In 46 per cent of the separations the man gained financially compared to their ex-spouse, after taking into account the change in their family size. Photo / 123RF
In 46 per cent of the separations the man gained financially compared to their ex-spouse, after taking into account the change in their family size. Photo / 123RF
The financial fallout of relationship failure hits mums the hardest with 73 per cent worse off after a break-up than their ex-partner, according to new research from AUT.
Dads fared a little better with 38 per cent being worse off financially than before the split.
The financial consequences of close to 16,000 parents who separated during 2009 were analysed by AUT business senior lecturer Dr Michael Fletcher.
In a world first, Fletcher followed the economic fortunes of pairs of ex-partners up to three years after separation using anonymised data. Researchers aren't usually able to link the partner's data. All the couples had children including step children, grandchildren and other arrangements.
AUT senior business lecturer Dr Michael Fletcher. Photo / Supplied
Fletcher's analysis found in 46 per cent of the separations the man gained financially compared to their ex-spouse, after taking into account the change in their family size. In around a quarter of cases both were worse off.
The research, the first of its kind in New Zealand, was referenced in the Law Commission's report into the review of the Property Relationship Act and a recent court decision on a property relationship dispute.
Fletcher explained that most women were worse off due to the couple bringing in a good income from the man's earnings. After separating, although the women increased their earnings, this was not enough to offset the loss of the ex-partner's income. They were also more likely to have care of the children than were the men. Any child support payments did not have a significant impact on ironing out the inequity between the pair.
"The group where both partners were worse off looks quite different. The women still lose because they no longer have the man's income coming into the household but the men were also worse off on average because their average earnings fell significantly."
In 11 per cent of cases the women came out ahead. The final 16 per cent of couples both better off after splitting.
"What came through was, first, that this group had a low average income before they separated and, second, that both the men and the women increased their earnings substantially in the year following the separation year."
Relationship failure can have the effect of pushing many former couples and their children into poverty.
The research found the collapse of a relationship led to large increases in poverty. Compared to a matched comparison group of similar people who did not separate, poverty rose 16.4 percentage points for the women and 8.8 percentage points for men. This impact lasted for the three years after separation.
Separation also had a significant impact on the average amount of benefit payments people received. The average amount of benefit support paid to the men post-breakup rose 44 per cent, while the average for women increased 300 per cent.
"Separation results in a movement onto welfare, especially among women, and that those who do move onto a benefit do not find it easy to move off.
"It's hard to get off the benefit because you need to be able to earn a pretty good income for it to be worthwhile as a sole parent."
Divorce lawyer Jeremy Sutton said it was "undoubtedly true" that women tended to be worse off after a split. Photo / Supplied
Fletcher chose the area of research as there is a lot of focus on sole-parents in poverty but no information on what happens when people split up. Over the last six years Fletcher used the Working For Families database to analyse what occurred when a couple separates.
Fletcher hoped the research would be used to reassess how welfare system and child support payments operated.
Divorce lawyer Jeremy Sutton said it was "undoubtedly true" that most women were worse off after a split than their spouse. He said this was a combination of them being the primary carer for the children while the man was the main income earner.
Often they are less aware of their financial situation and where all the money is. If women have been at home with children for some time they may also find their skills "stale" and their chosen industry has changed considerably since they last worked, Sutton said.
"It is very hard financially for the women going through a separation.
"We have spousal maintenance where you apply to the court for some financial compensation. It's very rare to see a man seeking spousal maintenance."
These maintenance payments can help a spouse keep the same standard of living while they get back on their feet, Sutton explained. However to be awarded them people often had to seek expensive legal representation.
Sutton wanted to see more people try to solve their problems out of court. He thought a mediation service similar to the Family Disputes Resolution should be set up for couples battling over property.
"Might be better to sit down around a table and talk it through than get lawyers involved and everyone gets upset which ultimately upsets the children more than anything.
