Demystifying economic harm

February 8, 2022

Gain a better understanding of economic harm, while we unpack some of the common misconceptions we often hear.

Economic harm is a crime that slips under the radar and goes unchecked due to various misunderstandings and a lack of awareness.

Its invisibility leaves people experiencing the effects of a crime with little to no support, as well as an impact that can last a lifetime.

To increase clarity about what economic harm is, we’re going to demystify some of the misconceptions we often hear.

1. Economic harm and family violence are different

Economic harm is a form of family violence that makes it illegal just like any form of violence in Aotearoa.

Economic harm is currently listed as a form of psychological abuse under the Family Violence Act, but it needs to be recognised as its own form of family violence.

Why? The impact and outcomes are different. As an example, it can lead to one person paying off joint loans they were coerced into taking out, which affects credit ratings, the financial ability to meet basic needs, ongoing legal costs and limits housing options.

Economic harm needs to be recognised as its own standalone form of family violence so that we can have policies and systems in place that are just and fair to protect and support people experiencing it.

Click here to read our recent submission

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For example - you’re a stay-at-home-mum with a young child, in a relationship where economic harm is occurring and you break up with your partner. You both took out a car loan, but the company has only your details and therefore holds you liable to pay it off. You’re not working and need to look after the child and your ex is nowhere to be seen.

Suddenly you need to find some money, but you don’t meet the criteria for a loan. You’re now trapped in an unmanageable amount of debt and stuck with the risk of getting a bad credit rating making it hard to ever buy a house, be employed, rent or have a credit card.  

2. Economic harm is only about money

Economic harm is about money and resources.

We’ve noticed that a lot of people think of financial abuse when we mention economic harm. Financial abuse does have a role in economic harm, however it also includes the ability to access personal and joint resources.

The definition of economic harm is – a behaviour towards a person that controls, restricts or removes their access to money, resources or participation in financial decisions.

If a person has limited access to education, employment, transport, choice of clothing or housing in a relationship, due to having no voice or being excluded from making their own decision economic harm could be occurring.

Click here to read more about the definition of economic harm

3. Economic harm is always intentional

Economic harm is often but isn’t always intentional.

It can be subtle which means people might not be aware they are causing harm.

This could be because they were brought up believing relationships function is a particular way due to role modelling, socialisation, culture or intergenerational values.

If it isn’t a joint agreement and decisions are forced or imposed, economic harm may be occurring despite how well meaning the intention was.

Click here to learn more about the signs of economic harm

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For example – someone could have seen their father make all the decisions about money in their home and think that is part of the man’s job, or believe they are being helpful by insisting that one person stays at home to look after the children.

4. Economic harm is simply elder abuse

Elder abuse is a form of economic harm – but economic harm can happen to anyone in a close personal relationship.

Economic harm is experienced in the context of power and control.

Often it’s intimate partners like husbands, wives, girlfriends or boyfriends, but it can also include flatmates, carers, or in a parent and child relationship.

“We had a joint bank account, but I didn’t realise we weren’t on the same page. I still don’t know how she spent all that money – it’s taken me years to get on top of the debt.”

5. Economic harm happens to men as much as women

Although it can affect anyone, it’s women who experience economic harm the most, making it a gendered problem.

One in three women experience physical or sexual violence in their lifetime in intimate partner relationships, and when you include psychological violence, where economic harm sits, it becomes one in two or 55% of women.

Men experience family violence at the rate of one in ten, and elder abuse is one in eight.

International research suggests that economic harm is present in more than 90% of relationships that are physically or sexually abusive.  

Click here to read our research: Economic Abuse in New Zealand

Hippie Young Woman Using her Smartphone in the City

6. If people had more money economic harm would not occur

Economic harm impacts all ages, socio-economic groups, cultures, ethnicities and genders. 

How much money a person has is irrelevant. Economic harm is about controlling, restricting and excluding a person from access and involvement in their own or their family’s money and resources.

Therefore it affects people with limited incomes, a lot of wealth and anyone in between.

Click here to read real-life stories from people who have experienced economic harm

7. Economic harm is over when the relationship is over

That would be great, wouldn’t it? But unfortunately, it’s not the case. 

Economic harm often lasts long after a relationship is over.

Mental health, confidence, credit scores, increased debts, court costs, and future life choices can all be affected long after the relationship has ended.

Credit ratings can be affected because of the controlling and restricted access to finances or lack of financial knowledge about accounts – impacting the ability to buy a house.

Getting a job can also be difficult – due to threats, stalking, constant messaging and interference from an ex-partners’ ongoing harmful behaviours.

When having to split assets or work out child support, there might be financial arrangements or refusals relating to child support payments that can leave families struggling to meet basic needs or cover ongoing court cases and costs – which could eventually lead to homelessness.

Click here to read more about the impact

8. Economic harm looks the same in every culture

Economic harm can look different depending on the culture.

In some cultures, economic harm is more visible between a parent and sibling, compared to an intimate partner.

This could be due to pressures and expectations around money that are based on traditions or beliefs – including how money is managed and who has access to it.

There may also be cultural expectations about who financially supports whom. For example, sending money back to your home country to provide support for the wider family.

It is important to be aware of these different values and beliefs because the above doesn’t necessarily mean economic harm is occurring. However, economic harm may be present so it is important to talk to someone if you are concerned.

Click here to learn more about economic harm and cultures

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For example - the oldest male of the family makes the financial decisions and the woman makes decisions regarding the children.

9. Anyone experiencing economic harm should be referred directly to a family violence service

Maybe.

It’s important to keep in mind that referrals should always be a choice and a social services agency is not always the best option. We encourage people to find out about the different options available and access the support that is right for them and their situation.

Our Financial Wellbeing Coach – Economic Harm, can provide support with the financial challenges of family violence. Our coach has experience in financial capability and advocacy and working with those who have experienced family violence and economic harm. 

If there are other forms of violence occurring, which often there is, a family violence service would be the best placed to help.

Some people might prefer family support, others could be working with a service already, whilst others might not be ready to reach out because they are struggling with shame and guilt, and others don’t want to go to a service altogether.

Click here to find support

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