The Child Support Enforcement (CSE) Program

January 28, 2015 The Child Support Enforcement (CSE) Program Introduction The Child Support Enforcement (CSE) program was enacted into law (P.L. 93-647) in January 1975. When the program was first established its goals were to reimburse the states and the federal government for the welfare payments they provided families and to help other families obtain consistent and ongoing child support payments from the noncustodial parent so that they could remain selfsufficient and stay off welfare. The CSE program has evolved over time from a “welfare cost-recovery” program into a “family-first” program that seeks to enhance the well-being of families by making child support a more reliable source of income. parents, establishing and enforcing medical child support, and distributing child support payments to custodial parents. CSE Collections and Methods In FY2013, the CSE program collected and distributed $28.0 billion on behalf of families. Nearly two-thirds of CSE collections were for families that had never received cash payments from the Temporary Assistance for Needy Families (TANF) program. Table 1.CSE Collections by Family Type, FY2013 Family Type The program has the potential to impact more children and for longer periods of time than most other federal programs. In FY2013, it served 16.9 million children (nearly one in four children in the United States). Scope of CSE Program The CSE program is a federal-state program that provides services to both welfare families (who are automatically enrolled free of charge) and non-welfare families (who must sign up and pay an application fee). Families who have never received welfare must pay a $25 annual user fee if the CSE agency collects at least $500 per year for them. The program is available in all 50 states; the District of Columbia; the territories of Guam, Puerto Rico, and the Virgin Islands; and about 60 tribal nations. It is generally operated at the county level of government. The CSE program is administered at the federal level by the Office of Child Support Enforcement (OCSE) in the Department of Health and Human Services (HHS). The OCSE helps CSE agencies in the states, territories, and tribes develop, manage, and operate their programs effectively and according to federal law. Specifically, OCSE financially supports CSE program operations, provides specified grants to states, provides policy guidance and technical assistance, conducts program audits, supports research through demonstration grants, and operates the Federal Parent Locator Service and the National Directory of New Hires. Collections (billions) Percentage TANF Families $0.9 3% Former TANF $8.8 31% Never TANF $18.3 65% Total $28.0 100% Source: Congressional Research Service (CRS), based on data from the U.S. Department of Health and Human Services (HHS). The majority of the collected payments (95%) went to families and the remainder went to the states and federal government as reimbursement for public assistance dollars that went to families. Most child support payments are collected from noncustodial parents through income withholding. In FY2013, 70% of collections were obtained through income withholding. Other methods of enforcement include • • • • • intercept of federal and state income tax refunds; intercept of unemployment compensation; liens against property; intercept of lottery winnings, judgments, or settlements; authority to seize assets of debtor parents held by public or private retirement funds and financial institutions; • authority to withhold, suspend, or restrict driver’s licenses, professional or occupational licenses; recreational or sporting licenses; and • authority to deny, revoke, or restrict passports. Program Components The CSE program increases the reliability of child support paid by noncustodial parents by: locating noncustodial parents, establishing paternity, establishing child support orders, reviewing and modifying child support orders, collecting child support payments from noncustodial Moreover, all jurisdictions have civil or criminal contemptof-court procedures. Also, federal criminal penalties may be imposed in certain cases, and federal law provides for international enforcement of child support. www.crs.gov | 7-5700 The Child Support Enforcement (CSE) Program CSE Caseload and Composition In FY2013, the CSE system handled 15.6 million cases. Table 2.CSE Cases by Family Type, FY2013 Family Type Number (millions) Percentage TANF Families 1.8 12% Former TANF 6.7 43% Never TANF 7.1 45% 15.6 100% Total Source: Congressional Research Service (CRS), based on data from the U.S. Department of Health Human Services (HHS). Among custodial parents who are eligible for child support, 82% are women, 79% are 30 years old or older, 57% have just one child, 68% are white, 25% are black, and 21% are Hispanic of either race (2012 data). According to 2012 data, 29% of custodial families have income below the federal poverty level. In 2012, child support represented 45% of family income for poor custodial families that received it. CSE Expenditures and Financing Structure In FY2013, total CSE expenditures amounted to $5.6 billion. The CSE program is a federal-state matching grant program under which states must spend money in order to receive federal funding. The federal government reimburses each state 66% of all allowable expenditures on CSE activities. The federal government’s funding is “openended” in that it pays its percentage of expenditures by matching the amounts spent by state and local governments with no upper limit or ceiling. There are five funding streams for the CSE program. The first two streams (mentioned above) are state dollars and federal matching funds. Third, states collect child support on behalf of families receiving TANF assistance to reimburse themselves (and the federal government) for the cost of TANF cash payments to the family. Fourth, the federal government provides states with an incentive payment (capped at $530 million in FY2013) to encourage them to operate effective programs. Federal law requires states to reinvest CSE incentive payments back into the CSE program or related activities. Fifth, application fees and costs recovered from non-welfare families may help finance the CSE program. Program Effectiveness The program made collections for about 60% of its caseload in FY2013 (compared to 23% in FY1998, when the 1996 welfare reforms were just being implemented). The CSE program has the potential to impact more children and for longer periods of time than most other federal programs; it may interact with mothers, fathers, and children for 18 years and in some cases up to 30 years if the noncustodial parent owes past-due child support. CSE Access and Visitation Programs A noncustodial parent’s right to visit with his or her children is commonly referred to as visitation or child access. Although a noncustodial parent’s right to visit with his or her children and receipt of child support payments by custodial parents are legally separate issues, some research indicates that fathers who visit their children (as compared to those who do not) are more likely to pay child support. The CSE Access and Visitation Grant program acknowledges and reflects the sentiment that healthy families need more than just financial support. The Access and Visitation program has been a separate line item in the CSE budget account since its enactment as part of P.L. 104193 (the 1996 welfare reform law). An annual entitlement of $10 million from the federal CSE budget account is available for these grants to all 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. Eligible activities include, but are not limited to, mediation, counseling, education, development of parenting plans, visitation enforcement, and development of guidelines for visitation and alternative custody arrangements. Issues CSE issues that have been raised include the following: • Should child support orders be more aligned with the noncustodial parent’s ability to pay? • Should child support orders in cases where the noncustodial parent is unemployed, underemployed, or incarcerated be automatically reviewed and modified? • Should child support arrearages (i.e., unpaid child support) be reduced or forgiven if the noncustodial parent does not have the resources to pay them (and the custodial parent is in agreement)? • Should the CSE program have the option of funding work-oriented programs for noncustodial parents who are unable to meet their child support obligations? • Should visitation/child access be considered a part of the general CSE program (i.e., 66% federal funding)? • Should the states bear more of the costs of their CSE programs (i.e., reducing the federal matching rate)? In FY2013, the CSE program collected $5.31 for every $1 it spent. Carmen Solomon-Fears, csolomonfears@crs.loc.gov, 77306 IF10113 www.crs.gov | 7-5700