Compulsory income management and family violence

13.36 This section considers the appropriateness of compulsory income management as a means to improve the safety of victims of family violence. It does so by examining how the assessment of ‘indicators of vulnerability’ may affect victims of family violence. It also considers how this assessment may affect a victim’s willingness to disclose family violence, and the criteria for exemption from income management.

Indicators of vulnerability

13.37 There is no express reference to family violence as an indicator of vulnerability in the Guide to Social Security Law or the Social Security (Administration) Act. However, the Guide to Social Security Law recognises a number of links between indicators of vulnerability and family violence. For example, ‘financial exploitation’ may occur when ‘a person is subject to undue pressure, harassment, violence, abuse, deception or exploitation for resources by another person or people, including other family and community members’.^[44] Similarly, homelessness may be a flawed indicator of vulnerability for people experiencing family violence, because the lack of adequate community housing creates few options for permanent accommodation.^[45]

13.38 Therefore, while the determination to impose Compulsory IM may be triggered by the particular indicators set out in the Guide to Social Security Law, family violence may be the overall context and cause of particular indicators assessed under the indicators of vulnerability, either individually or together.

13.39 The decision-making principles in the Guide to Social Security Law do not identify why, or how, income management may assist a person who is experiencing family violence. The Guide to Social Security Law sets out the principles ‘for determining that there were no indications of financial vulnerability’ during the previous 12 months:

• a person has been applying appropriate resources to meet priority needs,

• a person had control over their money and was not subject to financial exploitation,

• a person had stable payment patterns and budgeting practices and is meeting priority needs from their income support and family assistance payments,

• a person did not regularly require urgent funds to pay for foreseeable costs, or did not frequently change their income support pay dates and consideration is given to the reason for seeking the urgent payment.^[46]

13.40 The Australian Domestic and Family Violence Clearinghouse (ADFVC) in the report, Seeking Security, argued that compulsory income management may remove people who experience family violence from the decision-making process, leaving them disempowered.^[47]

One reason given for compulsory income management is to ensure that payments are spent on basic needs like food, rather than on undesirable expenses such as alcohol, drugs and gambling. However, this study found limited evidence from the literature that women who are affected by domestic violence generally have less capacity than other people to manage their own affairs.^[48]

13.41 The Australian Human Rights Commission has stated that applying family violence as a trigger for the imposition of income management may have unintended consequences because people experiencing family violence and on low income welfare payments often require support services, not ‘merely’ financial management.^[49]

Disclosure of family violence

13.42 The prospect of the imposition of income management may lead to non-disclosure of family violence, which may be bound up in the vulnerability indicators that trigger it. Victims of family violence may prefer not to disclose family violence due to fear that income management will be imposed. They may choose to stay in an abusive relationship rather than leaving and, for example, claiming Crisis Payment.^[50] Imposing income management on people experiencing family violence, who are capable of looking after themselves and their families, may reduce their ability to take steps to seek protection and safety.

13.43 As identified in the report, No Way to Live, by Dr Lesley Laing, victims and children experiencing family violence and post-separation from violence may have their decision making affected by the trauma—what the report termed ‘trauma informed decision making’.^[51] This may affect the victims’ understanding of the consequences of sharing personal information.

Submissions and consultations

Indicators of vulnerability and family violence

13.44 In Family Violence and Commonwealth Laws—Social Security Law, ALRC Issues Paper 39 (2011) (Social Security Issues Paper), the ALRC asked whether family violence should be included as an indicator of vulnerability for the purposes of administering the Vulnerable Welfare Payment under the income management provisions and, if so, what definition of family violence should apply.^[52] The ALRC also asked what additional decision-making principles or guidelines would be desirable—in particular, taking into account that a person may be a victim or a person using family violence, or both.^[53]

13.45 Most stakeholders opposed adding to the definition of vulnerability by including ‘family violence’ as an indicator, and argued instead that the indicators of vulnerability should be removed altogether.^[54] Stakeholders emphasised their concern that ‘vulnerability indicators’ may result in a person experiencing family violence being ‘triggered’ into income management and, as a consequence, compounding the problem through quarantined payments where the person wants to flee family violence.^[55]

13.46 The North Australian Aboriginal Justice Agency (NAAJA) submitted that, although the specific words ‘domestic or family violence’ are not included in the indicators of vulnerability in policy or legislative instruments, the ‘vulnerable indicators’ described in social security policy and legislation would trigger Compulsory IM for people experiencing family violence.^[56]

13.47 The ADFVC stated that screening for domestic and family violence is not a simple process;^[57] and a welfare recipient attempting to demonstrate that there are no ‘indications of financial vulnerability’ faces a high threshold of proof.

13.48 Some stakeholders noted that indicators may reflect broader social conditions, rather than particular attributes of the individual. With respect to ‘financial hardship’, the Council of Single Mothers and their Children (Vic) pointed out that many people receiving income support payments will fall into the category of experiencing financial hardship due to the combination of the low rates of welfare payments and the high cost of living.^[58]

13.49 The ADFVC found that people experiencing domestic and family violence have a higher level of need in numerous situations, for example, when people separate and require other accommodation, relocation costs, travel, caring for children or dependants, to attend medical appointments and health reasons.^[59] Current payment levels do not reflect the cost of living where victims of family violence incur additional costs and support services.^[60]

13.50 While economic abuse may be a particular manifestation of family violence, the Central Australian Aboriginal Legal Aid Service (CAALAS) commented that it cannot be assumed that a person suffering domestic and family violence is also suffering economic abuse, nor should it be assumed that because of domestic violence, a person is unable to manage their financial affairs.^[61]

Disclosure of family violence

13.51 Several stakeholders submitted that people experiencing family violence are likely to be more reluctant to disclose their circumstances where such disclosure may lead to Compulsory IM, which may result in the victim missing out on appropriate services and support.^[62] In particular, the disclosure of family violence was highlighted by stakeholders as a serious concern for people experiencing family violence who are afraid that disclosure to agencies may affect their social security payments.^[63]

13.52 These issues are exacerbated where English is not the first language and where there are issues related to the person’s decision-making capacity, such as the experience of trauma.

13.53 Some stakeholders submitted that all Commonwealth employees who have a decision making or intervention role with people experiencing family violence must undergo regular training in child abuse, domestic and family violence practice, to facilitate disclosure.^[64]

The appropriateness of compulsory IM for people experiencing family violence

13.54 Most stakeholders indicated that they did not support Compulsory IM, or for the income management policy to be applied to people experiencing family violence.^[65] Themes from submissions included:

• the considerable impact of trauma for persons experiencing family violence, concerns for informed decision making;

• the perpetrator blaming the welfare recipient for Compulsory IM;

• the undermining of fundamental principles of justice and human rights; and

• the lack of empirical evidence about the impact of income management on people experiencing family violence.^[66]

13.55 For example, CALAAS stated that it did not support compulsory income management, nor the inclusion of family violence

as an indicator of vulnerability at either a legislative or policy level. Compulsory IM in any form and the full ability to manage any income is vital to victims of domestic and family violence.^[67]

13.56 Similarly, NAAJA commented that it would have concern for the safety of a customer who was made subject to income management after a family violence incident, and queried the usefulness of income management in family violence.^[68]

13.57 Stakeholders identified that income management should be assessed on the individual needs of the person experiencing family violence. They also commented that agency procedures and communication strategies with the person should ensure privacy and provide options.^[69] Stakeholders also drew attention to the lack of autonomy for people experiencing family violence under the income management regime.^[70] For example, a number of stakeholders indicated that the welfare recipient should be fully engaged with any decision on what percentage of their income, if any, may be quarantined. Full flexibility and control of the process by the person experiencing family violence was paramount. The Welfare Rights Centre Inc Qld argued that the role of the social security system is to promote autonomy, dignity and choice.^[71]

13.58 The ADFVC argued it would disempower people already experiencing family violence and only lead to more hardship for them.^[72] Another commented that:

Family violence, the exercise of power and control of one person over another, is an attack on the individual’s autonomy, agency, and the freedom of the victim. The risks of further disempowerment and loss of independence from compulsory income management are high. Replacing individual power and control with state power and control is at best only a risky stop-gap and at worst further abuse.^[73]

13.59 Further, where a person experiencing family violence is placed on Compulsory IM following a violent incident, safety issues may arise for the victim, as the perpetrator may blame the victim for being income managed.^[74] As one stakeholder remarked:

Family violence requires renewed and careful consideration in relation to social security law, especially given current income management policies and increasing knowledge of financial abuse and other financial aspects of family violence. Safety is probably a more fundamental consideration for family violence victims than for any other social security applicants … the responsibility of the social security system to assist women whenever necessary to leave and re-build their lives is clear.^[75]

13.60 Other stakeholders argued that people experiencing family violence should be exempt from Compulsory IM, except in cases where statutory case management was required;^[76] and that family violence victimisation should not be a trigger for Compulsory IM.^[77] Further, the Sole Parents’ Union commented that income management should not apply to people on the basis of receiving social security payments.^[78]

Exemptions

13.61 In the Social Security Issues Paper, the ALRC asked whether people experiencing family violence should be exempt from income management in specified circumstances, where to do so would assist them to take steps to prevent or reduce violence.^[79]

13.62 A number of stakeholders supported an unqualified exemption for people experiencing family violence.^[80] One stakeholder supported an exemption for those people experiencing family violence, except where individual determinations are made within a statutory case management process.^[81]

13.63 CAALAS submitted that access to an exemption is unduly onerous to navigate and places an administrative burden of proof on people seeking to be exempt from income management.^[82] In addition, NAAJA considered that the exemption process is time consuming, for example, the review and appeal decision process.^[83]

13.64 NAAJA suggested that the test time of 12 months under s 123UGD(1)(d) should be amended, for example, where a welfare recipient experiencing family violence has recently left a violent relationship and settled down to a safe environment, the person is still required to wait 12 months for the exemption period to end.^[84]

ALRC’s views

13.65 Multiple issues affect people experiencing family violence, many of which are beyond the control of victims and their children. The ALRC considers that notable policy and implementation gaps exist within the legislative framework of income management, particularly as applied to victims of family violence.

13.66 The key concerns for people experiencing family violence raised in the submissions and during consultations were: the unsuitability of the compulsory measure; the vulnerability indicators and their application; privacy issues, including disclosure and consent; and the inadequate funding of services for welfare recipients to meet income management compliance requirements.

Unsuitability of compulsory measures

13.67 The complexity of family violence and the intertwining of family violence in a number of vulnerability indicators prompts questioning about whether Compulsory IM is an appropriate response. Later in the chapter the ALRC considers an alternative model, in light of the experience in Cape York, and whether a more nuanced response to income management can be achieved.

13.68 The National Plan to Reduce Violence Against Women and Their Children identified that specialist and mainstream services are critical to assist people to rebuild their lives following violence and the first point of contact for people experiencing family violence should also provide capable and compassionate assistance—including specialist children services for those who have witnessed family violence.^[85] Where ‘first contact’ takes place with Centrelink staff, for people experiencing family violence, the assessment to income manage a victim appears inconsistent with the National Plan.

13.69 If victims of family violence withhold information due to fear of income management or intervention, they are left without adequate protection. Compulsory income management makes withholding of information more likely. In addition, people experiencing family violence have many social pressures where the absence of support services to meet their statutory or personal requirements may affect their priority needs, or a lack of funded community shelters, refuges, or social or community housing that would result in homelessness. Income management fails to take into account the substantial effect of inadequate services.

13.70 The ALRC considers that treatment of people experiencing family violence should be determined on a case by case basis, with links to support services and immediate access to financial assistance, including individually determined access and control of their income management accounts.

Indicators of vulnerability

13.71 Questions may be raised about whether family violence should nevertheless be included as an express indicator of vulnerability—especially given the widely accepted view that economic abuse should be recognised as a form of family violence.^[86] The ALRC notes that various vulnerability indicators may cause or result from exposure to family violence and therefore may lead to a determination for the application of Compulsory IM. However, the ALRC does not consider that Compulsory IM is an effective remedy to assist family violence.

13.72 The ALRC therefore proposes that family violence be considered as a reason why income management may be an inappropriate response to indicators of vulnerability. Amending the Guide to Social Security Law would allow decision makers to recognise the problems resulting from subjecting victims of family violence to required quarantining of income.

Exemptions

13.73 The ALRC considers that the general approach to exemptions within income management, as reflected in the decision-making principles under the Social Security (Administration) Act, would make it difficult for most people experiencing family violence to obtain an exemption. The decision-making criteria do not provide an automatic case for exemption for people experiencing family violence. Even if family violence is included as an exemption, the process for challenging exemptions is a time-consuming one and the onus is on the welfare recipient to demonstrate why he or she should be exempt.

13.74 The vulnerable position of people experiencing family violence, and the complex needs for their safety and protection, requires an urgent and simplified process that enables welfare recipients freely to enter and exit income management.

13.75 Submissions have mentioned the various problems for a person seeking an exemption and the process of appealing the refusal by a decision maker. The difficulty of meeting the requirements for exemption under the Social Security (Administration) Act may be exacerbated where people experiencing family violence live in rural, remote or discrete communities, because they have limited access to support services, low-income housing and temporary accommodation.

13.76 The ALRC proposes that persons experiencing family violence should not be subjected to Compulsory IM. This may be achieved in two ways, by:

• amending the Guide to Social Security Law to say that family violence should be taken into account in considering whether income management is an appropriate response to indicators of vulnerability; or

• including family violence as an exemption—which is likely to be ineffective unless the review process were streamlined.

13.77 These proposals should be supported by the adequate and regular funding of family violence services that provide support and safety for people experiencing family violence, and are a crucial link in the web of services necessary to support victims of family violence.