Enhance Child Support Enforcement

Overview

Child support enforcement is an important component of the Federal and state effort to promote family self-sufficiency. For the low-income families who receive it, child support makes up a significant portion of the family budget (26 percent). Moreover, families that receive child support are less likely to return to TANF.

The 1996 welfare reform law included the most extensive child support reforms ever enacted. These include new information systems to help locate parents who owe child support, automatic income withholding from paychecks, driver and professional license revocation, and other administrative tools. As shown by increased collection amounts and rates, these reforms have been a great success. Since 1995, collections have increased by nearly 50 percent, rising by over $1 billion a year.

The 1996 reforms also streamlined paternity establishment, particularly voluntary paternity establishment, to encourage fathers to take the first step toward providing their children with financial and emotional support. These provisions have also been extremely successful. Paternity was established in more than 1.5 million cases in FY 1999, a 60 percent increase from 1995. Paternity is now established through in-hospital acknowledgment in nearly half of all non-marital births.

The Administration’s proposal continues rigorous enforcement of child support obligations while targeting additional child support collections to the families with greatest need. Under current law, states and the Federal Government can retain most payments on overdue child support for families in which the mother is or has been on welfare. The Administration’s proposal gives states financial incentives to increase the amount of collections on over-due child support given to families, especially families that have left welfare. When fully implemented, the proposal will provide annual payments of more than $280 million to more than 230,000 families that have left welfare, thereby helping them maintain their independence from welfare. In addition, fathers will know that when they pay child support, their families will benefit; their children will know that they are being supported by both of their parents. A major research study in Wisconsin has shown that when TANF families receive the child support paid on their behalf, fathers are more likely to pay child support and to pay more child support.

Summary of Proposals

Provide Federal Matching Funds for Child Support Pass-Through Payments to Families That Currently Receive TANF. Although the state and Federal Governments generally retain child support collected on behalf of families that receive TANF, almost half of the states give TANF families some of the support collected on their behalf. Building upon this state practice, the Administration proposes Federal matching for states to provide up to the greater of $100 per month or $50 over the current state pass through to families that receive TANF (starting in October 2004). This support must be ignored for purposes of calculating a family’s eligibility for TANF.

Encourage States to Give Families That Once Received Welfare All of the Child Support Collected on Their Behalf. The Administration proposal will simplify child support distribution rules to give states the option of providing families that have left welfare the full amount of child support collected on their behalf. This policy, which will be effective beginning October 2004, stipulates that the Federal Government will share costs with the states.

Require States to Regularly Review and Adjust Child Support Orders for Families That Currently Receive TANF. This proposal will require states to review child support orders for TANF families every three years. This mandatory review and, if necessary, modification of child support orders will increase the amount of payment required, which in turn will boost collections in welfare cases.

Collect a User Fee from Families That Have Never Received Welfare. This proposal will require families that have never used TANF to pay a $25 annual user fee (effective FY 2003) when child support enforcement efforts on their behalf are successful. Families that are receiving TANF assistance are already asked to contribute some or all of their child support to offset part of the cost of the child support enforcement efforts made on their behalf. The Federal and state governments will share this revenue.

Lower the Threshold for Passport Denial. The Administration proposes lowering the threshold for passport denial to $2,500 in past-due support, effective FY 2004. This policy will optimize the use of the successful provision established by the 1996 reforms that granted the authority to deny a passport to anyone owing over $5,000 of past-due child support.

Withhold Limited Social Security Benefits. This proposal will expand the Federal administrative offset program to allow states to collect past-due child support by withholding a limited amount of Social Security Disability Insurance payments from beneficiaries in appropriate cases. Benefits must exceed $760 a month in order to be subject to withholding.

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