Child Support Services Annual User Fee: In Brief

Contents

• Background
• Annual CSS User Fee
• Overview of Requirements
• Policy Debate
• Implementation Prior to Fee Increase

Summary

Section 454(6)(B)(ii) of the Social Security Act (42 U.S.C. 654) requires that states impose an annual user fee for child support services provided to families with no connection to the welfare system. The act also requires that an application fee be collected and provides the authority to recover costs.

When the annual user fee was first established by the Deficit Reduction Act of 2005 (P.L. 109-171), the amount of the fee was $25 and it was to be assessed if the state child support agency collected at least $500 in child support payments on behalf of the family in a given fiscal year. A 2018 statutory change (§53117 of P.L. 115-123) required that states raise the amount of the fee to $35, and that this fee be charged for nonassistance cases that collect at least $550 in child support.

The Social Security Act gives the states four options on how to obtain the user fee. According to an examination of the Child Support Services (CSS) program profiles of the 54 jurisdictions with CSS programs, 16 jurisdictions pay the fee with state funds, 2 jurisdictions collect the fee from the noncustodial parent, no jurisdictions impose the user fee directly on the custodial parent, and 32 jurisdictions impose the fee indirectly on the custodial parent by retaining the fee from the family's child support payment (after a minimum amount of child support has been collected on behalf of the family. In addition, 3 jurisdictions pay the fee entirely out of state funds until the child support collected for the case reaches a specified amount that is greater than $550 (at which point the fee is deducted from the family's child support payment), and 1 jurisdiction bills half the fee ($17.50) to the noncustodial parent and deducts the other half from the next child support payment to the family.

Background

The Child Support Services program (CSS; Title IV-D of the Social Security Act) provides services to families who receive cash and other kinds of public assistance, and it may also serve families not receiving any assistance. (The program was originally referred to as the "Child Support Enforcement" [CSE] program.¹) Nonassistance families within the program must pay certain fees, including an annual user fee. This report provides an overview of the annual user fee, including the 2018 statutory change (§53117 of P.L. 115-123) requiring states to raise the amount of the fee to $35 (increased from $25) for nonassistance cases that collect at least $550 (increased from $500) in child support. This report also discusses the policy issues surrounding the fee, which relate to the historical development of the CSS program as a whole. Finally, the report provides data on the variety of approaches taken by the states to implement the fee, which have evolved over time.

The child support program was enacted in 1975 as a federal-state program (P.L. 93-647). Today, all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands operate these programs, which provide seven major services on behalf of children:

• 1. parent location,
• 2. paternity establishment,
• 3. establishment of child support orders,
• 4. review and modification of child support orders,
• 5. collection of child support payments,
• 6. distribution of child support payments, and
• 7. establishment and enforcement of medical child support.

The program is administered federally by the Office of Child Support Services (OCSS) in the Administration for Children and Families, a U.S. Department of Health and Human Services (HHS) agency. (In cases where this report refers to actions taken or documents published under OCSS's former name, it refers to OCSE.²)

Families who are required to enroll in the CSS program are those receiving cash assistance under the Temporary Assistance for Needy Families program (TANF), Medicaid coverage, or, at state option, Supplemental Nutrition Assistance Program (SNAP) food assistance.³ The program is also available to nonassistance families if they choose to enroll.

When the CSS program was first enacted, its primary purpose was to reduce public expenditures for recipients of cash assistance (i.e., "cash assistance cost-recovery"). This was to be accomplished by obtaining ongoing support from noncustodial parents, which could be used to reimburse the federal and state governments for part of the expenses involved in providing assistance to needy families. Relatedly, the program also sought to strengthen families by securing financial support for children from their noncustodial parent on a consistent and continuing basis to enable some families to remain off public assistance. Over the years, the mission of the CSS program has shifted to emphasize the promotion of self-sufficiency and parental responsibility. Throughout this evolution in program focus, the CSS program has maintained different rules for assistance and nonassistance families.⁴

The CSS program costs, which are incurred through providing services to families, are funded via a number of sources. These include federal matching funds for state CSS expenditures and incentive payments to the states from the federal government. States also collect child support on behalf of families receiving TANF assistance to reimburse themselves (and the federal government) for the cost of that assistance to the family.⁵ Finally, fees and administrative costs recovered also help finance the CSS program.

Fees and recoveries may be collected through a variety of mechanisms.⁶ Currently, CSS agencies must charge a one-time application fee to nonassistance families who are seeking CSS services, in an amount not to exceed $25.⁷ Fees also may be charged in other circumstances, including for performing genetic tests (for purposes of paternity establishment) on any individual who is not a recipient of TANF assistance or Medicaid.⁸ Moreover, states may recover costs from either the custodial or noncustodial parent.⁹ Many of these authorities to charge fees and recover costs date back to the inception of the program. As they have been implemented and expanded over the years, the approaches taken by the states have varied significantly in the amount charged for each fee and the extent to which costs are recovered.

Effective October 1, 2006, the Deficit Reduction Act of 2005 (DRA; P.L. 109-171) added a new annual user fee applicable to certain nonassistance family child support cases.¹⁰ Unlike the application fee and cost recovery authorities, which allow states in many circumstances to determine how much to charge or recover, states must either collect the full amount of the annual user fee or reimburse the federal government's portion of the fee from state funds. The initial amount of the annual user fee was $25 when the CSS program collects at least $500 in child support annually from the noncustodial parent.¹¹ However, effective October 1, 2018, Section 53117 of P.L. 115-123 increased the fee to $35 and also increased the minimum amount of child support that must be collected in order for the fee to be assessed to $550.¹²

Annual CSS User Fee

Overview of Requirements

The Social Security Act, Section 454(6)(B)(ii), requires that states charge a fee for furnishing CSS services when more than $550 is collected for a case in a year. The act exempts current or former TANF assistance CSS cases from this fee.¹³ In addition, the state cannot charge a fee to a custodial parent or noncustodial parent who is cooperating with the CSS program as a condition of SNAP eligibility.¹⁴

The act provides the state with four options to collect the fee:

• 1. The state can retain the fee from the child support collected on behalf of the family. However, that $35 cannot be part of the first $550 collected in any given federal fiscal year.¹⁵
• 2. The state may recover the fee from the noncustodial parent, in addition to the child support that is paid by that parent.
• 3. The state may charge the fee to the custodial parent (or the person applying for CSS services).
• 4. The state may pay the fee out of its own funds. (If the $35 annual user fee is paid by the state out of state funds, it is not considered an administrative cost of the CSS program and thus is not eligible for federal matching funds.)

The function of the $35 user fee is to recoup, in part, the costs of the CSS program to the federal and state governments.¹⁶ The federal and state governments share income to the CSS program (sometimes referred to as cost recovery) at the same rate that they share program costs (i.e., 66% federal and 34% state). Consequently, the federal government retains 66% of the fee that is collected ($23.10), while the state retains 34% ($11.90). If a state chooses to forego collecting the fee and opts instead to pay the fee out of state funds, it must reimburse the federal government's share of the fee.

There are no data available on the total amount of annual user fees collected by the states. (The data in the OCSS Annual Report to Congress aggregate this fee with a number of other CSS-related collections made by the states.¹⁷) However, in its cost estimate of the Deficit Reduction Act of 2005, the Congressional Budget Office (CBO) estimated that the $25 CSS annual user fee provision would save the federal government $405 million, and the state governments $215 million, over the nine-year period between FY2007-FY2015.¹⁸ More recently, CBO estimated that both the $10 increase to the fee and the $50 increase to the threshold child support amount that must be collected would save the federal government $201 million between FY2018 and FY2027.¹⁹ (This CBO estimate did not include possible savings to state governments over that same period.)

Policy Debate

The policy question of whether an annual user fee should be charged for CSS services has received attention from federal and state stakeholders for the past few decades. For example, years before the fee requirement was enacted, the issue was studied by HHS.²⁰ A proposal for the fee also was included in the George H. W. Bush Administration's FY1992 budget request, and again in the George W. Bush Administration's FY2003 budget request. State attention to the issue prior to the enactment of the federal requirement included an extensive study of the feasibility of collecting fees for child support conducted by the Washington State Division of Child Support in 2001.²¹

Over the years prior to and immediately after the user fee requirement was enacted, a number of possible implications were identified as arguments for and against the fee.²² Arguments in favor were largely focused on the potential budgetary benefits of the fee, which would, to a limited extent, compensate the federal government and the states for the costs of operating a CSS program. Arguments against included concerns that charging fees for child support services would generally have the effect of reducing funds that otherwise could be available to the child and the family. Some also asserted that the administrative cost of reprogramming a state's automated computer system to account for the fee would outweigh the financial benefit of the fee's increased income to the state.

Prior to the implementation of the user fee, the debate also focused on the question of whether states should charge the fee to custodial parents.²³ Some argued that even if the fee was charged to custodial parents, they would still find the program to be a good value compared to the much higher fees that a private attorney or collection agency would charge for obtaining child support payments. They also pointed out that the fee (as enacted) was structured to apply to those who had received a certain minimum amount of child support payments. And, they asserted, even if states opt to charge the fee to custodial parents, most of those parents have income above the poverty level and therefore could likely pay the user fee without it negatively affecting their family's standard of living. In contrast, some opposed to imposing the fee on the custodial parent contended that it would treat similarly situated custodial families in an unequal manner (based on whether they had received TANF benefits in the past). In effect, some posited, the annual fee would impose a new surcharge on working poor families who had been successful in remaining self-sufficient.²⁴

Implementation Prior to Fee Increase

Table 1 is based on an examination of the CSS profiles of the 54 jurisdictions with CSS programs from the OCSE Intergovernmental Reference Guide.²⁵ (These jurisdictions are the 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.) As of February 2025, CSE programs imposed the fee on the custodial parent in the majority of jurisdictions, either indirectly by withholding it from the support payment, or directly by recovering it through a separate process.

• 16 jurisdictions paid the annual user fee with their own funds.
• 2 jurisdictions recovered the fee from the noncustodial parent.
• No jurisdictions recovered the fee directly from the custodial parent.
• 32 jurisdictions imposed the fee indirectly on the custodial parent by retaining it from the family's child support payment (after the minimum amount of support per year had been collected on behalf of the family).

Not counted in the above totals are the following:

• 3 jurisdictions pay the fee entirely out of state funds until the child support collected for the case reaches a specified amount that is greater than $550, at which point the fee is deducted from the family's child support payment.
• 1 jurisdiction bills half the fee ($17.50) to the noncustodial parent and deducts the other half from the next child support payment to the family.

Soon after the annual user fee was first implemented, the Government Accountability Office (GAO) conducted a study that, in part, examined how the 54 jurisdictions had implemented the user fee.²⁶ It also summarized the primary rationales reported by those interviewed for how the fee had been implemented:

Some CSE officials we interviewed stated that their states absorbed the $25 service fee due to concerns that the fee would be a burden, while others said that they charged the fee to custodial parents because their states couldn't afford to absorb the fee due to budgetary constraints. Some of the latter told us that the reason they charged the service fee to custodial, rather than noncustodial, parents was because it was easier administratively. A few also reported that families affected by the fee had voiced little opposition to it.²⁷

State practices have changed over time. At the time of the 2011 report, GAO found that 27 states charged the custodial parent either directly (through action to recover) or indirectly (by deducting it from support paid),²⁸ while 22 jurisdictions paid the fee with their own funds.²⁹ Since the publication of the GAO report, but prior to the 2018 fee increase, five jurisdictions shifted from paying the fee out of their own funds to directly recovering the fee from the custodial parent (Arkansas) or deducting the fee from the child support paid (California, Connecticut, Maine, and Texas). In addition, three jurisdictions shifted their approach from directly or indirectly recovering the fee from the custodial parent to covering the fee out of state funds (Michigan and Minnesota) or recovering the fee from the noncustodial parent (Idaho).

Since the 2018 fee increase, a total of six states have begun to collect the fee from child support paid to the family. Three of these states had previously paid the fee out of state funds (Alaska, Minnesota, and Pennsylvania), two of the states had recovered the fee from the noncustodial parent (Georgia and Ohio), and one state had charged the fee to the custodial parent (South Carolina). An additional state reverted from charging the fee to the custodial parent to its former policy of paying the fee out of state funds (Arkansas). Missouri shifted from assessing the fee to the custodial parent to billing half the fee ($17.50) to the noncustodial parent and deducting the other half from the next child support payment.³⁰

Carmen Solomon-Fears, former CRS Specialist in Social Policy, authored earlier versions of this report. Sylvia Bryan, CRS Research Assistant, assisted with the data compilation for the current version of the report.

Footnotes