Child Support Enforcement FY 2001 Data Preview Report

September 2002

Department of Health and Human Services
Administration for Children and Families
Office of Child Support Enforcement
Division of Planning, Research, and Evaluation

Revised

Table of Contents

Preface: Getting to the Story behind the Numbers

The following Office of Child Support Enforcement (OCSE) data preview report[1] highlights financial and statistical achievements reported to OCSE by states for Federal fiscal year 2001. This report shows advancements made in the child support program over the previous year and, in some cases, over the past 5 years. The information is taken from state-submitted reports; financial data are submitted quarterly, and statistical data are submitted annually.

These data are presented in technical tables with some accompanying descriptive text. The text summarizes the state-reported data in a strictly factual manner, without commentary to point out the `good news' and the `bad news' and without speculation as to the causes of any changes over time. It's tempting, but very difficult, to try to figure out the story that these numbers tell.

Example #1: Good news and bad news about how many families who sought child support actually got some

About 68 percent of cases with orders had a collection. In other words, the child support enforcement program actually collected and distributed money for more than 2/3 of the child support orders which it was charged to enforce. That's a pretty good success rate. What's more, this represents a spectacular improvement in a very short time - nearly doubling the 38 percent of orders that resulted in a collection in 1997. No wonder program officials are proud of their efforts. In my experience, one very seldom documents a virtual doubling of effectiveness in a government program in five years. It's reasonable to conclude that new enforcement tools such as driver's license and passport revocation and seizure of assets in financial institutions are as successful as hoped.

Similarly, we see that about 64 percent of cases have orders established. In other words, nearly 2/3 of parents who sought help getting child support actually got a court order mandating the payment of that support. This, too, represents a noteworthy improvement over the 57 percent success rate of five years ago, suggesting that new automation tools such as the state and national directories of new hires are having the desired impact.

Yet, another number in this report has to be considered in the same breath: the total percentage of cases in which a collection is made--44 percent. About 2/3 of the cases result in an order, and about 2/3 of the orders result in a collection, but we must acknowledge that 2/3 of 2/3 are 4/9. In other words, money was actually collected and distributed in only 44 percent of the total cases. Even this represents startling progress - up from 22 percent five years ago. Once again: a doubling of effectiveness. But we're in no position to feel satisfied, when we're succeeding in making a collection in fewer than half the cases.

That's one story behind the numbers: breath-taking improvement in the success rate of establishing child support orders and collecting on those orders, tempered with the recognition that more than half those who seek child support aren't getting it.

Example #2: Huge arrearage figure doesn't provide much guidance for policy-making and priority-setting

What are we to make of the fact that states now report over $88 billion in child support arrearages? The figure has been increasing for years, but it's very difficult to know what that really means. It is important to understand what this number represents. States differ greatly in how arrearages and other bad debts are handled. For some states, large amounts of this debt are the result of interest and penalties on the arrears; for some, these debts have been on the record for many, many years.

A more useful number to consider is the amount of arrearages that are certified through the Federal income tax refund interception program, which is currently about $66 billion. This total of arrearages to be enforced is probably more meaningful, but it's still enormous.

We know that states made collections in over 59 percent of the cases in which arrearages are owed. In other words, despite the fact that some of these debts are very old, states made collections on more than half of the cases with these arrearages. That's good news. We see that states are actively and successfully pursuing old child support debts, not neglecting them and concentrating only on current support.

We don't really know how much of the old child support debt is collectible. Moreover, we have some indications that the majority of the debt is owed by parents with little or no recent income, raising questions about whether `tougher' enforcement will lead to increased collection of arrearages or whether more realistic child support orders and mandatory job-training/job-placement programs are more likely to make a difference.

Perhaps the story behind the numbers here is that the enormity of the arrearages owed nationwide tells us little of any use about the successes and failures of the program. It's time to examine what's really in that large arrearage figure, in order to figure out what to do about it. For example, determining how much of the debt is owed to families and how much is owed to governments (to reimburse past welfare expenditures) may lead us to alter our views about the wisdom of compromising some portion of the arrears to increase payment of current support.

Example #3: Changing views on the families we serve

Perhaps the most surprising numbers in this report are those representing the composition of the IV-D child support program caseload. Of the 17 million cases reported, only about 3 million are those of parents and children currently receiving cash assistance (Temporary Assistance to Needy Families, formerly known as `welfare').

Many of us used to think of the government child support program as primarily a welfare program, serving mostly cash assistance clients. In fact, government budget personnel in the legislative and executive branches, at the state and Federal level, thought of the program as a `welfare cost recovery' program, because child support collections paid to the government on behalf of welfare recipients exceeded the government's cost to administer the program. Now, only 18 percent of the child support cases represent families receiving cash assistance.

About 6 million cases (36%) represent families who never received cash assistance. It's a bit of a shift in thinking to realize that the child support enforcement program serves all kinds of families and that, in fact, more than 1/3 of those served have no past or present connection to the welfare program.

And nearly 8 million cases (46%) are those of former welfare recipients. There's no question that the child support enforcement program is of primary importance as a source of income for "TANF leavers" who are trying to keep from becoming "TANF returners." This fact should be central to any discussion about the financial stability of families who have left welfare; such discussions tend to focus on job retention and career advancement or on the importance of continued access to food stamps and Medicaid, but the child support program is clearly a critical contributor.

Reductions in the TANF caseload, and increasing acknowledgement that child support should be a source of income for families rather than government, mean that it's no longer meaningful to measure the cost-effectiveness of the program in terms of the child support dollars paid to government to reimburse welfare expenditures. Now, we need to make clear that the cost-effectiveness of the program consists of the resources spent to administer the program compared to the increased financial stability of the households where our children are being raised. And in those terms, the story behind these numbers is heartening, indeed.

Sherri Z. Heller, Ed. D.

Commissioner

Office of Child Support Enforcement

Program Background

The Child Support Enforcement (CSE) program, established in 1975, has helped strengthen families and reduce welfare dependency by ensuring that parents live up to the responsibility of supporting their children. Many families have been able to remain self-sufficient and off public assistance due to the services received from the Child Support Enforcement program.

The program is an intergovernmental operation functioning in 54 separate states and territories. Many states have agreements with prosecuting attorneys, other law enforcement agencies, and officials of family or domestic relations courts to carry out the program at the local level.[2]

Child support enforcement services are required for families receiving assistance under the Temporary Assistance for Needy Families (TANF) program. Child support monies collected on behalf of TANF families that exceed the amount of the TANF grant go directly to the family, as well as, some "passthrough and disregard"[3] payments which are voluntarily made by some states. The remaining collections go to reimbursing state and federal governments for the TANF monies given to the families.

Child support services are available to families not receiving TANF who apply for such services, as well as, families who were formerly on TANF. Current child support payments collected on behalf of former TANF families are distributed to the families. Child support payments collected on behalf of non-TANF families are also forwarded to the family.

Program Results for FY 2001[4]

During FY 2001, almost $19.0 billion in child support payments were collected. Total caseload was 17.1 million. The CSE program had nearly 1.6 million paternities established or acknowledged and almost 1.2 million new child support orders established.

The Child Support Performance and Incentive Act of 1998 (CSPIA) provided for an alternative penalty procedure for states that fail to meet federal child support data processing requirements and provided for a more flexible penalty procedure for states that violate adoption requirements. In addition, CSPIA reformed federal incentive payments for an effective child support program by requiring a performance-based incentive system.

Preliminary Data. CSPIA requires that states have complete and reliable data for purposes of computing incentives. Federal auditors begin to review state data after the mandatory December 31^st deadline for data submissions. However, readers should note that no assumption has been made in this report regarding data reliability for each state as a result of these audits. The numbers are presented as submitted to OCSE.

Caseload. OCSE defines a child support case as a parent (mother, father, or putative father) who is now or eventually may be obligated under law for the support of a child or children receiving services under the title IV-D program.

A current assistance case is a case where the children are: (1) recipients of Temporary Assistance for Needy Families (TANF) under title IV-A of the Social Security Act or (2) entitled to Foster Care maintenance payments under title IV-E of the Social Security Act. In addition, the children's support rights have been assigned by a caretaker relative to the state and a referral to the state IV-D agency has been made. A former assistance case is a case where the children were formerly receiving title IV-A (AFDC or TANF) or title IV-E Foster Care services. A never assistance case is a case where the children are receiving services under the title IV-D program, but are not currently eligible for and have not previously received assistance under titles IV-A or IV-E of the Social Security Act. This includes cases where the family is receiving IV-D services as a result of a written application for IV-D services (including cases where children are receiving state, not title IV-E, foster care services) or a case where they are Medicaid recipients not receiving additional assistance.

There were 17.1 million cases reported in the Child Support Enforcement program during fiscal year 2001. This represents a 1.8 percent decrease in caseload since fiscal year 2000. There were 3.1 million current assistance cases, almost 7.9 million former assistance cases, and 6.1 million never assistance cases reported in fiscal 2001 (table 2).

Paternities Established. When children are born out-of-wedlock establishing paternity is a first step for obtaining a child support order. Paternity establishment involves the legal establishment of fatherhood for a child. Paternity can also be established by a voluntary acknowledgement signed by both parents either as part of an in-hospital or other acknowledgement program. States must have procedures that allow paternity to be established or acknowledged at least up to the child's eighteenth birthday.

Child support paternities were established or acknowledged for nearly 1.6 million children in fiscal year 2001, a one percent increase from fiscal year 2000. There were nearly 777,000 IV-D paternities legally established and 791,000 in-hospital and other paternities acknowledged for fiscal year 2001 (tables 2 and 3).

Orders Established. State administrators must use standard guidelines to determine how much a parent should pay for child support. CSE staff can take child support cases to court or to an administrative hearing process to establish the order.

Almost 1.2 million orders for child support were established in fiscal year 2001. Never assistance orders made up 43 percent of the support orders established for fiscal year 2001, current assistance orders accounted for 21 percent, and former assistance accounted for 36 percent (table 2).

Collections. Total child support collections were almost $19.0 billion for fiscal year 2001 (tables 1 and 3). This was a 6.2 percent increase in collections over the $17.9 billion collected during fiscal year 2000. Collection data are shown under the reporting categories: current IV-A and IV-E assistance ($1.3 billion), former assistance

($7.9 billion), and never assistance ($9.7 billion) in tables 1 and 3, and under TANF and non-TANF categories in table 3 to allow comparisons with previous years.

Child support payments are collected through various methods, such as income withholding, unemployment compensation, and state or federal income tax refund offsets. Income withholding is the most effective method of collections, with almost $14.6 billion collected (64.8 percent of total collections) in FY 2001.

(revised)

Collections per Full-Time Equivalent Staff. The amount of child support collected nationally per full-time equivalent staff (FTE) was over $313,000 in fiscal year 2001 (table 7). There were almost 61,000 FTE staff working in the child support program in the states in fiscal year 2001.

Expenditures and Incentives. In fiscal year 2001, total administrative expenditures were $4.8 billion, a 6.8 percent increase from fiscal year 2000 (table 3). The federal share of expenditures was $3.2 billion and the state share was $1.6 billion. The federal government reimburses states for 66 percent of the majority of allowable expenditures, 90 percent for laboratory paternity costs, and 80 percent for some ADP systems costs.[5]

For FY 2001, the majority of states (35) showed increases in total expenditures. However, most of those states (17) showed an increase of less than 10 percent.[6] Of states with decreases, most declined 10 percent or less. Estimated incentive paymentsfor fiscal year 2001 were nearly $337 million. Actual incentives earned for fiscal year 2001 cannot be determined until data reliability audits are complete for every state. At that time, final incentive levels can be determined, and estimated and actual incentives can be reconciled.[7]

Collections Due and Distributed. The total amount of current support due for fiscal year 2001 was over $24.7 billion (table 8). About $14.2 billion, or 57 percent, of that amount was collected and distributed (table 9). The total amount of arrearages due in fiscal year 2001 was $88.1 billion (table 10) and over $5.7 billion was collected and distributed (table 11). There were 10.3 million cases with arrears due in fiscal year 2001 and 6.1 million of these cases had collections (table 12). Hence, 59 percent of arrears cases had some payment toward their arrears in fiscal year 2001. In addition, there were almost $1.2 billion in interstate collections forwarded to other states in that year (table 16).

Other Statistics. In fiscal year 2001, program increases were noted for total cases in which a collection was made. At 7.4 million cases, this is a 3 percent increase over the number of paying cases for fiscal year 2000.

There were 11.0 million cases with an order in fiscal year 2001. This is a 3 percent increase over the number of cases with orders reported in the previous fiscal year.

The total number of children in CSE cases totaled almost 18.9 million in fiscal year 2001. While this represents a slight decrease under the number reported for fiscal year 2000--this change is more likely due to improved accuracy in reporting, than any significant change in the number of children in the child support caseload.

The traditional cost effectiveness ratio for fiscal year 2001 was $3.92 (table 14). Cost-effectiveness represents the amount of child support collected for every $1.00 expended on the program. With the effective date of CSPIA, state programs are evaluated under a new cost-effectiveness number. The CSPIA cost-effectiveness ratio was $4.18[8] for fiscal year 2001 (table 14). This new cost-effectiveness ratio still addresses collections to costs, but makes several adjustments to the comparison. For example, collections states sent to other states are included with other collections in the CSPIA ratio, allowing states to get credit for both incoming and outgoing collections.

According to unaudited incentive performance information for fiscal year2001, the national average for the IV-D PEP was 70.9 percent; for the statewide PEP, 89.9 percent; for cases with orders, 65.2 percent; for current collections, 57.3 percent; for cases with an arrears collection, 59.0 percent; and, as mentioned earlier, $4.18 for the CSPIA cost effectiveness ratio (table 17).

Summary Tables

Table 1 - Financial Overview
Table 2 - Statistical Overview
Table 3 - Program Trends
Table 4 - Total Distributed Collections
Table 5 - Statistical Program Status
Table 6 - Paternity Statistics
Table 7 - Total Distributed Collections Per FTE Staff
Table 8 - Total Amount of Current Support Due
Table 9 - Total Amount of Support Distributed as Current Support
Table 10 - Total Amount of Arrearages Due
Table 11 - Total Amount of Support Distributed as Arrears
Table 12 - Cases with Arrears Due and Paying Towards Arrears
Table 13 - Collections and Expenditures
Table 14 - Cost Effectiveness Ratios
Table 15 - Paternity Establishment
Table 16 - Interstate Collections Forwarded to Other States
Table 17 - Unaudited Performance Incentive Scores

Nationwide, Regional, and State Box Scores for FY 2001

Nationwide and Regional Box Scores
State Box Scores

Regional and state box scores summarize the child support program based on data received from states. The box scores give an overall summary of statistical and financial data by state and region taken from the OCSE-157, OCSE-34A, and the OCSE-396A reports and gives the percentage change over the previous fiscal year. Please note that no assumption has been made regarding data reliability for individual states. Also, please note that for the state box scores, large percentage changes in current, former and never assistance categories are likely due to improvement in states' automated systems. Decreases in current assistance collections are consistent with reduction in the TANF caseloads.

The Department of Health and Human Services (HHS) like many federal agencies, divides states into regions for administrative purposes. HHS has ten regional areas made up of four to eight states each, with a HHS regional office located in each area. Each regional office includes a Child Support Enforcement staff providing technical assistance to the states in that region. Along with the central office of the Child Support Enforcement program, regional offices help states implement federal child support laws and regulations, and monitor states performance. Following is a listing of each regional office and the associated states:

Region	States
Region I	Connecticut, New Hampshire, Maine, Rhode Island, Massachusetts, Vermont
Region II	New, Jersey, Puerto Rico, New York, Virgin Islands
Region III	Delaware, Pennsylvania, District of Columbia, Virginia, Maryland, West Virginia
Region IV	Alabama, Mississippi, Florida, North Carolina, Georgia, South Carolina, Kentucky, Tennessee
Region V	Illinois, Minnesota, Indiana, Ohio, Michigan, Wisconsin
Region VI	Arkansas, Oklahoma, Louisiana, Texas, New Mexico
Region VII	Iowa, Missouri, Kansas, Nebraska
Region VIII	Colorado, South Dakota, Montana, Utah, North Dakota, Wyoming
Region IX	Arizona, Hawaii, California, Nevada, Guam
Region X	Alaska, Oregon, Idaho, Washington

CSE Program Charts & Graphs

These charts and graphs of the Child Support Enforcement program, comprising financial and statistical data, are for fiscal year 2001 and previous years.

APPENDIX

CSPIA Incentive Measure Formulas

INCENTIVE MEASURE	FORM AND LINE NUMBERS
IV-D PEP
Number of Children in the Caseload in the FY or as of the end of the FY Who Were Born Out-of-Wedlock with Paternity Established or Acknowledged	OCSE-157 Line 6
Number of Children in the Caseload as of the End of the Preceding FY Who were Born Out-of-Wedlock	OCSE-157 Line 5 (of the preceding FY)
STATEWIDE PEP
Number of Minor Children in the State Born Out-of-Wedlock with Paternity Established or Acknowledged During the FY	OCSE-157 Line 9
Number of Children in the State Born Out-of Wedlock During the Preceding FY	OCSE-157 Line 8 (of the preceding FY)
SUPPORT ORDER ESTABLISHMENT
Number of IV-D Cases with Support Orders	OCSE-157 Line 2
Number of IV-D Cases	OCSE-157 Line 1
CURRENT COLLECTIONS
Amount Collected for Current Support in IV-D Cases	OCSE-157 Line 25
Amount Owed for Current Support in IV-D Cases	OCSE-157 Line 24
ARREARAGE COLLECTIONS
Number of IV-D Cases Paying Toward Arrears	OCSE-157 Line 29
Number of IV-D Cases With Arrears Due	OCSE-157 Line 28
COST EFFECTIVENESS
Total IV-D Dollars Collected	OCSE-34A Lines 8 + 5 + 13 of column (e)
Total IV-D Dollars Expended	OCSE-396A Lines 9 columns (A) + (C) - 1(b) columns (A) + (C)
STATE COLLECTIONS BASE
2(Current Assistance + Former	OCSE-34A:
Assistance Collections) + Never	2((Line 8 columns a+b+c) + (Line 5 columns a+b+c)) +
Assistance Collections	Line 8 column d + Line 5 column d + Line 13 column e

FORM OCSE-157 (OMB-0970-0177) - 06/30/01

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[1]This report was prepared by Nina Campbell, Adrienna Johnson, Ken Dittmar, Renée Jackson, and Delores Johnson under the leadership ofJoyce Pitts and at the direction of Gaile Maller. Please direct comments to jpitts@acf.hhs.gov.

[2] Some state programs are under the Revenue Department or the Attorney General.

[3] Arrears collections for these cases are distributed to state and federal governments.

[4] The following data tables provide information on the Child Support Enforcement (CSE) program for fiscal year 2001, or the last five years. Table 1 provides national totals on child support collections, expenditures, program costs, and traditional and Child Support Performance and Incentive Act (CSPIA) of 1998 cost-effectiveness ratios. Table 2 gives national statistics on the CSE caseload, cases with collections, percentage of cases with collections, cases with orders established, percentage of cases with orders established, percentage of cases with collections to cases with orders established, paternities established or acknowledged, and child support orders established. Table 3 provides child support trends for fiscal years 1997, 2000 and 2001. Table 4 provides individual state collection information; tables 5 and 6 provide statistical information for each state. Table 7 provides collections per full-time equivalent (FTE) information. Tables 8 and 9 and tables 12 through 15 provide much of the data used to calculate state performance incentive measures under CSPIA. Table 10 provides information on arrearages due and table 11 provides amount collected and distributed as arrears. Table 16 lists interstate collections for each state. Collections data are reported on form OCSE-34A and expenditure data is reported on the OCSE-396A. Statistical data included in this report are obtained from the OCSE-157 report. Information in this report is presented as reported by states and no assumption has yet been made concerning the reliability of the data. See appendix for copies of forms OCSE-157, 34A, and 396A.

[5] OCSE charges an assortment of fees to states in return for services provided to the state agency administering the child support program. These fees reduce the total amount of expenditures that are eligible for FFP. Total expenditures (including state and federal shares) reported are net of these fees.

[6]Ten of those states showed increases of more than 20 percent, with three states showing increases of over 30 percent.

[7] It should be noted that the new incentives established by the Child Support Performance and Incentive Act of 1998 went into effect in fiscal year 2000 and impact two-thirds of s state's incentive for fiscal year 2001.

[8] See the appendix for all the CSPIA performance measurement formulas.

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