Financial abuse signs typically manifest as rigid control over household funds, monitoring every cent spent, sabotaging career advancement, or forcing a partner into debt. This form of family violence is designed to erode autonomy, leaving the victim financially dependent and unable to escape the relationship safely.
Understanding Financial Abuse in New Zealand
Financial abuse, often referred to as economic abuse, is a pervasive yet frequently overlooked form of family violence. Unlike physical abuse, which leaves visible scars, financial abuse operates in the shadows of a relationship, slowly dismantling a victim’s independence and confidence. In New Zealand, the Family Violence Act 2018 explicitly recognizes economic abuse as a form of psychological abuse. It is defined as behavior that denies a person financial autonomy or controls their financial behavior in a way that limits their freedom.
The core objective of a financial abuser is power and control. By restricting access to money, the abuser ensures that the victim cannot leave the relationship, access legal representation, or support themselves and their children. This type of abuse affects people of all socioeconomic backgrounds, from beneficiaries to high-net-worth individuals. While the methods may differ—ranging from withholding a benefit payment to hiding assets in complex family trusts—the intent remains the same: to entrap the partner.
Recognizing the signs early is crucial. Often, victims do not realize they are being abused because the control is disguised as “budgeting,” “money management,” or “protecting the family assets.” However, when one partner holds all the cards and the other has to beg for basic necessities, the dynamic is not a partnership; it is abuse.
Restricting Access to Bank Accounts and Funds
One of the most common financial abuse signs is the restriction of access to existing funds. This tactic is designed to make the victim entirely dependent on the abuser for survival. In a healthy relationship, financial decisions are generally shared, and both parties have access to money for daily living. In an abusive dynamic, the flow of money is strictly unilateral.
The “Allowance” System
Abusers often implement an allowance system where the victim is given a meager amount of money to manage the entire household. If the victim cannot make ends meet, they are berated for being “bad with money” or “irresponsible.” This gaslighting technique makes the victim doubt their own competence. In severe cases, every receipt must be produced, and change must be returned to the penny. This level of scrutiny is humiliating and exhausting.
Control of Online Banking
In the digital age, financial abuse has moved online. Abusers may refuse to share passwords for internet banking, or they may change passwords frequently to lock the victim out. They might monitor the victim’s spending in real-time via banking apps and send abusive texts immediately after a purchase is made. This constant surveillance creates a sense of living in a panopticon, where the victim feels watched every moment of the day.
Withholding Essentials
A clear sign of abuse is when a partner has ample money for their own hobbies, alcohol, or luxury items, but refuses to provide money for the victim’s basic needs, such as food, medication, or clothing for the children. In New Zealand, this might look like a partner refusing to contribute to rent or mortgage payments, putting the family’s housing security at risk, while simultaneously buying expensive vehicles or gear.
Sabotaging Employment, Education, and Career Growth
Financial independence is the enemy of an abuser. Consequently, they will go to great lengths to prevent their partner from earning their own money or advancing their education. Sabotaging employment is a strategic move to ensure the victim has no “exit fund” and no professional network to turn to for help.
Tactics used to sabotage employment include:
- Disrupting Sleep: Preventing the victim from sleeping before a big meeting or exam, ensuring they perform poorly.
- Destroying Resources: Hiding car keys, destroying work uniforms, or deleting important computer files needed for work or study.
- Harassment at Work: Calling the victim’s workplace incessantly, showing up unannounced to cause a scene, or accusing the victim of having affairs with colleagues. This often leads to the victim resigning out of embarrassment or being fired.
- Childcare Sabotage: Refusing to look after the children at the last minute, forcing the victim to miss work.
In the New Zealand context, this sabotage has long-term effects on KiwiSaver balances. A victim who is forced out of the workforce not only loses current income but also misses out on employer contributions and government tax credits, leading to poverty in retirement. This economic disadvantage compounds over time, making it even harder to restart life post-separation.
Coerced Debt and Credit Damage
Coerced debt is a devastating form of financial abuse where the abuser forces the victim to take out loans, credit cards, or sign finance agreements in their own name. This is sometimes referred to as “sexually transmitted debt.” The abuser gets the benefit of the money or goods (such as a new car or holiday), while the victim is left with the legal liability.
The Impact on Credit Scores
If the relationship ends, the abuser often stops paying for the debts, leaving the victim to deal with creditors. In New Zealand, a bad credit rating can prevent a survivor from renting a house, getting a power connection, or securing a car loan. It effectively blacklists them from society. Creditors legally pursue the name on the contract, and proving coercion can be difficult without documented evidence.
Fraudulent Activity
Some abusers will forge their partner’s signature on loan documents or take out credit cards in their partner’s name without their knowledge. Victims may only discover this when a debt collector knocks on the door or when they are declined for a mortgage years later. This is fraud, but many victims are hesitant to report their partner to the police due to fear of retaliation or family pressure.
Hiding Assets and Financial Infidelity
When a relationship is deteriorating, or even during the relationship, an abuser may hide assets to prevent the victim from getting their fair share of relationship property. In New Zealand, the Property (Relationships) Act generally dictates an equal split of relationship property, but this relies on full disclosure.
Abusers may hide money by:
- Funneling cash: Moving money into secret bank accounts or cryptocurrency wallets.
- Overpaying taxes: Intentionally overpaying tax to the IRD with the intention of claiming a refund after the separation is finalized.
- Trusts and Shell Companies: Using complex family trusts or business structures to claim that assets do not belong to them personally, thereby shielding them from the relationship pool.
- Deferring Bonuses: Asking employers to delay bonus payments until after a separation agreement is signed.
This financial infidelity ensures that even if the victim leaves, they leave with significantly less than they are entitled to, while the abuser retains the wealth accumulated during the partnership.
Steps to Regain Financial Independence
Leaving a financially abusive relationship requires careful planning. Because the abuser controls the money, leaving impulsively can result in immediate poverty or homelessness. Here is a strategic approach to regaining control, specifically tailored for the New Zealand environment.
1. Safety Planning
Before making any financial moves, consider your physical safety. If an abuser notices money missing or a new account opened, violence may escalate. Use a safe device (a library computer or a friend’s phone) to research and plan. Contact Women’s Refuge or Shine for a personalized safety plan.
2. Gather Documentation
Locate and copy essential documents. You will need these to access government support and open new accounts. prioritizing:
- Passport and Driver Licence.
- Birth certificates (yours and children’s).
- IRD number and tax returns.
- Bank statements and credit card bills.
- Trust deeds or mortgage documents.
- Marriage certificate.
Store these copies with a trusted friend, family member, or in a secure digital cloud account that the abuser cannot access.
3. Open a Safe Bank Account
Open a new bank account in your name only at a different bank than the one you currently use with your partner. Ensure statements are set to “online only” and use a new email address for correspondence. Many NZ banks (such as Westpac, BNZ, and ASB) have specific domestic violence teams trained to help you set this up discreetly without alerting your partner.
4. Check Your Credit Report
Request a free copy of your credit record from agencies like Centrix, illion, or Equifax. This will reveal any debts you may not know about. If you find coerced debt, flag this immediately. While the debt is legally in your name, informing the credit reporter of the circumstances can sometimes lead to a suppression of the negative data while disputes are resolved.
Legal Protections and Resources in New Zealand
New Zealand has robust systems to support victims of financial abuse, though navigating them can be daunting. You do not have to do this alone.
Work and Income (WINZ)
Work and Income can provide emergency financial assistance, even if you are still living with the abuser but are planning to leave. They can assist with food grants, accommodation costs, and emergency dental or medical costs. Ask to speak with a Case Manager about “Emergency Benefit” or “Special Needs Grants” related to family violence.
Legal Protections
Under the Family Violence Act, you can apply for a Protection Order. This order can include conditions that prohibit the abuser from damaging your property or exerting financial control. Additionally, an Occupation Order can grant you the right to live in the family home while the abuser must leave, regardless of whose name is on the title.
Good Shepherd NZ
Good Shepherd offers No Interest Loans (NILS) specifically designed to help families on low incomes purchase essential household items or car repairs. This can be a vital resource for survivors attempting to set up a new home without falling into the trap of high-interest payday lenders.
The Banking Ombudsman
If you feel your bank has not supported you adequately or has allowed the abuser to manipulate joint accounts in breach of banking protocols, you can complain to the Banking Ombudsman Scheme. They can investigate whether the bank failed in its duty of care, particularly regarding joint account mandates.
For more detailed information on managing your money and rights, the government website Sorted.org.nz offers excellent, neutral advice on separating finances and managing debt.
Financial abuse is a trap, but it is one that can be dismantled. By recognizing the signs—the control, the sabotage, and the coerced debt—you can begin the process of reclaiming your financial identity and your freedom.
People Also Ask
What is considered financial abuse in a marriage?
In a marriage, financial abuse includes controlling all access to marital funds, giving an insufficient allowance, hiding assets, running up debt in a partner’s name without consent, and forbidding a partner from working. It is a pattern of behavior used to gain power and prevent the partner from leaving.
How do you prove financial abuse in NZ?
Proving financial abuse involves gathering evidence such as bank statements showing withdrawals you didn’t make, text messages or emails demanding money or refusing funds, credit reports showing coerced loans, and journals documenting incidents. Affidavits from friends or family who witnessed the deprivation can also serve as evidence in Family Court.
Can I report financial abuse to the police in New Zealand?
Yes, you can report financial abuse to the police. Under the Family Violence Act 2018, economic abuse is a recognized form of family violence. Additionally, specific acts like forging signatures on loan documents or theft of money are criminal offenses (fraud and theft) that can be prosecuted under the Crimes Act.
What are the red flags of financial abuse?
Red flags include a partner demanding to see receipts for minor purchases, criticizing your spending habits constantly, refusing to include you in major financial decisions, hiding passwords to online banking, and reacting with anger or violence when money is discussed.
How do I separate my finances from an abusive partner?
Start by opening a new bank account in your sole name at a different bank. change your PINs and passwords. redirect your income (wages or benefits) to this new account. Remove your name from joint credit cards if possible, and freeze joint accounts to prevent the abuser from draining them.
Is financial withholding abuse?
Yes, withholding money for basic necessities like food, clothing, medication, or rent is a severe form of financial abuse. It endangers the victim’s health and safety and creates a dependency that makes it difficult to escape the relationship.
