WOMEN'S household incomes suffer more than men's after divorce, but it takes men longer to recover emotionally, a study has found.
The joint research, led by the Australian Institute of Family Studies, also highlights the significant impact divorce has on the financial assets of divorcees, which leads to many requiring greater government support in later life.
The research to be presented at the institute's conference in Melbourne later this week shows the household income after divorce declined for women, but not for men.
In fact, while women's household income dropped significantly, particularly in the first year after divorce, males' income continued to rise. While the research showed some women were able to return to their pre-divorce income after six years through re-partnering, increased labour force participation and government benefits, this was not the case for divorced women with dependent children, who found it more difficult to combine paid work with family responsibilities.
The report based on data from the Household, Income and Labour Dynamics in Australia survey also showed that divorced men and women have fewer household assets than their married and never-married counterparts.
While the assets of those who divorce are worth $180,000 to $190,000 less than non-divorced people, even before divorce, the gap doubles to $360,000 to $390,000, six years after divorce.
Institute senior research fellow Dr Lixia Qu said for divorcees who did not re-partner, a lack of assets could lead to a greater reliance on government benefits.
"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.
Heidelberg mother-of-two Isabella Mammoliti, who was forced to return to work after her divorce in 2007, says it is not just the immediate financial burden of being a single parent that causes her "distress", but the long-term financial impact.
"My biggest worry is that I hadn't worked for over seven years and that's going to affect my superannuation in the future . . . I've also had to sell the family home, which has not only had an emotional impact on the children but will have a long-term financial impact."
The study which also looked at the emotional wellbeing of divorcees revealed that men reported greater feelings of isolation and loneliness than women, even up to six years after divorce.
After two years of divorce, 24 per cent of men said they felt isolated, compared with 12 per cent of women. After six years, more men (19 per cent) than women (12 per cent) still reported feelings of isolation.
Meanwhile, 35 per cent of men reported feeling "very lonely" two years after divorce, compared with 25 per cent of women and after six years, 26 per cent of men still reported loneliness compared with 20 per cent of women.
DIVORCE BY NUMBERS
The annual income of divorced women decreased by an average $10,000 in the
first year after divorce for men it increased by an average of $7000.
After six years, womens average income was $3000 more than their pre-divorce
income compared with $13,000 for men.
80 per cent of divorced women with no dependent children were employed two
years after divorce compared with 60 per cent of women with dependent children.
19 per cent of men reported feeling isolation six years after divorce, compared
to 12 per cent of women.
SOURCE: AUSTRALIAN INSTITUTE OF FAMILY STUD
Frequently Asked Questions about this Article…
How does divorce typically affect household income for women and men in Australia?
The study found women’s household incomes fall significantly after divorce — on average women’s annual income dropped about $10,000 in the first year — while men’s incomes actually rose (about $7,000 in the first year). After six years some women had returned to near pre‑divorce income, but men’s average income gain after six years was larger (about $13,000 for men versus $3,000 for women compared with pre‑divorce levels).
What impact does divorce have on household assets and long‑term wealth?
Divorced men and women have fewer household assets than married or never‑married people. The research showed divorcees were worth about $180,000–$190,000 less than non‑divorced people even before divorce, and that asset gap roughly doubled to $360,000–$390,000 six years after divorce.
Does divorce increase reliance on government support and affect retirement income?
Yes. The report’s senior research fellow, Dr Lixia Qu, says a lack of assets among divorcees — especially those who remain single — can lead to greater reliance on government benefits and has a significant impact on retirement income prospects.
How do dependent children influence a divorced woman’s ability to recover financially?
Women with dependent children find it harder to regain financial footing. The study found employment two years after divorce was 80% for divorced women without dependent children, but only 60% for women with dependent children, making it more difficult to combine paid work with family responsibilities and recover income.
What does the research say about emotional wellbeing and loneliness after divorce?
The study found men reported higher and longer‑lasting feelings of isolation and loneliness than women. Two years after divorce, 24% of men said they felt isolated (compared with 12% of women); after six years, 19% of men still reported isolation versus 12% of women. For feeling “very lonely,” 35% of men reported this at two years (25% of women), and at six years 26% of men versus 20% of women.
Who conducted the research and what data did it use?
The joint research was led by the Australian Institute of Family Studies and is based on data from the Household, Income and Labour Dynamics in Australia (HILDA) survey. The findings were to be presented at the Institute’s conference in Melbourne.
Can re‑partnering or increased work restore income after divorce?
For some women, yes. The study notes that some women returned to pre‑divorce income after six years through re‑partnering, increased labour force participation and government benefits. However, this recovery was less likely for divorced women with dependent children.
What are the key figures everyday investors should know about divorce and personal finances?
Key numbers from the study: women’s annual income fell by about $10,000 in the first year after divorce while men’s rose by about $7,000; after six years women were about $3,000 above pre‑divorce income on average versus $13,000 for men; divorced people had $180,000–$190,000 less in assets than non‑divorced people before divorce, widening to $360,000–$390,000 after six years; employment two years after divorce was 80% for women without dependent children versus 60% for those with dependent children.
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