Spotlight on economic abuse - Good Shepherd Youth & Family ...

In its recent review the ALRC identified three ways in which women could lose their own
superannuation through economic abuse, each of which involves coercion. The first is
through a superannuation agreement made under the Commonwealth Family Law Act
(1975) which is a form of financial agreement made by a couple which is a binding contract
describing how their property or finances (in this case one or both parties’ superannuation)
are to be dealt with (ALRC 2011b, p. 37). The second possible means of loss of
superannuation through economic abuse is where a partner has been coerced to ‘split’ her
superannuation contributions so a proportion is paid into her partner’s fund (ALRC 2011b).
The ALRC (2011b) concluded that while there were some protections in the Family Law Act
1975 to address the possibility of economic abuse through these two means further
investigation is needed to consider the ways in which federal family courts consider family
violence in property proceedings. The ALRC (2011d, p. 467) reiterated an earlier
ALRC/NSWLRC (2010) recommendation that “the Australian Government should initiate an
inquiry into how family violence should be dealt with in respect of property proceedings
under the Family Law Act 1975 (Cth) (and) (a)ny such inquiry should include consideration
of the treatment of superannuation in proceedings involving family violence”. This
recommendation captures the ALRC’s broader concern that family violence should be
considered by the family court both in assessing contributions and in considering the
distribution of assets following separation. In their report the ALRC (2011d, p. 466) cite a
case in which the adverse impacts of family violence on a person’s contribution were taken
into account by a court.
The third possible means of loss of superannuation through economic abuse is where
superannuation is in a self-managed superannuation fund. These are funds where the
trustees are the only members of the fund and over 90 per cent of such funds have two
members, mostly spouses (ALRC 2011c, p. 467, fns 32-36). The ALRC (2011c) concluded
that victims of family violence who are also trustees of self-managed superannuation funds
require additional protection and made a number of recommendations for changes to the
guidelines provided to self-managed superannuation fund trustees by the regulator—the
ATO—including the provision of specific information and examples concerning family
violence. The ALRC (2011d, p. 471) also pointed to the need for the ATO to avoid
compliance actions that exacerbate or harm the disadvantage suffered by a fund trustee
experiencing family violence but did not go as far as recommending that the ATO should be
required to consider family violence when determining appropriate compliance action,
apparently in response to stakeholder submissions from the Australian Institute of
Superannuation Trustees. The other possible areas for reform were identified as concerning
professional standards, training and licensing exemptions for self-managed superannuation
fund advisers and the ALRC directed these to the national government bodies (ATO, ASIC
and Treasury) that are involved in reform of regulatory arrangements for financial advice.
A final issue with superannuation concerns whether a woman leaving abuse can access part
of her superannuation funds early. Normally, funds are preserved until retirement age
although there is provision for early release of some funds on the grounds of financial
hardship or on compassionate grounds. The ALRC (2011c) has proposed a range of
changes to administrative guidelines to enable better decision-making with proper
consideration of family violence, while also accepting arguments that the financial hardship
faced by women on leaving abuse should be properly addressed through the income support
system. At least one submission to the ALRC on this issue pointed to the fact of women’s
existing disadvantage in accumulation of superannuation and argued that early access
compounds this disadvantage (Women’ Legal Service NSW 2011). A further issue identified
by the ALRC was the potential for any loosening of early release provisions to make it easier
for an abusive person to coerce a woman to seek release of her superannuation savings.
Proposals made by the ALRC include some minor loosening of qualifying periods on income
support payments for eligibility and for the Australian Prudential Regulation Authority to
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