Separation has a significant negative impact on the household income of women in Australia the year after a relationship breakdown in comparison with men, according to a new analysis. However, six years after the separation there are signs of recovery.
A new analysis of financial consequences of relationship breakdowns was released by the Australian Institute of Family Studies (AIFS) and the Australian National University (ANU) at the start of August.
Australian women were found to have the second best financial recovery rate post separation when compared to five other Organisation for Economic Co-operation and Development (OECD) countries - Britain, the United States, Switzerland, Germany and South Korea, according to an AIFS August 1 media release.
The analysis found that when compared with non-separated women, the equivalised household income of Australian women one year after a separation was 21 per cent lower. However, it was only 12 per cent lower six years after the separation. This was the second-best recovery rate across the six countries.
Government income support, the amount of child support received by the other partner, continued workforce participation and the rate of re-partnering were all found to be factors linked to a higher rate of household income for women in Australia following separation.
Women in Switzerland were found to have the best recovery rate following separation, while women in the United States were found to have the worst. This was also in part due to the factors listed above, however no single factor was found to be more important in the six OECD countries.
The data suggests that separation has a bigger impact on the household income of women following separation in all of the countries with the exception of Britain. There was found to have a similar negative affect on the household income of both men and women in Britain.
Separated men in Australia were found to have a comparable household income to non-separated men in the year following the relationship breakdown. After six years there was a 1 per cent decrease in household income for Australian men.
Relationship breakdowns in New South Wales
If you and your partner are in the process of separating there are a lot of things to consider, including closing joint bank accounts, considering child custody arrangements, completing an assessment of your finances and assets and possible impact on current employment.
The Australian Securities and Investment Commission recommends speaking to a solicitor about separating joint assets and finances and updating your will. A family lawyer can provide advice on how to proceed if you are in the middle of a relationship breakdown.