Marriage builds assets; separation destroys them — especially for women. In Australia, women often suffer a devastating economic decline after separation, one that impacts everything from their income to housing security to retirement savings.
The figures lay bare this stark gender inequality. After separation, an Australian woman’s income drops a staggering 21 to 30 per cent on average, according to research compiled by the Melbourne Institute.
This massive financial hole can take up to six years to climb out of. Men, in contrast, on average experience just a 5 per cent income dip before quickly bouncing back.
This drastic imbalance extends far beyond just salaries. Take the issue of property and assets. The family home is usually the biggest shared investment in a relationship.
When separation forces its sale, women must suddenly seek new housing — a particularly difficult transition for those who have taken time out of the workforce for caregiving duties or worked part-time or in low-paying jobs.
Even women who quickly re-enter the workforce post-divorce face an uphill battle.
Years dedicated to caring for families or low-income roles often translate to lower lifetime earnings and less wealth accumulation.
Women also regularly accrue much lower amounts in retirement savings, as reduced income means lower compulsory superannuation contributions that compound drastically over decades.
The root causes of this economic disparity are multi-faceted. The stubborn gender pay gap, for one, means women simply earn less from the get-go.
There are also long-standing social norms that lead many women to sacrifice career advancement and earning potential to bear a disproportionate share of unpaid domestic and childcare duties.
Additionally, navigating the financial complexities of separation requires expertise that few women or men possess.
While legal advice from a family lawyer is critical to ensuring women understand their rights during property settlements, and financial advisors can guide protecting longterm interests, high-quality assistance remains financially out of reach for many separated women.
The consequences are not just monetary, but also take an enormous mental and emotional toll.
Having one’s financial security violently upended, potentially after years of being an economic dependent, can trigger anxiety, depression, alienation and hopelessness that further impede a woman’s capacity to get back on her feet.
Studies across Western nations confirm this gendered economic imbalance after separation is not unique to Australia.
In 2015, the OECD reported that women’s incomes plunged by an average of 15 per cent, following a divorce in Australia, the United Kingdom, Germany, the United States and Switzerland. Men’s incomes, by contrast, rose by an average of 8 per cent in these OECD nations.
But while the root causes are complex, they do not absolve policymakers from responsibility to act. Only through revamped laws and better support systems can the disproportionate economic hardship separation inflicts on Australian women be alleviated.
Legal reforms could revise how assets are divided in separations to account for the outsized financial disruption to women. Increased funding for community legal services could ensure all women understand their rights and receive adequate representation.
New government initiatives around financial literacy training, employment assistance, affordable housing and even guaranteed minimum incomes during the transition to single life could make a major difference as well.
However, the critical first step is raising public awareness of this often invisible, female-concentrated economic inequality.
Comprehensive research and open conversations are urgently needed so Australian women can access the legal aid, money management tools and other vital resources required to recover their financial foothold.
Only by truly understanding separation’s disproportionate financial costs on women can we enact the structural reforms necessary to protect their economic rights, security and well-being in this sacred transition.
The time to have this long overdue conversation is now.