How to protect your wallet when your heart is broken

It's official: heartbroken women are poorer

When the heart breaks, so too does the bank. For women, that is.

New research shows women’s disposable household income declines by an ­average 29% after a break-up while for men it is just a 5% fall.

The study* found the risk of falling below the poverty line (defined as a household income below 50% of the national median) more than doubled for women a year after breaking up. *Melbourne Institute: From Partnered to Single: Financial Security Over a Lifetime

For women overall, in the first year of separation the risk of poverty increased from 9 to 22% (13 percentage points more than women in a relationship), while for men the poverty risk shifted from 9 to 13%. 13% increased risk of poverty 4% increased risk of poverty

Who is at high risk?

Women who didn’t have a job before they broke up and older women with school-age children were the most at risk group. Both groups either find it hard to move into employment post-separation or it may not be financially worthwhile because of welfare settings , the study finds..

The poverty trap

Professor Kalb, who co-authored the report, said “prevention” policies that supported both parties to be ­employed - such as flexible work hours and more equitable access to childcare - could help ­alleviate the risk women face on separation.

Tax time

The tax and transfer system may also need recalibration to support separated women, given they are more likely to lose income support payments or family tax benefits. At the same time, they're more likely to need formal childcare to facilitate their own employment.

"Do not quit your job, because then you are stuck. When one person earns the money, usually they take control of making decisions."

Family law expert and head of practice of family law for Cullen Macleod Lawyers Rebecca Bunney encourages women, especially those early in their careers, to heed the red flags. Rebecca Bunney

"It's important to say things like 'I don’t want to be 100% responsible for the finances' and I don't want to be '100% responsible for the kids', when that is shared and sorted, you will have an equal relationship."

A lawyer's guide to protecting your wallet when heartbroken:

Do NOT quit your job Make your partner care for their kids too If you have assets, sign a Binding Financial Agreement pre serious relationship Be honest about finances early in the relationship

Words: Jenna Clarke & Stephen Lunn Producer: Bianca Farmakis Read more

NewsBite