In 1975, the Congress created the federal child support enforcement program as title IV-D of the Social Security Act. The program's original purpose was to strengthen state and local efforts for obtaining child support for families receiving AFDC and for any non-AFDC individuals who apply for child support services. The program provides a broad range of services, including basic services such as locating the noncustodial parent or parents, establishing paternity through genetic tests or other means, establishing support orders obligating noncustodial parents to pay specific amounts, and collecting the payment of support owed. While the ultimate goal under the program is to collect child support for each case, any one case may need a different combination of basic services before collections can begin. To illustrate these different combinations of needed services, figure 1 gives a breakdown of the services Virginia's child support cases needed when time limits began. For example, at the beginning of the 2-year time limit, 4 percent of the custodial parents already had a support order in place but the noncustodial parents needed to be located and their support orders needed to be enforced through wage-withholding or other means. Appendix II describes the basic child support enforcement services. Child support enforcement is a joint federal and state responsibility. Within the federal government, OCSE is responsible for providing leadership, technical assistance, and standards for effective state programs. States or local offices under state supervision deliver child support services to families. The federal government and the states share administrative costs at the rate of 66 percent and 34 percent, respectively. In fiscal year 1996, administrative costs for the program were $3 billion and collections totaled $12 billion. About 13 percent of the 7.4 million AFDC child support cases and 28 percent of 9.3 million non-AFDC child support cases nationwide received at least one support payment in 1996. The new welfare reform law significantly changed our nation's welfare policy. Since 1935, AFDC had entitled single-parent families to receive monthly cash assistance generally for as long as they met income and other eligibility criteria and had children under age 18. TANF represents a significant departure from this approach, placing a 5-year limit on federal aid designed to ensure that assistance is temporary for most recipients.Before the welfare reform law passed, however, 14 states were granted waivers under section 1115 of the Social Security Act allowing them to experiment with assistance time limits ranging from 18 months to 5 years.Although state policies regarding exemptions and extensions varied, these state waivers were the first efforts to make assistance temporary based solely on a specified period of time. Table 1 summarizes some provisions of the time-limited programs adopted in the three states we reviewed. The Congress also wanted to encourage parental responsibility by requiring OCSE and the states to strengthen the existing child support enforcement program by adopting new enforcement tools. These tools include federal and state registries of child support orders, federal and state directories of new employee hires, and state reporting of quarterly wage reports to help locate noncustodial parents and enforce support orders. As all states move to implement these tools, many states are also working to complete the statewide automated systems required by federal law. From fiscal year 1981 through fiscal year 1997, the states have spent about $3.2 billion in federal and state funds to develop these systems to manage their caseloads. However, as of March 30, 1998, only 25 of the 54 child support enforcement systems had been certified by HHS. In addition, the welfare reform legislation established new custodial parent cooperation requirements and penalties to strengthen existing requirements and to simplify the paternity establishment process. The law also included additional tools such as the matching of data with states' financial institutions and the revocation of noncustodial parents' driver's, professional and occupational, and recreational licenses to enforce the payment of child support. Finally, the Congress required that HHS in consultation with the states develop and report to the Congress on a new incentive payment system to encourage states to operate effective programs. In the first three states to enforce time limits, most families who reached their 21-month to 3-year time limits did not have any child support collected for them during the 12 months before their welfare termination. Moreover, in about one-half to two-thirds of these families' child support cases, child support was not due at termination because a support obligation had not yet been established. Only about 20 to 30 percent of families reaching their time limits had any child support collected for them in the 12 months before termination. Figure 2 shows the status of welfare families' child support cases during the 12-month period before termination. The median annual amounts due for all cases with a current support order in Connecticut, Florida, and Virginia were $3,054, $2,134, and $2,067, respectively. However, as shown in table 2, the amount collected for families rarely equaled the full amount due. On average, the amount collected ranged from 43 percent to 52 percent of the amount due. For families with child support collected, median child support collections ranged from $581 to $1,348 and mean collections ranged from $1,065 to $1,388 for the 12-month period. Upon reaching termination, many families in the three states still required one or more basic child support services, including locating the noncustodial parent and establishing paternity and support orders, before collections and enforcement could begin. From 56 to 81 percent of all child support cases reviewed still needed at least one of these basic services when welfare benefits expired. One-half to about two-thirds of these cases had been open in the child support system for 5 years or longer. Locating a noncustodial parent is an essential precondition of all child support collections, for without location, paternity and support orders cannot be established, orders cannot be enforced, and collections cannot be made. In addition, locating a noncustodial parent may be necessary even though paternity has previously been established and a support order is in place. As figure 3 shows, from 56 to 81 percent of the noncustodial parents who needed to be located at the start of the time limit were not located by the time welfare benefits were terminated. State officials said locating noncustodial parents for families with older child support cases was particularly problematic. Information initially provided by custodial parents when they applied for welfare is no longer current, and new information is rarely forthcoming. Some noncustodial parents, like the custodial parents, are less educated, have fewer skills, and are less likely to be regularly employed. Therefore, they are harder to locate through employment sources. State officials also said noncustodial parents are often mobile, work "off the books," and some may quit their jobs as soon as they are located through their employers. Another basic child support service that may still be needed is establishing paternity. Of the large proportion of the cases we reviewed needing paternity established at the start of the time limit, the vast majority still did not have paternity established by the time welfare benefits were terminated. From 71 percent to 79 percent of the child support cases that needed to have paternity established did not have paternity established by the time welfare benefits ended, as shown in figure 4. Most of the cases reviewed needed support orders established at the start of the time limit, and the vast majority of them still did not have orders established by the time welfare benefits were terminated. From 75 to 79 percent of the child support cases needing orders remained without orders at termination, as illustrated by figure 5. The outcomes in two states with strong child support performance demonstrate how states may achieve better results establishing paternity, obtaining support orders, and collecting child support. In these states, we reviewed new AFDC child support cases that were first opened in 1992 and remained open for 5 years--the maximum length of time a family may receive federal TANF aid. About two-thirds of the cases that remained open for 5 years received some child support in the last 12 months of the period. Yet, despite the greater success rate of these states, about one-third of their child support clients would have reached the end of a 5-year time limit without any child support, as shown in figure 6. About two-thirds of the cases that remained open for 5 years had some child support collected for them in the last 12 months. However, the majority of cases did not receive the full amount due, as shown in table 3. The median annual amounts due for all cases with a current support order in Minnesota and Washington were $2,351 and $2,358, respectively. The amount collected per case averaged 69 to 83 percent of the full amount due, higher than the cases reviewed in the first states to enforce time limits. For cases with collections, the median child support collections ranged from $1,875 to $2,118 and mean collections ranged from $2,211 to $2,316 in the last 12 months. States achieved high rates of paternity and support order establishment during the 5-year period. More than 80 percent of cases needing paternity or support order establishment or both received these basic services during the 5-year period, as figures 7 and 8 show. However, about one-third of all the cases that remained open for 5 years had no child support collected for them during the last 12 months of the period. Time limits are being implemented on the two different sets of families represented in our study: those already receiving aid before time limits began and those whose assistance will begin under time limits. Many of the families already receiving aid who did not have collections before the time limits began may be unlikely to obtain child support before welfare benefits expire unless states can improve their performance in locating noncustodial parents. In addition, families who begin receiving aid under time limits are much more likely to receive some support before their benefits expire if states aggressively pursue their cases. A state's success in obtaining child support can provide an important supplement to a family's earnings. If states expect to obtain child support for families before their time-limited welfare benefits expire, the states will need to improve their performance and ensure that they effectively implement the new tools provided by the Congress. Our findings from the three states that implemented time limits under waivers indicate that many welfare families that did not get child support before the time limits began may be unlikely to obtain it before their welfare benefits expire unless states can locate noncustodial parents. Failure to locate the noncustodial parent was the primary reason efforts did not succeed in the three states that had implemented time-limited aid. One-half to three-quarters of the cases that needed a support order or paternity established could not get these services because the state could not or did not locate the noncustodial parent. Fifty-nine to 90 percent of the cases not receiving child support in these states were cases that had been open for more than 5 years. Although state officials told us that locating noncustodial parents for families who have been receiving welfare for several years is particularly difficult, opportunities may exist for states to renew or enhance their efforts to pursue child support for these cases. The implementation of time-limited assistance may motivate custodial parents to provide more current noncustodial parent information as their benefits expire. In addition, the new federal law requires states to reduce a family's grant amount by at least 25 percent for failure to cooperate with child support enforcement and gives states the option to deny assistance to the entire family. OCSE officials suggested that states may need to employ new strategies to work with families who have been receiving welfare for several years. Custodial parents in these cases may have to be reinterviewed to obtain current noncustodial parent information and to be educated on the benefits of obtaining child support in a time-limited welfare environment. Coupled with the new enforcement tools available to states, this new information could lead to better location and collection outcomes. States will also need to aggressively pursue new cases opened under time limits to help ensure successful outcomes. Our analysis of cases that first opened in 1992 and remained open for 5 years in two states showed that more than 70 percent of the paternities and support orders ever established on these cases were obtained within the first 2 years after opening. In addition, state officials told us that noncustodial parent information has to be pursued early and aggressively to achieve successful outcomes. Once a family reaches the end of its cash assistance, child support can be an important supplement to its income. Many families who leave welfare are employed in low-wage jobs. For example, in our recent report on TANF implementation in seven states, we found three states tracking wages for welfare recipients, with mean wages for welfare recipients placed in jobs ranging from $5.60 to $6.60 per hour. At these wage levels, many working families' earnings are near or below the federal poverty level. Although these families' incomes may be increased through the earned income tax credit and they may benefit from receiving other aid, including food stamps and medical assistance, they also may incur significant work-related expenses. For such families, child support payments could further enhance family incomes or reduce their need for public assistance. A study released in 1993 focusing on divorced women in Wisconsin found that receiving even minor amounts of child support can play a significant role in keeping families self-sufficient. However, for those families without earnings, child support is unlikely to replace families' lost cash assistance. For example, in the first three states to enforce time limits, the mean monthly child support collected ranged from 22 percent to 60 percent of the mean grant received in the month before termination. If states expect to ensure that families receive child support before their time-limited welfare benefits expire, they will need to get their statewide automated systems operational and certified, ensure that the new tools are effectively implemented, and improve their performance. State officials from all five states reviewed believed that the new tools mandated under welfare reform will help improve performance in their states. For example, they cited the national new-hire and support order registries as tools that offer significant potential improvement for their interstate caseloads, which constitute about one-third of their total caseloads. In addition, they expected the new custodial parent cooperation requirements to result in more accurate and more complete noncustodial parent information at welfare intake, which should help them locate noncustodial parents. However, officials in Connecticut, Florida, and Virginia also said they were challenged by rising caseloads and resource limitations. A Virginia official told us, for example, that despite rising caseloads, the child support agency had not been authorized to hire any child support staff in the last 4 years, and thus is currently 17 percent under authorized strength. To improve performance and take full advantage of the potentially powerful new tools provided by welfare reform, states will have to either increase their productivity or commit additional resources to ensure that the tools are effectively implemented. In commenting on a draft of our report, HHS agreed with several of the major implications cited, including the importance of improving the location of noncustodial parents and aggressively pursuing new cases and that child support can be an important supplement to postassistance family income. However, HHS questioned whether the past experience of a limited number of states should be used to predict the future performance of all states, especially with the new tools available to the states under welfare reform. We agree that our results should not be used to project future collection rates nationwide. However, we believe our work highlights the challenges states and families face in the new time-limited welfare environment. We also agree that new tools, such as the national new-hire and support order registries, hold the promise of improving states' child support performance. HHS also noted that the child support collections potential is often limited by the lack of job skills and low educational attainment of the fathers associated with welfare and former welfare families. We discuss in our report how these factors make some noncustodial parents less likely to be regularly employed and more difficult to locate, and we cite studies suggesting that lack of income may be a barrier to collecting child support. (HHS' comments are in app. III.) We also provided copies of a draft of this report to the five states covered in our review, who provided technical comments, which we incorporated as appropriate. We are sending copies of this report to the Chairmen and Ranking Minority Members of the Senate Committee on Finance and its Subcommittee on Social Security and Family Policy; the Secretary of HHS; and HHS' Assistant Secretary for Children and Families. We also will make copies available to others on request. If you or your staff have any questions about this report, please contact Gale C. Harris, Assistant Director, at (202) 512-7235 or Kevin M. Kumanga, Senior Evaluator, at (202) 512-4962. Other major contributors to this report are Patricia Elston, Anndrea Ewertsen, and Christopher Morehouse. Time-limited welfare is being imposed on two distinctively different sets of welfare child support cases--existing cases and new cases. Additionally, time limits on TANF aid vary in length, from a maximum of 5 years, as specified in federal law, to shorter periods as determined by the states.To assess the outcomes for these different sets of cases, we used two different units of analysis. For the existing cases in the states that implemented shorter time limits under waivers, we examined the child support outcomes for families whose aid was terminated at the end of their time limits. To do this, we reviewed all the child support cases associated with each family. To determine the extent to which states with relatively good performance in child support enforcement obtained child support for new welfare child support cases over a 5-year benefit period, we sampled and reviewed individual child support cases as the indicator of state agencies' likely performance. To track child support outcomes for welfare recipients whose welfare benefits have been terminated, we selected the three states in which families first faced benefit termination under state waivers approved before federal welfare reform. These states were Connecticut, Florida, and Virginia (see table 1 for summary of time limits adopted in these states). We then identified the child support cases associated with the families whose welfare benefits expired. Table I.1 shows the number of welfare cases and their child support cases analyzed for this report. In Connecticut and Florida, we drew a random sample of welfare cases; in Virginia, we reviewed the child support cases of all families whose welfare benefits had been terminated. In each state, we gathered case data for analysis by reviewing automated case files. We identified the child support services each case needed from the date the time limits began and tracked the child support outcomes that had been achieved for these cases when time limits expired. In most cases, these child support cases had been open for many years before the time limits were imposed. Specifically, we determined whether the noncustodial parent needed to be located and whether the case needed paternity or support order establishment at the date the time limits went into effect. For all cases with orders, whether they were established before or after the time limits were imposed, we also tracked the amount of current child support due and collected during the 12 months before time limits expired to determine the likelihood that families would have child support after their welfare benefits end. Our unit of analysis was the welfare family: that is, we identified all child support cases associated with the same welfare case and combined the total amounts due and collected on their behalf. Additionally, we annualized the financial outcomes for cases that had less than a full year of current support due during the period reviewed. Because most states have adopted 5-year time limits, we selected two states in which we tracked child support outcomes for 5 years. To select these states, we developed an index of child support performance using preliminary 1996 data. We assigned scores for performance in specific areas, with additional weights for performance on AFDC cases. We focused on states with strong performance in these areas, with the rationale that outcome data from these states could show how high-performing states have been able to meet the child support needs of their clients in a 5-year period. We ranked the states according to these scores and selected Minnesota and Washington from the 10 states with the highest scores. In both states, we gathered case data for analysis by reviewing automated case files. To track child support outcomes for 5 years, we identified new welfare cases that opened in June 1992 and the child support cases associated with each welfare family. Each child support case represents one noncustodial parent. We randomly selected our cases from this universe of child support cases. We collected data for more than 200 cases in each state and focused our analysis on the cases that remained open child support cases for the entire 5-year period--63 cases in Minnesota and 54 in Washington. We tracked outcomes regardless of whether the child support cases had changed from an AFDC to a non-AFDC status. Less than one-quarter of these cases remained AFDC child support cases continuously for the entire 5 years. We identified the child support services each case needed from the date the case opened and tracked the child support outcomes that had been achieved for these cases through May 1997, after 5 years had elapsed. Specifically, we determined whether the case needed paternity or support order establishment. For cases with orders, we also tracked the amount of current child support due and collected during the 12 months before time limits expired. We tracked collections by child support case only. Table I.2 shows the number of child support cases identified, sampled, and analyzed for this report. As stated earlier, a large proportion of the child support cases closed before the end of the 5-year period and therefore were not included in our analysis. About half of the cases were closed by the midpoint of the 5-year period. Figures I.1 and I.2 show the numbers and percentages of cases that closed each year during the period we reviewed. Represents case closures from January through May 1997. Represents case closures from June through December 1992. Represents case closures from January through May 1997. Represents case closures from June through December 1992. The most frequently noted reasons for closing a child support case were the custodial parent moving out of the state or country, the custodial and noncustodial parents' reuniting or the noncustodial parent being added to the welfare grant, the case being closed because the custodial parent refused to cooperate, or the state's failing to locate the noncustodial parent. Collectively, these reasons accounted for about 48 and 40 percent, respectively, of the case closures in Minnesota and Washington. To arrive at the estimates presented in this report, in every state but Virginia (where we selected all families whose aid was terminated), we sampled from either a population of those who were terminated from AFDC, or a pool of those who joined the AFDC rolls in June 1992. Because we analyzed samples of cases to estimate characteristics of the entire population of such cases, our estimates of percentages and dollar amounts have standard errors associated with them. A standard error is the variation that occurs by chance because a sample, rather than the entire population, was analyzed. The size of the standard error reflects the precision of the estimate. The smaller the standard error, the more precise the estimate. Following is a description of the sizes of the standard errors for the estimates presented in this report. The standard error for the estimated mean support amount due and the estimated mean support amount collected varied by state, but for no state was it greater than $615 for the mean amount due and $759 for the mean amount collected. The standard error for the estimated percentage of noncustodial parents for whom either location, paternity establishment, or a support order was needed varied by state, but in no state did it exceed 13 percentage points. The standard error for the percentage of AFDC families that received no support money varied by state but was in no state greater than 12.3 percentage points. The standard error for the percentage of the support order amounts due and received for families varied by state, but in no state did they exceed 13.7 percentage points. All of the standard errors were calculated at the 95-percent confidence level. This means that the chances are about 95 out of 100 that the range defined by the estimate, plus or minus the standard error, contains the true percentage or dollar figure we would have found if we had analyzed data from the entire population. Location includes efforts at local, state, and federal levels to identify a noncustodial parent's address, Social Security number, place of employment, and other characteristics. It might include efforts to directly contact individuals; contacts with public and private institutions, such as credit bureaus and state and federal income tax agencies; and the use of computer tape matches with state and federal databases. Paternity establishment is the identification of the legal father of a child, usually through the courts or expedited through hearings in a quasi-judicial or administrative body. Paternities are established in either of two ways: (1) through voluntary acknowledgment by the father or, (2) if contested, through a determination made on the basis of scientific and testimonial evidence. Support order establishment involves the development of a support order that legally obliges the noncustodial parent to pay child support and provide medical insurance coverage when it is available at reasonable cost. The child support enforcement agency must help custodial parents initiate an action in court or through an administrative or expedited legal process that will produce such an order. The child support enforcement agency helps determine a child's financial needs and the extent to which the noncustodial parent can provide financial support and medical insurance coverage. Support orders are subject to periodic review and adjustment at least every 3 years in welfare cases and upon parental request in nonwelfare cases. Collections and enforcement involve enforcing, monitoring, and processing payments. To enforce payment on delinquent cases or to ensure regularity and completeness of current accounts, child support enforcement agencies have a wide array of techniques at their disposal. These techniques include bonds and security deposits, federal and state tax intercepts, garnishments, liens, and wage withholding, among others. Noncustodial parents' payments must also be monitored, recorded, and distributed. Welfare Reform: States Are Restructuring Programs to Reduce Welfare Dependence (GAO/HEHS-98-109, June 18, 1998). Child Support Enforcement: Strong Leadership Required to Maximize Benefits of Automated Systems (GAO/AIMD-97-72, June 30, 1997). Welfare Reform: States' Early Experiences With Benefit Termination (GAO/HEHS-97-74, May 15, 1997). Child Support Enforcement: Early Results on Comparability of Privatized and Public Offices (GAO/HEHS-97-4, Dec. 16, 1996). Child Support Enforcement: Reorienting Management Toward Achieving Better Program Results (GAO/HEHS/GGD-97-14, Oct. 25, 1996). Child Support Enforcement: States' Experience With Private Agencies' Collection of Support Payments (GAO/HEHS-97-11, Oct. 23, 1996). Child Support Enforcement: States and Localities Move to Privatized Services (GAO/HEHS-96-43FS, Nov. 20, 1995). Child Support Enforcement: Opportunity to Reduce Federal and State Costs (GAO/T-HEHS-95-181, June 13, 1995). Child Support Enforcement: Families Could Benefit From Stronger Enforcement Program (GAO/HEHS-95-24, Dec. 27, 1994). Child Support Enforcement: Federal Efforts Have Not Kept Pace With Expanding Program (GAO/T-HEHS-94-209, July 20, 1994). Child Support Enforcement: Credit Bureau Reporting Shows Promise (GAO/HEHS-94-175, June 3, 1994). Child Support Assurance: Effect of Applying State Guidelines to Determine Fathers' Payments (GAO/HRD-93-26, Jan. 23, 1993). The first copy of each GAO report and testimony is free. Additional copies are $2 each. Orders should be sent to the following address, accompanied by a check or money order made out to the Superintendent of Documents, when necessary. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting Office Washington, DC Orders may also be placed by calling (202) 512-6000 or by using fax number (202) 512-6061, or TDD (202) 512-2537. Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512-6000 using a touchtone phone. 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Summary:
Pursuant to a congressional request, GAO provided information on how successful states are likely to be in obtaining child support for families whose benefits are subject to time limits, focusing on: (1) how successful states that experimented with time-limited benefits before welfare reform have been in obtaining child support for families who reach their limits; (2) how successful states have been in obtaining child support for families within a 5-year period, the maximum time a family may receive Temporary Assistance for Needy Families (TANF) benefits; and (3) the implications time limits have for states and families. GAO noted that: (1) many TANF families may not be able to count on child support as a steady source of income when their time-limited welfare benefits expire; (2) in the first three states to enforce welfare benefit time limits--Connecticut, Florida, and Virginia--only about 20 to 30 percent of families had any child support collected for them in the 12 months before their welfare benefits were terminated; (3) about one-half or more of the child support cases without collections lacked a child support order legally obligating a noncustodial parent to pay child support at the time the families' assistance was terminated, despite having a long history in the child support program before time limits were implemented; (4) for families whose child support was secured, the median collections among the three states ranged from a total of $581 to $1,348 for the 12-month period; (5) in two high-performing child support states, Minnesota and Washington, GAO observed better outcomes for a sample of Aid to Families with Dependent Children child support cases that first opened in 1992 and remained open for 5 years; (6) about two-thirds of the families received some child support in the last 12 months of that period; (7) support order establishment rates were higher for these cases as well: in both states, orders were established within 5 years for more than 80 percent of the cases that needed them; (8) the median amounts of child support collected for these families ranged from $1,875 to $2,118 for the 12-month period; (9) despite these outcomes, about one-third of the child support clients in these states reached the end of the 5-year period without any child support; (10) to better ensure that child support is available for families in a time-limited welfare system, states will need to improve their child support performance for families already in the welfare system and for those who enter it for the first time; (11) in the three states GAO studied that had imposed time limits on families already receiving aid, from one-half to three-quarters of the families could not get child support because the state did not or could not locate the noncustodial parent; (12) it is also important for states to move quickly to pursue child support for families that have just begun receiving aid; (13) state officials told GAO that information on noncustodial parents is best pursued early and aggressively to achieve successful outcomes; and (14) GAO's analysis showed that successful outcomes are most likely within 2 years after a family begins receiving child support services.