Courts could be given greater powers to transfer tax and social security debts to perpetrators of financial abuse under proposed Federal Government reforms.
The Government announced today that it was considering changes to prevent perpetrators of domestic and family violence from using taxation and social security systems to create debts in the names of their partners.
A consultation paper released by the Government proposes options for providing financial relief to victim-survivors who have incurred debts through coercion, fraud or other abusive behaviour.
The Government is also considering allowing courts greater flexibility to transfer responsibility for tax or social security debts to the abusive spouse during family law proceedings.
The proposals form part of the Government’s response to a Parliamentary Joint Committee inquiry into financial abuse, with 58 of the committee’s 61 recommendations supported or supported in principle.
Attorney-General Michelle Rowland said financial abuse could leave people responsible for debts incurred through the actions of abusive partners.
“Financial abuse can leave victim‑survivors carrying debts that were incurred in their name because of the actions of an abusive partner,” she said. “This is unacceptable.
“That is why the Government is consulting on an amendment to provide the courts greater flexibility to transfer a tax debt to the person responsible for financial abuse in family law proceedings.
“The change would mean victim‑survivors would no longer need to engage the ATO’s administrative processes when they are already before the courts.”
Other measures being developed or implemented by the Government include:
- Preventing perpetrators of domestic and family violence from receiving the superannuation death benefits of their victims, with draft legislation expected later this year.
- Introducing protections for people coerced into becoming company directors and subsequently exposed to corporate debts and liabilities.
- Giving the Australian Taxation Office powers to prevent superannuation rollovers into newly established self-managed funds where there are concerns about fraud, financial abuse or misconduct.
- Investing more than $180 million in changes to the child support system, including measures to prevent financial abuse and coercive behaviour.
- Expanding Services Australia’s powers to waive social security debts incurred as a result of domestic and family violence.
Assistant Treasurer Daniel Mulino said financial abuse could have consequences extending well beyond the end of an abusive relationship.
“Financial abuse is often one part of a broader pattern of coercion, control and abuse designed to remove a person’s independence and limit their choices,” he said.
“The effects can follow victim‑survivors for years, long after the relationship has ended, through debts, financial insecurity and lost opportunities.”
The Government will also hold discussions with financial institutions, regulators, professional associations and victim-survivor advocates about improving the financial services sector’s response to abuse.
The consultation paper is available on the Treasury website
