Child support enforcement: The ignored component of welfare reform

Abstract

Most of the research and policy debate related to PL 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, has centered on the time limits, family caps, work requirements and sanctions imposed on Temporary Assistance to Needy Families (TANF) recipients and states. While those parts of the bill are critical, this article argues that child support enforcement, which is usually only a footnote in the dialogue, is an integral component of welfare reform and the element that will contribute significantly to raising thousands of women and children out of poverty.

AS THE UNITED STATES LAUNCHES into the future, much more will be written and discussed about welfare reform. Since the passage of the the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 went into effect on Aug. 1, 1996, there has been an unprecedented debate in the professional literature, mass media, newsletters, and the Internet about the efficacy and fairness of this major policy change.

Most of the research and political deliberations at the state level have centered around five-year time limits, family caps, work requirements and work quotas, child care and medical support, and sanctions imposed on Temporary Assistance to Needy Families (TANF) recipients. Hagen (1998; 1999) covered these issues thoroughly in two companion articles on the new directions under TANF. Yet, observers agree that it is still much too early in the development of these welfare-to-work programs to know whether the dire predictions of many big city mayors about massive urban unemployment and destitution will transpire. It is hoped that the spate of outcome studies underway in many states and the Urban Instititute's national study will answer many of these questions.

A less controversial component in the legislative welfare reform package was the latest strengthening of the Child Support Enforcement (CSE) provisions in the Social Security Act. Yet, in all of the dialogue between the various interest groups and advocates for and against the revolutionary welfare reform bill, there is virtually no serious analysis of the impact that child support enforcement will have on the quality of life of millions of American children. It is the position of this article that child support enforcement, usually only a footnote in the policy dialogue, will ultimately prove to be a significant factor in assisting women and children out of poverty. However, in order for Child Support Enforcement to become a realized contributor to the economic well-being of children, there will have to be a comparable change in the approach to custodial and noncustodial parents that is taking place in the present climate of welfare to work.

Purpose

From the inception of the Congressional debate in the early 1970s, the reasons for federal involvement in child support enforcement has been intended to accomplish two goals. Given that the program was to serve two populations, those receiving welfare and those not, legislators believed that (1) welfare expenditures could be reduced and to some extent prevented by recouping Aid for Dependent Children (AFDC) benefits from noncustodial parents' child support payments, and (2) earlier enforcement of child support obligations for families not receiving AFDC could help prevent these families from needing support in the future in the form of welfare benefits. An examination of the legislative history of Child Support Enforcement indicates congressional efforts to achieve these two related goals. Conversely, there is no credible evidence that suggests that Congress viewed the legislation as positive family policy.

History

In 1975, Congress passed enabling legislation that established a Child Support Program as Title IV D of the Social Security Act. This initial legislation required each state to develop a child support enforcement program that provided services for establishing paternity, locating absent parents, establishing child support obligations, and collecting child support payments. The states were required to provide these services to both AFDC and nonAFDC families who requested such services for the symbolic sum of $1. To facilitate interstate collections, a federal parent locator service was established with federal access to federal data files on individuals, including earning records from the Social Security Administration and tax records from the Internal Revenue Service.

In 1984, Congress authorized mandatory wage withholding of child support when the absent parent was delinquent by more than one month or more in making child support payments. It also required states to develop guidelines for establishing child support awards. In 1988 with the Family Support Act, Congress again strengthened child support enforcement by authorizing wage withholding in all new child support cases. In addition, the law required that guidelines for Child Support Enforcement be presumptive, that is, the applicant for CSE will likely be eligible for services, and that there be periodic updating of child support awards.

In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act authorized states to move toward more centralized, automated systems that permitted such innovative collection ideas as new hire reporting registries so that child support withholding could begin when the noncustodial parent changes jobs. Also, it required states to report delinquent noncustodial parents to credit bureaus and required states to withhold, suspend, or restrict the use of driver's licenses and professional and occupational licenses. The law bolstered federal services to locate parents across state lines and required states to have common paternity procedures in interstate cases. Importantly, the bill ended the $50 pass through (the first $50 of child support was added to the family's grant), but it did give children formerly on welfare priority over the state when back child support is collected.

The twenty-three-year history of Child Support Enforcement legislation indicates a consistent and increasingly vigorous effort at using the power of policy to contribute to the objectives of making parents financially responsible for their children. With the elimination of cash grant entitlements under welfare reform, the fiscal relationship between recipients and the noncustodial parent has dramatically changed.

Literature Review

Given the length of time that Child Support Enforcement has been law in the United States and the number of people and amount of dollars involved, the research in the area is relatively sparse. Still, there is interesting work that has the potential to inform child support enforcement policy and implementation particularly as it relates to welfare-to-work goals. Beron (1992) examined those noncustodial fathers who pay none of their child support. He concluded that distinguishing between full, partial, and nonpayers of child support is an important distinction for policy analysis. His study indicated that child support enforcement programs can influence fathers' payment behavior, however the impact differs based upon the father's payment history. He concluded that child support payments will increase if fathers are able to augment the family's income rather than replace government aid. Conversely, there is some evidence that when custodial parents receive more child support, they will work less in the labor market (Graham & Bellar, 1989; Graham, 1990).

Klawitter (1994) noted that according to economic theory, fathers would increase their work and earnings when their child support payment was a fixed rate, but would not necessarily increase their work efforts in response to a fixed percentage rate since the father's disposable income would not be significantly improved with a fixed percentage. In her study of twenty-one counties in the 1980s, she found that the type and level of child support awards did not significantly affect fathers' earnings, at least in the first few years after the awards. Meyer (1993) found that receiving child support significantly decreases the likelihood that a mother will return to welfare. Robins (1986) analyzed child support payments from noncustodial parents and argued that they reduced the costs associated with AFDC programs, but because the courts awarded such low child support amounts, child support enforcement is not an effective anti-poverty device in and of itself. Glass (1990) studied the implementation of the 1984 and 1988 CSE legislation in two counties in New York. Her research concluded that improved child support enforcement helps custodial parents who are not recipients of AFDC, child support enforcement does not successfully remove parents from AFDC, and thus has little effect on the lives of poor families. According to Meyer et al. (1996), noncompliance rates remain substantially lower for low-income noncustodial parents than for those with higher incomes, even after controlling for the use of income withholding.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996

This bill revolutionized income maintenance in the United States. While many states through a variety of waivers, began to make changes in the their welfare systems before the passage of the bill, the federal law mandated changes for all states. Since the passage, it has become clear that states for the most part were ready and anxious to "end welfare as we know it."

Obviously the most significant change in welfare, particularly from the perspective of Child Support Enforcement, was the ending of welfare as an entitlement. Placing a lifetime limit of five years for any recipient to receive cash benefits (or four years in some states, e.g. Georgia) altered the perspective of recipients. Whether recipients had two years before they had to begin a primary work activity or, as in Georgia, immediately under Workfirst, the climate of a lifelong source of income, paltry though it may be, was over. The recipient knew that sooner or later, the cash support would end.

Another tenet of the TANF that will have an impact on the perspective of Child Support Enforcement was the initiation of the family cap. Under the family cap, no additional children will be covered under cash assistance. The simple math is that without any additional income, the average amount of dollars per child will be decreased.

Another substantive and equally compelling change in TANF policy is the complete reshaping of the organizational climate of welfare offices. Beyond the name changes of the institution and the titles of workers that are taking place in such states as Wisconsin and Georgia, the entire approach to the recipient is being altered. Rather than the worker ascertaining either what benefits the recipient was or was not entitled to, the worker now has an employment goal. The cash and in-kind supports are seen as temporary and merely adjunct to the real mission of the system, which is to get people into paying jobs. Only time will tell how viable the economy is to absorb a largely unskilled labor force, but at least in the short term, welfare caseloads are dropping precipitously as the economy remains sound and the most employable and motivated TANF recipients enter the labor market.

Barriers that Discourage Noncustodial Fathers' Involvement

According to Sorenson (1997), there are barriers in the Child Support Policy that seriously and negatively effects noncustodial fathers' involvement in child support that have not been adequately addressed in the most recent changes in the law. Sorenson delineates the following obstacles:

1. First, the process of paternity establishment, while becoming more sophisticated as the result of improved technology, remains cumbersome and bureaucratic. Also, this system often leads to a court-ordered payment schedule that exceeds the noncustodial fathers' ability to pay.

2. Under AFDC, child support income was taxed at 100%, except for the first $50 per month, which provided little incentive on the part of fathers to participate in the formal child support system. TANF offers even less incentive because the $50 disregard has been eliminated.

3. Child support policies are designed to collect cash payments but not other kinds of support that would reduce a family's economic burden. In situations where the father has sporadic or long-term unemployment, there may be limited ability to pay in cash. Since the rationale for collecting child support from the noncustodial father of children on AFDC is to reduce the state's financial obligation, in-kind support such as child care or transportation is not valued.

4. Child support and welfare policies have traditionally not taken into account the cost benefit of improving the noncustodial fathers employability.

5. Child support programs tend to ignore family system issues affecting the relationship between the parents such as visitation and custody.

These barriers cannot be considered in isolation from one another. They are interdependent, and as they change, that is, become an increasing barrier not quite as great an obstacle, the entire mosaic of the child support situation will be affected. For example, if the father's employment improves and support increases, the desire for more involvement, i.e., visitations, will likely increase.

Implications of Welfare Reform on Child Support Enforcement

Under the AFDC program, there was little incentive for the noncustodial parent to participate formally and voluntarily in the Child Support Enforcement program. After the $50 disregard, none of the additional support dollars went directly to the family. Rather, any additional dollars simply went to reduce the grant. The incentive for the noncustodial parent to participate was not there, nor was there any real incentive on the part of the custodial parent to actively cooperate with Child Support Enforcement personnel. While it has long been argued that custodial parents did not want to cooperate with CSE because they did not want to have anything to do with the father because either he was violent or disruptive to the family stability, the fact is there was little financial incentive. In fact, participation by the custodial parent was likely an economic disincentive.

There is plenty of anecdotal and common sense support to know that many noncustodial parents contributed to their children's economic well-being, often on an irregular basis, often because of their own sporadic workplace participation, but nonetheless, additional income was being generated for the family. This unreported income was placing the family in some jeopardy since the continuation of AFDC cash payments was contingent upon the full disclosure of any outside income. Yet, given the dismal economic conditions in which many custodial parents found themselves, it was worth the risk to take "under the table" money from the absent parent. The absent parent felt like he was making a real economic contribution to the household and not simply reducing the family financial debt to the state.

There are no reliable estimates on the amount of unreported money that found its way into AFDC homes from noncustodial parents, but one can speculate that it was considerable. Since only about 20% of the custodial parents on AFDC were receiving child support payments, it can be assumed that many more than 20% of the fathers were working if unemployment rates were meaningful. It is presumptuous to assume that the majority of these men do not want to have any financial responsibility for their children. In other words, there is money out there. For example, in the state of Georgia in 1994, over $93 million was collected in child support payments from noncustodial parents.

As the reality of TANF and the potentiality of lifetime limits of four and five years become apparent, custodial parents acting in their family's best economic interests will become more likely to cooperate with Child Support Enforcement programs. It can be assumed that most custodial parents are not going to move immediately into high paying jobs. In fact, the reverse is more likely the scenario. Most recipients, particularly as people move into their third and fourth year of the lifetime cap, and likely the more difficult to move from welfare to work, will be taking jobs at or just above minimum wage. However, whereas when they were on a cash grant their income could not rise above $50 a month from Child Support Enforcement, no such limit will exist if they are receiving a wage. It will become clear that cooperation with child support could mean an immediate boost in the family's income.

A similar incentive will exist as a result of the family cap. The custodial parent has an incentive to actively cooperate to receive child support for the additional child. Since child support for that child will not reduce the cash grant, additional income will be a benefit. Moreover, the custodial parent will still be up against the lifetime limit. The sooner the noncustodial parent becomes a paying noncustodial parent, the better the family income upon moving into the workplace.

There also needs to be creative interventions that increase the likelihood that noncustodial parents will be able to pay their child support. While some of these interventions need to take the form of teaching people the value of responsible parenting for the children they bring into this world, these attitudinal changes seem more long term and must start when people are much younger. A more immediate possibility is championing the efforts to not only getting the recipient into work activities, but also improving the skills of noncustodial parents so that they become economically productive and arrive at a place where they can support their children. Under the 1996 welfare reform bill, only 5% of the funds were earmarked for this kind of training and support.

As caseloads drop over the next five years and the TANF block grant remains the same, states will have a considerable amount of discretionary funds to support innovative approaches of helping people, particularly children, out of poverty. Initiatives that work with the unemployed fathers of TANF children can have several benefits. And, since many of these fathers are incarcerated, some of this training must begin while they are in prison if they will be returning to society in the near future. Partnerships between Health and Human Services, the Departments of Labor, Education, and Corrections must collaborate on these projects. More work needs to be done in the area of family and parenthood training. Notwithstanding the legitimate concern with "deadbeat dads," as fathers become more invested in their children they may also feel a greater sense to support them economically. While this may have longer range expectations, we must better use school prior to the time that adolescents become sexually active not only to reduce teen pregnancy, but also to instill in people the responsibility of parenthood.

In addition, courts need to take a greater role in working with families at the time of separation and divorce and child support award hearings. Issues around visitation and custody, how to function with the kids best interest, and sound economic decision making can help in reducing the animosity between the custodial and noncustodial parent and increasing the likelihood that payments will be stable.

There needs to be a recognition that if the child support program is going to work, the ability to serve the customers must improve. This improvement can come in two areas. One is an improvement at the local agent level in terms of location of the absent parent and insuring payment. This can only happen if the local agent is in a position to work on the cases. Currently, caseloads can range anywhere from 250 to 1,000. Even under the best of circumstances, this size caseload does not permit agents to work extensively on a case to better serve the client. Second, the customer-service component needs to improve. In many states it is almost impossible for the custodial parent to get up-to-date information on the status of the case or readily provide more recent information. People become frustrated with the system. In several states, there are now cottage industries that privately locate noncustodial parents.

Summary

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 was historic and went a long way to reversing the sixty years of welfare legislation. The onerous impact of this legislation will not be fully known for at least three years, the time when families begin to use up their lifetime limits. However, in the area of Child Support Enforcement, the legislation may be the impetus necessary to have that program achieve the goals that were outlined twenty-three years ago. While it will take some creative programming and a commitment to families, child support has the potential of assisting many former TANF families obtain additional income that will be meaningful in the quality of their lives.

References

Beron, K. J. (1993). Policy issues and child support payment behavior: Empirical findings. Contemporary Policy Issues, 124-135. Glass, B. L. (1990). Child support enforcement: An implementation

analysis. Social Science Review, 64, 542-5S8. Graham, J. W., & Beller, A. H. (1989). The effect of child support payments on the labor supply of female family heads. The Journal of Human Resources, 24, 664-668.

Graham, J. W. (1990). Child support and mother's employment. Contemporary Policy Issues, 8, 95-109.

Hagen, J. L. (1998). The new welfare law: Tough on work. Families in

Society, 79, 596-605.

Hagen, J. L. (1999). Public welfare and human services: New directions under TANF? Families in Society, 80, 78-90.

Klawitter, M. M. (1994). Child support awards and the earnings of divorced noncustodial fathers. Social Service Review, 68, 351-368. Meyer, D. R. (1993). Child support and welfare dynamics: Evidence

from Wisconsin. Demography, 30, 45-62.

Meyer, D. R., Bartfield, J., Garfield, I., & Brown, P. (1996). Child support reform: Lessons from Wisconsin. Family Relations, 45, 11-18.

Robins, P K. (1986). Child support, welfare dependency, and poverty. The American Economic Review, 76, 768-787.

Sorenson, E. (1997). Obstacles to noncustodial fathers participation in Child Support Enforcement. Washington, DC: The Urban Institute

James L. Wolk is professor and chair, Department of Social Work, Georgia State University,Atlanta, GA 30303. Sandra Schmahl is a doctoral candidate, Department of Political Science, University of Georgia, Athens, GA 30605.

Copyright Manticore Publishers Sep/Oct 1999
Provided by ProQuest Information and Learning Company. All rights Reserved