Welfare and tax settings

Published: May 3, 2019

Research brief: How do welfare and tax settings affect children’s involvement with child protective services?


A large body of international research has shown that low income increases the risk of poor outcomes for children. This report outlines key findings from recent experimental and quasi-experimental welfare and tax policy studies that have examined whether the link between income and child maltreatment is causal. It aims to inform discussions on welfare policy settings.

This work was one of two papers cooperatively developed with the Ministry of Social Development (MSD).

The partner paper explores how children are affected by Section 70A benefit deductions, what the impact might be of removing the deductions, and how else claims for child support could be encouraged.

Despite some methodological limitations, this developing area of research suggests that welfare and tax policies that affect incomes, particularly for parents supported by a benefit or with low incomes, can impact on the incidence of child maltreatment.

Further research is required to replicate these findings in a New Zealand context.

Key findings

A number of the studies described in this brief have found a significant relationship between low income and neglect, but the link with physical abuse or other types of abuse is less clear.

  • Experimental and quasi-experimental studies show that welfare policies that lower incomes through sanctions or benefit limits can increase rates of child neglect and entry into care.
  • Conversely, increasing incomes for families receiving a benefit or on a low income can reduce involvement with child protective services, child neglect, and entry into care. Policies that increase incomes can also lead to improved child behavioural and developmental outcomes.
  • Investment in financial supports for families experiencing material or financial hardship can substantially reduce downstream care and protection related service costs.

Nevertheless, it is important to note that the majority of families, whether in income poverty or not, do not harm their children – either through neglect or other forms of harm. The impact of lower income may be mitigated by the presence of protective factors, such as social connections and support.

Anticipating fine-grained impacts from benefit deductions or increases is challenging, as income changes can have complex interactions with child, family, and community level characteristics.

  • Younger children may be more vulnerable to neglect under conditions of low income, but are more responsive to improvements in educational outcomes when policy packages increase income. Older children are more likely to enter care as a consequence of benefit reductions.
  • Research suggests that reductions in income can compound the impact of other risk factors, so benefit reductions may have a greater negative impact on families experiencing chronic need or multiple risk factors. Income changes may also have a greater impact on sole mother families.

The impact of welfare policies can also be complicated by non-financial supports or requirements. For example, ‘welfare to work’ studies suggest that whether children have improved developmental outcomes or are more likely to experience neglect may depend on whether parents can afford or access childcare.