Research into the financial impact of divorce

A recent study from Australia has found that equivalised household income after divorce declined for women but not for men.

The research, led by the Australian Institute of Family Studies, found that some women were able to recover their income after six years through repartnering, increased labour force participation, and an increased proportion of income coming from government benefits. However, this was not the case for divorced women with dependent children.

Australian Institute of Family Studies Senior Research Fellow, Dr Lixia Qu said more Australians will experience divorce in the future and this has long-term financial implications for them and the Australian income support system.

“Divorce has a big impact on both men and women whose assets continue to fall behind married households and this impacts significantly on retirement income for divorced men and women who remained single, making them more reliant on government support to get by,” she said.

Joint researcher, Professor Matthew Gray of the Australian National University said while assets took a hit, most divorced women were able to recover their income position over six or seven years.

“This happens by a combination of increased employment rates, re-partnering and an increased level of government benefits. But many divorced women and men were left with a large and widening gap in their assets, compared to non-divorced contemporaries,” he said.