It’s not you — it’s my systemically doomed economic well-being
Chiara D’Ercole examines the financial realities that follow separation and divorce processes, often leaving women, especially, in dire economic situations. In considering children, property division and incidences of domestic violence, this article challenges the misconception that women (in particular mothers, where children are involved) emerge as ‘winners’ post-settlement.
In even the most ‘civil’ of relationship breakdowns, the notion that one member of a marriage or de facto relationship can emerge as a ‘winner’ following separation is mythical, financially speaking. For even the wealthiest of former partners (though the cost may sting to a lesser degree when compared to lower income earners) the procedures necessary to neatly deconstruct the legal entity that is a marriage or de facto relationship, involve costs. These costs, manifested in legal representation and court administrative fees, are incurred alongside costs to an individual’s property ownership, superannuation and, beyond separation and divorce, concurrent or future costs such as child support payments or spousal maintenance. It is only once the legalities of settlement have subsided that the true cost to one’s financial position can be realised, and research has shown that in Australia, the cost to a woman’s economic wellbeing in heterosexual relationships is, on average, substantially more severe than it is for men in the short-medium term, due to several systemic factors.
This article does not seek to discredit important research exploring men’s views of unfair treatment by Australian courts about arguably interdependent issues, such as the argument that courts do not enforce parenting orders as strongly as child support obligations. Nor does it aim to contribute to the unproductive ‘battle of the sexes’ often proliferated in the media and popular culture. This article will focus on the negative financial consequences for women post relationship breakdown due to the reality of empirical research indicating that statistically, in heterosexual relationships, women are more likely to suffer these consequences than men under a legal system where current settlement methods are not necessarily just and equitable.
Financial standing post relationship breakdown begins with the fact that the collective marital property belonging to a married or de facto ‘unit’ needs to be divided and, often, there is simply not enough money to go around when assessing assets and liabilities. Whilst income is not an asset for the purposes of property division, it is extremely significant to post-separation proneness to poverty. Perhaps the most widespread force working against women is Australia’s gender pay gap, which currently stands at 16% in 2017 as calculated by the Workplace Gender Equality Agency. Historical industry and occupation segregation between men and women, among other societal and cultural factors, are to blame for the enduring ‘glass ceiling’ that jeopardises women’s financial security, superannuation savings and asset accumulation.These capacities are further abrogated when women have children and break their workforce participation, even temporarily, to take care of children. Without them, women are left financially vulnerable and struggling against a gendered workforce that is not making great progress in terms of gender pay equality.
It is impossible to examine financial trends pertaining to women following a relationship breakdown without considering an issue that, on average, causes the death of at least one woman every week in Australia — domestic violence against women, perpetrated by either a current or former partner. Whilst domestic violence does not discriminate in its horror or unacceptability against persons of any sex, it is undeniably an issue that, on average, amasses more female victims in Australia than it does men. Though, according to 2012 data, approximately 95% of all victims of violence report a male perpetrator. Women are, however, at least three times more likely to experience violence from an intimate partner than men, five times more likely to require medical attention due to intimate partner violence, and five times more likely to report a perceived threat to their lives. In relation to the financial disadvantages for women post separation or divorce, data obtained by the Australian Institute of Family Studies indicated that victims of violence or abuse at the hands of an ex-partner reported receiving lower average property settlements than those who did not report violence and perceived their settlement arrangements to be unfair. Victims, in an effort to settle quickly, will often accept less favourable property settlement outcomes without realising (or where they do, compromising anyway) that they are jeopardising their economic stability.
Regarding child support payments, even where arrangements are in place with the Department of Human Services (‘DHS’), domestic violence has been found to ‘negatively affect mothers’ receipt of child support’, involving difficulties obtaining payments from ex-partners. Manipulation of child support payments is a method by which perpetrators of domestic violence can exert control over victims and devastate a mother’s economic wellbeing and mental health. Interestingly, payment of child support by fathers is not likely to drive them into poverty, whilst non-receipt of payments is likely to drive mothers into poverty.
While more so relevant for low-mid income earners, a mother’s receipt of child support is not necessarily a net gain to them because it may in fact reduce eligible mothers’ Family Tax Benefit A payments. The current Maintenance Income Test that determines this for sole parents reduces payments by 50 cents for every dollar of child support and spousal maintenance over the threshold of $1,565.85 per annum, plus $521.95 for each additional child. This is particularly relevant to women because mothers are the primary carers in most Australian families and more fathers report paying child support than mothers report receiving it. Overall, single mother households are significantly more likely to be in poverty than other households. Contrary to common views about welfare dependency, recent analysis by Hayley Fisher, Senior Lecturer in Economics at the University of Sydney, indicates that higher child support payments can in fact improve employment for single mothers.
So how is a woman to remain economically self-sufficient post separation or divorce? Until the gender pay gap closes and the ongoing effects of domestic violence in property division are addressed by somehow reconciling the ‘no fault’ element of divorce and the social security system improves, it is difficult to say. Although, the United States’ National Council on Family Relations has published a study entitled ‘Women Who Remain above the Poverty Level in Divorce’ — the sole dedication to this topic suggesting that such a phenomenon is remarkable. Research suggests that re-partnering statistically prevents long-term poverty, that skilled, educated X and Y generation women are less privy to poverty and that retraining correlates with better living standards for separated and divorced women. Uncertainty in either of those outcomes reflects an imbalance in the legal system that forces women to compensate for unavoidable costs, such as the true costs of children (particularly childcare), retraining, unfair pay, and the toll taken on one’s mental health. A greater light needs to be shone on women’s post-separation economic wellbeing, as legalities can cloud the systemically engendered likelihood that they will suffer once the illusory thread that has held their economic wellbeing in the balance is abruptly snipped.
Bibliography
Belinda Fehlberg et al, Australian Family Law: The Contemporary Context (Oxford University Press, 2nd ed, 2015).
