Income-contingent loans for women escaping domestic violence

Background

It is well established that women in Australia need access to more funds to safely leave violent relationships and this issue was addressed in a recommendation at the recent Inquiry into family, domestic and sexual violence. The financial difficulties that arise from violence is an important factor for women staying in these relationships and increases hardship throughout their lives. This project will investigate an income-contingent loan (ICL) scheme in combination with government grants for women who experience intimate partner violence (IPV) to enable them to more safely leave violence.

Aim

The ultimate aim of this research is a proposal for a financial support scheme that involves a combination of ICL and government grants to increase the number of women that can be supported and/or the amount that can be provided to each woman for a given level of government funding. We will also be providing the economic rationale and feasibility of the proposed scheme.

Methods

A long-term income projection model will be built for women who experience IPV. We use the Australian Longitudinal Study on Women's Health, ABS Personal Safety Survey (2016) and ABS Census data (2016) to inform these projections. We look at various design options for combinations of ICL and government grants using these income projections to propose schemes that will be economically feasible. In particular, the parameters of the loan will be varied in the model to analyse the long-term impact on affordability and financial risk mitigation for borrowers, and financial costs for the government and capital providers.

Significance

The research has many areas of significance. The scheme will increase the number of women that can be financially supported and/or the amount that can be provided to each woman for a given level of government funding. Importantly, this occurs through a mechanism that protects women from financial hardship in the future. The benefits in terms of enabling their safety and financial wellbeing cannot be under-estimated. The research will also provide important evidence on the economic feasibility of an ICL in this sector that could be funded by government and universally available to all women who experience IPV.

Funding Body

Australian Longitudinal Study on Women's Health is funded by the Department of Health

Project start date

July 2020

Expected completion date

December 2026