Women's experience of financial abuse and potential implications for Universal Credit

A new report by the TUC and Women’s Aid – Women’s experience of financial abuse and potential implications for Universal Credit, published on 12th March 2015 https://www.tuc.org.uk/sites/default/files/FinancialAbuse.pdf – highlights the affect that financial abuse has on victims of domestic violence. It catalogues the experiences and views of women who took part in research through focus groups and a survey.

Almost a third of women in England and Wales have experienced domestic violence at some point since age 16. There is no national estimate of the numbers experiencing financial abuse. Women experience more frequent and severe domestic violence and are more likely to be victims of financial abuse.

Financial abuse is not always recognised as a distinct aspect of domestic violence. It is sometimes regarded as part of emotional or psychological abuse (thus masking its extent).

As a form of control, financial abuse involves using or misusing money so as to limit and control the partner’s current and future actions and freedom of choice. It can include using credit cards without permission, putting contractual obligations in the partner’s name, and gambling with family assets. It often results in debt and other financial problems, sometimes leaving the survivor and children without enough food. Even when a survivor has left the home, financial control can still be exerted by the abuser with regard to child maintenance, interference in employment and/or damage to property. Financial abuse also affects the ability to flee from violence, as lack of money can delay or prevent victims leaving their abusers. US research suggests that virtually all abused women experience financial abuse at some point and financial abuse is a distinct yet common form of abuse.

The report found that, of survey respondents:
• 75 per cent were prevented from seeing family and friends
• 76 per cent agreed that their partner kept financial information from them
• 67 per cent of those in paid work at the time of the abuse agreed that their partner monitored their work activities
• 58 per cent agreed that their partners used them as a source of money.

Also:
• 71 per cent agreed that they went without essentials because they didn’t have enough money
• 41 per cent agreed they had to use the children’s birthday money or savings to buy essentials
• 77 per cent said their mental health had been affected. Some ex-partners made allegations about the survivor’s mental health and manipulated agencies into believing them.
• 61 per cent of survey respondents were in debt because of financial abuse and 37 per cent had a bad credit rating as a result. Almost half agreed they had lost confidence in budgeting.
• 52 per cent of survey respondents living with an abuser at the time of the survey agreed with the statement that they had no money so could not leave. Hence, financial abuse is a barrier to leaving the abuser. Some interviewees were threatened with losing their children or deportation if they left.

Benefits and tax credits intended for the family as a whole or the survivor could become additional income for the perpetrator, who often used family benefit entitlements for their own means and denied survivors access to benefit income. Sometimes Child Benefit was paid to the abuser, either because the woman was ineligible due to her immigration status or as a result of manipulation. Over 40 per cent of survey respondents receiving benefits/tax credits at the time of the abuse said that their partners took their benefit income from them.

Women were also caught by rules restricting access to benefits if they were non-UK nationals leaving the abuser, or if they were returning British nationals fleeing an abusive partner abroad. Disabled women reported having no access to their disability benefits. Access to benefits during the transition to a place of safety and longer term resettlement is crucial. Yet women spoke of delays and lack of payments when leaving a partner, including for one-off items such as furniture for a new home.

The report looked into the impact that Universal Credit could have on financial abuse. Universal Credit is a single integrated payment replacing out of work means-tested benefits, housing benefit and tax credits. Women expressed concern about the single payment per couple, which they felt was likely to go directly into their partner’s account, giving the abuser more money to control. Given the evidence in this report of partners using the existing benefits system to control household income, and of them building up debt in survivor’s names, the potential for a single, monthly household benefit to be misused by an abusive partner is significant. Monthly payments were felt to give the abuser access to a larger amount of money on pay day than was currently the case (73 per cent of respondents agreed or strongly agreed with this statement). Women also worried that a single monthly payment would give them less flexibility to juggle their finances, which was often necessary when an abuser was controlling most of the household income.
Following on from the research, Women’s Aid and the TUC have called for a five-point plan which would see:
• Survivors and agencies identifying and responding to abuse
• Banks dealing with abuse more effectively
• Changes to the delivery of Universal Credit to reduce the risk of further opportunities for financial abuse
• Benefits and child maintenance systems supporting survivors
• Further data collection to identify more detail about this form of abuse, so that more effective interventions can take place.
To achieve this Women’s Aid and the TUC are calling on government departments, agencies and banks to review their practices in light of the report’s findings and to implement policy changes to protect survivors of financial abuse. Key recommendations include paying childcare elements of Universal Credit to the main carer, providing training for Jobcentre Plus and bank staff so they are able to identify problems during the Universal Credit claim process, and reviewing legal aid regulations.
If you have been the victim of abuse, whether it is financial or otherwise, please do not hesitate to contact one of our family solicitors to discuss.