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The cost of living crisis facing many Australian families is often addressed in the media today by considering the impact of rising rents and lack of rental property supply, or the no-less important issue of competitive practices between our two largest supermarket chains.  However, given that intimate partner relationships form the foundation of many people’s lives, the impact of the cost of living crisis upon these relationships also bears scrutiny.

Here we explore the issues that may arise when cost of living pressures contribute to the breakdown of a relationship, and how separating couples may choose to move forward, when financial pressures are already causing significant distress.

Increased financial stress

A recent survey found that 56% of Australian families with children under 18 are currently reporting high levels of distress due to financial pressures, with the cost of living crisis and personal debt being cited as the most significant contributor to personal distress by 46% of respondents to the Suicide Prevention Australia Community Tracker.  This had increased by 6% from the previous quarter.  While official statistics on divorce are not yet available for 2023, qualitative data indicates that this increase in personal distress from financial pressures correlates with an increase in relationship breakdown.

The strain that comes from financial stresses upon families is recognisably a source of discord, uncertainty and conflict between couples, which inevitably contributes to the breakdown of many relationships.  Unfortunately, relationship breakdown is not only an emotionally costly experience, but it can also then give rise to significant financial costs.  For many couples, the breakdown of their relationship will cause a seismic shift in the resources individuals have available to provide for themselves and their dependants.

Complexities of relationships and finances

When the foundational relationship of a family breaks down, there are usually multiple complex and interrelated reasons.  The loss of trust and intimacy can be caused by non-financial pressures, such as physical or mental health issues or the pressures of raising young children.  However, almost all relationship issues will be magnified by financial stress.  If the main income earner loses their job, or the family business suffers a downturn, or for any other reason the income of the family is insufficient to meet outgoings (such as due to an increase in home loan or rental payments), family life will become more difficult for all parties.  If the couple is unable to work through these problems and the decision is taken to separate, the harsh reality is then that they are even less likely to be able to afford two households than they could afford one.

Separating under one roof

When couples do choose to separate but one or both parties cannot secure alternative housing, separation under one roof may seem a reasonable alternative.  This type of post-separation living arrangement has become far more common in the past 5 years, with Services Australia reporting an increase of 47% in claims for government benefits from people who are separated but still co-habiting with their former partner over this period.  While some families may choose this option, post-separation cohabitation is not commonly a preferred or successful living arrangement.  However, if you are in this situation, there are a few practical things that can be done to make it as functional as possible.

Functional separation

Parties who are separated under one roof for the purposes of claiming government benefits should be aware that their living circumstances must have changed in a practical sense, in order to support their claim of separation.

For example, if a couple claims to be separated under one roof, but still share a bedroom, share meals, and socialise together with or without their children, they are unlikely to meet the legislative or regulatory requirements to claim that they are separated.

Therefore, couples who have separated should sleep in separate bedrooms, maintain separate schedules within and outside the home, and ensure that, if socialising together, it is understood by their families and wider community that they are no longer a couple.  Their caring responsibilities for children should be changed from that which was the norm during the relationship.  Taking an approach to household chores more akin to housemates may also delineate their changed circumstances more clearly.

Making the necessary changes to separate finances is an important element of separation.  Practically, this will be different for each family, but separate bank accounts, individual management of personal expenses, and a fair and equitable approach to paying shared outgoings will be an important aspect of each party’s pursuit of independence.

Family violence

In circumstances where family violence is present, separating under one roof is inviable and intervention by way of court order or assistance from social services should be sought to enable victims and children to secure safe accommodation.

Lynn and Brown Lawyers encourage anyone needing help to negotiate post-separation financial or other arrangements to get in touch with one of our experienced family lawyers.  You can contact us through our website www.lynnandbrown.com.au or by calling 08 9375 3411.

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