Key Takeaways
- Financial abuse is a type of domestic violence that can be subtle and hard to recognise. It can also be a precursor for other very serious domestic violence behaviours.
- This type of abuse can make it very difficult for the victim to leave the situation as they may not have the resources to do so.
- Financial abuse can have significant long-term consequences, such as lead to homelessness, impact a person’s ability to successfully apply for loans and credit cards, and even impact their mental health.
- There are warning signs that could help you to recognise financially abusive behaviour and seek help.
We use money every day. It’s a tool for survival that also happens to represent security, freedom and empowerment.
While many of us are familiar with the struggle of earning money and ensuring we have the means we need to live happy and comfortable lives, we do have the ability to do this.
For some people though, money is used as a weapon against them by the people they love and trust.
This is known as financial abuse. Financial abuse is a common and frightening reality that many people face every single day.
It involves a person’s ability to acquire, use and maintain financial resources being controlled by someone else, usually a partner, and can be a somewhat silent form of domestic and family violence.
In this article, we’ll help you understand financial abuse, including how it can present, how you can recognise it and what you can do if you or someone you know is being financially abused.
What exactly is financial abuse?
Financial abuse involves behaviours that restrict and control a person’s access to money. By access, we mean not only being able to actually access any funds that they may have, but also control their ability to earn money through work or choose how money is actually used.
It can involve a partner or person making big financial decisions without the victim’s consent and can also include forcing them to agree to financial decisions and commitments, like loans and credit cards.
Financial abuse is not as well understood as other forms of abuse because it’s not always easy to recognise. One of the reasons it can be hard to recognise is because it is relatively common for one person in a relationship to take the lead when it comes to managing the finances of the relationship and household. Often, it’s easy for the victim to overlook the subtle signs of financial abuse.
However, while financial abuse is not as understood or recognised as other forms of abuse, like verbal abuse, physical assault and emotional abuse, it can be extremely powerful, often trapping the victim in an abusive relationship.
Ultimately, the perpetrator’s goal is to gain power and control of the relationship and uses financial abuse and control as their way to do so.
Do other kinds of abuse happen with financial abuse?
Financial abuse can be a standalone type of abuse or it can be present with other forms. Often it is seen alongside other forms of abuse, such as emotional and physical abuse. However, other types of abuse do not need to be occurring in order for financial abuse to present.
Financial abuse and coercive control
Coercive control is type of domestic and family violence and involves an individual using a pattern of behaviour to manipulate, dominate and control another person in a relationship. Financial abuse is often one of the behaviours that an abuser uses against their victims that is considered to be coercive control.
Coercive control, including financially abusive behaviours, has been proven to be a precursor to very serious instances of domestic violence, like homicide and injuries. A domestic violence homicide NSW Coroner’s Court review found that coercive control was present in 99% of relationships before the domestic homicide occurred.
While coercive control and financial abuse may seem subtle and be difficult to recognise, for your own safety, it’s extremely important to know how to recognise the signs.
Why does financial abuse happen?
As we touched on above, the goal of financial abuse is to be able to control and have power in a relationship. While this may be the goal, it’s important to understand that a variety of underlying factors can also influence this type of behaviour.
Some of the common reasons why financial abuse occurs include:
Power and Control
Financial abuse is often rooted in the abuser’s need to exert power and control over their partner. By controlling the finances, the abuser can manipulate and dictate the victim’s choices, decisions, and overall autonomy.
Dependency and Isolation
Financial abuse can be perpetuated when one partner intentionally creates or reinforces dependency on them. By limiting the victim’s access to money, employment, or education, the abuser ensures that the victim remains reliant on them, making it harder for the victim to leave the abusive relationship.
Gender Dynamics
In many cases, financial abuse is influenced by traditional gender roles and societal expectations. It can be a manifestation of gender inequality, with the abuser using financial means to assert dominance and maintain traditional gender roles within the relationship.
Emotional and Psychological Manipulation
Financial abuse often goes hand in hand with emotional and psychological manipulation. The abuser may use guilt, fear, or threats to control the victim’s financial resources, creating a sense of helplessness and trapping them in the abusive relationship.
History of Abusive Patterns
Financial abuse can be part of a larger pattern of abuse within a relationship. It may coexist with other forms of abuse, such as sexual, physical or emotional abuse. The abuser’s behaviours and motivations may be deeply rooted in their own experiences, upbringing, or psychological issues.
Who can be financially abused?
Unfortunately, financial abuse can happen to anyone, at any age, and of any socio-economic background.
Like many other forms of abuse, it most commonly happens to women, however, it can also happen to men, transgender and non-binary people too.
People who are potentially more vulnerable and/or dependent on others, such as disabled and elderly people, are also believed to be at a greater risk of experiencing this type of abuse.
How common is financial abuse?
Financial abuse is one of the most common forms of domestic and family violence experienced by people in Australia. According to Australian Bureau of Statistics Personal Safety Survey released in 2022, 1 in 6 women experience financial or economic abuse by their cohabiting partner which equates to around 16% of women in Australia. It also found that around 7% of Australian men have experienced financial abuse by a current or former partner.
While these statistics show that financial abuse is quite common and a significant issue, it’s also important to acknowledge that financial abuse could affect more people as it’s not always easy to identify.
What are the impacts of financial abuse?
Financial abuse can have both short-term and long-term consequences, with victims experiencing a wide variety of hardships. Here are some of the devasting effects of financial abuse:
Trapped in an abusive relationship
When financial abuse is present it can make it difficult for a vulnerable person to actually be able to leave a relationship permanently as they do not have the means to support themselves. It can also mean that the victim returns to their abuser as they cannot provide the necessities.
Homelessness
When a person leaves an abusive relationship without the means to support themselves it can commonly lead to homelessness. In fact, domestic violence (financial abuse is domestic violence) was found to be present in 42% of people who sought help from the Specialist Homeless Service in 2020-2021. They cited that they left their relationship due to domestic violence.
Social isolation
With no access to money it can make it difficult to have independence to be out and about doing things, including working. Unemployment can reduce a person’s social circle, which can reduce their support network and ability to earn an income too. Social isolation can be very damaging to a person’s mental health.
Difficulties gaining employment and establishing independence
A victim may find it difficult to gain adequate employment if and when they leave an abusive relationship as they may have a spotty employment record. If they have been unable to work during the relationship or forced to leave jobs throughout, this can impact the types of workplaces that will hire them in the future.
Perpetuating the domestic violence cycle
Domestic violence, including financial abuse can have a significant impact on children. If they grow up witnessing these behaviours, they may not necessarily understand what is and is not acceptable behaviour. They may display these types of behaviours when they get older or accept this kind od treatment in their relationships as an adult.
Mental health impacts
Abuse of any kind can be extremely detrimental to a person’s mental health. It can make them feel worthless and deserving of the behaviour. It can cause anxiety or depression and over time, if they are unable to seek help for these conditions, they could be at risk of hurting themselves.
Physical health issues
A person’s physical health is at risk when financial and family violence is present in a relationship. Besides the risk of actual physical assault and injury for the victim, if they need healthcare for any reason, without financial means, they may not be able to access the care that they need.
Financial wellbeing
A financially abused person may experience very long term financial consequences of this abuse. They may have significant debt accrued in their name, they may have their credit score ruined which could stop them from being able to access loans and credit, and they may not be financially literate as they have not had the chance to learn.
What behaviours are considered to be financial abuse?
Financial abuse can manifest in many different ways, however, to make it easier to get a grasp, we’ve categorised financial abuse into three main categories:
Your Resources
In this category the behaviours of the perpetrator results in the exploitation of the resources and assets you already have. They could do this by:
- Controlling how you spend your money;
- Using your money without permission, including credit cards that you may have;
- Making demands to have access to your bank account;
- Forcing you to use your money to pay bills;
- Running up bills in your name but not paying them;
- Offering to help create a budget or make financial decisions for you; and
- Taking your paycheck.
Earning Income
In this category, the behaviours are aimed to impact the victim’s ability to earn an income, resulting in them becoming dependent on the perpetrator. Some ways they may do this include:
- They may interfere with your ability to do your job through actions such as physically stopping you from getting to work or creating scenarios that mean you need to leave work early;
- Demeaning or criticising your career choice;
- Telling you where you can work;
- Forcing you to quit your job;
- Harassing you while you’re at work.
Controlling Shared Assets
In this category, the financially abusive person’s actions are aimed at controlling finances and assets that you may share. Some of the ways they may do this include:
- Not allowing you to be involved in significant financial decision making;
- Restricting access to any financial information, including those related to loans, investments, mortgages and bank accounts;
- Hiding or taking all funds of the relationship;
- Forcing you to ask permission to spend money, even when you have your own money and bank accounts;
- Refusing to provide for their child or pay child support;
- Refusing to work and forcing you to earn all money but not allowing you access to this money;
- Criticising financial decisions that you may make, including demanding you explain all spending you have done.
What should you do if you’re experiencing financial abuse?
While the unique circumstances of your situation will impact the steps you can take, there are a number of different things you can do to get help when you’re experiencing financial abuse. Some of these include:
- Contacting a close friend or family member for emotional support;
- Talking to a dedicated helpline specialising in domestic and family violence, such as 1800RESPECT;
- Document the evidence of the financial abuse that is occurring. If you need to take legal action, this information can help;
- If you’re in immediate danger consider seeking help from local authorities or organisations that help support victims, click here for a list of resources;
- Contact your financial institutions. Many of Australia’s banks are actively taking steps to recognise and help victims of financial abuse. They may be able to help change access information;
- Report the abuse. If you believe you’re being abused, the police may be able to help you by taking out domestic violence protection orders;
- Talk to a counsellor or therapist. Financial abuse can have psychological ramifications that can be difficult to overcome alone;
- Seek legal advice from a family lawyer. You may have legal options available to you that could protect you and your finances.
You don’t have to suffer alone when you’re being abused, there are many resources in Australia that can help you.
How can a family lawyer help you?
You maybe wondering what a lawyer an do for you when it comes to financial abuse and the reality is that our support can be extremely valuable. Our role is to provide you legal advice and guidance and ensure that you understand all of the options you have available to you.
Some of the things we can help with include:
- Providing advice on protective measures;
- Obtaining restraining and protection orders;
- Separating assets;
- Seeking a divorce;
- Ensure that you receive a fair division of assets in the event of a separation or divorce;
- Negotiate fair settlements;
- Help to organise the financial records and information to help strengthen your case;
- Legal representation in any court proceedings.
These are just some of the ways a family lawyer can help when you’re experiencing financial abuse or domestic and family violence of any kind.
Talk to Unified Lawyers today
If you’re experiencing abuse or domestic violence, whether it’s financial abuse or another kind, you don’t need to go through it alone.
At Unified Lawyers, we can help you no matter where you are in Australia. Our family law team is highly experienced in all aspects of family law, including how you can be protected. Let our team help you move forward with safety and security.
Call us on 1300 667 461 or book a free consultation online using the button below.
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