Australia considers changes to protect victims of financial abuse in tax and pension systems
In Australia, the government is considering a package of changes intended to limit opportunities for financial abuse through the tax system and retirement savings. Assistant Treasurer Daniel Mulino said perpetrators should not benefit by placing tax and other debts in former partners’ names or using their retirement funds.
As ABC News Australia reports, Mulino is considering 61 recommendations from a parliamentary inquiry into financial abuse. Possible steps include strengthening the obligations of banks, other lenders, insurers and superannuation funds to identify risks to customers. The inquiry also recommended including financial abuse in vulnerable consumer protection codes and creating mechanisms for proactive contact with people who may be experiencing such abuse.
Forced directorships
The government is also examining tougher sanctions for people who force partners to become company directors in order to accumulate tax debts in their names. Mulino said he was considering changes that could prevent a perpetrator from receiving payments in the event of a partner’s death if that partner had experienced financial abuse or died by suicide because of it.
The parliamentary inquiry proposed amendments to the law on superannuation system supervision so that a beneficiary who had committed domestic or family violence against the holder of a retirement account could be declared an ineligible recipient of payments.
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Self-managed superannuation funds
The Australian Taxation Office may receive powers to stop the unlawful withdrawal of money from self-managed superannuation funds. Mulino also said the government plans to consult on the agency’s authority to halt transfers of retirement savings where fraud is suspected.
According to Jasmine Opdam, a specialist at the Financial Abuse Service at Redfern Legal Centre, self-managed funds are a regulatory “blind spot” because their money is often held in bank accounts, from which it is easier to withdraw. She referred to Australian Taxation Office data from several years ago showing that up to A$250 million a year was illegally withdrawn early from such funds.
Financial advisers called for the full write-off of tax debts for victims of financial abuse. Mulino said he was examining the possibility of expanding the Taxation Office’s discretionary powers to waive penalties on tax debts. According to a Deloitte study commissioned by CBA and published by Australia’s Treasury, financial and economic abuse affects more than 2.4 million Australians and costs the economy nearly A$11 billion each year.
