September 2014 | Burt S. Barnow, Johns Hopkins University; Timothy M. Dall, The Lewin Group; Mark W. Nowak, The Lewin Group; and Barbara E. Dannhausen, Johns Hopkins University
The Potential of the Child Support Enforcement Program to Avoid Costs to Public Programs: A Review and Synthesis of the Literature: Final Report
State IV-D programs reduce the cost of means-tested public assistance through several mechanisms: (1) by retaining part or all of the child support collected on behalf of custodial households receiving assistance through the Temporary Assistance for Needy Families (TANF) program to offset TANF payments to these families, (2) by keeping households off welfare by helping them to collect child support, and (3) by reducing government expenditures for other government means-tested programs such as Medicaid, Food Stamps, and child care. Expenditures in these means-tested programs are reduced either by requiring the custodial parent to obtain private insurance or pay for the services (as is the case for Medicaid) or by increasing the income of the custodial parent’s household (as is the case for Food Stamps). Child support retained by the government to offset TANF payments is sometimes referred to as “cost recovery,” while savings to the government by keeping households off welfare through the collection of child support is sometimes referred to as “cost avoidance.” In this report the term “cost avoidance” is used in the broadest sense to encompass both recovered resources and costs avoided. The purpose of this study is to synthesize the theoretical and empirical literature on cost avoidance and to build a comprehensive and coherent framework to evaluate the intricacies of child support cost avoidance.
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