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Future Needs Following Separation: The impact of the gender pay gap & the importance of obtaining both legal & financial advice

A number of recent media articles have highlighted an important aspect to consider when facing separation.

 

Technology entrepreneur and former Victorian MP, Evan Thornley, was presenting to an IT start- up conference and included a slide that with an image that read “WOMEN. Like Men, only cheaper” and made a business case for employing women in IT as they are “relatively cheap”.

 

Whilst Mr Thornley made the point that the he wasn’t advocating for the gender pay gap, and apologised for his comments, the issue of the gender pay gap is an important issue that faces many women and has an effect not only on income levels, but the amount of superannuation they are able to accumulate and their lifestyle in retirement. (We note too that research has shown that even taking into account time taken off work by women for caring responsibilities, the gender pay gap does exist between men and women in the “same” role, not just because women “choose” lower paying roles, a discussion of which would be too long for this blog).

 

So what has this got to do with separation and family law?

 

Following separation, research by the Australian Institute of Family Studies and ANU show that both men and women will have less assets than their married counterparts. This is common sense as one household divided into two following separation will always result in the two single people retaining less assets than they did as a couple. However, the research also showed that whilst men are more likely to recover their levels of equivalised household income following separation, women’s income levels are likely to reduce, and in particular for women with dependent children, never recover. Any recoveries made by women are more likely to be through re-partnering, the receipt of government benefits and increased participation in the workforce. In addition to the challenges faced by all parties following separation, the gender pay gap continues to discriminate against women and contribute to their inability to recover financially from divorce.

 

If you are facing separation, you are strongly advised to consider your financial situation and what your financial needs will be moving forward, including in retirement. As family lawyers, we cannot provide financial advice, but we have a wide network of finance professionals who we work with and can refer our clients to who need advice regarding the best division of assets to ensure both parties can achieve the best possible result moving forward, taking into account the different financial challenges faced by each party following separation. This advice is an invaluable addition to the family law advice we can provide at Nicholes Family Lawyers.

By Nicholes Family Lawyers

 

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