(NOTE: Includes Findings from the Final Report)

This grant responds to 2002 Priority Area IV:  "Projects which further the national goals of the Child Support Program."  The Child Support Enforcement Division of the Massachusetts Department of Revenue (DOR) was concerned with the rate at which arrears owed by child support obligors in Massachusetts continued to grow even though DOR set new collection highs each year.  The goals of this project, which only applies to arrears that have been permanently assigned to the Commonwealth, were to better understand this problem and to develop strategies that would help manage arrears.  A key part of the demonstration project was a detailed data analysis of delinquent child support obligors in Massachusetts.  DOR also conducted a pilot program to develop eligibility criteria for equitably adjusting arrears under an arrears management regulation that was promulgated at the time of the demonstration project.

The project was based on a review of all of the obligated IV-D cases, whether current support or arrears-only, that were open on May 31, 2003; this population remained static and IV-D cases that were opened after that date were not included in the analysis.  The data analysis included a comparison of reported income of obligors as reflected in state and federal tax returns as well as quarterly wage reports submitted by employers to the Massachusetts Department of Revenue.  Although reported income data has some inherent limitations because it does not necessarily reflect the true financial circumstances of obligors who have income sources not reported to federal or state tax agencies, it is the only data easily available for study and it provided some valuable information that can be used to develop successful strategies for preventing the accrual of arrears and collecting arrears once they have accrued.

Project Findings (from Final Report)

More than half of the total arrears owed by obligors in Massachusetts are owed by just 10 percent of all obligors and the minimum amount owed by any of these obligors was more than $44,000.  In contrast, more than half of the obligors in Massachusetts owe less than 3 percent of the total arrears and the most any of these obligors owe is less than $3,900.

There were four major factors that contributed to the growth of arrears:  the introduction of the assessment of interest and penalty in January 1998; the amount of some child support orders which appeared too high in relation to the reported income of obligors, although it is important to note that these orders were established by judges who would not have been limited to looking at reported income alone; cases remaining open that appeared to meet federal case closing criteria; and some lack of non-compliance by all obligors, regardless of their income levels.

The pilot program involved selecting cases that might qualify for DOR’s equitable adjustment regulation.  A sample of 411 cases was selected and the noncustodial parents were contacted by case workers assigned to the project.  The response rate of 25 percent was higher than anticipated.  Out of the 103 obligors who responded to DOR’s pilot program, almost three-fourths of the obligors had received some form of government benefits or had been incarcerated.

The pilot program resulted in very little collection activity, although DOR did issue income withholding orders for a number of obligors.  The two most common actions taken in the pilot project cases were to enter exemptions from interest and penalty for any periods obligors met any exemption criteria and to make participants aware of DOR’s program to waive interest and penalty.  Under this program, DOR will waive all interest and penalty owed to the Commonwealth if the obligor pays all principal owed to the other parent and the Commonwealth and any interest owed the other parent.  Other actions taken in pilot cases were referral for equitable adjustment, filing a complaint for modification of a current obligation, or closing the case because it met federal case closing criteria. 

Twenty nine percent of the respondents were receiving Social Security Disability Insurance or Supplemental Security Income, 23 percent indicated that they were unemployed or underemployed, 14 percent had received General Relief or Temporary Aid to Needy Families (TANF), and 9 percent were or had been in jail. Thus, most of these obligors had circumstances that might warrant equitable adjustments of their arrears.  Nonetheless, 29 percent of the respondents had a good or fair credit rating, suggesting that some of them had the ability to pay something toward their arrears.  Given these mixed findings, DOR has continued case-by-case reviews and has identified the following category of cases that can be referred on a fast-track for the possible equitable adjustment of arrears:  If all arrears are assigned to the Commonwealth and the arrears accrued while the obligor received means-tested benefits, the obligor currently receives these benefits and is likely to continue to receive these benefits, DOR may adjust to zero the arrears owed to the Commonwealth and close the case, on grounds that there is no past, present or future ability to pay based on the particular circumstances in the case.

Lessons Learned

This demonstration project provided DOR with valuable information regarding the arrears owed by obligors in Massachusetts and about the obligors themselves.  DOR gained better insight into how arrears grow and areas to focus on to help prevent the arrears from growing and to address those arrears that have accrued.  DOR has used the information from this grant to develop different strategies to manage arrears for different obligor populations.   

Two key points emerged from this demonstration project that will help DOR as it continues to develop its arrears management strategy:  first, a large percentage of obligors owe a very small percentage of arrears and second, a small percentage of obligors owe a large amount of arrears.  Although the total owed by obligors is slightly more than $2 billion, it is important to note that more than half of this is owed by only 10 percent of the obligors and that most obligors owe $3,800 or less.

As for the small group who owe significant arrears, many of these are older arrears-only cases and only a portion of these arrears may ever be collected.  DOR initiated its Top Ten Arrears project, where caseworkers regularly review the ten cases in their caseloads owing the highest amount of arrears to see what could be done about the arrears.  The first group of Top Ten Arrears obligors owed more than $68 million in arrears when the project began, but this amount was reduced by 14 percent in the first eight months of the project.  The reduction resulted from closing eligible cases, aggressive enforcement resulting in increased collections, and correction of DOR’s records, as many of these were older cases that had not been reviewed in years.  Continuous updating of the Top Ten lists allows a systematic way to address this small group of obligors. 

DOR’s main focus going forward will be to prevent obligors who are in the large group who owe little arrears from becoming members of that second group.  To do this, DOR is working to improve its early intervention techniques, use aggressive enforcement in cases of noncompliance and equitably adjust arrears when appropriate.  DOR also began a program that focused enforcement case owners on cases where obligors owed $5,000 or less.  Enforcement caseworkers received lists of these obligors to contact about paying their child support debts before they become unmanageable amounts.  Caseworkers were encouraged to use different methods of communication to see which methods were most effective in generating payments or bringing obligors into compliance.  It is too early to determine the results of this project but the initial reports appear encouraging.

DOR continues to develop creative ways to deal with the assessment of interest and penalties.  For example, obligors who have paid 125 percent of their orders for the last three years but still owe arrears, interest and penalty will be contacted to inform them that DOR will waive a portion of the penalty that they owe for prior years.  DOR’s goal in this project is twofold:  generate additional lump sum payments from obligors who want to take advantage of the full waiver of interest and penalty program and encourage continued compliance with current support payments. With these and other initiatives, DOR hopes to make significant progress in the on-going battle to slow the growth of arrears.

(NOTE: Includes Findings from the Final Report)

Project Plan

This grant responded to 2003 Priority Area V: An Innovative Approach Testing Strategies to Increase Paternity Knowledge, Paternity Establishment, and the Utilization of Child Support Services by Teens and Young Parents.

The demonstration project tested delivery by teen parents of the Parenting and Paternity Awareness (P.A.P.A) curriculum. P.A.P.A. had previously been a formal, educational curriculum presented by trained teachers in all secondary schools in Texas. The evaluation component of the project was focused on three measures: 1) an anticipated increase in knowledge regarding the legal aspects of parenting and paternity; 2) retention of this information based on a defined time period (i.e., short-term post-test and long-term post-test approximately – one to three months after completion of the curriculum); and 3) changes in attitude about the desirability and feasibility of having a baby as a teenager.

Following the test period, the program continued appropriately without IV-D funding. A replication site was established in El Paso through foundation funds and cooperation with the Local Workforce Board (Upper Rio Grand at Work). Subsequently competitive discretionary funding was awarded through the ACF fatherhood grant program under the Deficit Reduction Act of 2006.

Resources Available

A seven-minute marketing video (named after the project) was produced under this grant to promote the program. A copy of the video (DVD format) can be obtained by contacting Gilbert Chavez at: gilbert.chavez@cs.oag.state.tx.us

Project Findings

The OAG collaborated with Austin-based non-profit YouthLaunch to adapt selected P.A.P.A. program content into a format that could be presented in the classroom by peer educators who were themselves teen parents. The “No Kidding” teen interns typically presented three 50-minute sessions on consecutive days in school settings.

Approximately 387 students (Grades 6-12) were evaluated in the “No Kidding” program in four schools. The program included three sessions (I: Telling Our Stories; II: Paternity; and III. Child Support and Money Matters) delivered over the course of three days. Surveys were administered to students as the basis for collecting data for the project evaluation. However, the presentations were given to almost 10 times more students (3,800) during the project period.

Texas posited that students might be more receptive to the parenting and paternity message if it came from someone like themselves who could speak first-hand about the challenges a teen faces raising a child.

The results of this demonstration project tend to support this hypothesis.

1. Teen parents felt they benefited (emotionally and financially) from the opportunity to serve as trained interns and remained optimistic about their own future potential. Most anticipated completing their education and developing professional careers before having more children.
2. Students in school settings increased their knowledge about paternity and parenting (from 35.2% baseline data to 60% short-term post-test) after completing the “No Kidding” program. Students also scored high on the knowledge retention scale (3 to 6 months post-test).
3. Overall, positive attitudes about the importance and responsibility of parenting were reinforced via student participation in this program. “Total Attitude Change” improved from 77.1 percent positive scale score before the No Kidding intervention to 80 percent at the short-term post-test.

Lessons Learned

The program’s use of trained teen parents in schools to deliver presentations on parenting, paternity, and child support is an effective intervention.

A longitudinal study would be required to determine the program’s potential impact on reducing teen pregnancy rates or improving the use of paternity establishment and child support among teen parents.

Not anticipated was the delay and difficulty Texas encountered in obtaining the necessary clearances from education officials to implement this project in the four schools. Part of the delay was attributed to the time it took to negotiate agreements with school officials after the grant was awarded to Texas (nearly 10 months). To smooth the start-up process at sites considering replication of the “No Kidding” program, Texas recommends that school representatives from the administrative and classroom levels should be involved in the planning from the earliest phases. School administrators had concerns that the curriculum would lead to conversations about potentially controversial topics such as sexual behavior. The program was delivered without such discussion.