A leading Australian superannuation fund is spearheading a campaign to extend the rules on early access to superannuation, to allow survivors of family violence access up to $10,000 as a crisis payment. Whilst this proposal has merit, given the challenging circumstances of the people in question, implementation of this proposal would represent a failure of public policy. The proposal would have a negative impact on superannuation accounts of vulnerable people and overwhelmingly affect women, as according to Our Watch, women are three times more likely than men to experience violence from an intimate partner. It can be argued that this policy is inequitable and priority should be given to harmonisation and improvement in existing systems of support for domestic violence survivors.
The process of building a secure financial future in retirement via superannuation in Australia is already flawed along gender equity lines. Superannuation is based on a linear method of accumulation, which favors men by assuming Australians become employed and promoted, receive superannuation payments, and continue this process until retirement with no significant breaks. Generally, women have lower superannuation than men and a more precarious attachment to the workforce, largely due to unpaid caring responsibilities. This is a chief mechanism by which the female experience of accumulating superannuation is broadly different to the male experience, and a reason why Australian women retire with between half to two-thirds the superannuation balance of men.
The proposal for domestic violence related payments from superannuation accounts is to release superannuation early along the existing line of “compassionate grounds”, as per current triggers including to avoid home re-possession and to treat chronic illnesses. However, taking money out of superannuation early has financial impacts on more than just superannuation. Superannuation can be heavily taxed and survivors may end up with more child support to pay and lower Centrelink payments, as shown by the Workplace Gender Equality Agency. Reduced compounded interest can increase the possibility of delayed financial poverty later in life.
However, early access to superannuation for domestic violence survivors is now being debated because coordinated national government support for survivors of domestic violence is inadequate. It is a reasonable argument in this context that it would be beneficial to have additional funds when women are rebuilding their lives after leaving a violent situation. For example, superannuation could be used to buy a car to transport children, increase work opportunities, access counselling or for rental accommodation.
In making policy to assist survivors in moving on with their lives, we should consider the political and historical context of existing support. Federally, Australia has had a potted history with ad hoc funding for domestic violence. Sector experts argue that this forces preventative, crisis management and rehabilitation community services to fight against funding cuts and precludes them from creating long-term and effective action plans. This means that on a system-wide level, services are struggling with demand and are overwhelmed across Australia.
This history suggests that there is scope for the federal government to provide more coordinated and sustained national funding to give much needed capacity for the services on the front line. On an individual level, the Commonwealth offers equal to a week’s pay at an individual’s existing income support payment rate through the Centrelink system a one-off crisis payment. This is inadequate to give women the ability to leave violent relationships, and there is scope to expand this payment, targeted as it is at the most financially disadvantaged. The Commonwealth Government could also look to the Victorian flexible package system, which allows up to $7,000 in assistance and can be used flexibly to address safety and security needs. These policy responses would ensure a more nationally consistent and equitable method of providing adequate support for survivors.
There is no doubt domestic violence survivors should receive support to escape violent situations and to re-establish their lives – but there must be a better and fairer way than being forced to rob their own future to stabilise their present.
Madelaine Barry is a Policy Analyst Intern at FPL Advisory.