The Costs of Sole Parenthood

Abstract

This paper has been prepared for the Department of Social Security. Its purpose is to review available evidence on the costs of sole parenthood, with particular reference to the implications of this research for the structure and level of social security payments. Put simply, the paper seeks to answer a number of apparently straightforward questions: Do sole parents have 'extra' costs not faced by two parent families with children? If so, what is the nature of these costs, and can they be quantified with any precision? Is it appropriate to meet all or part of these costs through income support arrangements, or would other policy instruments be more suitable? In this Report, Peter Whiteford approaches this issue from a number of different directions. The Report begins with a review of evidence on poverty among sole parent families in Australia and several other advanced nations, using results derived from the Luxembourg Income Study. Forms of financial assistance for sole parents in New Zealand and the United Kingdom are then compared in greater detail with those available in Australia. After a discussion of conceptual issues, the Report then considers housing arrangements and costs, expenditure patterns and living standards. Finally the available evidence on equivalence scales is reviewed and what these imply for relative needs is discussed. This analysis utilises the latest available data on the incomes and expenditure of sole parent families and others in the Australian population.