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What’s New in Child Support

February 1, 2008

Author: Susan C. Antos

As a result of a number of developments at the federal level, there will be some significant changes forthcoming in the laws governing child support in New York State, particularly as applied to low income individuals who are or were receiving public assistance.  For the most part, this is because 2008 is the year many of the child support provisions in the Deficit Reduction Act of 2005 become effective.  This article will review those provisions and whether and how New York is implementing them.  Additionally, this article will highlight two pieces of federal legislation and an international treaty of interest to those representing persons in child support proceedings.  Finally, this article will highlight a national initiative which proposes alternatives to incarceration for “dead broke” dads who are in violation of child support orders - Problem Solving Courts.

Child Support Provisions in The Deficit Reduction Act of 2005

The Deficit Reduction Act of 2005, P.L. 109-171 (hereinafter the DRA), which made many changes to the Temporary Assistance to Needy Families (TANF) work rules, also made a number of changes to the child support system funded by Title IV-D of the Social Security Act.  Many of these changes are likely to have a significant impact on low income families.

$25 annual fee for many users of IV-D Child Support Services

The DRA requires states to charge an annual fee of $25 to users of the IV-D child support system in cases where collections exceed $500 per year and the person has never been a recipient of benefits funded by TANF or the old Aid to Families with   Dependent Children Program.  42. U.S.C. 654(6)(b).  States have the option to pay the fee themselves or to charge the fee to the non-custodial parent.  The Governor’s Article VII bill (S. 6807/A.9807, part Z) would amend Social Services Law 111-g to authorize the Office of Temporary and Disability Assistance to promulgate regulations which would charge this fee to the custodial parent by deducting it from child support collected.  The custodial parent would be charged a separate fee for each child support case.  Thus, where there is more than one non-custodial parent, there will be an additional charge to the custodial parent.  This provision will not become effective until the deduction of the fee from child support disbursements can be done in an automated manner.

Nationally, eighteen states have made the decision to absorb the fee rather than charge either parent.1  This makes sense for a number of reasons.  If a state charges the custodial parent, they will have to advise the parent of her right to opt out of the child support system - an administrative cost that will probably equal or exceed the cost of the fee.  Additionally, there will be the administrative cost of tracking cases to determine whether annual collections equal or exceed $500 and whether the family has ever been a recipient of assistance.  In Connecticut, the state initially required the payment of the fee from the custodial parent, but Governor Jodi Rell reversed the policy and had the state pay the fee after implementation proved more complicated and controversial than expected.2 

Child support pass through

The DRA provides an incentive to states to provide a pass through and disregard of child support to families on TANF funded public assistance.  A percentage of child support collections, based on the federal Medicaid matching rate, must be returned to the federal government whenever the state collects child support on behalf of a person in receipt of TANF funded assistance.  Prior to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), the federal government waived its claim to this share if child support collected was passed through to families in amounts up to $50 per month.  The PRWORA abolished this incentive, and as a result, many states gave up the $50 pass through.  As of June 1, 2007, New York was one of only 16 states that continued a child support pass through without the federal incentive.3

The DRA restores this incentive effective October 1, 2008, up to $100 where there is one child and  up to $200 where there are two or more children, with no effect on the public assistance grant.  42. U.S.C. 657(a).  Although this increase in income will reduce food stamps, the overall net effect on the family should be an increase in income.  In New York the Governor’s Article VII bill would amend Social Services Law 131-a(8) to increase the child support disregard and pass through to $100 per month, regardless of the number of children in the household, effective October 1, 2008.  Additionally, the bill extends the pass through to families who have reached the five year time limit and who are now recipients of Safety Net Assistance.  New York gets no federal financial incentive for providing the pass through to these families.

Child Support Distribution Rules

Child support distribution rules for persons who are or who have been on public assistance are complicated4.  The DRA adopts a number of “family first” distribution requirements and state options, which are described more fully below:

Assignment of arrears

Effective October 1, 2009, a family that goes onto TANF funded public assistance will only assign their right to child support to the state for the period that they are on public assistance.  Currently, when a family goes on public assistance they also assign their right to any child support arrears which accrued before they went on public assistance.  This conditional assignment reverts back to the family when the household leaves assistance.  However, if the arrears are collected while the family is on public assistance, they go to the state and not the family. 

States have the option of eliminating the assignment of pre-TANF arrears a year before the DRA requires it - as of October 1, 2008.  In New York, the Governor’s Article VII bill would amend Social Services Law 348(2) and (3) and Social Services Law 158(5),(6) to limit assignments only to periods that families actually received Family Assistance or Safety Net Assistance.  However, the effective date of this provision is October 1, 2009.

Federal Income Tax Offset

Until this year, when child support arrears were collected by federal income tax offset, they always went to pay the state if any assigned child support arrears were owed to the state.  The DRA allows states the opportunity to pay families first when there is a federal income tax offset effective October 1, 2007.  So far, New York has not opted to take this “family first” option.

DRA final medical support regulations will be coming out shortly - stay tuned...

The Deficit Reduction Act of 2005 made a number of important changes regarding medical support and child support orders.  See 42 U.S.C. §652(f) and 666(a)(19); 29 U.S.C. 1169.  The DRA requires all orders enforced by the state child support enforcement agency to contain a provision for medical support against either the custodial or non custodial parent.  On September 20, 2006, the Administration for Children and Families issued proposed regulations, 71 Fed.  Reg. 54965-54973, which when finalized will provide much needed guidance in this area.  For example, the proposed regulations would limit the parental contribution to health care costs to 5% of income.  States would be permitted the option to develop reasonable alternatives to the percentage if they are income based numeric standards.  While the regulations have not been finalized yet, a number of states have developed standards that are worth considering.  For example, Wisconsin does not require a parent with income under 150% of the poverty level to carry health insurance unless it is available free or at nominal cost.

The final medical support regulations are expected to be finalized later this year.

Reduction in federal funding

States receive a 66% federal match under Title IV-D of the Social Security Act to provide child support services.  States also receive incentive money from the federal government when they meet or exceed their collection goals.  In the past, when states received extra incentive payments for exceeding certain child support collection targets, states could spend that money on child support activities and draw down federal matching money.  The DRA eliminates federal matching funds on reimbursable activities funded with incentive payments.  In New York State, this will mean an annual loss of approximately $17 million that would have been spent on child support activities.  A bipartisan bill pending in both the House and the Senate, The Child Support Protection Act (S. 803/ H.R. 1386) would restore the federal match to the incentive payments.  This bill has 30 sponsors in the Senate and 80 sponsors in the House of Representatives.5

Other Federal Legislation of interest

The Responsible Fatherhood and Healthy Families Act of 2007 (S. 1626 and H.R. 3395)


A bill introduced by Senators Bayh and Obama, and Representative Davis in the House, The Responsible Fatherhood and Healthy Families Act of 2007, would repeal the $25 collection fee on IV-D cases and make a number of other changes in the law that would assist low income parents:

  • Require states to deduct 20% of child support collected when calculating eligibility for food stamp benefits.  This would negate or minimize the effect of the pass through increase on food stamp eligibility;
  • Require states to apply a disregard to child support received that is at least equal to the earned income disregard when calculating eligibility and degree of need for TANF funded benefits;
  • Ban the recovery of birthing costs through the child support program;
  • Prohibit treating incarceration as “voluntary unemployment.”  New York  has adopted this policy through case law6 which makes it nearly impossible for incarcerated individuals to modify their support orders downward.
  • Ensure that child support collected on behalf of a child in foster care is used in the best interests of the child, as opposed to cost recovery, authorizing the creation of child support trust accounts for children in foster care.

Hague Convention on the International Recovery of Child Support

The United States is the first signatory to an international agreement that will provide a structure for obtaining and enforcing child support orders on a global basis.  The system is set up so that child support enforcement services are provided at no cost.  Although there are fees for establishment of child support orders, they will be means tested, and based upon the means of the child, so they are likely to be minimal.

The Convention will go into effect as soon as two countries have ratified it.  In the United States, steps are being taken toward ratification.  The United States Department of Health and Human Services and the United States Department of State are preparing a transmittal package for review by the Office of Management and Budget before presentation to the White House this spring.  The President will then submit the agreement to the Senate for advise and consent and ratification.  Implementing federal and state legislation will be necessary.  The entire process is estimated to take three years.  The Convention goes into effect as soon as two countries have ratified it.

Every country will have a “Central Authority” that will be responsible for oversight and operational protocols.  A country will have jurisdiction over a case if it is the habitual residence of the debtor or the habitual residence of the child and the debtor lived there with the child at one time and provided support to the child.  All countries have committed to have the appropriate forms available in many languages.  In the United States, support orders of nations who are signatories to the Hague convention will be recognized and enforced under UIFSA.  The Convention will be reviewed every four years by a special commission.  More information is available at www.hcch.net.

Problem Solving Courts

Building on the success of drug courts, some states are beginning to experiment with the idea of “problem solving courts,” in dealing with non-custodial parents who are unable to pay child support.  The National Council of Juvenile and Family Court Judges has prepared a technical assistance paper highlighting the benefits of approaching non-compliance with child support orders in a holistic way.  The courts consider alternatives to incarceration for parents who have been found in “willful contempt” which may take the form of substance abuse or mental health treatment, education or training. 

In North Carolina for example, instead of incarceration, the respondent wears an electronic ankle bracelet and reports for periodic assessment while in treatment or training.  In the pilot county, the program has avoided over 9500 days of incarceration in fiscal year 2006-07, saving the state over $2,000,000.  Nearly $200,000 in child support payments were made by individuals who had not paid child support for months or years prior to enrollment in the program.  See www.ncjfcj.org for more information.

Endnotes

 
1  Vicki Turetsky, Center for Law and Social Policy, Chart of application fees assessed by state, on file at the Empire Justice Center.  Alaska, Arkansas, California, Florida, Illinois, Maine, Massachusetts, Montana, New Jersey, New Mexico, Ohio, Oklahoma, Rhode Island, South Dakota, Texas, West Virginia and the District of Columbia have also opted to pay the fee rather than impose it on the family.  In Minnesota, the state made the fee 1% of collections so that the cost for a family receiving only $500 annually in child support would be $5.  A family with $5,000 in collections would pay a $50 annual fee.

2.  State Hits Custodial Parents with Fee; $25 Subtracted from Support Payments, Ann Marie Somma, Hartford Courant.  Hartford, Conn.: Sep 24, 2007.  pg. A.1; Rell Cancels Fee; Custodial Parents Were To Be Charged $25 Annually, Ann Marie Somma, Hartford Courant.  Hartford, Conn.: Sep 25, 2007.  pg B.1.

3.  New York Social Services Law §131-a(8)(a)(v.; J. Justice, State Policy Regarding Pass-Through and Disregard of Current Month’s Child Support Collected for Families Receiving TANF-Funded Cash Assistance (6/1/07, available at: http://www.clasp.org/publications/pass_through_2007june01.pdf;)

4.  S. Antos, Just Whose Money is it Anyway?  A Guide to the Distribution of Child Support Arrears to Former Public Assistance Recipients)

5.   For more information on the bill see:  http://www.clasp.org

6.   See Knights v. Knights, 71 N.Y.2d 865 (1988).

 





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