Financial issues related to separation/divorce

The latest material added to the Australian Institute of Family Studies library database is displayed, up to a maximum of 30 items. Where available online, a link to the document is provided. Many items can be borrowed from the Institute's library via the Interlibrary loan system.

See more resources on Financial issues related to separation/divorce in the AIFS library catalogue

Financial journeys of Australian parents after separation - transitions into and out of poverty.

Qu L and Weston R
Australian Journal of Social Issues v. 56 no. 1 Mar 2021: 54-77
This article explores the economic impacts of separation over time. Using data from the Longitudinal Study of Separated Families, it looks at poverty rates over four years, transitions into and out of poverty, the factors affecting these pathways, and differences for men and women.

The real cost of separation

Greenstone Financial Services, Hollard Insurance Company
Australia : Real Insurance, 2020.
This paper looks into Australians' attitudes to separation and divorce, including the emotional and financial impacts, impacts on children's wellbeing, how to prepare, benefits, gendered impacts, and the role of life insurance. It presents the findings of a survey of 5,035 adults, conducted by life insurance firm Real Insurance in March 2020. The survey participants reported that though the economic costs are deep and felt on multiple fronts, the impact of divorce and separation diminished significantly over time. Many participants held clear definitions of what justified divorce or separation, and provided advice on how to prepare for the transition and mitigate animosity.

Separation and elevated residential mobility : a cross-country comparison.

Kulu H, Mikolai J, Thomas M, Vidal S, Schnor C, Willaert D, Visser F and Mulder C
European Journal of Population 29 May 2020: Advance online publication
Divorce and separation will of course cause one or both partners to leave the home, and research has highlighted issues of residential instability and economic hardship. This article adds to the evidence by investigating the scale and persistence of residential mobility and instability in separated people. It looks at differences between men and women and cohabiting and married people, as well as differences in five countries - Australia, Belgium, Germany, the Netherlands, and the United Kingdom. The findings show that separated people can still be relocating a year after separation - particularly for people in Belgium. This ongoing stability appears related to a nation's housing market, regarding such factors as the availability of social and rental housing and access to mortgages. The role of parenthood and repartnering is also briefly discussed.

The rise of grey divorce : providing just and equitable property settlements for older women.

Kha H and Grant H
Australian Journal of Family Law v. 33 no. 3 Oct 2020: 161-181
Divorce in later life can have a significantly adverse impact on older women's financial situation, as these women have often sacrificed full time employment in order to raise children and maintain a home. This article argues that the Family Law Act should be amended to introduce a rebuttable presumption of equal contributions during a relationship, to help address this issue. This matter is of great importance considering the rising number of divorces occurring in later life.

De facto marriage: when ending a cohabitation costs as much as a divorce

Martinenghi F
Indooroopilly, Qld. : Life Course Centre, Institute for Social Science Research, University of Queensland, 2020.
There is much research into the whether the psychological and financial costs of divorce affect the stability of marriage - but what about for de facto couples? This paper investigates whether law reforms that increased the 'costs' of separation for cohabitating couples has also affected the formation and stability of these unions. The paper looks at the impact of the 2008 Family Law Amendment Act, which changed the way non-marital separation is settled and made the termination of a de facto relationship financially equivalent to a divorce. Using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, the paper compares the duration of cohabitations started in the three years prior to the reform with those started in the three years after. The study finds that when terminating a cohabitation becomes as costly as getting divorced, the probability of starting a cohabitation and the duration of premarital cohabitation does not change, but new unions are more stable and existing cohabitants affected by the reform in their third year are more likely to split.

What do housing wealth and tenure have to do with it? Changes in wellbeing of men and women after divorce using Australian panel data.

Andre S, Dewilde C and Muffels R
Social Science Research v. 78 Feb 2019: 104-118
There is a growing body of evidence on the association between housing, divorce, and wellbeing. Houses are sources of shelter and emotional and economic investment, and losing them and trying to find and pay for new accommodation can add to the stresses of divorce. This article investigates the moderating effect of two important aspects of housing - tenure and housing wealth - on the relationship between divorce or separation and wellbeing, using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. Three indicators of subjective wellbeing are used: life satisfaction, satisfaction with the economic or financial situation, and happiness. It finds that homeowners are more negatively affected than tenants, and that gender also plays a role. Moving from an owned to a rented house has a smaller negative impact for women than staying in the owned house, whereas for men, staying in the owned house or owning another increases happiness and helps mitigates financial stress. The implications of homeownership as a welfare resource is also discussed.

When couples part: understanding the consequences for adults and children : executive summary

Coleman L and Glenn F
London : ONE Plus ONE, 2009
This paper summarises the key findings and implications from a review of the literature on the impact of separation on adults and children. The resounding conclusion from this review is that the association between couple relationship breakdown and disadvantage is evident through a wide range of health and socio-economic indicators, and the findings support the case for more investment to help strengthen family relationships and to minimise the burden when relationship breakdown does occur. This paper also includes the foreword by Professor Michael Rutter and the reference list.

Australian family property law - 'just and equitable' outcomes?

Fehlberg B and Sarmas L
Australian Journal of Family Law v. 32 no. 1/2 Aug 2018: 81-107
The Family Law Act provides broad discretion to reallocate separating couples' and spouses' interests in property. This article reviews how this discretion operates in practice and whether the overarching 'just and equitable' principle is being achieved. This review is warranted as research consistently finds that women - especially mothers dependent children - face significant economic disadvantage after separation. The article highlights a lack of evidence on how the discretion is being applied and discusses possible reforms.

Relationship separation and length of time in receipt of income support payments: a longitudinal analysis of Australian Government administrative data

Spallek M, Haynes M, Baxter J and Kapelle N
Indooroopilly, Qld : Life Course Centre, Institute for Social Science Research, University of Queensland, 2018.
This paper investigates the association between income support receipt and relationship breakdown in Australia, drawing on a collaborative project combining national administrative data and data from the Households, Income and Labour Dynamics in Australia (HILDA) panel survey. The findings indicate that people on income support are less likely to exit the welfare system following a relationship breakdown than partnered people are, with women almost half as likely as men to exit the welfare system. A major part of this project was to assess the potential of administrative data for research and to trial a model for accessing and analysing this data. The findings highlights some of the strengths and limitations of administrative data compared to survey data, with the administrative data providing much greater statistical power for detecting associations for minority groups than was possible with panel data.

Family law property settlements : an exploratory quantitative analysis.

Turnbull C
Family Law Review v. 7 no. 3 2018: 215-230
This article adds to the research on the financial impact of separation. It presents findings from an exploratory study of the outcomes and reasoning processes behind a sample of 200 first-instance property settlement decisions involving families with children. It considers overall transfer of wealth, approaches to assessing contributions, value and ownership of property, superannuation, and dependent and independent children.

Small claims, large battles: achieving economic equality in the family law system

Petrie E
Melbourne, Vic. : Women's Legal Service Victoria, 2018.
Disadvantaged women, separating from their partners, face barriers in resolving family law property disputes - with many women simply walking away from their entitlements. These women have only small amounts of property to divide and many have experienced domestic violence or economic abuse. The 'Small Claims, Large Battles' project was established both to investigate these barriers and to provide legal representation, accompanied by financial counselling and social work support where required. This report presents the findings of the project and recommendations for improving court processes, financial disclosure, superannuation, joint debts, the financial rights of victims of family violence, and the transfer of property. The project was a collaboration between Women's Legal Service Victoria and the legal firms Lander & Rogers and Herbert Smith Freehills, who contributed their time and expertise pro bono. Legal representation was provided to 48 women, and the findings highlight women's financial insecurity following separation.

The economic consequences of divorce in six OECD countries.

De Vaus D, Gray M, Qu L and Stanton D
Australian Journal of Social Issues v. 52 no. 2 Jun 2017: 180-199
This article compares the short- and medium-term economic impact of divorce across 6 countries, comparing longitudinal data from the United States, the United Kingdom, Switzerland, Korea, Germany, and Australia. Based on the data collected during the 2000s, in general divorce had negative effects on the equivalised household incomes of women, but the extent and duration of the negative effects differed markedly between countries. In all of the countries, the effects of divorce on the equivalised household income of men were smaller than for women. Though it is not possible to explain the differences between countries, the analysis indicates that this negative economic impact is heavily influenced by the social security system, the labour market, family models, and the family law system. For women, the major factors are labour market earnings and the extent to which re-partnering occurs.

Do housing wealth and tenure (change) moderate the relationship between divorce and subjective wellbeing?

Andre S, Dewilde C and Muffels R
Tilburg, Netherlands : Tilburg University, 2017.
In times of divorce, the 'home ownership' 'nest egg' can be a source of anxiety and financial stress and a burden. This paper investigates the moderating effect of two important aspects of housing - tenure and housing wealth - on the relationship between divorce and wellbeing. Data is taken from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, for life satisfaction, happiness, and financial satisfaction of divorcing or separating couples. The paper finds that homeowners are more negatively affected by divorce or separation than tenants. When women move from an owned to a rented house, divorce has a smaller negative effect on happiness and financial satisfaction than when remaining in the owned home. For men however, housing wealth alleviates financial stress when the divorcees remain in an owner-occupied house after divorce.

Divorce - for richer, for poorer

Brown L
Sydney : AMP Limited, 2016.
This report explores the financial impact of divorce in Australia - highlighting how the economic costs can be considerable in both the short and long term. It uses new analysis of data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey to look at the financial impact of divorce on home ownership, employment status, income, household assets and debt, superannuation, and retirement prospects, for people with or without children. It also examines spending on children, including household spending, child care, financial stress, and education outcomes. While most families start to recover economically five years after the divorce, there remains a significant gap in the financial well-being of people who are divorced from those who are married even five years later. Though the impacts are most significant for divorced mothers, it is clear that no one wins from divorce financially.

Security in retirement: the impact of housing and key critical life events

Sharam A, Ralston L and Parkinson S
Hawthorn, Vic. : Swinburne Institute for Social Research, 2016.
This study evaluates the degree to which Australian households are financially ready for retirement. In particular, it examines the impacts of life events such as partnering and divorce, which may have a major effect on the ability to obtain and remain in home ownership. Topic include the wealth holdings of men and women at midlife and retirement, wealth in households in different income and tenure circumstances, the use of the income and asset test to assess eligibility for the Age Pension, the impact of relationship status change on housing tenure, and the circumstances of lone person male, lone person female, single-parent, and couple-only households. Data is taken from a range of sources including the ABS Survey of Income and Housing, the Household, Income, Labour Dynamics Australia (HILDA) Survey, and interviews with divorcees who owned or who had been purchasing a home with their former partner. This research study was instigated by the rise in the number of older single women becoming homeless in Australia. It concludes with recommendations for policy.

Divorce timing and economic well-being

Spangler A
Bowling Green, OH : National Center for Family & Marriage Research, Bowling Green State University, 2016
The timing of divorce in the life course may have important economic implications for older adults. Prior research has shown that 'gray' divorce, which occurs after age 50, is associated with fewer financial resources compared with divorce that occurred at younger ages, at least among women. Using data from the 1992-2012 Health and Retirement Study (HRS), this paper compares younger, older, and multiple-divorce divorced people for three economic indicators: total assets, employment status, and homeownership.

Strong families, prosperous states: do healthy families affect the wealth of states?

Wilcox W, Price J and Lerman R
Charlottesville, VA : Institute for Family Studies, 2015
This paper highlights the links between household family structure and the macroeconomic outcomes, and proposes policy ideas to strengthen the economic and cultural foundations of marriage and family life. The paper shows how shifts in marriage and family structure affect a state's economic performance, highlighting how higher levels of married-parent families are strongly associated with more economic growth, more economic mobility, less child poverty, and higher median family income at the state level in the United States. The policy proposals concern ending the 'marriage penalty' in means-tested welfare programs, vocational education and apprenticeships, reducing cases of unnecessary divorce through education and opportunities for reconciliation, and public campaigns to strengthen marriage and position it part of the education-marriage-parenthood sequence.

Australian family law in context : commentary and materials.

Parkinson P
Pyrmont, N.S.W. : Thomson Reuters (Professional) Australia, 2015.
This text book for law students examines the operation of family law in Australia. Featuring notes and questions for discussion, it examines the context of families and family law, the resolution of family disputes, the formation and dissolution of marriage, economic aspects of relationship breakdown, and children in family law.

Parental separation during childhood and adult children's wealth

Lersch P and Baxter J
Indooroopilly, Qld : Life Course Centre, Institute for Social Science Research, University of Queensland, 2015.
Divorce and separation have substantial consequences for children not only at the time but throughout their lives as adults. This paper adds to the research by investigating the neglected area of the relationship between parental separation in childhood and wealth in later adulthood. It examines whether the relationship varies by the timing of parental separation during childhood and whether the association varies over the life course - that is, can adult children compensate for their adverse childhood experiences over time? Data is taken from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The study finds that parental separation is associated with substantially less wealth for adult children, with this disadvantage persisting over time. The most likely pathway is the influence of parental separation on adult children's partnership and childbearing choices, affecting the accumulation of wealth.

The economic consequences of divorce in six OECD countries

De Vaus D, Gray M, Qu L and Stanton D
Melbourne : Australian Institute of Family Studies, 2015.
This report presents a cross-national comparison of the short- and medium-term economic effects of divorce. Estimates for men and women are derived from longitudinal data from Australia, Germany, Korea, Switzerland, the United Kingdom, and the United States. The report also details how the main sources of income for women change following divorce, and the relative contribution of these sources prior to and 2, 4, and 6 years after divorce. The findings show that though divorce has a negative effect on the equivalised household incomes of women in all of these countries, the extent and duration of these negative effects differ markedly between the nations. The report concludes by briefly considering the possible causes of these differences.

Maternal employment and care of children

Zhu A
"Understanding the causes and implications of the trade-off between working and caring for young children is relevant to the policy goals of greater workforce participation, welfare burden reduction and gender equality. Essay 1 examines the longer-term employment impacts of variations in the time spent out of the workforce for partnered mothers with primary-school-commencing children. It uses Australian administrative data and exploits exogenous variations in workforce absence due to school entry age thresholds ... We find that the initial employment gaps caused by variations in school starting age do not persist after controlling for child age, suggesting that partnered mothers are not subject to employment hysteresis. Essay 2 assesses the workforce participation costs of caring for larger families using Australian Bureau of Statistics (ABS) Census data ... Mothers who progress fertility beyond the second child, compared to those who have two children are less likely to be employed. This holds even in the longer-term, once all children have reached primary school age ... Essay 3 examines the factors that are associated with a higher hazard of exit from welfare for Australian mothers after they separate. It distinguishes the type of welfare exit that is due to finding a new partner from increasing personal income while remaining single by estimating a competing risk model. Following around 78,000 mothers and using administrative data, we find a convergence in the welfare receipt rates of well-off and poor mothers after separation, which is then slowly unwound as more advantaged mothers leave welfare at a faster rate. Different characteristics are associated with exiting welfare due to finding a new partner versus exiting welfare while remaining single."--Author abstract.

Partnership dissolution: how does it affect income, employment and well-being?

Brewer M and Nandi A
Colchester, UK : Institute for Social and Economic Research, 2014.
"Incomes, employment patterns, housing, mental health and life satisfaction can all change markedly when couples split up, but there is considerable variation within the population. Using data from all 18 waves (1991-2008) of the British Household Panel Survey (BHPS), an annual longitudinal survey that interviews every adult member of a nationally-representative sample of around 5,000 households, we assess comprehensively how these different domains change in the years following separation ... Our most important results are that children and their mothers see living standards fall by more, on average, after separation, than do fathers ... What is perhaps surprising is that the (proportionate) fall in living standards is far more acute for those from above-median couples than for those from below-median couples ... An even more striking finding, although one affecting fewer individuals, is the difference in post-separation living standards of men and women from couples whose children are no longer dependent: these women, who are mostly aged over 50 and tend to have been married, see living standards fall by far more, on average, after separation, than their former partners, and 30 percent of them fall into relative poverty after separation. On the other hand, this is the group that sees well-being rise (and mental distress fall) the most after separation."--Non technical summary.

The economic consequences of divorce in Australia.

De Vaus D, Gray M, Qu L and Stanton D
International Journal of Law, Policy and the Family v. 28 no. 1 Apr 2014: 26-47
Estimating the impact of divorce on economic wellbeing is complicated and much of the research to date has been based upon cross-sectional data. This article adds to the research base by exploring the significance of using longitudinal data instead. It uses the first 10 waves of the Household, Income and Labour Dynamics in Australia (HILDA) survey to examine the short and medium term economic impacts of divorce for men and women, income and assets before and after divorce, changes in financial living standards, and the extent of financial recovery after divorce.

Household income after separation : does initiator status make a difference?

Hewitt B and Poortman A
HILDA Survey Research Conference 2013 : papers. Melbourne, Vic. : Melbourne Institute of Applied Economic and Social Research, 2013: 32p
This paper explores the hypothesis that the high financial cost of divorce is a deterrent, by examining whether people who initiate separation do better financially than the other partner. Data is taken from the Household Income and Labor Dynamics in Australia (HILDA) survey. The study found no significant differences in household income for men who initiated separation relative to men who reported that their separation was initiated either jointly or by their partner. However, the study found that women's household income was lower if they initiated separation than for women who did not. Several reasons are proposed for these unexpected findings.

'Some of my children are worth more than others' : perceptions of nonresidential fathers with second families as to the fairness of the Australian Child Support Agency's handling of first family child support financial arrangements.

Stambulich D, Pooley J, Gately N and Taylor M
Marriage and Family Review v. 48 no. 8 Dec 2012: 318-341
Under Australian law, non-resident parents are obliged to support their children financially and are encouraged to maintain connections. However, the majority of these parents re-partner, and a significant number of families in Australia are step-families. This article adds to the debates around fairness in the context of custody, access, and financial support. It explores the experiences that shape non-resident fathers' perceptions of fairness in relation to providing financial support for children emanating both out of their first and second families, drawing on interview with nine fathers. Themes include financial distress, inequity, humiliation and distress, and negative experience in dealing with the Child Support Agency, characterised as inflexible and harassing.

Counting the cost: inquiry into the costs of problem gambling : final report

Victorian Competition and Efficiency Commission
Melbourne, Vic. : Victorian Competition and Efficiency Commission, 2012.
This inquiry was commissioned to investigate the economic and social costs of problem gambling in Victoria. These include direct costs, costs relating to health and human services, Victorian justice system, mental and physical wellbeing, business, productivity loss, regulatory costs, regional and metropolitan impacts, and indirect costs such as bankruptcy, divorce and separation, and job change. This report presents the findings of the Inquiry and recommends priorities for future research.

Another inconvenient truth : fragile families and the looming financial crisis for the welfare state.

Parkinson P
Family Law Quarterly v. 45 no. 3 Fall 2011: 329-352
In addition to environment problems, financial crises, and the ageing population, this article argues that western societies also face a new threat - the fragility and instability of family life. The article discusses the growth of family instability in the West, the rise in nonmarital cohabitation and single mothers, the financial impact of single or separated parents on private transfers and social insurance, the impact on the provision of care by adult children to their parents, and the implications for public policy.

The sustainable demographic dividend: what do marriage and fertility have to do with the economy?

Social Trends Institute
New York : Social Trends Institute, 2011
This report looks the impact of marriage and fertility on economic growth. It examines the effect of trends in marriage, cohabitation, and birth rate, on the economy, across developed and developing nations, and notes changing regional trends towards marriage, divorce, cohabitation, non-marital childbearing, single parent families, and family size. Special articles include: The Sustainable Demographic Dividend; The Empty Cradle: How Contemporary Family Trends Undermine the Global Economy; Marriage and the Baby Carriage: Which Sectors of the Economy Benefit Most?; and International Family Indicators.

The effects of children's ADHD on parents' relationship dissolution and labor supply

Kvist A, Nielsen H and Simonsen M
Bonn, Germany : IZA, 2011
"This paper uses Danish register-based data for the population of children born in 1990-1997 to investigate the effects on parents of having a child with attention-deficit/hyperactivity-disorder (ADHD). Ten years after birth, parents of children diagnosed with ADHD have a 75% higher probability of having dissolved their relationship and a 7-13% lower labor supply. Exploiting detailed information about documented risk factors behind ADHD, we find that roughly half of this gap is due to selection. However, a statistically and economically significant gap is left, which is likely related to the impact of high psychic costs of coping with a child with ADHD."

The disappearing gender gap: the impact of divorce, wages, and preferences on education choices and women's work

Fernandez R and Wong J
Bonn, Germany : IZA, 2011.
"Women born in 1935 went to college significantly less than their male counterparts and married women's labor force participation (LFP) averaged 40% between the ages of thirty and forty. The cohort born twenty years later behaved very differently. The education gender gap was eliminated and married women's LFP averaged 70% over the same ages. In order to evaluate the quantitative contributions of the many significant changes in the economic environment, family structure, and social norms that occurred over this period, this paper develops a dynamic life-cycle model calibrated to data relevant to the 1935 cohort. We find that the higher probability of divorce and the changes in wage structure faced by the 1955 cohort are each able to explain, in isolation, a large proportion (about 60%) of the observed changes in female LFP. After combining all economic and family structure changes, we find that a simple change in preferences towards work can account for the remaining change in LFP. To eliminate the education gender gap requires, on the other hand, for the psychic cost of obtaining higher education to change asymmetrically for women versus men."--Author abstract.
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