Fiscal cost recovery mechanisms in child maintenance payments: UK, US, NZ and Australia compared Christine Skinner, Daniel R. Meyer, Kay Cook and Michael Fletcher Presented at Social Policy Association Annual conference: 15 th July 2014, University of Sheffield.
Introduction Background Methods Results Conclusion The Department of Social Policy and Social Work
Background 1 How do child maintenance payments for lone parent families interact with social security benefit payments? Explored 2 possibilities: 1. CM substitute re social security benefits 2. CM complement re social security benefits Implications re government expenditures The Department of Social Policy and Social Work
Background 2 Compare CM regimes UK, US (Wisconsin), NZ & Australia Similar policy drivers and histories Increasing lone parent families Rise fiscal costs supporting lone parents Principle of cost recovery from beginning UK modelled on US Wisconsin NZ modelled on Australia The Department of Social Policy and Social Work
Good technique - detail few cases. Standardises context - easier comparison We explore: How much CM expected in calculations? How much CM received (some, none, all may be clawed back by state before paid)? How much CM is reduced in interaction with other benefits? Method Vignette The Department of Social Policy and Social Work
Method Vignette Ms Mary & Mr Paul: single parent family 1 child aged 3 months. Never lived together. Assume live in rented accommodation. Explore 7 scenarios – vary by Employment status Earned income The Department of Social Policy and Social Work
Method – Vignette The Department of Social Policy and Social Work Ms Mary & Mr Paul in 7 scenarios MaryPaul Child Maintenance AUnemployed No BUnemployed Yes CUnemployed2/3 median earningsYes DUnemployedMedian earningsYes EMedian PT earnings2/3 median earnings No FMedian PT earnings2/3 median earningsYes GMedian PT earningsMedian FT earningsYes
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Median Earnings The Department of Social Policy and Social Work *
How much CM is state recovering? We calculated amount recovered as % of the CM paid. We considered how CM interacted with all benefits and the effect on Mary’s total gross income (inclusive of housing costs and benefits). The Department of Social Policy and Social Work
Conclusion Explicit claw–back: Divergence over time within countries in CM treated as substitute or complement in social security systems Implicit: Divergence within countries if CM treated as income in calculating entitlements to social security thereby reducing level of benefits. The Department of Social Policy and Social Work
Explicit claw-back mechanism The Department of Social Policy and Social Work (Wisconsin)
Implicit claw-back The Department of Social Policy and Social Work
Possible Typology The Department of Social Policy and Social Work
Limitations – further questions Only one family type – limited scenarios Taxes not included Cost recovery from 2 perspectives: The state The lone parent family Need to explore: Advantages/ disadvantages of approaches? How rationalised in policy making? The Department of Social Policy and Social Work