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What is financial abuse?
Understanding what “financial abuse” means
Financial abuse is a deliberate pattern of behaviours where someone uses power to control, exploit, or sabotage another person’s finances, liabilities, or ability to manage money.
It often accompanies physical and emotional violence and may be rooted in coercive control – systematic behaviours that create fear and strip away independence. Victim survivors often describe feeling trapped, scared, having diminished self-esteem and no choice.
Financial abuse can occur within intimate partner relationships, wider family relationships, and other relationships of trust. What is considered “family” differs across family units and cultures.
Common examples include controlling employment, income and bank accounts, coercing signatures on financial documents, accumulating debt in someone else’s name, borrowing money without repayment, selling assets, withholding child support or financial contributions, abusing Power of Attorney, and sabotaging legal and financial processes.
Business-related financial abuse
Business structures, tax and financial systems can be used to control, exploit or disadvantage a partner or family member, causing significant harm. Business-related financial abuse has only recently been recognised as a distinct form of abuse, and practitioners should not assume that someone involved in business is financially sophisticated or adequately protected. Complex structures, informal family arrangements and blurred personal-business boundaries can create unique vulnerabilities, particularly where family violence dynamics, coercion or power imbalances are present.
What may appear to be informal family arrangements can sometimes mask serious concerns, including modern slavery and human rights violations. Family business arrangements, such as everyone “helping out”, may be perfectly legitimate; however, the practitioner’s role is to consider whether there is informed consent and appropriate safeguards for the clients, and to consider whether any vulnerabilities or power imbalances may undermine a person’s ability to participate freely.
The risks can be particularly acute among migrants. For example, in Australia, one-third of small businesses are operated by migrants, many of whom may come from backgrounds without formal business systems or regulatory frameworks, making them more vulnerable to exploitation.
Tax system abuse
The tax system is often used to perpetrate financial abuse. In Australia, the Tax Ombudsman’s review of the tax system found that perpetrators commonly misuse tax registrations, lodgements and online access to create debts or liabilities in another person’s name without their knowledge.
Common tactics include using others’ ABNs to run a business, lodging tax returns without consent, reporting income the victim never received and accessing tax accounts or myGov without permission.
These actions can have cascading effects with unexpected tax debts or disrupted social security entitlements, often only discovered after a relationship has ended. The Tax Ombudsman’s review highlights that tax debts created through coercion are extremely difficult to overturn, and the ATO can reassign debts to perpetrators in only limited circumstances.
Public practitioners may notice red flags such as third parties giving instructions on behalf of the taxpayer, refund details that do not match the taxpayer’s account, inconsistent information between what the client says and what has been lodged, or the taxpayer being unaware of business activities recorded under their name.
The ATO has a taxpayer vulnerability framework that includes family violence as a vulnerability. Existing administrative procedures and guidance issued will be revised in line with this framework. For example, late taxpayers experiencing financial abuse, coercive control, or family and domestic violence may receive a GIC remission.
NOTE: There is not any readily available data on the misuse of the New Zealand tax system to perpetuate financial abuse at this stage.
Elder financial abuse
Financial abuse of older people is a specific type of financial abuse that comes with its own set of concerns and considerations. Gaining a better understanding of this type of abuse will help you to better support and protect your clients.
Why financial abuse is hard to spot
Financial abuse can closely resemble standard business practice and family arrangements, and perpetrators deliberately exploit this ambiguity. What appears healthy or mutually supportive in one relationship may be coercive in another. Arrangements might start with genuine help but gradually shift from “taking care” to “taking assets” or “taking control”. Abuse may be disguised by material benefits such as luxury vehicles and lifestyle, yet even outcomes considered desirable can be signs of abuse when consent is not freely given.
Family dynamics create vulnerabilities that those within the family may not recognise, and trust can mask harmful behaviour until significant damage has occurred. For public practitioners, early warning signs often present as a sense that “something doesn’t feel right”. This professional intuition is important and signals the need for further verification.
Cultural and language barriers, as well as limited financial or business experience, can make recognising and reporting abuse even harder.
While police can intervene through protective orders or investigate criminal behaviour, some financially abusive actions are deemed civil matters rather than criminal, limiting law enforcement responses. Victims are often left to pursue civil restitution on their own, offering little accountability or protection.