Child Support - Paul Legler

Ma -12-00 01:41P P.02 DRAFT- for INTERNAL USE ONLY PROMOTING WORK AND PAYMENT OF CHILD SUPPORT THROUGH CHILD SUPPORT TRUST ACCOUNTS Child Support Trust Accounts (CSTAs) would allow welfare recipients to accumulate child support payments in trust during the period of time that they on welfare. When the recipients left welfare for work the accumulated child support payments would be paid to them. Child Support Trust Accounts would create all the right incentives: CSTAs would encourage people to leave welfare for work and self- sufficiency. CSTAs would help people stay off welfare once they have left. CSTAs would create an incentive for noncustodial parents to pay child support. CSTAs would create an incentive for custodial parents on welfare to cooperate with child support enforcement efforts. Background Current welfare rules require that when someone goes on welfare (TANF), they must assign their right to child support payments to the State and cooperate with child support enforcement efforts. This is to help reimburse the State for the assistance provided to the family. Some States "pass- through" some part of the child support (usually $50) to the welfare recipient and disregard it for purposes of determining the level of the benefit payment. Prior to the 1996 welfare reform law, a $50 pass-through was required and the Federal government shared in the cost. However, the 1996 welfare reform law gave States much more flexibility and the $50 pass-through requirement was eliminated. A minority of States have kept a pass-through but the States that choose to do so must now pay the entire cost of it. There is some interest in Congress, especially on the Democratic side, in restoring the mandatory pass-through of child support. There are two major arguments for the pass-through of child support to welfare recipients: 1. Incentive for Fathers to Pay. There has been an increasing chorus of voices calling for the pass-through of child support as an incentive for fathers, particularly low-income fathers, to pay child support. This has been a hot topic at recent forums and conferences dealing with fatherhood issues. Organizations that work with low-income fathers contend that fathers currently have no incentive to pay child support to a mother on welfare because the money goes to the State and does not benefit the child. 2. Incentive for Mothers to Cooperate in Child Support Collections Efforts. Mothers often know crucial identifying information about a father's location or work. However, for a