Separation and child support payments: impact on income support receipt and income

Project Status: Archive
People Involved: Bruce Bradbury
Research Areas: Measures of Social Inequality & Wellbeing
Funding Agency: Australian Government Department of Families, Housing, Community Services and Indigenous Affairs

Do parents who separate and pay child support reduce their labour supply and/or their income? For many child support payers, the returns to working are substantially lower when they have to pay child support. It is possible, therefore, that this decrease might lead to a reduction in workforce participation among payers (and/or a reduction in declared income). Though there has always been speculation about a possible labour supply impact from the child support payments, evidence to date on this question is inconclusive.

This project compared the patterns of income support receipt (as a proxy for labour supply) by payer parents before and after their separation. Because the number of separations in a given period was relatively small and the anticipated changes were not likely to be very large, the project drew upon administrative data.