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Superannuation and Family Law Lawyers

For most working Australians, superannuation is the largest asset they will have outside of owning their home.  The amount of superannuation that an individual has will largely depend on their employment history and earnings.

How does this relate to divorce and separation?

A recent research report by David Hetherington and Warwick Smith from ‘Per Capita’ has noted how women’s superannuation generally accrues at a lower rate than men’s. See Figure 1 below which highlights data from the Australian Bureau of Statistics.

graph

The report notes that superannuation benefits accrue in direct proportion to income received. It is often the case that women spend less time in the workforce and so do not have the same opportunity as men to contribute towards their superannuation. Reduced time within the workforce is attributable to various factors including taking time off work to care for young children, carer responsibilities such as taking children to and from school and caring for children when they are sick.  Other relevant factors include the cost and availability of childcare. All of these contributing factors often lead to an increased likelihood of being engaged in part-time or casual employment.  Clearly these factors would also apply to fathers who carry out a primary care role.
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Impact of Divorce on Retirement

Often during a highly stressful divorce or property settlement, for instance where domestic violence may be involved or the parties are simply eager to settle quickly and move on with their lives; individuals are readily settling without consideration of future financial stability. In particular, an article by Patricia Babalis (link below) highlighted a report by the Swinburne Institute for Social Research which discovered that at divorce, asset settlement ‘is often mishandled due to emotional tension and ignorance of what can be included in a settlement’. Further, the article touched on the reality that is financial instability from divorce. Where separating parties do not achieve a settlement that ensures future stability, individuals may find themselves struggling in their retirement plans due to reduced super balances and sale of property.

 

In reiterating the words of Babalis, divorce is a stressful and sometimes unexpected time. However, ‘knowing what you may be entitled to could be a good start to making sure asset distribution is fair.’ Our specialist separation lawyers are able to give you the guidance you need in regards to your current situation, as well as ensuring the best for your future long term financial position.
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