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Date: Thursday, March 13, 1997 FOR IMMEDIATE RELEASE Contact: Michael Kharfen (202) 401-9215
"Instead of rewarding states solely for their program's cost-effectiveness, we want to reward states for good performance in each of five measures that assure support for children," said Secretary Shalala. "If approved by Congress, this plan will provide real incentives for the states to improve the child support system and help families achieve self-sufficiency." The new welfare reform law required HHS to prepare the plan for consideration and legislative action by the Congress.
Today's plan to Congress recommends a fundamental shift from current law on how states receive additional federal dollars or increased incentive funding. Under current law, states are guaranteed incentive funds regardless of how well they perform, with payments based on a single performance indicator -- cost-effectiveness.
The new incentive funding system being recommended today is based on the state's performance in five essential areas of child support: establishment of paternities, establishment of child support orders, collections on current child support owed, collection on previously or past due child support owed, and cost- effectiveness. This new system would more accurately measure the true performance of the states' child support programs and their success in fostering family self-sufficiency. The five categories were chosen to reflect real effectiveness in supporting children and helping families achieve self-sufficiency. They also mirror the logical progression of actions states take to insure support; for example, before collections can be made, paternity needs to be established and a support order must then be obtained.
Since 1993, the Clinton Adminstration has placed a new emphasis on child support enforcement, resulting in unprecedented financial support for children. In 1996, the federal/state child support enforcement system collected approximately $12 billion, up from $8 billion in 1992. Paternity establishment rose to nearly 1 million in 1996, almost doubling, from 516,000 in 1992. Under the tough child support measures proposed by the administration and included in the welfare law signed by President Clinton in August 1996, child support collections are projected to increase by $24 billion over the next 10 years. This proposal for an incentive-based funding system would build on these efforts by encouraging and rewarding states for improving their child support programs.
Three categories -- paternities established, orders established, and collections on current support owed -- will weigh more heavily under the proposal because they contribute to the immediate support for children. To reinforce the goal of achieving self-sufficiency for families, increased support for welfare families will be weighted higher than support for families never on welfare.
"This is an historic opportunity for the child support program and the children who benefit from its efforts," said David Gray Ross, deputy director of the Office of Child Support Enforcement. "The Congress and the nation's child support community now have a blueprint for action that will result in real improvement in child support systems and success for families to lead independent lives."
In measuring improvement, states would be compared against how they performed for the previous year. The total amount of the incentive will depend on the performance of the state in all five categories. If a state performs well in all five areas, then it will receive some portion of incentive for each area. If a state drops in performance in one of the five areas, but continues to maintain a sufficiently high level, then the state will receive a lower portion of incentive.
The report recommends that the new incentive system be phased in starting in fiscal year 2000 to be fully implemented in 2001. To continue improving the lives of children, the report strongly recommends that states be required to reinvest all federal incentive funds into ensuring further advancement in obtaining support for children.