Recovering the costs of the child support system:The approach of Australia, NZ, UK and US.

In times of austerity, governments concerned about the economic vulnerability of lone-parent families may look to non-resident parents to provide more income through child support payments. Emerging research has examined the way child support schemes and welfare benefits interact, revealing that child support’s poverty-reducing effects can be limited by these hidden interactions (Skinner et al., 2016). However, the prior research (which examined the UK, Australia, New Zealand, and the US) was focused on the perspective of the resident parent, ignoring effects on governments’ expenditures. This paper extends that research, using the same countries, but focusing on the government perspective. Research questions include: (a) For different model families, how much does the government provide and how much child support is expected from nonresident parents? (b) If that amount of child support is paid, how much is kept by the government to offset welfare expenditures versus going to the family? (c) Are separated parents expected to contribute to costs of running the child support scheme through fees? (d) What are the advantages of various approaches? Using a vignette (model family) approach, we examine 10 scenarios in which two separated parents have different levels of earnings. First, we use policy rules to calculate whether each parent would be eligible for welfare benefits. Second, we calculate the amount of child support that would be due in each country in the scenarios. Third, we assume the required child support is paid and reexamine the effect of the child support receipt on the level of welfare benefits (and thus governmental costs) that result. We also incorporate the effect of any fees imposed on either parent for participating in the child support scheme. Finally, we calculate the extent to which the net income of lone parents is coming from government, nonresident parents, or lone parents themselves.