Financial security is critical for people planning to escape family violence or rebuilding a life free from violence. So, how is it that a system designed to support us in times of need can be used by perpetrators to commit further acts of family violence?
Family Tax Benefit (FTB) is an example where this can occur. FTB is a two-part payment that helps with the cost of raising children. When parents are partnered, FTB is only payable to one person in the relationship. However, in assessing eligibility and the rate of payment, Centrelink requires income information of both the recipient and their partner.
To receive FTB in fortnightly instalments, the recipient must provide an income estimate for the financial year ahead. At the end of the financial year Centrelink check their income estimate against their actual income through data matching with the Australian Tax Office. If the estimate and actual income amounts differ, Centrelink recalculate their entitlement accordingly. This can result in an overpayment or top up payment.
Recipients whose income has changed or fluctuated throughout the year are more likely to have an overpayment or top up payment. However, in family violence circumstances there are several complexities created by this process
No access to income information
Family violence often includes financial abuse, leaving a victim/survivor without access to accurate income information of the perpetrator. This includes circumstances where the perpetrator deliberately provides the victim/survivor with inaccurate information to report to Centrelink or where asking the perpetrator for income information has triggered violence and caused the victim/survivor to fear for their safety.
This leaves the victim/survivor with the difficult task of trying to accurately estimate their partner’s income and increases the risk of Centrelink raising a debt against them if they make a mistake.
Overpayment for failure to lodge tax return
When a recipient and/or their partner fail to lodge their tax return (or advise Centrelink they aren’t required to lodge a tax return) within the time limit, then the full amount of FTB received for the relevant financial year is raised as an overpayment. These are called ‘non-lodger debts’.
When it comes to overpayments, Centrelink only seek repayment from the recipient, even if their partner is the one who hasn’t lodged a tax return. As a result, the recipient can be left with a debt through no fault of their own. In circumstances of family violence, this makes the victim/survivor responsible for the perpetrator’s actions and can limit their ability to develop financial freedom and independence.
Additionally, if Centrelink raises a non-lodger debt, the recipient can no longer receive FTB in fortnightly instalments. This generally remains in place until the outstanding tax return is lodged. However, in circumstances of family violence, a victim/survivor can ask Centrelink to delay this for up to six months.
It is important to note, if someone is unable to receive FTB by fortnightly instalments due to non-lodgement of tax returns, they can still receive FTB as a lump sum at the end of financial year provided tax returns are lodged within relevant time limits.
If a couple separates, the recipient can recommence receiving FTB fortnightly and Centrelink will ‘write-off’ the non-lodger debt. This means they pause recovery of the debt until the ex-partner lodges the relevant tax return. If Centrelink doesn’t automatically write off a non-lodger debt upon separation, they can be asked to do this.
Having Centrelink write off a non-lodger debt is helpful for victim/survivors as it places any debt recovery on hold until a determination is made as to whether there is in fact a debt. Without a write-off, the victim survivor again unfairly bears the consequences of the perpetrator’s actions.
Recovery of Overpayments
Despite using the family income to assess eligibility and rate of payment, and despite the payment being designed to assist with the cost of raising children, Centrelink only seeks to recover an overpayment from the recipient. This occurs irrespective of the circumstances resulting in the debt.
Consequently, the process of raising and recovering FTB overpayments often makes the victim/survivor further responsible for the perpetrator’s abusive behaviour, and limits their ability to develop financial freedom and independence. Meanwhile, there is no accountability for the perpetrator.
Family violence is considered by Centrelink to be a relevant factor in considering debt waiver due to special circumstances. One of the challenges in this, however, is that often the presence of family violence is not deemed as ‘unusual’, as is required by the special circumstances debt waiver provisions. As a result, there will usually need to be additional circumstances of vulnerability and hardship to obtain waiver of debt.
Furthermore, debt waiver due to special circumstances is only available where neither the recipient nor a third party (including a perpetrator of family violence) have knowingly provided false information to Centrelink. This means where a perpetrator has purposely provided false information to Centrelink, a waiver cannot be obtained by the victim/survivor. It also makes it difficult to obtain a waiver in circumstances where a victim/survivor has guessed the perpetrator’s income, knowing it was a guess, but being unable to obtain the correct information due to perpetrator withholding their income information or due to victim/survivor prioritising their safety and not asking the perpetrator for the information.
All this means that current social security responses to family violence do not sufficiently emphasise recovery and restoration and may even impede it.
Historically, social security law has been focussed on ensuring the immediate safety and security of victims of family violence. However, safety is only the start—the ultimate objective of the family violence response must be that victims, including children, can recover and thrive, and do so at the pace they require.
Financial security is a key part of recovery. Women who have lived with a violent partner are more likely than other women to experience financial difficulty, and many women experience poverty as a result of family violence. The associated abuse can be financial in nature (defined by law as economic abuse) or can be characterised by other forms of family violence that affect a victim’s financial wellbeing.
A range of factors can exacerbate victims’ experience of financial insecurity—among them difficulty obtaining child support payments, tenancy problems, a lack of control over household finances, and credit, utility and car-related debt incurred by the perpetrator.
SSRV believe that, while there has been significant improvement in how social security law treats people escaping family violence, more needs to be done to prevent family violence being further perpetrated through the social security system.