Home loan reforms needed to help abuse victims, says CWES

CWES’ lived experience advisory panel members revealed that 84 per cent had experienced financial and economic abuse following a separation, with 94 per cent having been left to pay shared financial liabilities or debt that belongs to their ex-partner.

Chief executive of CWES, Rebecca Glenn, stated that while society questions why women do not always leave negative relationships, the data has found that the abuse can continue after separation.

Ms Glenn commented: “Even when there’s not the same physical proximity, perpetrators can still extend control and abuse through economic resources.

“One concerning trend is perpetrators refusing to contribute to mortgage repayments when their partner leaves. In these cases, banks can, and often do, seek full repayments from the victim.

“The concept of joint and severally liable is not well-understood in Australia, but it means banks are entitled to chase one party on a joint mortgage for the whole amount owing.”

The Centre added that while many victim-survivors would look to meet repayment obligations so they can stay in their home or maintain the asset, despite the financial sacrifices required, many are then being rejected if they attempt to refinance on their own due to responsible lending guidelines and serviceability assessments, despite the history of successfully servicing the loan.

Ms Glenn added: “This creates a ridiculous situation of victim-survivors being forced into the private rental market to pay rents that are similar to or more than their mortgage repayments, resulting in more costs to individuals, society, and the economy as well as contributing to the growing rate of older women who are experiencing homelessness.

“We know this is a complex area where there isn’t one single lever we can pull to solve the problem, that’s why we are calling for banks and regulators to work together with the federal government to support survivors of economic abuse through innovation and reform.”

CWES called on financial institutions to review how they could redesign joint mortgages to make them harder to weaponise in the first place, as well as possible regulatory relief that could enable banks to provide longer grace periods for victim-survivors to maintain a mortgage and stay in their home.

“We know that secure housing and earlier intervention can save money in the long run and often what is needed is two to three years’ relief while survivors rebuild their lives,” Ms Glenn noted.

“We all have a role to play in ending domestic and family abuse, including economic abuse and we are looking forward to working with the banks, with regulators, and with the federal government to support women’s economic safety.”

CWES’ call for reform followed the Women’s Economic Equality Taskforce (WEET) releasing its final report, Women’s Economic Equality: A 10-year plan to unleash the full capacity and contribution of women to the Australian economy, earlier this year.

The report put forward seven main recommendations, with the federal government ensuring there are sufficient financial literacy programs as part of the high school curriculum a key part of the sixth recommendation.

Speaking to The Adviser recently, brokers revealed how they’re looking to help their clients increase their financial literacy levels, with many finding the “overall level of financial literacy is lower than ideal”.

The recommendations call on the government to:

• Provide leadership and accountability for driving equality outcomes and embed gender equity into its decision making, budgeting and policy design, implementation, and evaluation mechanisms.
• Invest in policies and programs that recognise the economic importance and value of care work in Australia and help families better share caring responsibilities.
• Utilise its legislative, regulatory, and spending powers to ensure all Australian workplaces create safe, secure, flexible, and equitable work opportunities that support women’s economic participation.
• Undertake a long-term, targeted, and deliberate investment program to ensure women are leading and building the economy in equal measure to men.
• Ensure that women have financial security across their lives and are increasingly building lifetime wealth and economic equality.
• Invest in programs to address community attitudes and bias that prevent women’s full economic participation across a lifetime.

The WEET also encouraged the government to co-design a financial support program for victim-survivors of domestic and family violence that enables them to leave violence, re-establish safe and stable housing, and focus on recovery without incurring financial losses.

As part of the government’s Housing Australia Future Fund (HAFF) legislation, it revealed that it would invest $100 million in crisis and transitional housing options for women and children impacted by family and domestic violence and older women at risk of homelessness.

[Related: Government urged to put financial literacy on the curriculum]