Financial support for abuse survivors – a privilege and a responsibility
21st August 2025
Our financial advice firm (EFS Advice) was engaged earlier this year to meet with over 100 members of an abuse class action to discuss their financial situation and plans for their settlement funds.
As anyone who has worked with survivors of trauma knows, the journey doesn’t end with compensation. In fact, for many, receiving a settlement brings a new set of questions, uncertainties and anxiety.
Our role was to meet individually with each member to provide a financial consultation – this was done in conjunction with a financial counsellor and a support person – with a view to helping them start to think about how to best manage, maximise and protect their settlement funds. Our team gained many learnings during this process.
Every member we spoke to was different. Some had a clear plan and already had experience with managing their finances, while others had never received funds like this in the past and were quite vulnerable to mismanaging the funds or becoming victims of fraud.
The goal was not to tell anyone what to do but rather to make sure they understood their options and the long-term implications of their choices, and provide further support if needed. For members who had never managed a significant sum of money before, this was especially important.
In this article we cover the following topics and explain some key financial planning strategies with benefits that apply to all abuse settlement recipients:
- Financial literacy and vulnerability issues
- The unique 90-day personal injury super strategy lawyers must know about
- Centrelink and community housing
- Super Total and Permanent Disability (TPD) Claims
- Other financial considerations
Financial literacy and vulnerability
The class action members fell into three broad groups of roughly equal size:
- Those already financially well organised – many members were doing well financially, may have had work, and owned a property with a mortgage. These members benefited from a typical financial planning discussion on how best to manage their settlement.
- Those who would benefit from personal injury financial advice strategies. Members of this group were typically not working and on Centrelink benefits. They realise the benefits of financial advice and can take advantage of various unique personal injury financial strategies (see below for more information on strategies to protect Centrelink payments from settlement proceeds, reduce tax on future earnings forever, provide additional protections, etc).
- Those most at risk – this group were the most vulnerable, and the most difficult to help. They tend to lack financial and general literacy, may struggle to manage their settlement, and are at the highest risk of making poor decisions or loss.
We think it’s the third group who need additional local and ongoing supports to assist them. These members would likely benefit the most from personal injury financial advice strategies, but given low literacy, high levels of incarceration and other challenges, it can make it difficult or even impossible for them to go through a financial advice process.
A critical strategy: The Personal Injury 90-day Superannuation Strategy
There is a unique personal injury financial strategy that is appropriate for abuse settlement recipients (and in fact any recipient of a personal injury compensation settlement) but it must be implemented within 90 days of receipt of the settlement.
To take advantage of this, settlement recipients need to meet with two doctors and have them certify the following condition:
Because of the personal injury, it is unlikely that the above member can ever be gainfully employed in a capacity for which they are reasonably qualified because of education, experience or training [1]
Once this is the case, the settlement recipient can contribute an unlimited amount into a superannuation account, within 90 days of receipt of the settlement, and retain full access to these funds.
This strategy provides various benefits:
- Funds are shielded from Centrelink’s means testing (while in accumulation).
- Funds can be held in a fully tax-free earnings environment (while in superannuation pension phase).
- Settlement funds will always be accessible, even if the person works in the future.
- The superannuation account offers additional protections to vulnerable people.
It also allows the person to keep their funds in cash receiving interest (and safe) or they can invest the funds, or a combination. The person can commence an income stream.
Centrelink and community housing
A common complaint from the class action members and abuse survivors generally was about the Centrelink preclusion period and subsequent repayment. Another concern was the possible impact to Centrelink payments moving forward. As outlined above, this could be avoided through certain financial strategies.
Superannuation history and possible TPD claims
A critical question to ask all abuse settlement recipients is about their current working status, their work history, and their superannuation history. Many don’t realise that if they are not working now due to health or disability reasons, but have worked in the past, they may have been set up with a default superannuation account with attached disability insurances such as Total and Permanent Disability (TPD) and Income Protection (IP) insurance. And they may be able to claim on this insurance cover – even if the super and insurances no longer exist.
We referred roughly one-third of class action members back to the law firm to investigate their superannuation and insurance history to see if they would have a valid claim.
Other financial considerations
There are a number of other common financial considerations for abuse settlement recipients, some of these areas include:
- Banking and cash flow – and basic education on how to manage an amount of money that many members have not had to manage in the past.
- Property purchase – many members were considering purchasing a property for the first time and benefit from support and information on how to go about this.
- Relationship breakdown – a common question was whether prior relationship breakdown (or future relationship breakdown) could put settlement proceeds at risk. We developed relationships with family lawyers to assist members with these issues.
- Estate planning.
A privilege and a responsibility
Working with this group was one of the most humbling and important engagements our firm has ever undertaken. We didn’t just provide financial advice – we helped create a sense of control, choice and dignity.
For these class action members and indeed, all survivors of abuse, financial empowerment is not just about money. It’s about reclaiming independence, building a future, and being treated with respect and care.
At EFS Advice, we believe there is significant room for improvement on how we best work with law firms and their clients to safeguard the financial future of abuse survivors (particularly the more vulnerable people) and would welcome discussions with anyone working in this area to explore how that can be achieved.
The ALA thanks Andy Reynolds for this contribution.
For more reading on abuse law and trauma, please see the latest edition of Precedent available here (ALA members only).
The views and opinions expressed in this article are the authors and do not necessarily represent the views and opinions of the Australian Lawyers Alliance.
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