Lifting the veil on ‘financial abuse’ through the tax system

Friday, 12 December 2025

Financial abuse is quietly wreaking havoc on victims’ tax affairs in New Zealand — a hidden crisis that experts say mirrors Australia’s experience but remains unacknowledged here.

Australia’s Taxation Ombudsman Ruth Owen visited New Zealand to speak at a tax conference in November with a message that there is one form of intimate partner economic and financial abuse that has not yet been recognised in this country.

There are different definitions and forms of economic and financial abuse, but it generally refers to a pattern of controlling, exploitative, and disruptive behaviours involving intimate partner finances that can range from sabotaging people’s employment, withholding money for household expenses, to stealing money.

It is frequently associated with physical abuse, and it is only in the last few years that academic studies have highlighted just how common it is.

Speaking in Auckland at the Chartered Accountants Australia New Zealand conference, Owen said one in six Australian women, and one in 13 Australian men, had been victims of financial abuse.

Comparative figures for New Zealand are roughly comparable, with one in seven women having experienced some form of economic abuse.

However, Owen highlighted her work to fight one of its unrecognised forms - financial abuse through the tax system.

And at a financial abuse summit in Auckland just days later, a case emerged indicating Owen was right to tell tax advisers that financial abuse through the tax system would be happening in New Zealand, just as it was blighting lives in Australia.

Owen had uncovered examples from the Australian Tax System where abusers set up companies and registered victims as directors without their knowledge. Many only discovered this when the Australian Tax Office issued a “director penalty notice” demanding payment of a tax debt.

Owen said the Australian tax system had been designed without contemplating financial abuse.

She recommended law change to allow the ATO to forgive tax debts of what she called “victim-survivors”, and to give it power to transfer tax debts to the abusers who were the true hand behind their creation.

“The Government did come out and make that commitment, and will be coming out to consult on that,” Owen said.

In a report she published last year, she spoke of the “weaponisation” of the tax system, by abusers, saying: “The impacts on victim-survivors (and their families) can be devastating and long lasting, with substantial financial burdens and ongoing instability and stress caused by debts they did not personally incur.”

Owens’ words came just days before a landmark event at the Ellen Melville Centre in Auckland at which non-bank lenders in the Financial Services Federation (FSF), whose members include UDC Finance, launched a voluntary code recognising the prevalence and threat of financial abuse.

At that event, a UDC employee told The Post the financier had just recognised that a car loan debt incurred by a company, set up with a woman victim-survivor of financial abuse as the sole director, was fraudulent.

The code, which was developed with charity Good Shepherd, encourages FSF members to adapt their systems, training and policies to identify and prevent abuse. It includes making it as easy and safe as possible for victim-survivors to ask for, and get, help.

That included referring victim-survivors to services like Good Shepherd’s Family violence/economic harm service.

The code is a first, and FSF executive director Lyn McMorran called on other industries to use it as a template to develop their own.

Devastating impact on victim-survivor

At the event, Good Shepherd advisor Vanessa Mazzola, who is based in Christchurch, outlined the abuse of a woman involving a UDC loan.

In that case, a self-employed personal trainer’s physically violent partner stole money from her, used her credit card without her knowledge, and bought an $80,000 car through a UDC loan he took out in her name. Without her knowledge, the partner used her passport, and forged her signature on documents, with all the documentation and communications going to his email address.

Mazzola read a statement by the victim-survivor, who attended the event.

“While trying to recover emotionally and rebuild life as a single mum, they also had to deal with the financial damage he'd caused,” Mazzola read.

“UDC Finance advised that the loan was legally in my name and that if I wanted to keep the car, I would have to take responsibility for it. But he had the car, and I was scared of what he might do if payments weren't made.

“He left me with debt, and I was struggling to afford food and basic living costs for my daughter, myself and my daughter,” Mazzola read.

Mazzola contacted UDC, and the finance company removed the loan from her name.

“Thanks to Vanessa and to Good Shepherd, that heavy debt and the constant anxiety finally lifted,” the victim-survivor’s statement said.

Putting a name to abuse

Academic Janet Fanslow from the University of Auckland Waipapa Taumata Rau has studied the prevalence of economic and financial abuse, which indicated one in seven women had experienced it in their lifetimes.

UDC Don Atkinson chief executive said they had around 1.5 million customers with $22 billion of loans.

“That’s a third of the population,” he said. “There’s a real responsibility on us to turn the words into action”

Fanslow said academics’ work was vital to people and organisations to understand, and talk about financial and economic abuse.

“Without the ability to name things like economic abuse we don’t have a way of talking about it, of making it visible,” she said.

The severity of its impact was shown in testimonies gathered from victim-survivors.

“What we found is that women who had experienced intimate partner violence without economic abuse, were still about two times more likely to experience food insecurity compared to women who had no intimate partner violence at all,” she said.

“But when we [look at] violence exposure plus economic abuse, those women were almost five times more likely to have food insecurity, three times more likely to be on a benefit, and three times less likely to have enough money to support themselves in case of an emergency,” she said.

Inland Revenue response

Unlike the ATO, New Zealand’s Inland Revenue (IRD) Te Tari Taake believes it has the tools and discretion to deal with intimate partner financial abuse when they discover it in the tax system.

An IRD spokesperson said: “Inland Revenue has measures in place to identify financial abuse and respond to it to help our customers. Our staff have specialist training to identify signs of financial abuse and help customers when abuse is found.”

She said: “There is also tailored support for victims of economic abuse such as debt relief and instalment plans and adjustment to things like child support, student loans, KiwiSaver and Working for Families entitlements.”

IRD used “advanced analytics and audits” to detect financial wrongdoing, she said.

However, like the ATO, Inland Revenue does not have information designed to alert victim-survivors to their options on its website, including in its policy document “Options for relief from tax debt”.

After a long battle by Labour MPs and stalking survivor Susan Templeton, the law was changed to allow company directors who fear for their safety to withhold their home addresses from the Companies Office register.

Templeton, who had herself experienced financial abuse, said she had seen examples of an abuser creating companies with women intimate partners as directors, some of whom did not know he had done it.

She said more had to be done to show the country all the forms that physical and economic abuse takes.

“Decent people can’t imagine it, so they can’t see it,” Templeton said.