Who Pays? Who Benefits?

Author: Susan Stanton . Date: August 23, 2018

Georgia’s Parental Accountability Court (PAC) program recently received an award from the National Child Support Enforcement Association (NCSEA). PAC “intends to assist families by offering an alternative to incarceration for chronic nonpayers of child support.” By 2017, the program operated in 31 of Georgia’s 49 judicial districts and included: volunteer opportunities, literacy training, job assistance/placement, mental health services, clinical assessments substance abuse treatment and coaching/mentoring. From 2012 through 2017, the PAC program reported working with 4,758 noncustodial parents who subsequently paid an estimated $5.3 million in child support. To be accepted into the program, noncustodial parents must have been: incarcerated or in contempt of court for failure to pay child support/child abandonment or referred in lieu of incarceration. This suggests that Georgia incarcerated or was on the verge of incarcerating up to 4,758 parents (who likely were experiencing poverty and unemployment, and therefore had no ability to pay) for chronic nonpayment of pay child support.

According to the most recent and reliable research on this issue, nationally, 83% of child support debt is owed by parents whose income is less than $20,000 and 42% is owed by parents with no reported income (Sorenson et al, 2007). The extent to which people in Georgia’s PAC were poor is unclear, but the national data suggests that many of those parents may not have had the ability to pay. Not having a job and/or being poor is stressful. Parenting is stressful. Parenting when there is court-ordered child support is often more stressful. The threat of incarceration is anxiety producing and the reality of incarceration is destructive to children and parents. The chance for relief from the stress of debt that is offered by programs like PAC is attractive for parents struggling to support themselves and raise their children. For more than 20 years, mothers, fathers and loved ones have described this situation to the Center for Family Policy and Practice (CFFPP) in interviews and listening sessions. Parents try to avoid incarceration for all the reasons anyone would—including the fact that it separates them from their children and makes it virtually impossible to provide any kind of support for them. They regularly tell us that when the threat of jail for nonpayment of child support is imminent, family and friends rally to try and keep the parent with court-ordered child support out of jail. This means grandmas, aunts and uncles, nieces and nephews, girlfriends, friends and neighbors pitch in. Custodial parents have contributed to keep the other parent out of jail. Grandmothers have contributed from their Social Security checks. (See What We Want to Give Our Kids, p. 14-15 and If I Had Money, p. 15-17.) Many of the contributors also struggle to make ends meet, but they don’t want to see someone they care about, especially a parent, go to jail. In other words, money is yanked from struggling families and communities to keep the parent (who is likely experiencing poverty and unemployment) out of jail.

In 2016, child support debt in Georgia totaled $2.4 billion. Ironically, in the case of a family that currently receives or has ever received Temporary Assistance for Needy Families (TANF) cash benefits, when any of the court-ordered amount is paid through the state, only a small portion of that child support payment may actually go to the custodial parent. In accordance with state and federal law, money paid on behalf of some of the very poorest parents and families, can be retained by the state as reimbursement for public benefits received by the custodial parent. In Georgia, $295 million of the 2016 child support debt was earmarked to the state as reimbursement for TANF (see Child Support Debt in Georgia Frustrates Family Economic Security for Black Parents and Children).

PAC is one of many programs focused on getting noncustodial parents to pay their court-ordered child support. If we also want to support parents’ ability to raise kids, then we need in-depth information and research about where the child support payments come from, where the money goes and what impacts the system has on parents, their families and their communities. Understanding the impacts and creating policies and programming that support parents also necessitates that child support agencies report the demographics—race, ethnicity, gender, income—of all noncustodial and custodial parents and their children, so that disparities can be tracked. Research must move beyond simply how much child support these parents pay to the state disbursement center to include demographics about the parents and the impacts of the system on parents’ ability to raise kids.




New Federal Child Support Annual Report Shows Fewer Children Served, and Millions Paid by Families With Low Incomes

Author: Nino Rodriguez . Date: April 5, 2017

The federal Office of Child Support Enforcement has recently published its Annual Report to Congress for FY 2015. The number of children and parents served by child support agencies nationwide has continued to steadily decline over the past five years.1 This is despite the number of children in the USA remaining relatively stable during the same years. This decline in the number of cases is especially sharp, down more than 11%, among children who have ever received Temporary Assistance for Needy Families (TANF) cash benefits. This may be due to a couple factors: (1) the historic and ongoing declines in the number of children receiving TANF from the States where they live; and (2) an increasing reluctance from custodial parents with low incomes, particularly women of color, to involve themselves in both TANF and the formal child support enforcement system when their child’s other parent, usually the father, has no ability to pay court-ordered child support.

The new report also reveals that fully 24% of all child support debt, amounting to more than $27 billion, can be retained by the government to reimburse TANF benefits that children have received.2 In 2015, nearly $1.3 billion of parent’s child support payments were actually retained by the federal and State governments to reimburse TANF and foster-care benefits that children received.3 Because the large majority of child support debt is owed by parents with no or low reported income, it is likely that a large majority of this $1.3 billion paid represents money retained from parents of color with low incomes—and includes contributions from their adult children, family members and communities, as documented in CFFPP’s recent studies.

1 Cases have dropped by about 7%; see Table 2, top four rows, page 255.
2 See Table 89, page 342.
3 See bottom rows, Tables 14 and 15, pages 267-8.

Wisconsin Works for Some

Author: Susan Stanton . Date: February 8, 2017

In his budget, to be released this week, Wisconsin’s Governor Scott Walker is expected to roll out Wisconsin Works for Everyone, a plan which will further aspects of the state’s Temporary Assistance for Needy Families (TANF) program also known as W-2 or Wisconsin Works. Self-sufficiency is the stated goal of the Wisconsin Works for Everyone proposal, which seems to mean not utilizing safety net services to care for one’s self or family. It makes sense for the state to want adults and parents to provide for themselves and their children financially. Of course, most parents want the same thing.

A fundamental component of Governor Walker’s proposal would require able-bodied parents whose children are ages 6-18 and who receive FoodShare benefits (aka food stamps, SNAP, QUEST card) and/or housing subsidies to work 80 hours per month and if that goal is not met, to impose sanctions and ultimately, revoke the benefit. In April 2015, Wisconsin created a similar FoodShare requirement for so-called “childless adults” which include the majority of typical low-income noncustodial parents. Since then, about 21,000 Wisconsin residents using food stamps have met W-2’s employment requirement through state employment programs. But here’s the catch: 64,000 FoodShare recipients lost benefits entirely. This means that for every one FoodShare recipient who has met the 80-hour-per-month requirement, three have not, and all three have lost access to this piece of the safety net as a result. Essentially, the new proposal would expand a requirement for a benefit intended to provide food for children and adults, a requirement that has succeeded for just 1 in 4 people in a pilot program, hardly a success. It would now include even more adults, parents and children in need.

Many of these marginalized parents already feel additional burdens around work, money, housing and feeding their children. While the Governor indicates that there will be more supports to help FoodShare recipients find jobs, low-income parents of color continue to face many employment and housing challenges in seeking self-sufficiency. Self-sufficiency can remain out of reach for a multitude of reasons: lack of transportation, limited access to affordable, geographically reasonable, and safe child care; racial discrimination; access to affordable housing;  inconsistent work schedules; low wages and jobs with no benefits, among others. These challenges affect low-income parents’ ability to find and keep any job, much less a job with a living wage or a career ladder.

Yet even if low-income noncustodial parents successfully navigate and endure these challenges and manage to obtain and retain work, they might receive a paycheck reflecting substantially less than 40% of their earned wages. When reviewing a paystub, many low-income noncustodial parents see common deductions like Social Security and a monthly child support payment, but many also have deductions for arrears and By federal law, the state can deduct up to 60% from a noncustodial parent’s paycheck for the current payment and for arrears. The remainder might not be enough to allow for self-sufficiency, much less to help families move toward economic security or even income stability. If child support payments are not made regularly, many noncustodial parents are at risk of going to jail and will in that case likely lose their jobs, while child support arrears often continue to accrue.  Whether they work more or less than 80 hours per month, these parents and children need access to safety net services including food and housing.

It is also important to note that, for the poorest families who have ever received cash benefits from the state, the state deducts a portion of the payment to reimburse state welfare payments to the family. According to the Office of Child Support Enforcement, as of 2015, child support debt in Wisconsin totaled $2.6 billion. Approximately 17%, or $449 million, of that was owed by families with the lowest incomes to the government to repay W-2 benefits. Wisconsin Works for Everyone purports to incentivize work and is touted for its intention to reward working families and move families out of poverty. Yet, for the families with the greatest financial needs, it appears that they are simply being ‘helped” to pay the state money the parents and children can ill afford.

Reforming the welfare system is necessary to ensure that Wisconsin works for everyone. But effective reforms will focus on changing policies and practices to help ensure that low-income fathers and mothers (regardless of whether they live in the same residence as their children) will be able to provide for their children. Creating more requirements rooted in an inaccurate perception that low-income parents do not want to take care of their children simply ensures that they won’t be able to do so. In fact, expanding the requirements for FoodShare recipients and shrinking the safety net that already fails to effectively support childless adults ensures that Wisconsin will increase its numbers of homeless adults and children who are not getting the nutrition they need.


Clinton’s Child Tax Credit Proposal: Yes, And….

Author: Susan Stanton . Date: October 20, 2016

In its current form, the Child Tax Credit was passed with bipartisan support. In combination with the Earned Income Tax Credit, research suggests that it benefits children “at virtually every stage of life, including improved school performance, higher college enrollment, and increased work effort and earnings in adulthood.” The CTC is a successful policy that benefits many low- and middle-income families. Presidential candidate Hillary Clinton recently rolled out plans to improve the Child Tax Credit (CTC) in ways intended to benefit low- and middle- income families. Overall, she proposed the following changes:

1-Doubling the Child Tax Credit from $1000 to $2000 for children under 5 years old and

2-Extending the benefit to more working families by allowing the Credit to phase-in starting with the first dollar earned rather than starting after earning $3000.

These changes would be funded through other tax policy changes designed to ensure that the “wealthy, Wall Street, and big corporations pay their fair share.” Clinton would also like to see the Child Tax Credit expanded to include families with older children and low-income workers without children.

Structured as a refundable tax credit, this proposal would put money in the pockets of more low- and middle-income parents, including those  that do not owe income taxes. Yet, the CTC and the proposed changes could be altered to more positively and equitably benefit more parents and children—including those most in need. First, the proposal does not address the issues that underlie families’ economic situations and therefore limits its positive impact. For example, continuing to link the Child Tax Credit to dollars earned through employment should draw attention to other job related issues like availability of living wage positions and employment discrimination. Without consideration of these and other underlying issues, the proposed CTC will provide some additional income to more families, but it will not provide meaningful economic stability or relief to the families and parents with the greatest economic need. Plus, in keeping with current federal child support law, the Child Tax Credits of the more than two million mothers and fathers that owe child support debt to the state will be intercepted and retained by the Internal Revenue Service and never reach the child’s household.

Secondly, neither the current Child Tax Credit policy nor Clinton’s proposed changes seem to be mindful of how people are related to each other and how they organize their households (at all income levels).  If this understanding of families’ lives is not integrated into family policy, the result may be additional conflict and economic challenge in the low- and middle-income families it is intended to assist. For some families, the “all or nothing” approach to awarding the Child Tax Credit is reasonable and for other families where the adults have decided they should not be partners, the “all or nothing” approach can create conflict or inequity and have a negative impact on the child.  Currently, the CTC is awarded to the custodial parent unless the other parent can prove that he/she provided more than 50% of the support that year and/or there is agreement between the parents that the parent with less placement should receive the CTC.  The expectation of record keeping and parental cooperation can not only be onerous but can also increase the likelihood of conflict between co-parents that maintain separate households. This is especially significant for families experiencing poverty whose resources are already stretched too far and for families where safety (including domestic violence and other interpersonal violence is an issue).  Don’t hesitate to give the full CTC to a parent who is acting as the sole parent. However, when both parents are working to provide economic security and stability for their children, government policy, and in this case tax policy, should support parents in working toward that goal.

Finally, many children do not live with two parents in the same household all the time.  Sometimes the separate household are established through divorce, and in other families, parents were never married.  In the latter case, roles and responsibilities may or may not be established through the courts. Either way, actual parenting time and economic roles and responsibilities may or may not be accurately reflected in legal documents. As a result, structuring the Child Tax Credit in ways that award the full credit to only one parent based on court documented placement can help create conflict for families where parents don’t live together and therefore don’t live with their children all the time. This can be an especially challenging scenario for parents whose economic security is tenuous and who rely on the money from the Child Tax Credit.

Examining tax policy with an eye toward the economic security of more people is positive. If a goal of the Child Tax Credit is to alleviate the financial pressures of low- and middle-income families, then it is essential that tax and related policies be written from a lens that understands the make-up of families and the circumstances they face. This policy provides an opportunity to recognize all children and their parents, and specifically bring into the circle of concern and support more low-income families of color with children whose parents don’t live together.