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Industry welcomes new financial abuse ‘legal loophole’ crackdown
Super industry advocates are calling on all parties to prioritise stopping abusers from getting access to their victim’s super.
The Labor party has committed to looking into how it can stop perpetrators of domestic and family violence from receiving their victim’s superannuation after death.
This week Minister for Women Katy Gallagher launched the Building Australia’s Future: Labor’s Commitment to Women.
As part of the package, increasing focus will be placed on ending financial abuse, a “fast growing and insidious form of domestic and family violence where perpetrators rack up tax or social security debts in their partner’s name”, a statement from the party said.
Namely, under existing laws, an abuser can receive a victim’s super death benefit unless they are the direct cause of that person’s death. Even if the perpetrator has been convicted of family violence offences, or in cases when there was systemic abuse which indirectly contributed to the cause of the victim’s death, this still applies.
“We have zero tolerance for perpetrators who exploit financial systems to harm their victims,” Gallagher said.
Following the announcement, The Association of Superannuation Funds of Australia (ASFA) welcomed Labor’s pledge to stop perpetrators of financial abuse from accessing their victim's super.
“For too long, perpetrators of family violence have been able to profit from their victims’ death, accessing their super after they died,” ASFA chief executive Mary Delahunty said.
“This insidious legal loophole is wrong, and we welcome the government’s announcement they will start working to close it.”
The industry body noted that other sector organisations, like the Super Members Council (SMC) and Women in Super, have similarly advocated to change the law in this area.
Namely, industry has called for two key changes:
Expanding the Forfeiture Rule to prevent perpetrators from inheriting money from their victims, which would require legislative amendment to the Superannuation Industry (Supervision) Act 1993.
Increasing investigative powers and evidence standards of superannuation funds, so they are able to withhold death benefit payments in substantiated cases of family violence until the legal matter has been resolved.
“The superannuation sector stands united and will work with government to bring about the reforms needed to keep members’ money out of the hands of abusers,” Delahunty concluded.
On Tuesday the SMC also welcomed the Labor party’s latest election commitment, additionally calling for all parties and independents to match this pledge and close “this legal loophole”.
“These reforms are about standing up for victims of family violence,” SMC deputy CEO, Georgia Brumby said.
“A perpetrator getting their victim’s super death benefit is an extension of the abuse. The intention to introduce these reforms is a critical step towards ensuring that people’s superannuation is protected and not used as a financial reward for perpetrators,” Brumby continued.
“Perpetrators should not profit from their crimes. Closing this legal loophole will protect victims of family violence and financial abuse.
“We call on all political parties and independent candidates to pledge their support for these reforms, to protect those who have been wronged and not those that have caused harm.”
SMC advocated for this reform in its submission and joint testimony – alongside Women in Super and ASFA – to the Parliamentary Joint Committee in Relation to Financial Abuse.
It was also among SMC’s 12 super-related policy priorities that it asked all parties and independents to support at this election.
AUTHOR
Jessica Penny
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