Today (5 December) the Parliamentary Joint Committee on Corporations and Financial Services will release its long-awaited report from the inquiry into the Financial Services Regulatory Framework in Relation to Financial Abuse, which commenced in April 2024.

Members of the Economic Abuse Reference Group, a national network of over 50 community organisations that work with government and industry to reduce the financial impact of family violence, have welcomed the report. EARG led the community sector’s response to the inquiry and is encouraged by the Committee’s adoption of many of its recommendations and evidence.

The Committee makes extensive recommendations for reform to child support collection, the tax system, lending laws, social security, insurance and superannuation that, if enacted, would close loopholes in our laws and policies that are exploited by perpetrators of financial abuse.
The Committee's recommendations include:

• Requiring banks and lenders to be satisfied that a borrower is not experiencing financial abuse before approving loans;
• Recognising financial abuse in the terms and conditions for all financial products;
• Preventing perpetrators of family violence from benefitting under victim survivors’ superannuation death benefits;
• Transferring responsibility for collecting child support payments from Services Australia to the Australian Taxation Office to improve compliance;
• Making it easier for victim survivors to access crisis payments from Services Australia;
• Reviewing the COVID-19 early release of superannuation scheme and considering repayments for people who withdrew super as a direct result of financial abuse;
• Allowing insurance policies to be split so a victim survivor’s claim is not denied due to the conduct of their perpetrator;
• Providing better remedies for victim survivors who have been made company directors without their consent and left liable for company tax debts;
• Developing training and education programs to increase financial providers’ understanding of financial abuse of First Nations Australians.

Quotes attributable to Jasmine Opdam, National EARG Coordinator and Senior Policy and Advocacy Officer, Financial Abuse Service, Redfern Legal Centre:

“It is encouraging to see that the voices of victim survivors and their advocates in the community sector have finally been heard. These recommendations reflect changes that the EARG has long called for: practical solutions, informed by lived experience, that put the safety of victim survivors first. Now we need government agencies and the financial services sector to come together and commit to tangible actions to implement these recommendations.

The scope of these recommendations makes it clear that addressing the epidemic of financial abuse in Australia requires cross-sector and cross-government action. While there is a lot of work still to be done, there are practical changes to legislation and policies that can be made quickly and will go a long way towards closing loopholes and providing better outcomes for victim survivors. The Australian Government, financial institutions, and professional bodies for accountants, financial planners and lawyers all have a role to play in ending financial abuse. This is only the beginning of the conversation.”

Quotes attributable to Dacia Abela, Program Manager, Restoring Financial Safety Program, Westjustice:

“We welcome the recommendations made by the Parliamentary Joint Committee on Corporations and Financial Services. The Report emphasises how prevalent and insidious financial abuse is in Australia and demonstrates how it can cut across so many aspects of a person’s life. We are pleased to see our recommendations relating to responsible lending, insurance, privacy, and Centrelink echoed by the Committee. We commend the Committee for listening to the experiences of victim-survivors and implore both the government, its agencies and private companies to adopt the recommendations in full.

Financial abuse and financial insecurity can have detrimental effects on victim-survivors’ physical safety and health and these recommendations will go a long way towards seeing financial and government services afford greater protections to victim survivors, to make their products and services safer and more accessible and ultimately prevent financial abuse from happening in the first place.”

Quotes attributable to Julia Davis, Senior Policy and Communications Officer, Financial Rights Legal Centre:

“It’s excellent to see the Committee recognise the staggering human and economic cost of financial abuse. Introducing friction points and better checks and balances when people apply for credit are very welcome developments that will make financial institutions more accountable.

We strongly support the insurance recommendations, like the introduction of protections for the conduct of others, and improvements to the General Insurance and Life Insurance Codes. Allowing insurance policies to be split will also help people escape coercive control while maintaining their insurance cover and accrued benefits.

Expanding Design and Distribution Obligations to include consideration of customers impacted by abuse, and the potential for perpetrators to cause harm by misusing products and services, will go a long way toward preventing harms occurring in the first place.”

Quotes on behalf of the Economic Abuse Reference Group of Western Australia (EARGWA):

“Financial abuse traps individuals in cycles of dependency and disempowerment. These recommendations provide a meaningful opportunity to reform the financial services sector, making it more inclusive and trauma-informed.

EARGWA is encouraged by the recommendations' strong focus on regional and remote areas. These measures are crucial for ensuring that all Western Australians, regardless of their location, have equitable access to support. The emphasis on improving financial literacy, enhancing in-person banking services, and protecting against financial abuse will significantly benefit our communities.

EARGWA remains dedicated to building on the hard work of our predecessors to ensure the Inquiry’s findings lead to meaningful, lasting change. We will continue to work alongside Western Australians to advocate for implementation that prioritises the safety and dignity of all individuals.”

Contact

For further information contact media@financialrights.org.au