The financial impact of Divorce

Get in touch: 1800 770 780

How can we help?

While divorce is undoubtedly an incredibly difficult decision to be made, there are times and circumstances that can cause a marriage to end. In these instances, there is a great deal to consider emotionally, legally and financially prior to starting the divorce proceedings. If the parties can work together and compromise, it is possible for the couple to disengage with minimal fallout and loss in all areas of joint interests. If not the cost of dissolving a marriage can be extreme and financially detrimental to both parties, particularly women.

Initially, there are a number of steps that are legally required to end a marriage. You must prove the following:

    • A legal marriage exists
    • The couple has taken steps to repair the marriage to no avail
    • There has been a separation for at least 12 months prior to filing for a divorce
    • You are an Australian citizen or;
    • A permanent resident of Australia or;
  • You have resided in Australia for at least 12 months prior to applying for a divorce

Once you meet the above criteria, you can apply for the dissolution of your marriage. However, it is important that the couple also meets the criteria for legal separation for at least 12 months prior to filing for divorce. If the couple does not meet the separation requirements, they cannot file for divorce. These requirements include:

    • One or both parties must communicate that they believe the marriage is over
    • The 12-month period can be interrupted by a reconciliation as long as the time is less than 3 months.
  • The time period for which you are reunited does not count toward the 12-month requirement

If a couple reunites for more than 3 months, the 12-month time period must start over again upon the couple deciding to separate again. It is also important to note that if a family cannot afford to move into two separate residences during the period of separation, the separation can still be valid via the statements of family or friends that the couple is truly living separate lives.

The rules are slightly different for couples who have been married for less than 2 years. Under these circumstances, a couple will need to attend some form of counselling prior to filing for a divorce. Once they have attended counselling sessions, if they still wish to separate and divorce, they can submit a counselling certificate indicating the marriage should be dissolved.

Beyond the straight legalities of divorce, there are additional issues to be considered. The most significant of these is the financial state of the parties subsequent to divorce.

There are many steps that must be taken for a couple’s assets to be divided. Both parties will have to do the following:

    • Close joint accounts and open new accounts in their own names
    • Take a complete inventory of the marital assets, including both real and personal property
    • Take a complete inventory of any pre-marital assets or separate property assets
      • Reveal individual income status


    • Inventory your superannuation accounts

During the course of dividing assets, it is highly likely all couples will face a change in lifestyle due to a decrease in finances. Oftentimes this financial hardship hits women harder than men, and in particular women who stayed out of the workforce to raise families or those who will still be primarily responsible for the children. Such circumstances tend to limit their opportunities and reduce the number of hours they can dedicate to creating their own financial independence.

Some women never really catch up financially and are forever burdened with tight budgets and fears surrounding being able to keep up with the cost of living. In addition, they are often left with fewer superannuation funds and fewer opportunities to increase these monies. On the alternative side of the spectrum, men tend to recover more quickly as they have not lost years of career advancement to family care. In addition, with men retaining their earning potential they are abler to make up any retirement funds they may have lost due to the distribution of their superannuation assets. Finally, women are less likely to maintain home ownership after divorce. Their lack of separate property savings and solid income makes purchasing a new home or maintaining the cost on the family home difficult, if not impossible. Men are more likely to be able to either buy a new home or maintain the family residence.

It is important for all parties to recognise the financial losses that can occur as the result of divorcing and do their best to mitigate the monetary damage. It is also incredibly important that women take the necessary steps to protect themselves in the event of the dissolution of their marriages, including seeking sound legal and financial advice from trusted professionals.

In the event that you find yourself in need of assistance with this or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.


Just ask us a question

We are always ready to help you.