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3 Ways States Can Improve Child Support

Decades of problems with distribution, debt, and enforcement have undermined the child support program’s ability to serve low-income families.

Colorado Capitol building
The Colorado Capitol is pictured in Denver, November 2023. (Getty/Hyoung Chang/The Denver Post)

State child support programs play an important role in aiding custodial parents with paying for the costs of raising children. These programs served 12.8 million children in fiscal year 2022—equal to roughly 1 in 5 children in the United States, or the equivalent of more than all children served by the Special Supplemental Nutrition Program for Women, Infants, and Children; Social Security; the Child Care Development Fund; Temporary Assistance for Needy Families (TANF); and Supplemental Security Income combined. Importantly, however, these other programs provide assistance through government dollars, while child support programs collect payments from noncustodial parents and disperse nearly all of them to custodial parents to help ensure that the costs of raising children are covered.

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According to U.S. Census Bureau estimates for 2022, paying child support pushed 258,000 people, primarily noncustodial parents and those that reside with them, into poverty. This often stems from harmful debt and enforcement policies that limit the positive impacts of the child support program. Additionally, the government takes more than $1 billion in child support payments from families every year to reimburse TANF and foster care costs instead of sending the money to the children for whom it is meant.

To resolve some of these structural issues, states should:

  1. Ensure that 100 percent of child support payments go to families.
  2. Reduce child support debt that noncustodial parents owe to the government.
  3. Redefine child support enforcement to prioritize providing opportunities instead of punishing people who cannot pay.

States have room to improve when it comes to reforming their child support programs to serve families better. Doing so can help custodial parents get the resources that they are owed and that they need to raise their children as well as support noncustodial parents in achieving the financial stability that will allow them to make payments.

See also

Families receiving TANF or foster care services reimburse the government through child support

Since the creation of the child support program, it has served as a public assistance cost recovery tool. This means that child support payments from families who receive TANF (or Aid to Families with Dependent Children, before TANF replaced it) are shared between federal and state governments as reimbursement for the public assistance. In order to receive TANF, custodial parents are generally required to participate in the child support program and assign their child support rights to the state. This leads to custodial parents with some of the lowest incomes being denied access to the child support they are owed, with money noncustodial parents are still legally required to pay being kept as assistance reimbursement instead of going to their children.

Relatedly, the parents of children in foster care can be required to make child support payments to reimburse the costs of care provided. In fiscal year 2022, state and federal governments kept as assistance reimbursement about two-thirds of all child support collected from families receiving TANF or foster care services. According to data released by the Office of Child Support Services, this totals more than $400 million. (see Figure 1)

When factoring in families and children who previously received these types of services but had not yet fully paid off the reimbursement costs, FY 2022 assistance reimbursement jumps to $1.07 billion, with the federal government receiving $670 million and states receiving $400 million. (see Figure 2) These numbers are not outliers: Retained collections consistently total more than $1 billion each year.

Fortunately, as of 2022, guidance from the Administration for Children and Families has encouraged state child welfare agencies to forgo assignment of child support in foster care cases. This will avoid adding to the challenges that parents may face in attempting to reunite with their children. For families receiving TANF, states can pursue a policy of pass-through and disregard, allowing the government to pass a portion or the entirety of a child support payment to a family, while not counting it as income to prevent benefits from being cut. More than half of states have some version of a pass-through and disregard policy in place, ranging from $50 to guaranteeing that full payments reach families. The FY 2022 total for pass-through collections to TANF families sat around $96 million—roughly 24 percent of the amount states and the federal government keep in assistance reimbursement from these families.

Pass-through and disregard policies across the United States

Research has shown that implementing pass-through and disregard policies was associated with increases in the likelihood that payments would be made and in the dollar amount of those payments, as noncustodial parents became more willing to pay once they knew that the money would reach their children. In Colorado—which began its 100 percent pass-through and disregard policy for TANF families in 2017—data from before and after policy implementation show that families received an extra $167 in average monthly child support payments when the pass-through was combined with larger and more frequent payments from noncustodial parents.

Other states that also have or plan to implement the most expansive pass-through policies to date include Minnesota, Michigan, Illinois, Wisconsin, and California. These states are leading the way, although they may still have gaps that prevent families from receiving 100 percent of the child support they are owed. For example, some states, including Colorado and Michigan, only pass through payments to families currently on TANF; Wisconsin, meanwhile, ensures that all payments reach families who previously received TANF but passes through only 75 percent of payments to current TANF recipients. Minnesota disregards only a portion of pass-through payments from being counted as income, meaning that a custodial parent can still see their public assistance benefits reduced.

Additionally, some states ensure that child support reaches former TANF families through tax offset collections, or tax refunds owed to noncustodial parents that the federal government intercepts and uses to pay past-due support. Wyoming uses a method called DRA distribution—after the Deficit Reduction Act of 2005—that allows these funds to be sent to custodial parents first instead of allowing the government to immediately take what it is owed for assistance reimbursement. This gets more money to families without a pass-through policy, though Wyoming also passes through to families any remaining collections that would otherwise be left over for the government. Simply put, while government retainment of child support remains a problem, options are available for states to deliver 100 percent of payments to families.

Piling on debt burdens poor families

When noncustodial parents miss payments, either to the state or to custodial parents, arrears start to accrue that must be paid back. The many parents who have trouble keeping up with payments due to having low incomes, being unemployed, or having their child support order set at an unaffordable level often have little choice but to watch this debt grow, as child support arrears cannot be extinguished by filing for bankruptcy. This helps explain much of the roughly $114 billion in arrears due as of FY 2022, of which more than $19 billion is owed to states and the federal government. One sample of noncustodial fathers in Wisconsin showed that more than 90 percent of those who were not making payments and roughly 70 percent to 80 percent of those making partial payments had incomes of less than $20,000 per year, while more than half of fathers making full payments earned more than $30,000.

In addition to these base payments, roughly two-thirds of states charge interest on arrears, which causes total amounts owed to grow even more quickly. One California study estimated that the state’s 10 percent interest rate generated an additional $3.9 billion in arrears, making up more than one-quarter of the state’s total arrears. Interest rates make it even more difficult for noncustodial parents to climb out of a rapidly growing debt, trapping them in poverty.

The constant stress of having to keep up with child support payments or catch up on debt owed is associated with having a worse quality of life.

The constant stress of having to keep up with child support payments or catch up on debt owed is associated with having a worse quality of life. Survey data predominantly from fathers of color show that fathers with arrears are more likely to report experiencing poorer physical health, economic hardship, and symptoms of depression. Additionally, arrears can strain noncustodial parents’ relationships with children and custodial parents, as parents struggling to make payments or live off what income is left have even less breathing room to provide informal support to their families, which can contribute to reduced parental engagement.

States have various options for reducing the burden that public assistance debt imposes. Beyond passing through arrears payments or using the DRA distribution to help ensure that collections reach families, states can eliminate interest rates that cause arrears to rapidly accrue. They can also enact debt relief programs to address arrears owed to the government. The Office of Child Support Services has identified at least 36 states that have some sort of relief program in place—typically requiring noncustodial parents to make regular payments or participate in an employment and training or parenting program in order to qualify. Research shows that this debt relief often has the intended effect of increasing payments while reducing arrears, in addition to improving credit scores, reducing barriers to housing and employment, and improving noncustodial parents’ relationships with their children, custodial parents, and the child support system. Some states also have programs that reduce arrears if noncustodial parents demonstrate that they cannot pay the full amount.

Good jobs over jail: Redefining the meaning of enforcement

If arrears go unpaid for too long, state agencies may take drastic action to increase collections. These include revoking passports, reporting debts to credit bureaus, seizing bank accounts, suspending driver’s and occupational licenses, and even incarcerating people. Too often, such efforts make it harder for low-income parents to find the financial stability they need to consistently meet their obligations. This strictly punitive approach to child support enforcement has persisted for a long time and has disproportionately harmed Black fathers, who have lower incomes and are more likely to struggle to make payments. In recent years, however, both states and the federal government have begun to reassess how they can best serve families.

The Office of Child Support Services was previously known as the Office of Child Support Enforcement, changing its name in 2023 to better reflect its modernized focus toward helping families and to avoid evoking the fear typically associated with enforcement. To back up this change, the agency has encouraged states to help noncustodial parents achieve financial security through employment services; state agencies often agree that such capital-building tools can be particularly helpful for parents unable to make payments. Approximately 32 states operate employment programs to provide noncustodial parents the training or experience necessary to find stable employment and a steady income. These efforts are better aligned with a family-centered approach to child support than are efforts to punish noncustodial parents for their inability to pay.

Additionally, during the COVID-19 pandemic, states such as Wisconsin implemented significant shifts in enforcement procedures to account for the fact that many people were out of a job. Agency and court staff in Wisconsin reported that administrative and judicial enforcement remedies were broadly paused during the initial months of the pandemic, favoring more flexibility and proactive communication. Case management focused on helping noncustodial parents make payments—whether by discussing potential child support order reviews, expunging arrears, or encouraging participation in employment programs—noting that they hoped this new approach would last beyond the pandemic to become a staple of how child support agencies operate going forward.

Recommendations

Despite the progress that many states are making toward aligning their child support agencies with the goal of greater financial and family stability, policymakers can do more to minimize the number of people that the system pushes into poverty. Below are three ways states can meet the needs of some of their most economically vulnerable families:

  1. Ensure that 100 percent of child support payments go to families. Eligibility for financial assistance is restricted to the poorest families—and these families should not have to sacrifice one stream of valuable support to ensure they have access to another. All child support should reach the children for whom it is intended without affecting public assistance benefits, and states should forgo assignment of child support in foster care cases in order to reduce barriers to family reunification.
  2. Reduce child support debt owed to the government. More than 90 percent of arrears accrued from reimbursing TANF benefits are more than five years old; nearly half are more than 20 years old. Policymakers can prevent these arrears from getting too high by not charging interest and can reduce the burdens this debt inflicts by expanding debt relief programs and making sure collected arrears go directly to families.
  3. Redefine child support enforcement to prioritize opportunities instead of punishments. States should encourage agency staff to proactively communicate with low-income families in order to build stronger community relationships and to provide services that can help parents make payments. A prime example of this is referring parents to or operating employment programs. Research suggests that participation in these programs can help increase the percentage of people making payments, the size of payments being made, and the earnings of noncustodial parents, while reducing the use of harsh punitive measures. Importantly, programs serving low-income families should make use of supportive services that can increase accessibility and provide the flexibility many parents need to participate and work toward program completion.

Conclusion

The child support system has a troubled history of perpetuating fear and shame for noncustodial parents, particularly parents of color. In order for it to properly serve low-income families, policymakers must prioritize their needs and avoid policies that trap people in poverty. Doing so will benefit many of the nation’s most economically vulnerable children and give the next generation the resources they need to succeed.

The author would like to thank Rose Khattar, Lily Roberts, Emily Gee, Emma Lofgren, David Correa, Meghan Miller, and Chester Hawkins for their support and feedback. Additionally, the author would like to thank Elaine Sorensen from the Administration for Children and Families and Diana Azevedo-McCaffrey from the Center on Budget and Policy Priorities for their valuable review.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.

Author

Kyle Ross

Policy Analyst, Inclusive Economy

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