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Exploring the Connection between Child Support and Child Care Subsidies

Child support and child care subsidies are two economic supports for low-income single-parent families. Regular receipt of child support provides income, while access to child care helps facilitate parents’ employment. These two resources also have the potential to impact each other through: (1) cooperation requirements (i.e., parents who receive child care subsidies are required to cooperate with child support); and (2) subsidy eligibly calculations, which count child support income that exceeds $1,250 in monthly income as part of the family’s total income. Because child support can be irregular, monthly variation in child support receipt could affect subsidy receipt. This study aims to better understand the population of families who participate in both programs in Wisconsin and the relationship between child support receipt and child care subsidies.

We use a sequential mixed-methods approach, beginning with quantitative analysis of Wisconsin administrative data followed by in-depth interviews with Wisconsin mothers. We first use data drawn from the Wisconsin Administrative Data Core (WADC), linking child support data from KIDS, child care subsidy information from CARES, and quarterly UI wage records, covering 2015 through 2024. We start with mothers with an open child support order during the sample period (n=275,910), and construct a sample of mothers who were owed child support for at least one month in which they also received a child care subsidy payment and further narrowed to mothers with child support due near the $1,250 Shares disregard threshold (n=2,988). Mothers are grouped into four subgroups based on the regularity of child support receipt, and child care measures are examined descriptively and through multivariate OLS regression and discrete-time event history (logit) models. We build on the broad patterns observed in the data with in-depth semi-structured interviews (n = 23), using a sample of mothers drawn from our administrative data.

Our research questions and key findings were:

  • How many Wisconsin mothers both receive Shares and are owed child support, and what are the pathways to both programs? We find that 15.4% of mothers with open current child support orders also received Shares subsidies in at least one month. Mothers who are owed monthly child support near the disregard threshold comprise about 7% of mothers participating in both programs and roughly 1% of all mothers owed child support. Mothers were evenly split in whether they encountered child support or Shares first. Mothers typically learned about Shares from friends or family or other benefit programs while some mothers were connected to child support via a cooperation requirement, an experience some found confusing, invasive, or unsafe.
  • What are the characteristics of mothers in this sample, and what role do the Shares and child support programs play in making ends meet? Nearly all our sample was employed (92%) yet earned well below 200% of the federal poverty level and were owed a relatively large amount of child support that was often paid only partially. Mothers described Shares as central to making work and caregiving possible, while child support, when received regularly, helped buffer against financial precarity. However, most mothers described ongoing hardship and constant trade-offs between child care copays and other basic expenses, and those who experienced inconsistent child support receipt described economic and emotional well-being strains.
  • What is the relationship between child support receipt and stability of subsidies, and what are mothers’ perceptions of how child support receipt affects their child care subsidies and situations? Multivariate models show that increases in child support are associated with decreases in subsidy amounts and a small increased likelihood of subsidy interruption, but no clear association was found between payments crossing the $1,250 threshold and subsidy interruption itself. Qualitatively, some mothers understood how child support affected their Shares eligibility and subsidy amounts, while others did not. Several described subsidy amounts that remained based on child support income that had since stopped or declined, leaving a sustained gap between their subsidy and actual child care costs.

Categories

Child Support, Child Support Policy Research, Economic Support, Employment, Employment General, Means-Tested Programs, Related Social Policies, WI Administrative Data Core

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