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CHILD SUPPORT ENFORCEMENT FY 2010 PRELIMINARY REPORT

May 2011

DEPARTMENT OF HEALTH AND HUMAN SERVICES
ADMINISTRATION FOR CHILDREN AND FAMILIES
OFFICE OF CHILD SUPPORT ENFORCEMENT

Program Highlights

The Office of Child Support Enforcement (OCSE) Preliminary Report highlights financial and statistical program achievements based on quarterly and annual data. In fiscal year (FY) 2010 information was compiled from State-submitted reports on program status sent to the Federal government. Some of the highlights from this year’s data are discussed below.

Caseload. We saw a change in the trend of total cases and current assistance cases starting in FY 2009. There were 15.9 million total cases in the Child Support Enforcement Program in FY 2010, an increase of 0.4 percent over the number of cases in FY 2009. This is in addition to the almost 1 percent increase in FY 2009. In FY 2010, there were 2.2 million current assistance cases, an increase of 0.9 percent from FY 2009. This is on top of the 6 percent increase in FY 2009. The previous trends in former assistance cases and never assistance cases continued, with former assistance cases steadily decreasing and never assistance continuing to increase. There were 6.8 million former assistance cases, a decrease of 1.4 percent from FY 2009; and 6.9 million never assistance cases reported, an increase of 2.0 percent from FY 2009 (Table P-3). In FY 2010, current assistance cases comprise 14 percent of the total caseload, while former assistance and never assistance each make-up 43 percent of the total caseload.

Collections Distributed. After a drop in collections in 2009 for the first time in the program’s history, we saw total distributed child support collections increase by 0.6 percent to $26.6 billion in FY 2010 as shown in Tables P-1, P-3, and P-4. Although collections increased in FY 2010 over FY 2009, collections are still below the amount for FY 2008. The largest proportion of collections (over two-thirds) are due to income withholding from employee wages, and these collections were down 0.4 percent as would be expected due to the high unemployment in FY 2010. The overall increase in collections in FY 2010 was driven primarily by a 22 percent increase in collections due to offset of unemployment compensation benefits. There were 8.9 million cases with collections, a 0.9 percent decrease from FY 2009 (Table P-2 and P-3). The percentage of cases with collections has decreased for the past two years. We saw this percentage drop to 56 percent of cases in FY 2010. We saw the percentage of cases with collections to cases with orders decrease for the second year in a row from 72 percent in FY 2008 to 71 percent in FY 2009 to 70 percent in FY 2010.

Collections Due and Distributed. The total amount of current support due for FY 2010 was over $32 billion. More than $20 billion or 62 percent of that amount was collected and distributed (Table P-17). The percent of current supported collected remains unchanged from 2008 and 2009.

Expenditures. In FY 2010, total administrative expenditures were $5.8 billion, a 1.3 percent decrease from the previous year (Table P-3). This is the second year that we saw a decrease in administrative expenditures. Total administrative expenditures were down 0.4 percent in 2009. We saw even larger decreases in Computer Systems (ADP) expenditures over the last two years, 26.7 percent decrease in FY 2010 and 16.4 percent decrease in FY 2009. Full Time Equivalent Staff were down 3.1 percent in FY 2010, and down 2.5 percent in FY 2009, and they have been declining steadily since 2006 (Table P-2). Accordingly, the cost effectiveness ratio increased to $4.88 in FY 2010.

Paternities Established. Paternity establishment involves the legal establishment of fatherhood for a child. One way paternity can be established is by a voluntary acknowledgment signed by both parents as part of an in-hospital or other acknowledgment program.

During FY 2010, 1.7 million paternities were established or acknowledged, of which 1.1 million involved in-hospital or other paternity acknowledgments. This represents a 4.2 percent decrease from the number of paternities established in FY 2009. This is the first decrease in the total number of paternities since FY 2002.

Orders Established. In FY 2010, 1.3 million child support orders were established, an increase of 2.3 percent over FY 2009 (Table P-3). Current assistance orders accounted for 18.2 percent of these orders, former assistance orders accounted for 30.4 percent, and never assistance orders accounted for 51.5 percent of the support orders established in FY 2010. The total number of cases with an order established in FY 2010 was 12.7 million, a 1.2 percent increase over the number of cases with orders established in the previous fiscal year (Table P-2 and P-3). The percent of cases with orders increased to 80 percent.

Arrears. In FY 2010, the total amount of arrearages reported for all previous fiscal years was $110 billion. This was a 2 % increase over FY 2009. Over $7 billion of these arrearages was collected and distributed. The amount of support distributed towards arrears decreased 0.5 percent in comparison with the amount of arrears collected and distributed in FY 2009 (Table P-19). Over 11.3 million cases had arrears due in FY 2010, and over 7.0 million or 62 percent of these cases had collections (Tables P-20 and P-21). In FY 2009, 63 percent of cases with arrears due had collections.

Children. The number of children in the Title IV-D caseload was 17.5 million, a 0.5 percent increase from the 17.4 million children in the Title IV-D caseload in FY 2009 (Table P-2 and P-3). This was the second year in a row that we saw an increase in the number of children served by the program. This was a change from the previous trend that saw number of children decreasing.

Tribal Child Support. In FY 2010, there were 38 comprehensive Tribal Child Support Enforcement Programs. Two Tribes became comprehensive in FY 2010; Coeur D’Alene and Eastern Shoshone. These Tribes distributed over $27 million in child support collections, a 35 percent increase from FY 2009 (Tables P-36 and P-37). Collections sent to other States or Tribes in FY 2010 was over $4 million. Tribal expenditures (outlays) were over $31 million in FY 2010, an increase of 17 percent over the previous year (Tables P-36 and P-39). There were over 38,000 cases in the Tribal Program caseload (Tables P-36 and P-40), a 7 percent increase from FY 2009; over 27,000 children with paternity established (Tables P-36 and P-43), a 37 percent increase from FY 2009; and over 21,000 support orders established, a 23 percent increase from FY 2009 (Tables P-36 and P-41).

The attached tables and charts provide further preliminary detail regarding collections, expenditures, caseload, paternities, orders established, and other program statistics related to both the Child Support Enforcement and Tribal Child Support Enforcement Programs for FY 2010 and for some prior years.

SUMMARY TABLES FY 2010

• Table P-1: Financial Overview for Five Consecutive Fiscal Years
• Table P-2: Statistical Overview for Five Consecutive Fiscal Years
• Table P-3: Program Trends for Three Consecutive Fiscal Years
• Table P-4: Total Distributed Collections for Five Consecutive Fiscal Years
• Table P-5: Distributed Current Assistance Collections for Five Consecutive Fiscal Years
• Table P-6: Distributed Former Assistance Collections for Five Consecutive Fiscal Years
• Table P-7: Distributed Medicaid Never Assistance Collections for Five Consecutive Fiscal Years
• Table P-8: Distributed Never Assistance Collections for Five Consecutive Fiscal Years
• Table P-9: Total Caseload for Five Consecutive Fiscal Years
• Table P-10: Cases Open at the End of the Fiscal Year for Five Consecutive Fiscal Years
• Table P-11: Cases for Which the State Has No Jurisdiction for Five Consecutive Fiscal Years
• Table P-12: Total Cases with Support Orders Established for Five Consecutive Fiscal Years
• Table P-13: Number of Support Orders Established During the Fiscal Year for Five Consecutive Fiscal Years
• Table P-14: Number of Cases With Collections During the Fiscal Year for Five Consecutive Fiscal Years
• Table P-15: Total Number of Children in IV-D Cases for Five Consecutive Fiscal Years
• Table P-16: Amount of Current Support Due for Five Consecutive Fiscal Years
• Table P-17: Amount of Support Distributed as Current Support for Five Consecutive Fiscal Years
• Table P-18: Total Amount of Arrearages Due for All Fiscal Years for Five Consecutive Fiscal Years
• Table P-19: Total Amount of Support Distributed as Arrears for Five Consecutive Fiscal Years
• Table P-20: Cases with Arrears Due for Five Consecutive Fiscal Years
• Table P-21: Cases Paying Towards Arrears for Five Consecutive Fiscal Years
• Table P-22: Collections Forwarded to Non-IV-D Cases for Five Consecutive Fiscal Years
• Table P-23: Fees Retained by Other States For Five Consecutive Fiscal Years
• Table P-24: Non IV-D Cost for Five Consecutive Fiscal Years
• Table P-25: Total Administrative Expenditures for Five Consecutive Fiscal Years
• Table P-26: Total Collections Sent To Other States for Five Consecutive Fiscal Years
• Table P-27: Current Assistance Collections Sent To Other States for Five Consecutive Fiscal Years
• Table P-28: Former Assistance Collections Sent To Other States for Five Consecutive Fiscal Years
• Table P-29: Medicaid Never Assistance Collections Sent To Other States for Five Consecutive Fiscal Years
• Table P-30: Never Assistance Collections Sent To Other States for Five Consecutive Fiscal Years
• Table P-31: Paternity Establishment1/, Fiscal Year 2010
• Table P-32: Net Undistributed Collections (UDC), Fiscal Year 2010
• Table P-33: Cases With Medical Support Ordered and Arrears-Only Cases With Orders Established, Fiscal Year 2010
• Table P-34: Health Insurance Provided As Ordered, Fiscal Year 2010
• Table P-35: Unaudited Incentive Performance Measures, for Fiscal Year 2010
• Table P-36: Tribal Program Financial and Statistical Overview for Four Consecutive Fiscal Years
• Table P-37: Tribal Program Total Distributed Collections for Four Consecutive Fiscal Years
• Table P-38: Tribal Program Total Collections Forwarded to States for Four Consecutive Fiscal Years
• Table P-39: Tribal Program Expenditures (Outlays) for Four Consecutive Fiscal Years
• Table P-40: Tribal Program Caseload for Four Consecutive Fiscal Years
• Table P-41: Tribal Program Support Orders Established for Four Consecutive Fiscal Years
• Table P-42: Tribal Program Total Number of Children Born Out-of-Wedlock for Four Consecutive Fiscal Years
• Table P-42a: Tribal Program Total Number of Children In The Previous Year Born Out-Of-Wedlock for Four Consecutive Fiscal Years
• Table P-43: Tribal Program Children With Paternities Established for Four Consecutive Fiscal Years
• Table P-44: Tribal Program Total Amount of Current Support Due for Four Consecutive Fisal Years
• Table P-45: Tribal Program Total Amount of Current Support Collected and Distributed for Four Consecutive Fiscal Years
• Table P-46: Tribal Program Total Amount of Past Due Support Owed for Four Consecutive Fiscal Years
• Table P-47: Tribal Program Total Amount of Past Due Support Collected and Distributed for Four Consecutive Fiscal Years

NATIONWIDE, REGIONAL, AND STATE BOX SCORES FY 2010

NATIONWIDE

NATIONWIDE		% change from FY 09
Collections Distributed	$26,555,741,023	0.6%
- Current Assistance	$1,015,060,217	3.8%
- Former Assistance	$8,971,138,329	-3.5%
- Never Assistance	$11,840,173,746	-0.8%
- Medicaid Assistance	$4,729,368,731	13.2%
Total Expenditures	$5,775,633,834	-1.3%
Cost Effectiveness ($ Change)	$4.88	$0.10
Paternities & Acknowledgements	1,733,973	-4.2%
Orders Established	1,297,020	2.3%
Full Time Equivalent Staff	56,703	-3.1%
Total Caseload	15,858,602	0.4%
- Current Assistance	2,198,249	0.9%
- Former Assistance	6,777,199	-1.4%
- Never Assistance	6,883,154	2.0%
Net Undistributed Collections	$568,058,781	-3.5%
Arrears Amounts Due	$110,261,308,005	2.4%

CHARTS & GRAPHS FY 2010

List of Charts

Appendix

Incentive Formulas

CSPIA Incentive Measure Formulas

CSPIA Incentive Measure Formulas
INCENTIVE MEASURE	FORM AND LINE NUMBERS
PATERNITY ESTABLISHMENT PERCENTAGE (PEP): IV-D
Number of Children in the Caseload in the FY or as of the End of the FY Who Were Born Out-of-Wedlock with Paternity Established or Acknowledged divided by Number of Children in the Caseload as of the End of the Preceding FY Who Were Born Out-of-Wedlock	OCSE-157, Line 6 divided by OCSE-157, Line 5a
PATERNITY ESTABLISHMENT PERCENTAGE (PEP): STATEWIDE
Number of Minor Children in the State Born Out-of-Wedlock with Paternity Established or Acknowledged During the FY divided by Number of Children in the State Born Out-of-Wedlock During the Preceding FY	OCSE-157, Line 9 divided by OCSE-157, Line 8a
SUPPORT ORDER ESTABLISHMENT
Number of IV-D Cases with Support Orders divided by Number of IV-D Cases	OCSE-157, Line 2 divided by OCSE-157, Line 1
CURRENT COLLECTIONS
Amount Collected for Current Support in IV-D Cases divided by Amount Owed for Current Support in IV-D Cases	OCSE-157, Line 25 divided by OCSE-157, Line 24
ARREARAGE COLLECTIONS
Number of IV-D Cases Paying Toward Arrears divided by Number of IV-D Cases with Arrears Due	OCSE-157, Line 29 divided by OCSE-157, Line 28
COST-EFFECTIVENESS
Total IV-D Dollars Collected divided by Total IV-D Dollars Expended	OCSE-34A, Lines 4b + 4c + 8 + 11 of column (G) divided by OCSE-396A, Line 7 columns (A) + (C) less Line 1(c) columns (A) + (C)
STATE COLLECTION BASE
2 times (Current Assistance + Former Assistance Collections + Medicaid Assistance) + Never Assistance Collections + Fees Retained by Other States	OCSE-34A: 2 times ((Line 4b, columns A+B+C+D+E) + (Line 8, columns A+B+C+D+E)) + Line 4b, column F + Line 8, column F + Line 4c + 11 of column G

How an Incentive Payment is Determined

Because of the complexity of the incentives formula set forth in section 458 of the Social Security Act, we have included an example of how the system would work in a particular year for State A. Let’s make the following assumptions regarding State A (See Table A):

• State A’s paternity performance level is 93 percent, making its applicable percent 100 percent (see Table C)
• State A’s order establishment performance level is 74 percent, making its applicable percent 88 percent (see Table C)
• State A’s current support collections performance level is 59 percent, making its applicable percent 69 percent (see Table D)
• State A’s arrearage support collections performance level is 60 percent, making its applicable percent 70 percent (see Table D)
• State A’s cost-effectiveness ratio is $4.40, making its applicable percent 80 percent (see Table E)
• State A’s collections base is $50 million (determined by 2 times the collections for Current Assistance, Former Assistance, and Medicaid Never Assistance plus Never Assistance collections and fees retained by other states)

• The maximum incentive for State A is:

  • $50 million collections base for paternity ($50 mil. times 1.00), plus
  • $44 million collections base for orders ($50 mil. times 0.88), plus
  • $34.5 million collections base for current collections ($50 mil. times 0.69), plus
  • $26.25 million collections base for arrearage collections ($50 mil. times 0.75¹ times 0.70) plus
  • $30.0 million collections base for cost-effectiveness ($50 million times 0.75¹ times 0.80) equals
  • Resulting in a maximum incentive base amount of $184.75 million for State A.

Table A

Table A

Measure	State A’s Performance Level	Applicable Percent based on Performance	Weight	State A’s Collection Base (assumed to be $50,000,000)
Paternity Establishment	93%	100%	1.00	$50,000,000
Order Establishment	74%	88%	1.00	$44,000,000
Current Collections	59%	69%	1.00	$34,500,000
Arrearage Collections	60%	70%	0.75	$26,250,000
Cost-Effectiveness	$4.40	80%	0.75	$30,000,000
State A’s Maximum Incentive Base Amount				$184,750,000

We must now make some assumptions regarding the other States. Let’s assume that there are only two other States in our country--and the maximum incentive base amount is $84 million for State B and $50 million for State C, making the total maximum incentive base amount $318.75 million for all three States (See Table B).

• We must now determine what is State A’s share of the $318.75 million. It is 58 percent ($184.75 divided by $318.75).

Table B

Table B

State	Maximum Incentive Base Amounts	State’s Share of $318,750,000	Incentive Payment Pool $461,000,000
A	$184,750,000	0.58	$267,199,216
B	$84,000,000	0.26	$121,487,059
C	$50,000,000	0.16	$72,313,725
Totals	$318,750,000	1.00	$461,000,000

• Let us assume it is FY 2003, so the incentive payment pool for the FY is $461 million (see table F).
• Since State A’s share is 0.58, this state has earned 58 percent of the $461 million incentive payment pool that Congress is allowing, or $267.2 million ($461 mil. x 0.58) incentive payment for this particular fiscal year.

Table C²

If the Paternity Establishment or Support Order Performance Level Is:

Performance Levels

At Least:	But Less Than:	The Applicable Percentage Is:	At Least:	But Less Than:	The Applicable Percentage Is:
80%		100%	64%	65%	74%
79%	80%	98%	63%	64%	73%
78%	79%	96%	62%	63%	72%
77%	78%	94%	61%	62%	71%
76%	77%	92%	60%	61%	70%
75%	76%	90%	59%	60%	69%
74%	75%	88%	58%	59%	68%
73%	74%	86%	57%	58%	67%
72%	73%	84%	56%	57%	66%
71%	72%	82%	55%	56%	65%
70%	71%	80%	54%	55%	64%
69%	70%	79%	53%	54%	63%
68%	69%	78%	52%	53%	62%
67%	68%	77%	51%	52%	61%
66%	67%	76%	50%	51%	60%
65%	66%	75%	0%	50%	0%

Table D³

If the Current Collections or Arrearage Collections Performance Level Is:

Performance Levels

At Least:	But Less Than:	The Applicable Percentage Is:	At Least:	But Less Than:	The Applicable Percentage Is:
80%		100%	59%	60%	69%
79%	80%	98%	58%	59%	68%
78%	79%	96%	57%	58%	67%
77%	78%	94%	56%	57%	66%
76%	77%	92%	55%	56%	65%
75%	76%	90%	54%	55%	64%
74%	75%	88%	53%	54%	63%
73%	74%	86%	52%	53%	62%
72%	73%	84%	51%	52%	61%
71%	72%	82%	50%	51%	60%
70%	71%	80%	49%	50%	59%
69%	70%	79%	48%	49%	58%
68%	69%	78%	47%	48%	57%
67%	68%	77%	46%	47%	56%
66%	67%	76%	45%	46%	55%
65%	66%	75%	44%	45%	54%
64%	65%	74%	43%	55%	53%
63%	64%	73%	42%	43%	52%
62%	63%	72%	41%	42%	51%
61%	62%	71%	40%	41%	50%
60%	61%	70%	0%	40%	0%

Table E⁴

If the Cost-Effectiveness Performance Level Is:

Cost-Effectiveness Performance Levels

At Least:	But Less Than:	The Applicable Percentage Is:
5.00		100%
4.50	4.99	90%
4.00	4.50	80%
3.50	4.00	70%
3.00	3.50	60%
2.50	3.00	50%
2.00	2.50	40%
0.00	2.00	0%

The incentive payment pool after FY 2008 is the amount of the incentive payment pool for the preceding FY, multiplied by the percentage by which the CPI for that preceding FY exceeds the CPI for the second preceding FY.

The CPI for a FY is the average of the CPI for the 12 month period ending on Sept. 30 of the FY. The CPI means the last CPI for all-urban consumers published by the United States Department of Labor. The NOT seasonally adjusted CPI numbers are used.

The percentage increase between the preceding FY (FY 2008) and second preceding FY (FY 2007) is about 4.44%. So, $483 million (the FY 2008 incentive pool amount) plus 4.44% equals about $504 million (the FY 2009 incentive pool amount). The FY 2010 incentive pool amount ($504 million) was established by the budget submitted by the Office of Legislative Affairs and Budget (OLAB).

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¹ Because the measure has less weight.

² Use this table to determine the maximum incentive levels for the paternity establishment and support order performance measures.

³ Use this table to determine the maximum incentive levels for the current and arrearage support collections performance measures.

⁴ Use this table to determine the maximum incentive level for the cost-effectiveness performance measure.

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