Financial abuse can extend beyond bank accounts. Here's how superannuation can become another tool of coercive control, and the warning signs that could help protect your retirement savings.
For most Australians, superannuation is a long-term investment designed to provide financial security in retirement. Australia now has $4.4 trillion invested across its superannuation system, making it one of the largest pools of retirement savings in the world.
Financial abuse is often associated with bank accounts, debts and day-to-day finances. However, retirement savings can also be used as a tool of coercive control.
Professor Ann Kayis-Kumar , Founding Director of the UNSW Tax and Business Advisory Clinic at UNSW Business School, said the clinic had recently seen troubling cases involving self-managed super funds (SMSFs).
"This wasn't on our radar until just recently this year and late last year, where we had a number of clients who came to us, all women, all victim-survivors, some of whom didn't even realise that an SMSF had been created in their name," said Prof. Kayis-Kumar on a recent episode of The Business Of podcast.
For victim-survivors, the abuse may not come to light until years later, raising an unsettling question: could someone be making decisions about your super without you knowing?
How can financial abuse affect your super?
Prof. Kayis-Kumar said recent casework from the UNSW Tax and Business Advisory Clinic had uncovered situations in which victim-survivors were unaware an SMSF had been established in their name until after their retirement savings had already been affected.
"Victim-survivors have had their superannuation fund balances taken out of an APRA-regulated fund and put into an SMSF, which is then drained by the perpetrator," Prof. Kayis-Kumar said.
In one case, the client only became aware that something was wrong after receiving a notice from the Australian Taxation Office (ATO).
"The red letter said that an SMSF, which she did not know had been created in her name, had been non-compliant for five years," Prof. Kayis-Kumar said.
"There was about $16,000 worth of penalties for each breach, and the most troubling part of that letter was that it could also be coupled with up to 12 months in prison."
Prof. Kayis-Kumar said the client was left trying to understand a financial structure she didn't know existed while recovering from abuse.
"For someone who didn't even know there was an SMSF, let alone the realisation that there's $0 left in the SMSF, she now has no super and the Tax Office is chasing her, when she's trying to recover from the experience of escaping abuse and look after two children. That's just awful," Prof. Kayis-Kumar said.
As more cases like this emerge, Prof. Kayis-Kumar says they highlight a broader issue that experts are only beginning to understand.
Why are experts concerned?
While SMSFs are a legitimate way for Australians to manage their retirement savings, little is known about how often they are exploited as a tool of financial abuse and coercive control.
Prof. Kayis-Kumar said: "SMSFs are now used by hundreds of thousands of Australians, yet the ATO has reported that around $252 million was illegally accessed in a single year. Illegal early access means that SMSF balances were withdrawn without a condition of release being met - and while the ATO has identified that one of the top three reasons for illegal early access is 'relationship breakdown', what's really worrying is that we don't know how often this involves perpetrators weaponising SMSFs to siphon off a victim-survivor's retirement savings. There seems to be no publicly available data quantifying the prevalence of financial abuse as a dimension within this problem."
Prof. Kayis-Kumar said victim-survivors could be left navigating an incredibly complex situation, often without access to the information needed to understand what has happened.
"There is currently no pro bono service in Australia with expertise in superannuation and SMSFs, but we're increasingly finding that this is exactly what victim-survivors need." Prof. Kayis-Kumar said.
How to spot the warning signs of financial abuse
Financial abuse isn't always obvious. Prof. Kayis-Kumar said it often developed gradually, making it difficult for victim-survivors to recognise until significant financial harm has already occurred.
"It's very hard for victim-survivors to even identify what they're experiencing, because it just shapes so much of their experience, and it becomes so difficult to unpick," Prof. Kayis-Kumar said.
To help people identify financial abuse, Prof. Kayis-Kumar outlined five key warning signs:
- Controlling access - restricting access to money, bank accounts, business income or tax information.
- Hiding money - keeping finances, income or assets secret.
- Shifting debts - creating debts in another person's name or leaving them responsible for financial liabilities they did not create.
- Making decisions - excluding someone from financial decisions that directly affect them.
- Inaccessible or unclear information - withholding or obscuring financial information through complex business structures or financial arrangements.
While the warning signs won't be present in every situation, Prof. Kayis-Kumar said understanding your financial arrangements and being involved in key financial decisions could help people identify when something isn't right.
"Being in the room with the accountant, or the tax advisor, or the lawyer, is a really important piece of the puzzle, being aware of decisions that are being made that have implications for you," Prof. Kayis-Kumar said.
She also encourages people with concerns to check their MyGov account, tax records and director ID, maintain a direct relationship with the professionals advising on shared financial arrangements, and seek specialist support where needed.
"It really shouldn't be up to the victim-survivor to be protecting herself from professionals and systems. The onus really needs to be on making perpetrators accountable for when they do misuse those systems," Prof. Kayis-Kumar said.
