Domestic violence has become disturbingly common – on average, one woman a week is murdered by her current or former partner.
In the year 2021/22, 5606 women – an average of 15 per day – were hospitalised due to family and domestic violence.
Financial abuse is just one of the forms domestic violence can take, when an abuser takes away access to money, coerces the victim into poor financial decisions or uses their assets or money without consent.
The Centre for Women’s Economic Safety (CWES) is calling for greater protections for victim-survivors of post-separation economic abuse, including mortgage and lending reforms that would support victim’s and children’s ability to stay in their own homes.
94% of victims deal with financial fallout from abuse
The CWES says that of its lived experience advisory panel (in other words, individuals who have survived domestic violence themselves) 84% have experienced financial and economic abuse, particularly post-separation, and 94% were left to pay shared financial liabilities or debt belonging to their ex-partner.
Financial abuse comes in many forms, including hiding assets, stripping property pools, refusing to pay child support, creating new costs and debts for partners and critically, refusing to maintain mortgage repayments.
These behaviours are echoed across all regions, ethnic and religious backgrounds, and all education and income levels.
“All too often, we ask, ‘why doesn’t she leave’, when our lived experience data shows that abuse doesn’t end at separation,” CWES CEO Rebecca Glenn said.
“Even when there’s not the same physical proximity, perpetrators can still extend control and abuse through economic resources.
“One concerning trend is perpetrators refusing to contribute to mortgage repayments when their partner leaves.
“In these cases, banks can, and often do, seek full repayments from the victim.
“The concept of joint and severally liable is not well understood in Australia, but it means banks are entitled to chase one party on a joint mortgage for the whole amount owing.”
Pushing women into homelessness
Women over the age of 55 are the fastest-growing cohort of homeless people in Australia, with domestic abuse being the largest contributing factor.
Assisting victims in staying housed and giving them a safe, stable and affordable home to heal and recover in, is vitally important.
The Centre for Women’s Economic Safety last year published a paper calling on banks to reimagine banking products, including mortgages.
While many victim-survivors can meet repayment obligations to retain the asset or stay in their home despite the financial sacrifices to do so, refinancing often leads to rejection.
Banks reject victim-survivors due to responsible lending guidelines and serviceability assessments, despite a history of successfully servicing the loan.
“This creates a ridiculous situation of victim-survivors being forced into the private rental market to pay rents that are similar to or more than their mortgage repayments, resulting in more costs to individuals, society and the economy as well as contributing to the growing rate of older women who are experiencing homelessness,” Glenn explained.
“We know this is a complex area where there isn’t one single lever, we can pull to solve the problem.
“That’s why we are calling for banks and regulators to work together with the federal government to support survivors of economic abuse through innovation and reform.”
Disarming joint mortgages
The CWES is calling on banks and financial institutions to re-design joint mortgages to make it more difficult to weaponise them in the first place.
Changes might include regulatory relief, providing longer grace periods for victim-survivors to maintain a mortgage to stay in their home; and law reforms from the government to prevent wastage and abuse via Family Law processes.
“We know that secure housing and earlier intervention can save money in the long run, and often what is needed is two to three years’ relief while survivors rebuild their lives,” Glenn outlined.
“We all have a role to play in ending domestic and family abuse, including economic abuse, and we are looking forward to working with the banks, with regulators and with the federal government to support women’s economic safety.”