Office of Child Support Enforcement
TABLE OF CONTENTS
19th OCSE Annual Report
Chapters 1 - 5
- 1. Introduction and Overview
- 2. Innovative Management
- 3. Enhanced Effectiveness
- 4. Communications
- 5. Summary of FY 1994 Program Results (w/o charts)
The Nineteenth Annual report to Congress contains information on the dimensions of the child support situation in this country and on the functions of the Child Support Enforcement program. It also includes a summary of programs in the area of child support enforcement.
In addition, the report contains selected State-by-State financial, statistical, and program data for Fiscal Year 1994 obtained from Federal reports completed by State Child Support Enforcement agencies. Included in the report is a series of graphs and tables which present selected financial, statistical, and program data for the fiscal years 1990-1994, as well as technical notes on the data presented in this Report.
To obtain additional copies of this report contact:
The National Training Center
Administration for Children and Families
370 L'Enfant Promenade, S.W.
Washington, D.C. 20447
I am pleased to offer this Nineteenth Annual Report to Congress on Child Support Enforcement, which illustrates the program's accomplishments during the past fiscal year. Since the Clinton Administration took office, our partnership with states has brought about unprecedented increases in support for children. For fiscal year 1994, states collected nearly $10 billion in child support and established over 1 million new support orders. They also located over 4 million noncustodial parents and established paternity for almost 591,000 children.
While these numbers are impressive, there is still much work to do. Millions of children still receive little or no support from their non-custodial parents. When these parents evade their responsibilities and fail to pay support, the result too often is more poverty, welfare dependency, and tougher lives for children.
By making stronger child support enforcement a top priority, President Clinton continues to fulfill his commitment to helping children. The President has worked closely with the Congress to ensure that the toughest child support provisions ever proposed are included in the pending welfare reform legislation: streamlined paternity establishment; uniform interstate child support laws; employer reporting of new hires; computerized statewide collections; and tough new penalties, including drivers' license revocation. Together, these measures will increase collections, reduce federal welfare costs, and send the strongest possible message that those who have children must take responsibility for them.
We at the federal level look forward to continuing our partnership with the states and all those who are working to improve the lives of children. As the President has said, "We cannot rest until parents across our nation begin to shoulder this responsibility. We must act now to give our children the future they deserve."
Donna E. Shalala
CHAPTERS 1 - 5
The Child Support Enforcement program began when Congress enacted title IV-D of the Social Security Act in 1975 for the purpose of establishing and enforcing the support obligations owed by noncustodial parents to their children. The Child Support Enforcement program is a joint undertaking involving Federal, State and local cooperative efforts.
The Office of Child Support Enforcement (OCSE) within the Administration for Children and Families of the Department of Health and Human Services is the Federal agency that oversees administration of the program. The Federal government sets program standards and policy, evaluates States' performance in conducting their programs, and offers technical assistance and training to States. It also conducts audits of State program activities, and operates the Federal Parent Locator Service, National Training Center and National Reference Center. The Federal government pays the predominant share of the cost of funding the program. OCSE acts as the agent of the Internal Revenue Service in facilitating collection of overdue support from Federal income tax refunds. OCSE prepares this annual report to Congress based on States' reports of their activities.
State governments work directly with families through State Child Support Enforcement (CSE) agencies and/or their local counterparts. These agencies work closely with officials of family or domestic relations courts or officials of administrative processes to establish paternity, establish support orders, collect support and distribute amounts collected. They also work with prosecuting attorneys and other law enforcement agencies to establish and enforce support orders. Each State CSE agency operates under a State plan approved by OCSE. State governments and, in some States, county governments participate in funding the program.
The Child Support Enforcement program directly serves a variety of families. The program serves families receiving assistance under the title IV-A Aid to Families with Dependent Children (AFDC) program; families receiving assistance under the title IV-E Foster Care program; families receiving assistance under the title XIX Medicaid program; families who formerly received assistance under the above programs; and any other families who apply for services.
Much of the child support collected for families in the AFDC and title IV-E Foster Care programs is used to repay assistance that the families receive under those programs. Federal law requires applicants for and recipients of AFDC to assign their support rights to the State in order to receive AFDC. The AFDC families receive up to the first $50 of any current child support collected each month, as well as any current support collected that is above the amount of assistance received.
For some families, the child support payments are enough to enable them to leave the AFDC rolls. Child support collected for families who are not receiving government assistance goes directly to those families to help them remain self-sufficient.
During fiscal year 1994, State CSE agencies were able to:
- Establish paternity for 590,819 children;
- Establish 1,023,292 support orders;
- Locate 4,104,349 parents or their employers, income or assets; and
- Collect $9,868,940,000 in child support.
This report is organized to focus on the constructive steps taken in FY 1994 to better serve children. The CSE program concentrated major efforts in FY 1994 on innovative management, on enhancing program effectiveness, and on improving communications with our State partners as well as the stakeholders in the system and the general public.
Two ongoing efforts begun in FY 1994 are particularly promising to the CSE program. First, President Clinton's welfare reform proposal (The Work and Responsibility Act) featured legislative provisions that would strengthen child support enforcement. Second, OCSE in partnership with State and local child support agencies was designated by the Federal Office of Management and Budget as a pilot project under the Government Performance and Results Act.
In FY 1994, the Administration proposed replacing the existing welfare system with a system that allows people to help themselves and reinforces fundamental family values. This proposal, The Work and Responsibility Act, envisions a system that rewards work over welfare and signals that people should not have children until they are ready to support them and that both parents must take responsibility for supporting their children.
The Administration's welfare reform proposal is a simple compact that gives people more opportunity in return for more responsibility. It gives people access to the skills they need and expects work in return. Work is the best social program this country has ever devised: it gives hope and structure as well as dignity and meaning to our daily lives.
The Work and Responsibility Act features child support enforcement provisions aimed at establishing child support awards in every case, ensuring fair award levels, collecting the amounts owed, and augmenting the responsibilities of and the employment opportunities for noncustodial parents.
The Child Support Enforcement Provisions. The Administration's proposal, introduced in Congress on June 21, 1994, would establish child support awards in every case primarily by streamlining the paternity establishment process, and by establishing paternity outreach programs. States would also be offered new performance based incentives for all paternities established and voluntary acknowledgement procedures would be expanded and simplified.
The Administration's proposal would ensure fair child support award levels primarily by requiring universal and periodic updating of awards to reflect the current ability of the noncustodial parent to pay support. The rules governing the distribution of child support payments would be amended to strengthen families and a national commission would be established to examine the idea of national guidelines for setting child support awards.
The Administration's proposal would enhance collection of child support primarily by creating central registries of support orders, centralized collection and disbursements at the State level, and tougher enforcement tools. A Federal Child Support Case Registry and a National New Hire Directory would be established to improve location of responsible parents and increase collections, especially in interstate cases. States would have the power to revoke professional and drivers' licenses.
Finally, the Administration's proposal would augment the responsibilities and opportunities for noncustodial parents by providing training, work readiness and work opportunities for non-custodial parents, by providing grants to States for access and visitation programs for noncustodial parents, and by funding new demonstration projects which would promote parenting skills.
While the 103rd Congress did not complete action on the Work and Responsibility Act, the Administration's major child support enforcement proposals have been included in the welfare reform measures under consideration by the 104th Congress.
The Government Performance and Results Act (GPRA), enacted August 3, 1993, reforms the way Federal agencies do business. The law requires Federal program managers to develop strategic plans, to set measurable goals tied to program outcomes, and to systematically and publicly report on their progress. The Act is intended to improve the effectiveness of Federal programs by promoting a new focus on results, service quality, and public satisfaction. OCSE in partnership with State and local child support agencies was designated in FY 1994 by the Office of Management and Budget as a GPRA pilot project for two years.
The GPRA Partnership. The child support enforcement system is built on a series of partnerships among Federal, State, and local governments as well as on relationships with employers, courts, and other social service agencies. Under the GPRA pilot project, Federal, State and local child support enforcement (IV-D) functions remain the same, but GPRA refocuses and restructures these efforts toward achieving specific and measurable program results.
GPRA activities, conducted in OCSE central and regional offices and in State and local IV-D offices, fall into three categories: strategic planning, performance planning and reporting, and special demonstrations. Federal staff, State IV-D directors, and advocacy organizations have worked together to develop a national strategic plan that communicates the mission, future vision and goals and objectives of the CSE program. Federal and state partners have begun work on developing performance indicators that will measure our success in achieving each of the strategic plan goals and objectives.
Strategic Planning. Working closely with its State partners, OCSE started to implement GPRA in FY 1994 by jointly developing a national five-year strategic plan, including goals and performance measures. A draft strategic plan was circulated widely in the child support enforcement community. Commenters included Federal executive and line staff in Washington and in the ten Administration for Children and Families (ACF) Regional Offices, State IV-D directors and staff, and advocacy organizations.
During the summer and early fall of 1994 about 25 State IV-D directors met face-to-face and via telephone and video facilities in the regional offices to explore strategic planning and performance measurement in their States. The discussion emphasized the importance of building consensus in goal-setting, making strategic planning an on-going process, and ensuring that Federal and State goals are aligned.
Another area deemed essential for GPRA is the building of coalitions at all governmental levels to promote improvements in the child support enforcement system. This process emphasizes, in particular, strengthening the partnerships between State IV-D agencies and the child support enforcement staff in the Federal regional offices.
Since that meeting in late 1994, Federal staff and State IV-D directors have forged a consensus on the mission, vision and strategic plan goals and objectives for the CSE program. The partnership has moved forward to form a representative workgroup which has developed draft performance indicators.
Performance Planning and Reporting. As a GPRA pilot, OCSE must conduct performance planning for FY 1995 and 1996. Starting with a basic performance plan for FY 1995, OCSE's two indicators of successful program results nationwide are the total number of paternities established and total child support dollars collected. These measures are uniformly considered to be among those indicative of program performance and data for these indicators are collected by all States.
In FY 1995, these basic and universal measures will be expanded upon. A set of performance measures that reflects all the goals and objectives of the strategic plan will be developed by State and Federal partners. Once these measures have gained consensus, they will become the basis for appropriate revision of data reporting systems. Eventually, performance plans and reports on program results will incorporate all the measures in order to tell the full story of the CSE program's annual performance.
Special Demonstrations. In FY 1994, OCSE began work in voluntary partnership with State and local child support enforcement programs across the nation to demonstrate the GPRA principles. These demonstrations, which will help lay the groundwork for durable reforms, will test a wide range of potential improvements in CSE programs. Some of these new projects will operate in a single county, many are statewide in scope, and a few are being conducted on a regional basis.
In FY 1994, innovative management practices strengthened the child support enforcement system. New laws to improve the child support enforcement system were enacted. New Model Office demonstrations were funded in two States. A new edition of the "Compendium of State Best Practices" was published. OCSE also furnished training and technical assistance to help States develop comprehensive, automated, statewide child support enforcement systems.
In FY 1994, new laws directly affecting child support enforcement were enacted. Among other things, these new laws facilitate enforcement, close bankruptcy loopholes, and utilize credit reporting to strengthen the child support system. These most recent changes in the law also reflect past and present research and demonstration efforts of the CSE system.
The Full Faith and Credit for Child Support Orders Act (P.L. 103-383) requires each State to enforce, according to its terms, a child support order by a court (or administrative authority) of another State, with conditions and specifications for resolving issues of jurisdiction for modifying orders.
The Bankruptcy Reform Act of 1994 (P.L. 103-394) protects child support obligations from being discharged in bankruptcy. Among many other provisions, the new law includes child support as an exception to automatic stays, for judicial liens, and to discharge debts in bankruptcy. It also provides protection against trustee avoidance, facilitates access to bankruptcy proceedings, and assigns child support a priority in collecting claims from debtors.
The Small Business Administration Reauthorization and Amendments Act (P.L. 103-403) requires that recipients of SBA financial assistance not be more than 60 days delinquent in paying child support.
The Social Security Amendments of 1994 (P.L. 103-432) requires State IV-D agencies to periodically report parents who are at least two months delinquent in paying child support to credit bureaus, modifies the formula under the Paternity Establishment Percentage used to determine the States' substantial compliance, and requires DHHS to provide free access for the Justice Department to the Federal Parent Locator Service in cases involving the unlawful taking or restraint of a child and/or the making or enforcing of a child custody determination.
These new laws, in short, help to provide the teeth the OCSE system needs to pursue some of the most challenging cases.
In FY 1994, OCSE sponsored a wide range of research and demonstration projects authorized under sections 1110 and 1115 of the Social Security Act. These grants and contracts range from evaluations of existing child support guidelines in ten States to a supplement to the Census Bureau's Current Population Survey, which was designed to provide a better measure of the receipt of child support payments.
One major project started in FY 1994 was the evaluation of child support award guidelines. This project will study the ongoing applications of guidelines in ten or more States to assess both their use and deviations from the guidelines in setting the amount of child support awards. The guideline review reports prepared by the States since 1988 will be summarized and assessed. Finally, the impact of guidelines on order amounts will be analyzed based on the latest data from the periodic Child Support Supplement to the Current Population Survey.
In FY 1994, OCSE also sponsored demonstration projects on paternity establishment in Arkansas, Colorado, and New York; projects on staffing in Virginia and on new hire reporting in Alaska; and projects on training in Iowa, Nebraska, Kansas, Missouri, and Vermont. OCSE, moreover, has sponsored projects on child access and visitation in Arizona, Colorado, Florida, Idaho, Indiana, and Massachusetts to test various methods of providing visitation and access to children for noncustodial parents.
In FY 1994, OCSE funded two Model Office projects under cooperative agreements with the States of Maine and Colorado. The Model Office projects are designed to establish a controlled environment in which management of the child support enforcement process can be maintained at a high quality level. With the management variable controlled, OCSE and the States will be better able to assess the full potential of current policies, to establish benchmarks for measuring future program performance, and to evaluate innovative alternatives to current practices.
Colorado's Model Offices. The goals of the Colorado model office are to eliminate boundaries between the Federal, State and local levels of the program, to examine redistributions of functions within the existing program, and to recognize greater roles for Federal and regional offices in an improved interactive partnership.
Colorado will assess the knowledge of office staff, changes in techniques of case management, adjustments to facilities, and the adequacy of current equipment configurations, with the emphasis on better services to clients out of local offices. To identify more effective parent locator services, Colorado will contract out the high volume matching of automated data bases to a private agency on a fee-for-finds-only basis.
Colorado will also test innovative ways to assert long-arm jurisdiction, to improve the information gathered through joint interviews of clients with other social service agencies, to improve service of process, to increase the use of direct income withholding, and to develop automated data exchanges with other States. They will encourage the establishment of paternity within one year of birth through developing connections with community agencies by offering immediate genetic testing.
Maine's Model Offices. Maine's vision of a model office is where all of their line, support, and management staff are doing nothing but enforcement. The Maine proposal is grounded in the belief that productivity is a function of the attention paid to the enforcement team, the technology at the disposal of that team, and the processes by which the team and technology operate. There are two Maine test sites: Bangor and Biddeford.
The operational objectives of the Maine demonstration feature establishing new Case Management Teams with new job descriptions, pilot training, and reallocations of functions, such as decentralizing client intake and centralizing data entry. Based on past surveys of client and case worker dissatisfactions, new forms and procedures will be developed that seek to establish partnerships with clients.
The Maine project plan proposes outcome-based performance indicators for measuring their achievements. The key indicators include increases in the number of paying cases, in the number of obligated cases, in the number of paternities acknowledged, in the number of long-arm actions, and in the proportion of arrearages collected from the pool of uncollected payments.
In FY 1994, OCSE published a second edition of the "Compendium of State Best Practices" to facilitate the sharing of ideas on program functions, techniques and management which particular States and practitioners view as effective or innovative. A sample of the best State practices follows.
In Connecticut, paralegals interview the mothers of children born out of wedlock when they come into the office for their AFDC intake interview, rather than requiring them to come back to the office after AFDC is granted. The procedure helps reduce the number of interview no-shows and improves the amount and quality of information provided by the mother.
In Florida, training materials are developed by the State with input from district trainers and revised based on field-tests. Trainers are encouraged to use case work, case scenarios, activities, discussion groups, and a wide variety of training aids such as posters, videos, overheads, and interactive flip charts which are more effective than lecture presentations. Blending the train-the-trainer approach with the availability of State office trainers, who can be sent into the field as needed, has proven to be a winning combination.
In Indiana, obligors can make child support payments using a credit card. Despite past difficulties, technological advances have made it easier for agencies and debtors to use credit cards. Judges target obligors with good credit histories which results in greater potential for collections. For the debtor parents, using the credit card offers a solution when they are confronted with the possibility of jail and the probability of property seizure for nonsupport.
The State of Kentucky has successfully made use of credit reporting agencies. All cases referred to the Internal Revenue Service for income tax refund offset are certified for the credit reporting agencies and this has resulted in many noncustodial parents paying child support in order to maintain good credit and has helped to collect over $627,000 during a 2« year period.
In Massachusetts, all orders for child support must be made payable by wage assignment and the IV-D agency is empowered to execute wage assignments to bring cases into compliance. The Department of Revenue's Child Support Enforcement Division has pioneered a system of mass enforcement of IV-D cases which utilizes computer technology to collect child support.
The Minnesota legislature took steps to improve access by the IV-D agency to information from employers, public utilities, insurance companies, and financial institutions and, thereby, made it easier to obtain asset information about non-paying parents. Information which may be released is limited to residence, home and work telephones, source of income, employer, place of employment and social security number.
In New Jersey, liens are automatically placed against any real or personal property and assets of the delinquent obligor to secure child support arrears beginning on the date the payment is due and unpaid, and thus become a judgment by operation of law. If an obligor is unable to pay the full amount of the arrears, the custodial parent (and the State in AFDC cases) has the option of accepting partial payment and releasing the lien on the specific property being sold or refinanced. However, any unpaid amount would remain due and owing and serve as a lien against any additional real property the obligor may own.
South Dakota implemented legislation allowing the IV-D agency to block the renewal of a driver's or professional license issued by the State to a noncustodial parent owing a child support arrearage of $1,000 or more. The individual must make arrangement with the IV-D agency to repay the arrearage, which is reduced to a written stipulation and conforming court order and filed with the court to ensure continued compliance. The State believes this will increase collections from self-employed persons who are not subject to wage withholding.
The Texas IV-D agency has worked to provide a menu of options to employers and county payment offices to utilize when forwarding child support payments. For one example, Texans may now use electronic fund transfers which enhance the State's ability to get child support payments to the families in an expeditious manner.
For many State IV-D programs, developing and implementing an automated statewide child support enforcement system has provided a concentrated focus for the child support program. The cooperative efforts of OCSE and the States in this area may well represent the cutting edge of innovative management in FY 1994.
The Family Support Act of 1988 mandated that all States implement a statewide, comprehensive automated child support enforcement system which meets OCSE certification requirements by October 1, 1995. The benefits of automation include streamlining the process, eliminating burdensome paperwork, and improving States' ability to track and collect child support payments. As of September 30, 1994, 48 States and jurisdictions had completed the planning phase of their projects, 32 States were in the development phase, and 2 States were engaged in implementation.
In FY 1994, OCSE developed and distributed the Automated Systems for Child Support Enforcement: A Guide for States which specifies the requirements that comprehensive, automated, statewide child support enforcement systems must fulfill for Federal certification. Working with State IV-D Directors, OCSE circulated a questionnaire that incorporated changes in the certification requirements suggested by the States. States have used the questionnaire as a self-assessment tool and in preparing for on-site reviews. OCSE is responding to the States' questions regarding certification, compiling the questions and responses, and distributing them to all States.
As States implement statewide automated CSE systems and participate in certification reviews, OCSE is sharing the results of these reviews with other interested States. In FY 1994, a certification workshop for States which adopted automated systems similar to the Virginia CSE system was held following the Virginia certification review. A similar workshop was held for States which transferred a variation of the West Virginia CSE system following that State's certification review.
In the future, these automated systems will provide the CSE system with reliable and flexible re-enforcement for many of the other innovations initiated in FY 1994. Building on the foundation provided by the best practices of the States, these comprehensive, statewide automated systems will enable States to follow through on their most promising ground-breaking efforts.
In FY 1994, important steps ranging from the creation of in-hospital paternity establishment programs to pursuit of Federal criminal prosecutions in child support cases were taken to enhance the overall effectiveness of the CSE process. Other steps were also taken to facilitate enforcement in interstate cases and to better use automated data systems to enforce child support obligations.
In 1994, OCSE drafted a final rule to implement the new paternity establishment requirements mandated by the Omnibus Budget Reconciliation Act of 1993 (OBRA '93). After the publication of proposed rules regarding the paternity establishment provisions, OCSE received over 100 written comments from representatives of State and local IV-D agencies, national organizations, advocacy groups, and private citizens. The final rule reflects and responds to these comments.
The paternity regulation requires a State to have a simple civil process for the voluntary acknowledgement of paternity that creates a rebuttable or conclusive presumption of paternity which is admissible as evidence of paternity. A rebuttable presumption shifts the burden of proof to the father if he later contests the paternity; a conclusive presumption of paternity has the same legal effect as a judgment and serves as the basis for seeking a support order, without further efforts to establish paternity.
States, in cooperation with birthing hospitals, must implement voluntary acknowledgment programs in any hospital that has an obstetric care unit or that provides obstetric services, and in any birthing center associated with a hospital. With few exceptions, these hospital-based programs must be operational statewide no later than January 1, 1995.
For contested paternity cases, the regulation requires States to have a variety of procedures to streamline the establishment process. States must also have procedures requiring the entry of default orders in paternity cases upon a showing that process was served on the defendant and that the defendant failed to respond in accordance with State procedures.
In interstate cases, the rule requires a State to give full faith and credit to a determination of paternity made by any other State, whether established through voluntary acknowledgment or through administrative or judicial processes.
Under the new expedited process requirements, within 90 calendar days of locating the alleged noncustodial parent, the IV-D agency must establish an order for support or complete service of process (or document unsuccessful attempts to serve process). The IV-D agency must resolve 75 percent of all pending cases in 6 months and 90 percent in 12 months.
The Federal government provides a computerized national network operated by OCSE to provide States access to information on a noncustodial parent's location, earnings, assets, and employer's address. The key components of this network are described below.
Federal Parent Locator Service. The Federal Parent Locator Service (FPLS) provides Social Security Numbers (SSNs), addresses, and employer and wage information to State and local CSE agencies to establish and enforce child support orders. The FPLS utilizes the most current information available from the Internal Revenue Service, Social Security Administration, National Personnel Records Center (NPRC), Department of Defense (DOD), Department of Veterans Affairs, Selective Service System (SSS), and State Employment Security Agencies.
During FY 1994, the FPLS processed approximately 4 million requests for information from State and local CSE agencies. The matches with DOD, SSS, and NPRC were increased to weekly instead of biweekly. The FPLS match with the DOD was expanded to receive additional data from OPM, the Executive Office of the President, and the Administrative Office of the U.S. Courts. The FPLS is testing a new automated match with SSA to identify SSNs.
FPLS/State Employment Security Agencies (SESA) Crossmatches. The FPLS obtains employer addresses and wage and unemployment compensation data from the SESAs. This information is extremely useful in assisting CSE agencies to process cases where the custodial parent and children reside in one State and the noncustodial parent lives or works in another State. The employment data are updated quarterly by employers reporting to their State employment security agency and the unemployment data are updated continually from State unemployment compensation payment records. In FY 1994, approximately 2.8 million FPLS cases were submitted for crossmatching with the data from the SESAs.
Enumeration Verification System. The Enumeration Verification System (EVS) is a multi-purpose SSN verification system. While States may use the FPLS to identify SSNs for noncustodial parents, the EVS verifies and corrects SSNs and identifies multiple SSNs. The EVS is comprised of two systems. One system provides a State with multiple SSNs for an individual legally issued more than one SSN.
The second system provides a corrected SSN in cases where a transposition of digits has occurred in the SSN that a State already has for an individual. In FY 1994, 4.4 million SSNs were submitted to EVS; over 190,000 SSNs were corrected and over 38,200 multiple SSNs were identified.
Federal Income Tax Refund Offset. OCSE acts as an intermediary between the States and the Internal Revenue Service (IRS) in the operation of the Federal Income Tax Refund Offset program for the collection of past-due child support. In FY 1994, the Federal income tax refund offset resulted in nationwide collections of over $685 million, an increase of 12.5 percent over FY 1993. A sum of $497 million was offset on behalf of families receiving public assistance and $188 million was offset on behalf of non-AFDC families. The IRS charged an administrative fee of $7.28 per offset in FY 1994.
The SSN verification system (EVS) was incorporated into the Federal Income Tax Refund Offset Program. Each year a significant number of no-match cases fall out of the offset program because of invalid SSNs; these SSNs were processed through EVS. In processing year 1993, over 330,000 tax refund offset cases were submitted through the EVS system, allowing OCSE to return over 65,000 corrected SSNs to the participating States. Of these, 47,524 were resubmitted in FY 1994 to the tax refund offset program, resulting in 10,421 offsets and additional tax offset collections of over $9.5 million in past due child support.
IRS Full Collection Process. When States' attempts to recover delinquent child support have been unsuccessful, the law provides State CSE agencies with a collection mechanism referred to as the "full collection process." This mechanism is used only when there is a good chance that the IRS can make a collection and only for cases in which a child support obligation is delinquent and the amount owed has been certified to be at least $750.
OCSE and IRS are collaborating on a full collection pilot project to assess ways to improve the process. In FY 1994, OCSE working with the States submitted 698 full collection cases to the IRS; collectively, these cases represent over $14 million in arrearages. Twelve States are participating in the pilot project: Arkansas, California, Delaware, Massachusetts, Michigan, Missouri, New York, Tennessee, Texas, Utah, Virginia, and Washington. The results of these projects will become available in late 1995 and 1996.
Project 1099. Since October 1984, OCSE has participated in Project 1099 which provides State CSE agencies access to all of the earned and unearned income information reported to IRS by employers and financial institutions. The Project 1099 information is used to locate noncustodial parents and to verify income and employment, which is essential to establishing and enforcing child support obligations.
In addition to helping locate the additional non-wage income and assets of regular wage earning obligors, the Project 1099 information is also used to facilitate States' efforts to locate income and asset sources of self-employed and non-wage earning obligors and to facilitate States' efforts to review and modify child support orders.
In FY 1994, OCSE submitted over 3.4 million cases to the IRS under Project 1099 and over 2.6 million cases were matched for a 76 percent match rate. This high volume of cases and high match rate shows the enormous potential of this asset identification tool and the reason States are encouraged to use Project 1099 information to the maximum extent possible.
OCSE audits and oversight are used to enforce many Federal requirements. Federal law specifies that a State that has been audited and found not to be in substantial compliance with Federal requirements is subject to a financial penalty. The penalty may be held in abeyance for up to one year to allow a State to implement corrective actions to remedy the program deficiency.
At the end of the corrective action period, a follow-up audit is conducted in the areas of deficiency. If the follow-up audit shows that the deficiency has been corrected, the penalty is rescinded. If it is determined that the State remains out of compliance with Federal requirements, a graduated penalty, as provided by law, is assessed.
The penalty ranges from one to five percent of the total payments made to the State by the Federal government for the Aid to Families with Dependent Children program under Part IV-A of the Social Security Act. The actual amount of the penalty depends on the severity and the duration of the deficiency. If a State is under penalty, a comprehensive audit is conducted annually until previously cited deficiencies are corrected.
FY 1994 Audit Results. During FY 1994, OCSE issued final reports to 13 States based on comprehensive audits of their programs covering various audit periods from 1991 through 1993 and sent seven notices to States to inform them that audits of their programs showed they were not in substantial compliance with Federal requirements. Four States' programs achieved substantial compliance with the Federal requirements in FY 1994.
FY 1994 Audit Deficiencies. Ten types of deficiencies were identified among the seven States that received notices of non-compliance. The six areas frequently cited as deficient were medical support; expedited processes; services to non-AFDC families; notice of collection of assigned support; provision of services in interstate IV-D cases; and distribution of child support collections.
Other areas of deficiency identified in one or more States were failure to use appropriate enforcement techniques, such as State income tax refund offset or withholding of unemployment compensation; failure to have required guidelines for imposition of liens or posting security, bond, or guarantee to secure payment of overdue support; failure to locate non-custodial parents and to establish child support orders in all appropriate cases; failure to make all IV-D services available statewide; and failure to carry out a program for wage or income withholding in delinquent cases.
Audit Penalties Rescinded and Imposed. During FY 1994, 15 follow-up audit reports were issued to 14 States that had been sent notices of substantial non-compliance in prior years. Rescinding notices were sent to ten States after substantial compliance was achieved with criteria on which they had previously failed. The remaining four States will be evaluated to determine if the penalty should be rescinded or imposed in FY 1995. One State with a follow-up report issued in FY 1993 achieved substantial compliance and received a rescinding notice in FY 1994.
During FY 1994, one comprehensive annual audit report was issued. The decision as to whether a penalty will be imposed was pending at the end of FY 1994. Two States with annual audit reports issued in FY 1993 achieved substantial compliance and consequently had penalty rescinding notices sent in FY 1994. Two States that had follow-up reports issued in FY 1993 and failed to achieve substantial compliance had 1 percent penalties imposed in FY 1994.
Audit Appeals Decided. If a penalty is imposed after a follow-up review, a State may appeal the audit penalty to the HHS Departmental Appeals Board (DAB). Payment of the penalty is delayed while the appeal is pending. The appeals board reviews the written records which may be supplemented by informal conferences and evidentiary hearings. In FY 1994, two States appealed an audit penalty. The DAB upheld one of these two penalties and one case was pending at the end of FY 1994. The penalty disallowance collections totaled $1,253,060 in FY 1994.
New Audit Regulations. In 1994, final regulations were drafted to streamline the audit process, to place a greater focus on outcomes, and to specify how the OCSE audits will evaluate compliance with the requirements set forth in the law and regulations, including requirements resulting from the Family Support Act of 1988 and the Omnibus Budget Reconciliation Act of 1993.
The rule redefines substantial compliance to place a greater focus on performance. Eliminating administrative or procedural criteria and focusing on service-related criteria, the new rule is intended to produce a more results-oriented audit.
The Child Support Recovery Act of 1992 (P.L. 102-521) made it a Federal crime to fail to pay support for a child residing in another State. All reasonable available remedies must have been exhausted before prosecution is to be undertaken, because this remedy is reserved for only the most egregious cases.
In FY 1994, the Federal government held training conferences on the criminal nonsupport initiative at which representatives of over half the States participated, including representatives from State and county child support enforcement offices, Federal regional offices, U.S. Attorneys' offices, and the Federal Bureau of Investigation. The Department of Justice (DoJ) and OCSE entered into a memorandum of understanding to expand Federal criminal prosecution for nonsupport. As part of this agreement, an attorney from DoJ has been detailed to OCSE two days a week to assist in this effort.
Beginning in August of 1994, OCSE requested that State IV-D agencies each submit five cases that were good candidates for prosecution. Of the 260 cases sent in by 43 States, over 150 cases were selected as having the highest potential for successful criminal prosecution for nonsupport and were referred to DoJ for prosecution.
In FY 1994, OCSE improved communications with State partners and stakeholders, with the public, and with a variety of advocacy groups. In addition to training, workshops, and technical assistance, the improved communications feature exemplary outreach efforts at the State and local level and Federal outreach initiatives to the military, Native American, and international communities.
The Fourth National Child Support Enforcement Training Conference, held July 25 through 27, 1994, was attended by over 150 State and local CSE trainers and CSE practitioners. The conference focused primarily on collecting child support from nontraditional wage earners, aspects of the Uniform Interstate Family Support Act (UIFSA), and the paternity establishment provisions of the Omnibus Budget Reconciliation Act of 1993. The objective was to introduce CSE trainers and practitioners to new developments.
The conference also provided opportunities for State trainers and other staff to share information on best practices in the areas of paternity establishment, genetic testing, and medical support enforcement. Sessions were conducted on outreach and public education efforts as well as forming partnerships with hospitals to carry out in-hospital paternity establishment programs.
Implementation of OBRA '93 Conference. In April 1994, OCSE sponsored a conference on the implementation of the child support enforcement provisions of the Omnibus Budget Reconciliation Act of 1993 (OBRA '93). The conference was targeted on those persons responsible for implementing the paternity provisions of OBRA '93 (including in-hospital paternity establishment) and also on those persons involved in the policy-related medical support issues in OBRA '93. The conference, which was attended by representatives from the Health Care Financing Administration and the Department of Labor, provided a full information exchange and discussion of implementation issues and concerns.
Train-the-Trainer Workshops. OCSE conducted two train-the-trainer courses in FY 1994. The first workshop was in April; the second was in September. Over 20 State CSE trainers from nine States attended the first session which was held at OCSE headquarters. The second workshop was held in Nevada and was attended by State AFDC agency trainers as well as CSE trainers.
The training provided instruction in curriculum design, delivery, and evaluation. The courses are instrumental because of their multiplier effect: that is, the State trainers return to their jurisdictions and educate other program staff, who, in turn, inform the public through daily interaction.
OCSE coordinated several work groups comprised of Federal and State CSE representatives as well as other interested persons to develop standardized products which will assist the States in managing their child support enforcement programs more effectively.
The Income Withholding Form Work Group included representatives from OCSE, the American Payroll Association, the American Society For Payroll Management, and various State and local child support practitioners. The objective for the work group is to develop a standardized income withholding form to replace the multiplicity of forms now used to collect child support via income withholding. The work group drafted a form and plans to pilot test it in several States in early 1995.
The Interstate Forms Committee--which is comprised of Federal staff and State representatives--addressed the needs of States which have adopted the Uniform Interstate Family Support Act (UIFSA) legislation. The purpose of the group is to produce a training curriculum, handbook, and a series of new forms to be used in the processing of interstate cases. An automation subcommittee ensures that data elements in the new forms for case processing meet State systems criteria.
Information Exchange Reports. In FY 1994, OCSE developed a quick and effective means of sharing the latest in enforcement practices with the States. Called Information Exchange Reports, these reports list various elements of establishment or enforcement practices and how the various States use them.
In FY 1994, OCSE developed three such information exchanges. "Paternity Profiles" was developed for assisting States in the implementation of new paternity laws and for promoting a transfer of early paternity establishment program practices and policy trends.
"Licensing Restrictions and Revocations" reviews the approaches taken by 19 States in either restricting or revoking drivers, professional or other licenses as an enforcement practice. "Immediate Employer Reporting of New Hires" transfers information on the development or enactment of State laws, policies, and procedures which require employers to provide early information on new hires to child support or other governmental agencies. This information is especially valuable in facilitating child support collection through wage withholding.
Technical Assistance Linkages. OCSE staff established linkages with Federal and private sector agencies such as: The Departments of Justice and Defense; the Indian Health Service and the National Center for Health Statistics; the Maternal and Child Health programs; the American Hospital Association and the Association for Vital Records and Health Statistics as well as the Head Start Bureau within ACF. This effort involved meetings with agency officials, dissemination of information materials, presentations, and providing articles for their publications and newsletters on paternity establishment, medical support enforcement, and child support enforcement services.
The information services component of OCSE responds to inquiries and requests for technical and program information. This component distributes publications, Action Transmittals, and Information Memoranda to State and county CSE agencies, Federal personnel, members of Congress, State and county governments, and the general public. It also responds to individual case-related correspondence received directly from the public or transmitted by elected officials.
In FY 1994, OCSE improved its correspondence response-time, ensuring that each of some 2,600 letters received a specific, informational reply whenever appropriate. OCSE developed and implemented an inventory tracking system for its National Resource Center, which distributed an average of 7,800 brochures, memorandums, and publications per month to State and local CSE practitioners and the general public.
In FY 1994, OCSE published and distributed nine issues of the "Child Support Report", a newsletter to communicate technical and program information to CSE workers and others on a regular basis. With a distribution of 12,000 copies per issue, this newsletter has long provided the CSE community with a forum for sharing successful practices and for highlighting State and Federal initiatives.
ACF Bulletin Board. In FY 1994, OCSE instituted a new toll-free telephone number (1-800-627-8886) for access to an electronic computer bulletin board which contains information that may be helpful to the child support community. The ACF Bulletin Board provides OCSE Internet addresses to anyone who calls. Also pertinent files such as OCSE Action Transmittals, Information Memoranda, Dear Colleague letters and files on systems development efforts are available for States to download via the ACF Bulletin Board.
OCSE Publications. In FY 1994, OCSE responded to some 3,745 requests for publications and/or information material and a total of 108,778 publications were disseminated. The Annual Report to Congress is the most widely distributed publication. Other frequently requested OCSE publications include:
- "Administrative Determination of Paternity" highlights the experiences of five States using various approaches to create an administrative process for paternity establishment.
- "Child Support Guidelines: The Next Generation" analyzes the financial and emotional issues surrounding child support guidelines and presents the views of advocacy groups.
- "Child Support Enforcement Resource Program Directory" identifies persons with CSE subject matter expertise and expands the pool of experts from which State and local CSE staff can draw in conducting conferences, training workshops, and other technical assistance efforts.
- "Compendium of Best Practices in Child Support: Second Edition" describes numerous innovative CSE practices in location, enforcement, medical support, management, and outreach.
- "Universal Wage Withholding for Child Support: An Employer's Guide" provides information to employers on their role and responsibilities for wage withholding.
The importance of Federal, State, and local outreach efforts cannot be over-emphasized. All program professionals recognize that the effectiveness of the child support enforcement program is best achieved when a non-custodial parent willingly complies with his or her support obligation. A representative sample of recent outreach efforts by the States follows.
Arkansas encourages teens to delay parenting until they are emotionally and financially able to take care of a baby and informs teens who are already parents about laws, resources and responsibilities. "Am I Ready?" is a curriculum for use in grades 7 through 9 that focuses on teen parenting rather than teen pregnancy. The package includes a manual for teachers with lesson plans in Math, English, Biology, Debate, Family Life and Art. The curriculum package also incudes a video, "Draw Your Own Conclusions," of a mock game show played by teenagers.
Arkansas has also developed another video targeted on adult parents, which is narrated in English or Spanish. This video starts "Congratulations, you just had or are about to have a baby" and then discusses paternity issues, including poverty levels of children whose paternity has not been legally established, social security benefits, health insurance coverage, and the father's relationship with his child. Six couples talk about why they signed the voluntary paternity establishment papers: why it was important to them, their children and their extended families. The video concludes, "Fathers who think it through accept the responsibility."
A California video "Keep Your Freedom - Keep Your Dreams" features teenagers, 14 -17 years old, who had babies. They talk about having to put their dreams on hold: "I thought that it would never happen to me;" "My friends call and I can't talk because I have to take care of the baby;" "He wants to do things with his friends. I really need him to be here with me;" "The toughest part is that a baby takes 100 percent of your time. You can't be a kid - you have to grow up;" "Your dreams change. So wait. You have a whole life ahead of you."
Illinois produces a flyer, in both English and Spanish, to publicize a toll-free child support inquiry action line. The toll-free line is operated by the Office of the Ombudsperson in the Illinois Department of Public Aid and serves as a special link for the community to programs such as child support enforcement. The ombudsperson staff are eager to serve parents and persons with child support concerns.
Iowa produces and posts flyers giving "cheap excuses" for not paying child support. "They're just kids. They can't need that much. I didn't;" "I just started a new family. I can't choose between my old kids and my new kids;" "Why should I pay child support? I never get to see my kids;" "After I pay my bills, there's not enough left;" and "I can't trust my ex. My child support payment won't go to my kids, so I don't bother."
New Mexico's new phone system, KIDS (Key Information Delivery System), uses a computer on a toll-free, 24-hour phone line to relay routine information to callers and messages to and from case workers. Between 1500 and 2000 calls a day are received at CSE offices throughout the State.
New Mexico's Responsibility, Awareness and Parenthood or RAP program was developed to make teenagers aware of the legal and financial consequences of pregnancy. The program emphasizes peer group counseling with teens talking to teens.
Oklahoma has a "10 Most Wanted" list of persons who are in extreme violation of court orders to pay child support and the media highly publicize the list. The message to delinquent parents is that, if they are trying to avoid making court-ordered child support payments, the State is serious about enforcement and will use all the tools available to find them and that criminal charges could be brought against them.
Oklahoma also distributes a flyer that pictures a judge's gavel striking down, with the caption, "Child Support: It's Not a Choice, It's the Law." The flyer lists a toll-free number so that anyone who wishes to call to get more information can do so.
Washington produces an easy-to-read brochure entitled "Facts About the Child Support Enforcement Program" that explains how the program works and includes a postcard that can be sent to the State Office of Support Enforcement to request an application for services. Another Washington brochure entitled "Employer's Guide" is aimed at employers and explains payroll deduction, health insurance coverage, and the new hire reporting program.
Wisconsin has two new fact sheets. One, "Percentage Standard for Setting Child Support Amounts" provides instructions for establishing child support payment amounts. The percentage amounts are based on the principle that, as nearly as possible, a child should maintain a standard of living the child would have enjoyed had both parents been living together. Another fact sheet, "Payment of Child Support for Substitute Care," explains that Federal law requires the collection of child support payments from both parents of a child who is placed in a substitute care facility such as a foster home, a group home or a child-caring institution.
Under the leadership of Deputy Director David Gray Ross in FY 1994, OCSE has made a conscious effort to listen better. Judge Ross visited 22 States in 1994 to participate in various conferences, workshops and forums and encouraged a stronger dialogue with the advocates for both noncustodial and custodial parents. In response to the comments of some stakeholders in the system, the OCSE central office was restructured to ensure that advocates have designated contact persons who can provide timely responses to their inquiries.
OCSE also initiated special efforts to reach groups of parents that have unique situations by adding specialists to the staff to focus exclusively on improving child support enforcement performance where cases involve either Indian Reservations or foreign governments. New staff are also focusing on the unique problems of cases involving members of the Armed Forces and employees of the Federal government.
Notable progress was made in 1994 in obtaining child support for Native American children, an area that has long been problematic. Enforcement of support orders for Native American children has been hampered due to a lack of reciprocity between State and tribal courts, disputes over legal jurisdiction, and service of process problems.
In 1994, a joint agreement was signed between the State of New Mexico and the Navajo Nation that enables tribal members to enforce and collect child support on behalf of Navajo children in New Mexico. The Navajo reservation is the largest in the U.S.
The following series of charts and graphs with accompanying descriptions highlight selected program information for FY 1994 or show five year programmatic trends in the CSE program.
The data from which these figures were developed are from reports completed by individual State CSE agencies and aggregated by OCSE for the nation.
Individual State information is available in the State Box Scores and State Data Tables found in the appendices.
Total IV-D Child Support Caseload
The total IV-D Child Support caseload is an average of the quarterly case counts of all noncustodial parents who are now or may eventually be obligated under law for the support of one or more dependent children. Nationally, the Child Support Enforcement program had 18.6 million cases in FY 1994, an increase of almost 9 percent over fiscal year 1993 and 45 percent since FY 1990.
Cases where families were referred to the Child Support agency because they are receiving AFDC, title IV-E Foster Care, or Medicaid are classified as AFDC cases; cases where the custodial parents applied for child support enforcement services are called non-AFDC cases. During the five-year period from 1990 to 1994, the non-AFDC portion of the caseload increased by 69 percent, while the AFDC portion grew by only 36 percent and the AFDC arrears-only caseload increased by almost 17 percent. An AFDC arrears-only case is a noncustodial parent whose child or children are former recipients of Aid to Families with Dependent Children, the noncustodial parent owes past due child support, and the child support arrearages are assigned to the State.
The establishment of a child's paternity is a prerequisite for establishing an order for child support. A record 590,819 children had their paternity established by the child support program in FY 1994. This represents an increase of almost 7 percent over the previous year and a cumulative 50 percent increase over the last five years.
The 7 percent increase in paternities established between fiscal years 1993 and 1994 is somewhat smaller than the increase of 8 percent seen between fiscal years 1992 and 1993. However, these data do not include paternities established through voluntary "in-hospital" programs where the case is not part of the IV-D caseload; these data are being reported beginning in FY 1995.
Support Orders Established
The legal establishment of an order to pay child support is a prerequisite to collecting child support. In FY 1994, the Child Support Enforcement program established over 1 million support orders.
There was virtually no change in the number of support orders that were established between FY 1994 and FY 1993--less than a one percent decline. However, the percentage change between fiscal years 1992 and 1993 was an increase of almost 15 percent.
IV-D Cases With and Without Orders
States report the number of cases remaining open on the last day of each quarter that have support orders established. Of the 18.6 million cases in the child support caseload in FY 1994, 10.4 million cases or 56 percent had support orders.
Just over half (52 percent) of AFDC and AFDC arrears-only cases had orders to pay child support in FY 1994, while 62 percent of non-AFDC cases had orders.
IV-D Cases for Which a Collection Was Made
States report the number of cases in which a collection was made during the second month of each quarter. In FY 1994 there were 3.4 million cases with a collection in the child support enforcement program. This is an increase of 9 percent over fiscal year 1993 and 49 percent over the figure for FY 1990. Of the cases with collections, 64 percent were non-AFDC and 36 percent were AFDC and AFDC arrears-only cases.
Paying cases accounted for about 18 percent of the Child Support Enforcement caseload; this figure has risen only slightly since FY 1990.
Total child support collections are the amounts collected by the program and distributed during the year on behalf of families receiving benefits from the AFDC, title IV-E foster care and Medicaid programs and non-AFDC families who have applied for child support services.
In FY 1994 collections reached a record high of almost $9.9 billion, an 11 percent increase over FY 1993. Non-AFDC collections accounted for 74 percent of the total amount collected.
AFDC collections, including title IV-E Foster Care and Medicaid collections, amounted to $2.6 billion in FY 1994. This is an increase of 6 percent over the previous year and 46 percent since FY 1990.
In FY 1994 AFDC collections were 26 percent of total collections compared to 29 percent of total collections in FY 1990.
Distribution of AFDC Collections
The Federal and State governments retain portions of AFDC child support collections as reimbursement for AFDC payments to families. States kept $893 million as their share of AFDC payment reimbursements and received an additional $407 million in collection incentives from the Federal share of AFDC payments. The Federal share of the $2.6 billion collected in AFDC cases amounted to $765 million.
In FY 1994, AFDC families received over $493 million in support collections through the Child Support Enforcement program. A total of $367 million of this amount was paid as a result of the $50 monthly pass-through and $32 million was for medical support payments; the remainder was passed-through because the child support paid exceeded the amounts of the AFDC grants.
AFDC $50 Disregard Collections Distributed to Families
The first $50 of current child support collected each month on behalf of AFDC families is paid to the families by the IV-D agency. The families receiving these pass-through payments benefit from the extra income each month, which is disregarded in determining their continued eligibility for AFDC. Prior to the creation of the pass-through, all current support collections were retained by the Federal and State governments to reimburse AFDC payments made to these families.
In FY 1994, AFDC families received $367 million in pass-through payments. This represents 14 percent of the total AFDC collections for the year. Pass-through payment totals increased by one percent over FY 1993 and by 28 percent for the five year period between 1990 and 1994.
Percent of AFDC Payments Recovered
The AFDC recovery rate is the percent of AFDC assistance payments recovered through child support collections. The AFDC recovery rate rose to a high of 12.5 percent in FY 1994. This is an increase over the 12.0 rate of the year before and the 10.3 rate of FY 1990.
It should be noted that even if States could collect all of the child support due, it would not be possible for some to recover 100 percent of the title IV-A grant money. This is largely because AFDC assistance payments often exceed child support award levels.
Non-AFDC distributed collections are child support payments made on behalf of and distributed to families who have applied for Child Support Enforcement services.
In FY 1994, non-AFDC collections rose to $7.3 billion, an increase of almost 13 percent since the previous year and 72 percent since FY 1990. This growth in collections for non-AFDC cases closely parallels the growth in the non-AFDC caseload (69 percent in 5 years).
Collections made on behalf of other States totaled a record $785 million in FY 1994, an increase of 8 percent. In five years, interstate collections rose by 72 percent: these increases may reflect better communications and cooperation among the States. Interstate collections reported by the States amounted to 8 percent of total collections in FY 1994.
A State's distributed collection amount does not include collections made on behalf of other States, so does not reflect the efforts put forth by one State to collect for another. In some cases, a substantial amount of child support is collected by one State on behalf of other States. Of the total amount collected by eight States (Alaska, Arizona, Colorado, the District of Columbia, Idaho, Montana, Nevada, and Wyoming), 20 percent or more was on behalf of other States; for two jurisdictions (Nevada and the District of Columbia) collections passed on to other States amount to more than 30 percent of the total amount collected.
Total Collections by Method of Collection
Wage withholding, withholding of unemployment compensation, and Federal and State income tax refund offset are all powerful enforcement techniques. However, wage withholding is by far the most effective, totaling 55 percent of all collections in FY 1994. Federal and State income tax refund offset contributed 6 percent and 1 percent, respectively; and the withholding of unemployment compensation accounted for about 2 percent of total collections.
The remaining 36 percent of collections was obtained from parents who sent their child support payments directly to the State Child Support Enforcement agency, payments received through other enforcement techniques, or collections received from other States.
Accounts receivable data present the total dollar amount of child support payments due and received by IV-D agencies. Information reported for FY 1994 indicates that $14.1 billion in current support and $30.8 billion in prior years support was due. Almost $7.6 billion or 54 percent of the current support due was collected. Of prior years support due, only $2.1 billion or 7 percent was collected.
Overall, 22 percent of all reported receivables were collected in FY 1994. This is slightly lower than the percent of receivables collected in FY 1993.
Comparisons of States' accounts receivable data are complicated because States count arrearages differently based on State laws and practices. For example, some States include unreimbursed public assistance as a debt and others do not. Some States have statutes of limitations governing collection of debt and some have policies for writing off bad debts.
Total expenditures are the net amounts of combined Federal and State funds expended on the operation of the CSE program. The amounts reported are reduced by the amount of program income (fees and costs recovered in excess of fees, interest earned, and other program income received) received by the States.
Total expenditures were $2.6 billion in FY 1994, an increase of 14 percent over FY 1993. Of this $2.6 billion, $1.7 billion was the Federal share and $816 million was the States' share. The recent increases in program costs are heavily impacted by the costs of developing and implementing automated systems, as required by the Family Support Act of 1988, as well as by increased caseloads. Expenses associated with automation, for example, totaled $345 million in FY 1994.
Total Collections per Dollar of Administrative Costs
During the five-year period FY 1990 to FY 1994, the ratio of total child support collections to total administrative costs has increased from $3.75 to $3.86. This means that, nationally, almost $4.00 in child support payments are collected for every $1.00 spent to administer the Child Support Enforcement program.
- OCSE-AT-94-01, January 28, 1994: Instructions for completing standardized interstate forms in cases involving a responding UIFSA State, and instructions for using the interstate forms to request support orders for prior periods.
- OCSE-AT-94-02, March 11, 1994: Revised Program Instructions for the Statutory Requirements for Immediate Wage Withholding in All Child Support Orders Initially Issued In the State Not Being Enforced Under Title IV-D of the Social Security Act.
- OCSE-AT-94-03, June 1, 1994: Elimination of Annual Three-Year hardware and Software Configuration Plan Requirement.
- OCSE-AT-94-04, June 2, 1994: Charge-backs for Child Support Enforcement Network (CSENet) usage.
- ACF/FNS-AT-94-05, July 22, 1994: Federal/State Information Technology Policy.
- OCSE-AT-94-05, August 23, 1994: Collection of Child Support by the Internal Revenue Service (IRS) through offsetting Federal income tax refunds.
- OCSE-AT-94-06, December 23, 1994: Final Rule - Paternity Establishment and Revision of Child Support Enforcement Program and Audit Regulations.
The first Federal child support enforcement legislation was Section 402(a)(11) of the Social Security Act [42 USC 602(a)(11)], which required State welfare agencies to notify appropriate law enforcement officials upon providing Aid to Families with Dependent Children (AFDC) with respect to a child who was abandoned or deserted by a parent.
Also that year, the National Conference of Commissioners on Uniform State Laws and the American Bar Association approved the Uniform Reciprocal Enforcement of Support Act (subsequent amendments to this Act were approved in 1952, 1958, and 1968).
Public Law (P.L.) 89-97, the Social Security Amendments of 1965, allowed a State or local welfare agency to obtain from the Secretary of Health, Education, and Welfare the address and place of employment of an absent parent who owed child support under a court order for support.
P.L. 90-248, the Social Security Amendments of 1967, allowed States to obtain from the Internal Revenue Service (IRS) the addresses of absent parents who owed child support under a court order for support. In addition, each State was required to establish a single organizational unit to establish paternity and collect child support for deserted children receiving AFDC. States were also required to work cooperatively with each other under child support reciprocity agreements and with courts and law enforcement officials.
P.L. 93-647, the Social Security Amendments of 1974, created, inter alia, PartþD of Title IV of the Social Security Act [Sections 451, et seq.; 42 USC 651, et seq.]. The key child support enforcement provisions, which reflect three years of intense Congressional attention, are as follows:
- The Secretary of the Department of Health, Education, and Welfare (now the Department of Health and Human Services or DHHS) has primary responsibility for the Program and is required to establish a separate organizational unit to operate the program. Operational responsibilities include:
- Establishing a parent locator service
- Establishing standards for State program organization, staffing, and operation to assure an effective program
- Reviewing and approving State plans for the program
- Evaluating State program operations by conducting audits of each State's program
- certifying cases for referral to the Federal courts to enforce support obligations
- certifying cases for referral to the IRS for support collections
- providing technical assistance to States and assisting hem with reporting procedures
- maintaining records of program operations, expenditures, and collections, and
- submitting an annual report to the Congress
- Primary responsibility for operating the Child Support Enforcement Program is placed on the States pursuant to the State plan. The major requirements of a State plan are that:
- The State designate a single and separate organizational unit to administer the program
- The State undertake to establish paternity and secure support for individuals receiving AFDC and others who apply directly for child support enforcement services
- Child support payments be made to the State for distribution
- The State enter into cooperative agreements with appropriate courts and law enforcement officials
- The state establish a State parent locator service that uses State and local parent location resources and the Federal Parent Locator Service
- The State cooperate with any other State in locating an absent parent, establishing paternity, and securing support; and
- The State maintain a full record of collections and disbursements made under the plan.
- Procedures were set out for the distribution of child support collections received on behalf of families receiving AFDC.
- Incentive payments to States for collections made on AFDC cases were created.
- Monies due and payable to Federal employees became subject to garnishment for the collection of child support.
- New eligibility requirements were added to the AFDC program, which required each applicant for, or recipient of, AFDC to make an assignment of support rights to the State; to cooperate with the State in establishing paternity and securing support; and to furnish his or her Social Security number to the State.
The effective date of P.L. 93-647 was July 1, 1975, except for the provision regarding garnishment of Federal employees, which was effective upon enactment. However, several problems were identified prior to the effective date and Congress passed P.L.94-46 to extend the effective date to August 1,1975. In addition, P.L.94-88 was passed in August 1975 to allow States to obtain waivers from certain program requirements under certain conditions until June 30, 1976 and to receive Federal reimbursement at a reduced rate. This law also eased the requirement for AFDC recipients to cooperate with State child support enforcement agencies when such cooperation would not be in the best interests of the child. It also provided for supplemental payments to AFDC recipients whose grants would be reduced due to the implementation of the child support enforcement program.
P.L. 94-566, effective October 20, 1976, required State employment agencies to provide absent parents' addresses to State child support enforcement agencies.
P.L. 95-30, effective May 23, 1977, made several amendments to Title IV-D:
- Provisions relating to the garnishment of a Federal employee's wages for child support were amended to:
- include employees of the District of Columbia
- specify the conditions and procedures to be followed to serve garnishments on Federal agencies
- authorize the issuance of garnishment regulations by the three branches of the Federal Government and by the District; and
- define further certain terms used.
- Section 454 of the Social Security Act (42 USC 654) was amended to require the State plan to provide bonding for employees who receive, handle, or disburse cash and to insure that the accounting and collection functions be performed by different individuals.
- The incentive payment provision, under section 458(a) of the Social Security Act [42 USC 658(a)], was amended to change the rate to 15 percent of AFDC collections (from 25 percent for the first 12 months and 10 percent thereafter).
P.L. 95-142, the Medicare-Medicaid Antifraud and Abuse Amendments of 1977, established a medical support enforcement program, under which States could require Medicaid applicants to assign to the State their rights to medical support. State Medicaid agencies were allowed to enter into cooperative agreements with any appropriate agency of any State, including the IV-D agency, for assistance with the enforcement and collection of medical support obligations. Incentives were also available to localities making child support collections for States and for States securing collections on behalf of other States.
P.L. 95-598, the Bankruptcy Reform Act of 1978, repealed section 456(b) of the Social Security Act [42 USC 656(b)], which had barred the discharge in bankruptcy of assigned child support debts. (This section of the Act (now 546(h)) was restored by P.L. 97-35 in 1981.)
P.L. 96-178 extended Federal Financial Participation (FFP) for non-AFDC services to March 31, 1980, retroactive to October 1, 1978.
P.L. 96-265, the Social Security Disability Amendments of 1980, increased Federal matching funds to 90 percent, effective July 1, 1981, for the costs of developing, implementing, and enhancing approved automated child support management information systems. Federal matching funds were also made available for child support enforcement duties performed by certain court personnel. In another provision, the law authorized the use of the IRS to collect child support arrearages on behalf of non-AFDC families. Finally, the law provided State and local IV-D agencies access to wage information held by the Social Security Administration and State employment security agencies for use in establishing and enforcing child support obligations.
P.L. 96-272, the Adoption Assistance and Child Welfare Act of 1980, contained four amendments to Title IV-D of the Social Security Act. First, the law made FFP for non-AFDC services available on a permanent basis. Second, it allowed States to receive incentive payments on all AFDC collections as well as interstate collections. Third, as of October 1, 1979, States were required to claim reimbursement for expenditures within two years, with some exceptions. The fourth change postponed until October, 1980, the imposition of the 5 percent penalty on AFDC reimbursement for States not having effective child support enforcement programs.
P.L. 97-35, the Omnibus Reconciliation Act of 1981, added five amendments to the IV-D provisions. First, IRS was authorized to withhold all or a part of certain individuals' Federal income tax refunds for collection of delinquent child support obligations. Second, IV-D agencies were required to collect spousal support for AFDC families. Third, for non-AFDC cases, IV-D agencies were required to collect fees from absent parents who were delinquent in their child support payments. Fourth, child support obligations assigned to the State no longer were dischargeable in bankruptcy proceedings. The law imposed on States a requirement to withhold a portion of unemployment benefits from absent parents delinquent in their support payments.
P.L. 97-248, the Tax Equity and Fiscal Responsibility Act of 1982, included the following provisions, affecting the IV-D program:
- FFP was reduced from 75 to 70 percent, effective October 1, 1982. Incentives were reduced from 15 to 12 percent, effective October 1, 1983. The provision for reimbursement of costs of certain court personnel that exceed the amount of funds spent by a State on similar court expenses during calendar year 1978 was repealed.
- The mandatory non-AFDC collection fee imposed by P.L.þ97-35 was repealed, retroactive to August 13, 1981. States were allowed to elect not to recover costs or to recover costs from collections or from fees imposed on absent parents. Another provision allowed States to collect spousal support in certain non-AFDC cases.
- As of October 1, 1982, members of the uniformed services on active duty are required to make allotments from their pay when support arrearages reach the equivalent of a 2-month delinquency.
- Also beginning October 1, 1982, States were allowed to reimburse themselves for AFDC grants paid to families for the first month in which the collection of child support is sufficient to make a family ineligible for AFDC.
P.L. 97-253, the Omnibus Budget Reconciliation Act of 1982, provided for the disclosure of information obtained under authority of the Food Stamp Act of 1977 to various programs, including State child support enforcement agencies.
P.L. 97-252, the Uniformed Services Former Spouses' Protection Act, authorized treatment of military retirement or retainer pay as property to be divided by State courts in connection with divorce, dissolution, annulment, or legal separation proceedings.
P.L. 98-378, the Child Support Enforcement Amendments of 1984, featured provisions that required critical improvements in State and local child support enforcement programs in four major areas:
- Mandatory Practices
All States must enact statutes providing for the use of improved enforcement mechanisms, including:
- mandatory income withholding procedures
- expedited processes for establishing and enforcing support orders
- State income tax refund interceptions
- liens against real and personal property, security or bonds to assure compliance with support obligations
- reports of support delinquency information to consumer reporting agencies
State law must allow for the bringing of paternity actions any time prior to a child's 18th birthday and all support orders issued or modified after October 1, 1985, must include a provision for wage withholding.
- Federal Financial Participation and Audit Provisions
To encourage greater reliance on performance-based incentives, Federal matching funds were reduced by 2 percent in FY 1988 (to 68 percent) and another 2 percent in FY 1990 (to 66 percent). Federal matching funds at 90 percent became available for the development and installation of automated systems, including computer hardware purchases, to facilitate income withholding and other newly required procedures.
State incentive payments were reset at 6 percent for both AFDC and non-AFDC collections. These percentages can increase to as much as 10 percent for both categories for very cost-effective States, but a State's non-AFDC incentive payments are limited by the amount of incentives received for AFDC collections. The law further required States to pass incentives through to local child support enforcement agencies where these agencies have participated in the costs of the program.
Annual State audits were replaced with audits conducted at least once every 3 years. The focus of the audits was altered to evaluate a State's effectiveness on the basis of program performance as well as operational compliance. Penalties for noncompliance are from 1 to 5 percent of the Federal share of the State's AFDC funds. The Federal government may suspend imposition of a penalty based on a State's filing of, and complying with, an acceptable corrective action plan.
- Improved Interstate Enforcement
The proven enforcement techniques discussed above must be applied to interstate cases as well as intrastate cases. Both States involved in an interstate case may take credit for the collection when reporting total collections for the purpose of calculating incentives. Special demonstration grants were authorized beginning in FY 1985 to fund innovative methods of interstate enforcement and collection. Federal audits will focus on States' effectiveness in establishing and enforcing obligations across State lines.
- Equal Services for Welfare and Nonwelfare Families
The Social Security Act was amended to show that Congress intended the Child Support Enforcement Program to aid both nonwelfare and welfare families. Several specific requirements were directed at improving State services to nonwelfare families. All of the mandatory practices must be made available for both classes of cases; the interception of Federal income tax refunds is extended to nonwelfare cases; incentive payments for nonwelfare cases became available for the first time; when families are terminated from the welfare rolls, they automatically must receive nonwelfare support enforcement services without being charged an application fee; and States must publicize the availability of nonwelfare support enforcement services.
- Other Provisions
States were required to
- Collect support in certain foster care cases,
- Collect spousal support in addition to child support where both are due in a case,
- Notify AFDC recipients, at least yearly, of the collections made in their individual cases,
- Establish State commissions to examine, investigate, and study the operation of the State's child support system and report findings to the State's governor,
- Formulate guidelines for determining appropriate child support obligation amounts and distribute the guidelines to judges and other individuals who possess authority to establish obligation amounts,
- Offset the costs of the program by charging various fees to nonwelfare families and to delinquent absent parents,
- Allow families whose AFDC eligibility is terminated as a result of the payment of child support to remain eligible to receive Medicaid for 4 months,
- Seek to establish medical support orders in addition to monetary awards.
The Federal Parent Locator Service was made more accessible and effective in locating absent parents. Sunset provisions are included in the extension of Medicaid eligibility and Federal tax offsets for non-AFDC families.
P.L. 98-369, the Tax Reform Act of 1984, included two tax provisions pertaining to alimony and child support.
- Under prior law, alimony was deductible by the payor and includible in the income of the payee. The 1984 law revised the rules relating to the definition of alimony. Generally, only cash payments that will terminate on the death of the payee spouse qualify as alimony. Alimony payments, if in excess of $10,000 per year, generally must be payable for at least 6 years and must not decline by more than $10,000. The prior law requirement that the payment be based on a legal support obligation was repealed and payors are required to furnish to the IRS the social security number of the payee spouse. A $50 penalty for failure to do so will be imposed. The provision is effective for divorce or separation agreements or orders executed after 1984.
- The 1984 law also provided that the $1,000 dependency exemption for a child of divorced or separated parents generally will be allocated to the custodial parent unless the custodial parent signs a written declaration that he or she will not claim the exemption for the year. Each parent may claim the medical expenses that he or she pays for the child, for purposes of computing the medical expense deduction. The provision is effective for taxable years beginning after 1984.
P.L. 99-509, the Omnibus Budget Reconciliation Act of 1986, included one child support enforcement amendment prohibiting the retroactive modification of child support awards. Under this new requirement, State laws must provide for either parent to apply for modification of an existing order with notice provided to the other parent. No modification is permitted before the date of this notification.
P.L. 100-203, the Omnibus Budget Reconciliation Act of 1987, required States to provide child support enforcement services to all families with an absent parent who receives Medicaid and have assigned their support rights to the State, regardless of whether they are receiving AFDC.
P.L. 100-485, the Family Support Act of 1988, emphasized the duties of parents to work and support their children and, in particular, emphasized child support enforcement as the first line of defense against welfare dependence. The key child support enforcement provisions, in brief, include:
- Guidelines for Child Support Awards
Judges and other officials are required to use State guidelines for child support unless they are rebutted by a written finding that applying the guidelines would be unjust or inappropriate in a particular case. States must review guidelines for awards every four years. Beginning five years after enactment, States generally must review and adjust individual case awards every three years for AFDC cases. The same applies to other IV-D cases, except review and adjustment must be at the request of a parent.
- Establishment of Paternity
States are required to meet Federal standards for the establishment of paternity. The standard relates to the percentage obtained by dividing the number of children in the State who are born out of wedlock, are receiving cash benefits or IV-D child support services, and for whom paternity has been established by the number of children who are born out of wedlock and are receiving cash benefits or IV-D child support services. To meet Federal requirements, this percentage in a State must: (1) be at least 50 percent; (2) be at least equal to the average for all States; or (3) have increased by 3 percentage points from fiscal years 1988 to 1991 and by 3 percentage points each year thereafter.
States are mandated to require all parties in a contested paternity case to take a genetic test upon request of any party. The Federal matching rate for laboratory testing to establish paternity is set at 90 percent.
- Disregard of Child Support
The child support enforcement disregard authorized under the Deficit Reduction Act of 1984 is clarified so that it applies to a payment made by the noncustodial parent in the month it was due even though it was received in a subsequent month.
- Requirement for Prompt State Response
The Secretary of DHHS required to set time limits within which States must accept and respond to requests for assistance in establishing and enforcing support orders as well as time limits within which child support payments collected by the State IV-D agency must be distributed to the families to whom they are owed.
- Requirement for Automated Tracking and Monitoring System
Every State that does not have a Statewide automated tracking and monitoring system in effect must submit an advance planning document that meets Federal requirements by October 1, 1991. The Secretary must approve each document within nine months after submission. By October 1, 1995, every State must have an approved system in effect. Federal 90 percent matching rates for this activity expire September 30, 1995.
- Interstate Enforcement
A Commission on Interstate Child Support was created to hold national conferences on interstate child support enforcement reform and to report to Congress no later than October 1, 1990 on recommendations for improvements in the system and revisions in the Uniform Reciprocal Enforcement of Support Act.
- Computing Incentive Payments
Amounts spent by States for interstate demonstration projects are excluded from calculating the amount of the States' incentive payments.
- Use of INTERNET System
The Secretaries of Labor and DHHS required to enter into an agreement to give the Federal Parent Locator Service prompt access to wage and unemployment compensation claims information useful in locating absent parents.
- Wage Withholding
With respect to IV-D cases, each State must provide for immediate wage withholding in the case of orders that are issued or modified on or after the first day of the 25th month beginning after the date of enactment unless:
- One of the parties demonstrates, and the court finds, that there is good cause not to require such withholding; or
- There is a written agreement between both parties providing for an alternative arrangement.
Prior law requirements for mandatory wage withholding in cases where payments are in arrears apply to orders that are not subject to immediate wage withholding. States are required to provide for immediate wage withholding for all support orders initially issued on or after January 1, 1994, regardless of whether a parent has applied for IV-D services.
- Work and Training Demonstration Programs for Noncustodial Parents
The Secretary of DHHS is required to grant waivers to up to five States to allow them to provide services to noncustodial parents under the JOBS program. No new power is granted to the States to require participation by noncustodial parents.
- Data Collection and Reporting
The Secretary of DHHS is required to collect and maintain State-by-State statistics on paternity establishment, location of absent parent for the purpose of establishing a support obligation, enforcement of a child support obligation, and location of absent parent for the purpose of enforcing or modifying an established obligation.
- Use of Social Security Number
Each State must, in the administration of any law involving the issuance of a birth certificate, require each parent to furnish his or her social security number (SSN), unless the State finds good cause for not requiring the parent to furnish it. The SSN shall not appear on the birth certificate, and the use of the SSN obtained through the birth record is restricted to child support enforcement purposes, except under certain circumstances.
- Notification of Support Collected
Each State required to inform families receiving AFDC of the amount of support collected on their behalf on a monthly basis, rather than annually as provided under prior law. States may provide quarterly notification if the Secretary of DHHS determines that monthly reporting imposes an unreasonable administrative burden. This provision is effective 4 years after the date of enactment.
P.L. 101-239, the Omnibus Budget Reconciliation Act of 1989, made permanent the requirement that Medicaid benefits continue for 4 months after a family loses AFDC eligibility as a result of collection of child support payments.
P.L. 101-508, the Omnibus Budget Reconciliation Act of 1990, permanently extended the Federal provision that allows States to ask the IRS to collect child support arrearages of at least $500 out of income tax refunds otherwise due to noncustodial parents. The minor child restriction is to be eliminated for adults with a current support order who are disabled, as defined under OASDI or SSI. The IRS offset can be used for spousal support when spousal and child support are included in the same support order.
P.L. 101-508 also extended the life of the Interstate Child Support Commission from July 1, 1991 to July 1, 1992, required the Commission to submit its report no later than May 1, 1992, and authorized the Commission to hire its own staff.
P.L. 102-521, the Child Support Recovery Act of 1992, imposed a Federal criminal penalty for the willful failure to pay a past-due child support obligation with respect to a child who resides in another State that has remained unpaid for longer than a year or is greater than $5,000. For the first conviction the penalty is a fine of up to $5,000 and/or imprisonment for not more than six months; for a second conviction, a fine of not more than $250,000 an/or imprisonment for up to two years.
P.L. 102-537, the Ted Weiss Child Support Enforcement Act of 1992, amended the Fair Credit Reporting Act to require consumer credit reporting agencies to include in any consumer report information on child support delinquencies provided by or verified by State or local CSE agencies, which antedates the report by 7 years.
P.L. 103-66, the Omnibus Budget Reconciliation Act of 1993, increased the percentage of children for whom the State must establish paternity and required States to adopt laws requiring civil procedures to voluntarily acknowledge paternity (including hospital-based programs).
P.L. 103-66 also required States to adopt laws to ensure the compliance of health insurers and employers in carrying out court or administrative orders for medical child support and included a provision that forbids health insurers to deny coverage to children who are not living with the covered individual or who were born outside of marriage.
P.L. 103-383, the Full Faith and Credit for Child Support Orders Act, requires each state to enforce, according to its terms, a child support order by a court (or administrative authority) of another state, with conditions and specifications for resolving issues of jurisdiction.
P.L. 103-394, the Bankruptcy Reform Act of 1994, protects child support from being discharged in bankruptcy. Among many other provisions, the new law includes child support as an exception to automatic stays, for judicial liens, and to discharge of debts in bankruptcy. It also provides protection against trustee avoidance, facilitates access to bankruptcy proceedings, and assigns child support a priority for collecting claims from debtors.
P.L. 103-403, the Small Business Administration Reauthorization and Amendments Act, requires that recipients of financial assistance not be more than 60 days delinquent in paying child support.
P.L. 103-432, the Social Security Amendments of 1994, requires state IV-D agencies to periodically report parents who are at least two months delinquent in paying child support to credit bureaus, modifies the benchmarks under Paternity Establishment Percentage formula used to determine the states' substantial compliance, and requires DHHS to provide free access for the Justice Department to the Federal Parent Locator Service in cases involving the unlawful taking or restraint of a child and/or the making or enforcing of a child custody determination.