In Focus

Jun 19, 2015  |  PERMALINK »

For Father’s Day, Let’s Support and Honor All Dads, Both Custodial and Non-Custodial

By Elizabeth Lower-Basch

During the annual rite of honoring fathers with their special Sunday in June, we should be mindful that most fathers—regardless of whether they live with their kids or not—want to do the best they can for their kids. As a special Father’s Day gift to those non-custodial fathers who struggle to provide financial support for their children, CLASP urges the adoption of a proposed rule from the federal Office of Child Support Enforcement (OCSE) to make child support orders more realistic—and effective.  

Child support enforcement exists because we, as a society, agree that children deserve the financial support of both parents, regardless of whether those parents are married or live together.  In 2014, the federal-state system of child support enforcement served more than 16 million children, representing nearly 1 in 4 children in the United States.  Over the years, child support programs have gotten more effective, using tools such as wage garnishment and tax refund interception to ensure that non-custodial parents who have the ability to pay child support, do so.  In 2014, 60 percent of child support cases had collections, up from 51.5 percent in 2004.

However, many non-custodial parents are failing to pay child support, not because they are unwilling to support their children, but because they simply do not have the financial resources to do so.  For example, one study found that 70 percent of unpaid child support debt is owed by parents with no or low reported earnings. All too often, the child support enforcement system does not help these low-income non-custodial parents, but becomes yet another obstacle in their path to supporting themselves and their families.  Last fall, OCSE issued a proposed rule that would take a big step toward requiring states to establish child support orders that reflect non-custodial parents' true ability to pay and that would minimize the likelihood of their accruing insurmountable child support debt that itself acts as a barrier to employment. 

Specifically, the proposed rule would:

  • require states, as they set orders, to consider non-custodial parents’ “actual” earnings and incomes, rather than imputing their income;
  • require state guidelines to draw upon all available information regarding the non-custodial parent’s ability to pay; and
  • prohibit the treatment of incarceration as “voluntary unemployment.” When this occurs, income is imputed and support orders cannot be modified downward even though the incarcerated parent has little, if any, income.

Some members of Congress have described the proposed rule as undermining child support enforcement.  Nothing could be further from the truth.  While these policies may result in lower child support orders, what matters to the well-being of children is actual payments.  Custodial parents cannot pay for rent or child care with artificially high orders that will never be paid. And setting the order unrealistically high means that non-custodial parents rapidly accumulate large—and demoralizing—amounts of debt that they have no hope of being able to pay off. Moreover, this debt has negative consequences on credit scores.

This can actually reduce the child support collected. In a study of child support orders set for low-income parents, the U.S. Department of Health and Human Services (HHS) Office of Inspector General found that compliance was significantly lower when a monthly order was more than 20 percent of a parent’s income than when orders were 15 percent or less of income.  In some cases, the simple fact of owing child support debt can make it harder to get a job -- nearly half of employers check credit scores when hiring for some or all positions.  In other cases, the tools used to enforce child support orders, such as loss of drivers' licenses or professional credentials, make it impossible to earn the money needed to pay support.  The National Child Support Enforcement Association agrees that orders should be based on actual ability to pay, and notes that "When current child support is set, or allowed to remain, at an inappropriate level, there is an increase in non-compliance and ever-increasing arrears."

The proposed rule specifically addresses the use of contempt orders leading to jail time for parents who are unable to pay child support orders. It would require states to take into account actual earnings and income and the subsistence needs of the non-custodial parent when setting the "purge amount" that must be paid to avoid incarceration.  It is unjust to jail non-custodial parents for nonpayment when they have no ability to comply by paying. Moreover, it is absolutely counterproductive to the goal of ensuring support for children, as jail time is likely to make it even harder for the non-custodial parent to find or keep employment needed to pay child support, creating a downward spiral.

Another key provision of the proposed rule would allow employment services for non-custodial parents to be included as child support enforcement activities.  The concept here is simple -- if we help parents obtain the skills needed to find and keep jobs, they will be more able to pay child support.  This is not a new concept, and more than half the states already offer some sort of employment services to non-custodial parents in one or more counties.  But these programs have typically been funded with temporary grants, or have had to compete for limited federal Temporary Assistance for Needy Families (TANF) funding, which has prevented the programs from reaching the majority of non-custodial parents who could benefit.  Allowing such activities to be included under the child support enforcement program would help expand and institutionalize them.

CLASP submitted comments at the time in support of the proposed rule, and urges the Administration to finalize the regulation promptly.  When a non-custodial father gets a job and is able to help support his family, he will feel better about being honored on Father's Day—and every day.

Jul 28, 2009  |  PERMALINK »

Responsible Fatherhood Bill Would Expand EITC for Childless Adults and Non-custodial Parents

By Elizabeth Lower-Basch

On June 19, 2009, Senator Bayh (D-IN) introduced S. 1309, the Responsible Fatherhood and Healthy Families Act of 2009.  Among other provisions, the bill would expand the Earned Income Tax Credit (EITC) for adults without dependent children,  The maximum EITC for childless adults and noncustodial parents is just $438 for tax year 2008, less than one-sixth the amount that can be received by an adult with one child.  Moreover, the EITC for these workers begins to phase out when a worker is earning less than two-thirds of the federal poverty level.  Over several years, S. 1309 would raise the maximum benefit to $555 and would increase the phase-out threshold to the federal poverty line.

In addition, S. 1309 would double the EITC for noncustodial parents who paid the full amount of all current child support orders in the previous tax year, as verified by the state child support enforcement agency.  This would both increase the incentive for noncustodial parents to pay the child support they owe, and reduce the implicit "tax" on their earnings created by the child support order.


Oct 13, 2009  |  PERMALINK »

States Should Distribute More Owed Child Support to Parents

By Josh Bone

More states should take advantage of a provision in federal law that allows them to distribute more owed child support payments directly to custodial parents.  Such a move could help more low-income families become self sufficient and would provide much-needed income to families in this tough economic climate.

Currently, most states retain child support payments owed to parents receiving Temporary Assistance for Needy Families (TANF) benefits. The federal and state governments then split these child support payments based on the state's Medicaid matching rate.  This policy was put in place to reimburse government spending on TANF. However, one of the changes in the law in early 2006 allows states to pay, or "pass through," a portion of child support revenues directly to TANF recipients without the federal government taking any share of the "passed through" revenue, as long as these payments are not counted or "disregarded" when calculating TANF benefits..

West Virginia, Washington, and Pennsylvania, among others, have taken advantage of this flexibility.  Most notably, West Virginia recently began "passing through" all child support payments to custodial parents.  The approximately 18,000 affected families in West Virginia will receive as much $85 million in currently outstanding child support payments.  In Washington, about 12,400 families received $12.5 million between August 1, 2008 and October 31, 2009.  Pennsylvania has "passed through" an additional $16 million.  Low-income families in all of these states now have more money to spend, a crucial boost in the current economic climate.

The long-term benefits of such policies are also significant.  The Office of Management and Budget projects such policies might save as much as $4.9 billion over 10 years, since families that receive increased child support payments will be less dependent on transfer programs.  Additionally, when payments go directly to families, fathers are more likely to pay child support and work in the legal economy.  While budget problems are making many states skittish about increasing pass-throughs, it is critical that these states keep in mind the potential short- and long-term benefits of West Virginia's approach.


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