free confidential discussion with our lawyers.

Victims of financial abuse are often nervous about approaching professionals, such as solicitors. We recognise that it is a daunting step. Our solicitors are friendly, approachable and knowledgeable. We would be happy to guide you through the property settlement process, and help you achieve a parenting plan for your children.