An inexplicable delay by the federal treasurer’s department is allowing perpetrators of sexual abuse and assault to hide their assets from survivors’ claims for compensation by moving them into superannuation accounts. The scale of this cannot be quantified because so few cases go to trial, but it is significant enough to be considered an issue by lawyers representing people in abuse claims.
More than four years ago the government began a review into the possible early release of an individual’s superannuation, considering whether or not a perpetrator’s superannuation should be available to unpaid victims of crime compensation orders. There were two key proposals. The first was referred to as a “claw-back” mechanism, where perpetrators have made “out-of-character” voluntary contributions to their superannuation accounts in an attempt to shield their assets from survivors’ claims. The second was to allow survivors of “serious, violent crimes” access to a perpetrator’s superannuation as compensation where other assets have been exhausted. Currently, there are specific legal mechanisms that exempt superannuation from such costs orders, and even from bankruptcy.
In 2017 the government released drafts of these two proposals, received more than 60 submissions, conducted 10 roundtables, and “several bilateral meetings with stakeholders”. The result of this work was the “Review of superannuation and victims of crime compensation” document, published by the Australian Government Treasury in May 2018, which included a commitment to the introduction of new legislation. The document noted that on March 26, 2018, the then minister for Revenue and Financial Services, Kelly O’Dwyer, announced the government “would legislate to ensure that victims of serious crimes will be able to access the perpetrator’s superannuation”. According to the document, “She indicated that the government hoped to introduce relevant legislation by the end of this year.”
The closing day for further submissions was June 15, 2018, but nothing else ever happened. No legislation was introduced. No further documents have been published. When asked for an explanation, a representative from the federal Treasury told The Saturday Paper, “Since the release of the 2018 consultation paper ... Treasury has undertaken initial design work on the proposals outlined in that paper. We anticipate undertaking additional consultation prior to finalising a bill for introduction into the parliament.”
No answer was provided on a proposed time line for this work, only a reference to the complexity of the problem. “Given the vulnerable stakeholders who the measure would target (many of whom are victims of violent or sexually based crimes) and the multitude of court jurisdictions that would be captured, it is very important that the government get these policy settings right. There are difficult issues to be dealt with, including balancing the rights of multiple victims, potentially multiple claims over time, and interactions with family law and bankruptcy law.”
Andrew Carpenter, a senior associate at Websters Lawyers in South Australia, has come to specialise in supporting claims by survivors of child sexual abuse. A decade ago when he was working at a different firm on different matters, “someone that came in was a survivor and wanted help, and no one wanted to help her”. Since then he has seen how many lawyers “don’t want to take on these matters” and has developed expertise in bringing claims against both individuals and institutions for abuse. Carpenter says he has spoken with MPs, a representative from the federal Treasury, and multiple charities and organisations that support survivors, and all
of them are in favour of new law reform.
In the years since 2018 he has represented many survivors who have gone without proper financial compensation because the laws around access to a perpetrator’s superannuation still haven’t been amended. “You generally see a lot of paedophiles are narcissists,” he says, “and they believe that they’ve been done wrong, and they will continue to fight it.” He describes perpetrators selling assets and dumping huge figures into their lawyers’ trust accounts or into their own superannuation accounts to avoid paying compensation. Regardless of whether or not they officially file for bankruptcy, they are able to continue to fund their legal fees with this money, even from jail, and then live comfortable lives off their superannuation when the matter is resolved.
There are some serious and valid competing interests to be considered in the draft legislation. For instance, it may be complex to manage the entitlements of a perpetrator’s dependants against claims by survivors. It is foreseeable that individual perpetrators create multiple survivors, and it often takes survivors of child sexual abuse years to make a disclosure; there may need to be mechanisms or safeguards that allow for multiple claims over long periods of time to be made against a single perpetrator’s superannuation.
The Association of Superannuation Funds of Australia supported both proposals, but the Australian Institute of Superannuation Trustees only supported the “claw-back” proposal, not the proposal for more general access. Their view hinged on “the complexity, cost, inefficiencies and difficulty” of implementing and administering such a scheme. There were also some variations in submissions from organisations about whether access to super would be available only where offenders had criminal law convictions. Given the current rates of convictions for sexual crimes in Australia, which are in the low single-digits by percentage, there are calls for successful civil suits to be given similar access. Despite this, the government’s report says, consultations indicate “strong support for the position that a criminal conviction be required”. A submission by the Women’s Legal Service Victoria notes that, “requiring victims to distil the violence perpetrated against them into a discrete criminal offence can invalidate the overall experience of survivors”.
Child protection organisation Bravehearts made a submission to the review in 2018. Its director of research, Carol Ronken, told The Saturday Paper they were originally “pleased” to see the government “proactively pursuing changes to the legislation” for compensating victims, but that “it is so disappointing to see, almost four years on, that there has been no further discussion on this. Too often we hear about offenders protecting their financial and other assets, restricting the capacity of victims to access compensation. This needs to change. Enabling access to an offender’s superannuation is one avenue to hold offenders accountable for their crimes. Victims/survivors need to see action, they deserve to see their needs prioritised.”
“What I’m seeing a lot of at the moment,” Andrew Carpenter says, “is a lot of offenders who will sell their house and they’ll say they’re doing it to get legal fees. They will try to get themselves off in the criminal [courts]. And then when the survivors try to sue them, they just say, ‘Sorry, I’ve got nothing.’ But they’ve put a lot of money into their super and these perpetrators who are effectively in their 70s go to jail for three or four years, come out, and live off hundreds and hundreds of thousands of dollars of super without any fear of anyone taking the money from them.”
He recounts one recent case with a woman identified as “S, E” by the courts, who had been abused by her godfather. The man was found guilty in the District Court, appealed to the Supreme Court, where his conviction was upheld, then appealed again to the High Court, where it was again upheld. “And when we went to sue him,” Carpenter explains, “he effectively said, ‘I would rather pay [my lawyer] 20 grand a day than give this girl a cent, because she’s ruining my life.’ ”
Carpenter says that perpetrator had millions of dollars in superannuation and a freehold piece of real estate. He says politicians are nervous to make changes to the law because they believe it would push people like S, E’s abuser onto welfare. “And my argument is, well, you’ve got a 35-year-old that has never been able to work, with agoraphobia, who was too scared to leave the house, [a person who is] going to be on effectively social security for the remainder of their life … survivors are struggling to make ends meet.”
Carpenter says money talks. “You see a lot of these perpetrators getting suspended sentences,” he says, but if they thought their millions in super were on the line, “it might be a great deterrent”.
Ronken says that for survivors it’s not really about the money. “This is about offenders being held accountable for the long-term, lifelong impacts of the serious harm victims too often struggle to live with. Victims of sexual abuse, and other serious crimes, live with incredible consequences that impact on so many areas of their lives: from disrupted education, impacts on career opportunities, mental health and relationship impacts, dealing with lifelong triggers, and medical issues.”
This article was first published in the print edition of The Saturday Paper on March 26, 2022 as "Hidden assets".
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