Analysis of Federal-State Financing of the Child Support Enforcement Program







Prepared for Members and Committees of Congress



The Deficit Reduction Act of 2005 (P.L. 109-171) made changes to the Child Support
Enforcement (CSE) program that will result in less federal financial support to state CSE
programs. The CSE program serves families that are recipients of the Temporary Assistance for
Needy Families (TANF) program and non-recipient families. It provides seven major services:
parent location, paternity establishment, establishment of child support orders, review and
modification of support orders, collection of child support payments, distribution of support
payments, and establishment and enforcement of medical child support orders. In FY2004, the
CSE system handled 15.9 million cases, of which almost 83% (13.2 million) were non-TANF
cases. In FY2004, the CSE program expenditures amounted to $5.3 billion and the program
collected $4.38 in child support payments (from noncustodial parents) for every dollar spent on
the program.
The federal government bears the majority of CSE program expenditures and provides incentive
payments to the states for success in meeting CSE goals. Most child support collections for TANF
families are kept by the federal government and states to reimburse families for their TANF costs.
Collections for non-TANF families generally are paid to the families.
Some policymakers are concerned that the federal government’s role in financing CSE is too
high, and contend that the states should pay a greater share of the program’s costs. Comparing
CSE expenditures with the income generated by retained collections for TANF families, the
federal government has lost money each year since 1979 (the FY2004 “loss” to the federal
government was $2.4 billion). Although in the past the income generated by the CSE program for
states (in the aggregate) exceeded their expenses, this no longer holds true (the FY2004 “loss” to
states was $422 million). The increasing federal “losses” on the CSE program and the switch
from “gain” to “loss” for the state governments is in part attributable to the decline in the TANF
caseload. An alternative analysis views retained child support collections as reimbursement for a
portion of cash welfare expenditures for families with children, rather than as “income” to the
state. The share of TANF cash expenditures reimbursed by child support collections has
consistently grown over time. The reason for this is that CSE collections for welfare families has
remained relatively stable, while cash welfare payments decreased dramatically from $22.8
billion in FY1994 to $10.4 billion in FY2004. In FY1994, retained child support collections for
welfare families as a percentage of total cash welfare expenditures was less than 9%; by FY2004
it had increased to 20%.
The change in the composition of the CSE caseload, together with changes made pursuant to P.L.
109-171, are expected to result in state CSE programs having to compete with all other state
interests in obtaining funds from the general treasury or county treasuries. This is a dramatic
departure from the past, when the CSE program was unique among social welfare programs in
that it added money to state treasuries. This report will not be updated.






Introduc tion ..................................................................................................................................... 1
Backgr ound ..................................................................................................................................... 1
CSE Caseload............................................................................................................................3
How the CSE Program Is Financed.................................................................................................5
Context of the Current System..................................................................................................5
Funding Elements......................................................................................................................7
CSE Collections and the “Family First” Policy........................................................................9
Financing Issues............................................................................................................................12
Expanded Mission...................................................................................................................12
Revenue Gains and Losses......................................................................................................14
Cash Flow Generated by the Child Support Program.......................................................14
Child Support Financing and Welfare Costs.....................................................................20
CSE Incentive System.............................................................................................................21
Welfare Cost Avoidance..........................................................................................................22
Maintaining the Cost-Effectiveness of the CSE Program.......................................................24
Financing the State and Local Share of Child Support Expenditures.....................................25
Figure 1. Composition of Child Support Caseload, FY2004..........................................................5
Figure 2. Percentages of Total Child Support Collections Distributed to Families, and the
Federal and State Governments, FY2004...................................................................................10
Figure 3. Welfare and Nonwelfare Collections, FY1979-FY2004................................................13
Figure 4. Federal, State, and Taxpayer “Savings” and/or “Costs” from Income and
Expenditures Generated by the Child Support Enforcement Program, FY1979-FY2004.........19
Figure 5. Cash Welfare (AFDC/TANF) Payments and Child Support Collections Made on
Behalf of AFDC/TANF Families, FY1994-FY2004..................................................................21
Table 1. Welfare and Nonwelfare Collections, FY1979-2004.......................................................13
Table 2. Federal, State, and Taxpayer “Savings” and/or “Costs” from Income and
Expenditures Generated by the Child Support Enforcement (CSE) Program, FY1979-
FY2004 ....................................................................................................................................... 16
Table 3. Federal, State, and Taxpayer “Savings” and/or “Costs” from Income and
Expenditures Generated by the Child Support Enforcement (CSE) Program, FY1979-
FY2004 ....................................................................................................................................... 17
Table A-1. Financing of the Federal-State Child Support Enforcement Program, FY1999..........27
Table A-2. Financing of the Federal-State Child Support Enforcement Program, FY2004..........29
Table A-3. Trend in Total CSE Collections, by State, FY1999-FY2004.......................................30





Table A-4. Trend in TANF/Foster Care Collections, by State, FY1999-FY2004..........................32
Table A-5. Trend in Non-TANF Collections, by State, FY1999-FY2004.....................................34
Table A-6. Average Monthly Child Support Payments in Cases with Collections, by State,
FY1999-FY2004 ........................................................................................................................ 36
Table A-7. Collections on Behalf of TANF Families as a Percentage of Total CSE
Collections, by State, FY1999-FY2004.....................................................................................37
Table A-8. Trend in Total CSE Expenditures, by State, FY1999-FY2004....................................39
Appendix A. State-by-State Financing Information......................................................................27
Appendix B. Distribution of Child Support Payments and the “Family First Policy”..................42
Author Contact Information..........................................................................................................45






The Deficit Reduction Act of 2005 (P.L. 109-171) made changes to the Child Support
Enforcement (CSE) program that will result in less federal financial support to state CSE
programs. The Deficit Reduction Act provisions, some of which become effective in FY2007,
together with a congruence of several program factors and policies (i.e., reduced percentage of
cash welfare families on the CSE rolls and commitment to allow former welfare families to keep
a greater portion of child support collected from noncustodial parents) may mean that states will
have to increase state funding in order for CSE programs to continue to run effectively.
This report describes the current system of child support financing, analyzes trends in child
support collections and expenditures, and discusses the effect of declining Temporary Assistance 2
for Needy Families (TANF) rolls on CSE program financing. It also explains how child support
collections are distributed to families and to the state and federal governments. In addition, the
report includes two appendices. Appendix A presents several state-by-state tables, which include
an examination of state income and expenditures for every state for FY1999 and FY2004,
collection and expenditure data by state for FY1999-FY2004, average monthly child support
payments in cases in which a collection was made for every state for FY1999-FY2004, and child
support collections made on behalf of TANF families as a percentage of total CSE collections for
every state for FY1999-FY2004. Appendix B describes the distribution of child support
payments and the “family first” policy.

The CSE program was passed by Congress in 1975 (P.L. 93-647) with two primary goals. The
first goal was to reduce public expenditures for actual and potential welfare recipients by
obtaining ongoing support from noncustodial parents. The second goal was to establish paternity
for children born outside marriage so that child support could be obtained. The December 1974
Finance Committee report on the CSE legislation stated, “The problem of welfare in the United
States is, to a considerable extent, a problem of the non-support of children by their absent 3
parents.” It also stated that the result of a new federal-state CSE program would be to lower
welfare costs to the taxpayer and to deter fathers from abandoning their families.
Both welfare and nonwelfare families are eligible for CSE services. Although federal matching
funds for CSE program expenditures on nonwelfare cases have been available to states since the
program’s enactment, they were authorized only on a temporary basis until 1980. P.L. 96-272
(enacted on June 17, 1980) made federal matching funds for CSE nonwelfare services available

1 This report was originally written on March 24, 2000, by Carmen Solomon-Fears, Gene Falk, Michelle Ganow (a
visiting research associate), and Melinda Gish of the Domestic Social Policy Division of the Congressional Research
Service. The author would like to thank Gene Falk and Melinda Gish for their suggestions regarding this revision of the
report.
2 P.L. 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, ended Aid to Families
with Dependent Children (AFDC) and related programs, replacing them with ablock grant” program of Temporary
Assistance for Needy Families (TANF). States were required to end their AFDC programs and begin TANF by July 1,
1997. Most states opted to begin their TANF program sooner.
3 U.S. Congress, Senate Committee on Finance, Social Services Amendments of 1974, report to accompany H.R. 17045,
93rd Cong. 2nd sess., S.Rept. 93-1356, p. 42.





on a permanent basis.4 Since 1989, nonwelfare families have exceeded welfare families in the
CSE caseload.
States are responsible for administering the CSE program, but the federal government plays a
major role in dictating the major design features of state programs, funding state and local
programs, monitoring and evaluating state programs, providing technical assistance, and giving
direct assistance to states in locating absent parents and obtaining support payments.
All 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands operate CSE
programs and are entitled to federal matching funds. To qualify for federal matching funds, each
state’s CSE plan must be approved by the Office of Child Support Enforcement (OCSE),
Department of Health and Human Services (HHS). The CSE program provides seven major
services on behalf of children: parent location, paternity establishment, establishment of child
support orders, review and modification of support orders, collection of support payments,
distribution of support payments, and establishment and enforcement of medical child support
orders. Collection methods include income withholding, intercept of federal and state income tax
refunds, intercept of unemployment compensation, liens against property, providing child support
debt information to credit bureaus, withholding of driver’s licenses and other professional
licenses, passport denial, and seizure of funds in financial institutions.
P.L. 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996,
replaced the Aid to Families with Dependent Children (AFDC) entitlement program with a TANF
block grant and made major changes to the CSE program. P.L. 104-193 allowed all states to link 5
up to an array of databases, and permitted the Federal Parent Locator Service (FPLS) to be used
for the purpose of establishing parentage; establishing, setting the amount of, modifying, or
enforcing child support obligations; or enforcing child custody or visitation orders. It required
that a designated state agency, directly or by contract, conduct automated comparisons of the 6
Social Security numbers reported by employers to the state directory of new hires and the Social
Security numbers of CSE cases that appear in the records of the state registry of child support
orders. (The 1996 welfare reform law required the HHS Secretary to conduct similar comparisons
of the federal directories.) When a match occurs, the state directory of new hires is required to
report to the state CSE agency the name, date of birth, Social Security number of the employee,
and employer’s name, address, and identification number. The CSE agency then, within two
business days, is required to instruct appropriate employers to withhold child support obligations

4 Families who receive TANF cash benefits, Medicaid benefits, or whose children receive Title IV-E foster care
payments automatically are enrolled (free of charge) in the CSE program. Other families must apply for CSE services,
and states must charge an application fee that cannot exceed $25. In addition, states have the option of recovering costs
in excess of the application fee. Such recovery may be from either the custodial parent or the noncustodial parent.
5 The Federal Parent Locator Service (FPLS) is a service operated by OCSE to help state CSE agencies locate parents
in order to obtain child support payments. The FPLS obtains address and employer information from federal agencies.
The FPLS also includes the Federal Child Support Case Registry and the National Directory of New Hires.
6 P.L. 104-193, the 1996 welfare reform law, required states, beginning October 1, 1997, to establish an automated
directory of new hires containing information from employers (including federal, state, and local governments and
labor organizations) for each newly hired employee, that includes the name, address and Social Security number of the
employee and the employer’s name, address, and tax identification number. Within three business days after receipt of
new hire information from the employer, the State Directory of New Hires is required to submit its new hire reports to
the National Directory of New Hires. Contrary to its name, the National Directory of New Hires includes more than
just information on new employees. It is a database that includes information on (1) all newly hired employees,
compiled from state reports (and reports from federal employers), (2) the wage reports of existing employees, and (3)
unemployment insurance claims.





from the employee’s paycheck, unless the employee’s income is not subject to withholding.7 P.L.
104-193 required employers to remit to the state disbursement unit income withheld within seven
business days after the employee’s payday. P.L. 104-193 required states to operate a centralized
collection and disbursement unit to send child support payments to custodial parents within two
business days.
P.L. 104-193 also established what is often referred to as the “family first” policy, wherein a
family that is no longer receiving TANF benefits has first claim on all child support paid by the
noncustodial parent. This means that the states not only pay current child support that is collected
to former TANF families, but also pay a higher proportion of arrearages (i.e., collections on past-
due child support payments) to former TANF families.
Since the 1996 welfare reform changes, the TANF rolls have decreased significantly. Currently,
there are about 2 million TANF families on the rolls per month, and 40% of those families consist
of child-only families; in FY1994, there were about 5 million cash welfare families. Moreover,
annual federal and state TANF expenditures have decreased from almost $23 billion in FY1994 to
$10 billion in FY2004. Reduced cash welfare rolls have resulted in a reduced share of welfare
families in the CSE caseload, which means that the CSE program has a lesser amount of welfare
costs to recover. Further, pursuant to the Deficit Reduction Act of 2005 (P.L. 109-171), federal
financing of the CSE program will be greatly reduced. These two factors have tremendous
implications with regard to the funding of the CSE program.
The CSE program serves both TANF recipients8 and non-TANF recipients. In FY2004, the CSE
system handled 15.9 million cases, of which 5.9 million were families who had never been on
TANF, 7.3 million were former-TANF families, and 2.6 million were families who were receiving 9
TANF assistance (see Figure 1). Former-TANF cases are families that are no longer on TANF

7 There are three exceptions to the immediate income withholding rule: (1) if one of the parties demonstrates, and the
court (or administrative process) finds that there is good cause not to require immediate withholding, (2) if both parties
agree in writing to an alternative arrangement, or (3) at the HHS Secretarys discretion, if a state can demonstrate that
the rule will not increase the effectiveness or efficiency of the states CSE program.
8 In 1984, Congress reinstated authority for the state CSE agencies to take steps (when appropriate) to secure an
assignment to the state for any rights to support on behalf of Title IV-E foster care children and to collect child support
on behalf of those children. This authority had been inadvertently deleted in 1980 when the foster care program was
transferred from Title IV-A of the Social Security Act to Title IV-E of the Social Security Act. Child support collected
on behalf of such foster care children is retained by the state as reimbursement for foster care maintenance payments
with appropriate reimbursement to the federal government. The public agency responsible for supervising the
placement of the child may use the collection in excess of the foster care payment in the manner it determines will best
serve the interests of the child, including setting such payments aside for the child’s future needs or making all or a part
of the payments available to the person responsible for meeting the child’s day-to-day needs. Child support paid in
excess of amounts ordered to meet the child’s need may be retained by the state to reimburse it and the federal
government for any past foster care maintenance payments or AFDC/TANF payments made with respect to the child.
The data in the tables and figures in this report generally include child support payments collected on behalf of foster
care children, unless otherwise noted. Likewise, the caseload numbers also include Title IV-E foster care children who
are being served by the CSE program. In FY2003, CSE collections made on behalf of foster care cases amounted to
less than 0.4% of total CSE collections; OCSE does not collect data specifically on foster care cases.
9 As mentioned below, a mother with two children by different fathers would be considered two families or cases by
the CSE program and one family or case by the TANF program. Thereby, the 2.6 million CSE cases receiving TANF
cash assistance differ from the 2.0 million TANF cases.





(therefore, they are really non-TANF cases), but for whom past-due child support is still owed
(i.e., child support arrearages accrued while the family was still receiving TANF benefits).
OCSE defines a CSE “case” as a noncustodial parent (mother, father, or putative/alleged father)
who is now or eventually may be obligated under law for the support of a child or children
receiving services under the CSE program. If the noncustodial parent owes support for two
children by different women, that would be considered two cases; if both children have the same
mother, that would be considered one case.
The CSE program defines a current assistance case as one in which the children are (1) recipients
of cash aid under TANF (Title IV-A of the Social Security Act) or (2) entitled to Foster Care
maintenance payments (Title IV-E of the Social Security Act). In addition, the children’s support
rights have been assigned by a caretaker to the state, and a referral to the state CSE agency has
been made. A former assistance case is defined as a case in which the children were formerly
receiving TANF or foster care services. A never assistance case is defined as a case in which the
children are receiving services under the CSE program, but are not currently eligible for and have
not previously received assistance under TANF or foster care.
In FY1978, TANF cases comprised 85% of the CSE caseload, but dropped to 17% of the caseload
in FY2004. By the same token, non-TANF cases represented only about 15% of the CSE caseload
in FY1978, and increased to 83% of the caseload in FY2004. Available data show that non-TANF
cases increasingly are families that formerly received TANF.
In FY1999, OCSE started reporting data for the following categories: current assistance, former
assistance, and never received assistance rather than by TANF and non-TANF. The data indicate
that the number and percentage of CSE families who currently receive TANF has decreased over
time, while the number and percentage of CSE families who formerly received TANF has
increased. The data also show that the proportion of the CSE caseload composed of families who
had never received TANF has remained relatively stable for the period FY1999-FY2004. The
decline in TANF families since 1994, and the relative stability of the segment of the caseload that
had never been on the TANF rolls, resulted in a smaller CSE caseload. In FY1999, the CSE
caseload was 17.3 million families; by FY2004, it had dropped to 15.9 million families.
In FY2004, the largest group of families who were participating in the CSE program were 10
families who had left the TANF rolls (i.e., former TANF families—46%. Families who had
never been on TANF represented 37% of the CSE caseload, and families who were currently 11
receiving TANF benefits comprised 17% of the CSE caseload (see Figure 1). Thus, although
the majority of the CSE caseload is composed of non-TANF families (83%), most of them at
some point in their lives received TANF/AFDC (63%). This is consistent with the expanded
mission of the CSE program. The expectation is that as child support becomes a more consistent
and stable income source/support, these former TANF families will never have to return to the
TANF rolls, and families that never resorted to the TANF program will never have to do so.

10 Under the old jargon, former TANF families would have been included among non-TANF families.
11 In FY2004, families currently receiving TANF comprised almost 17% of the CSE caseload and received 5% of CSE
collections (see Table A-7). In contrast, former TANF families comprised 46% of the CSE caseload and received 43%
of CSE collections. Families that have never been on TANF comprised 37% of the CSE caseload and also received
43% of CSE collections. In FY2004, the state data reporting forms were revised to include information on child support
collected for Medicaid reimbursement on behalf of families that had never been on TANF. These collections totaled
$1.9 billion in FY2004, almost 9% of CSE collections.





Figure 1. Composition of Child Support Caseload, FY2004
TANF Cases
17 %
Never-TANF Cases
37%
Former-TANF Cases
46%
Source: Figure prepared by the Congressional Research Service (CRS) based on data from the Department of
Health and Human Services (HHS).

The CSE program is a federal-state matching grant program under which states must spend
money in order to receive federal funding. For every dollar a state spends on CSE expenditures, it
generally receives 66 cents from the federal government. States also receive CSE incentive 12
payments from the federal government. Although the actual dollars contributed by the federal
government are greater than those from state treasuries, the level of funding allocated by the state
or local government determines the total amount of resources available to the CSE agency.
One of the original goals of the CSE program was to reduce public expenditures on the AFDC
program by obtaining child support from noncustodial parents on an ongoing basis. Thus, when
the CSE program was enacted in 1975, a new requirement for AFDC eligibility was added,
mandating custodial parents to assign to the state their rights to collect child support payments.

12 Local programs may receive additional funding from either the state or local government, or both, pursuant to the
state’s CSE plan.





This assignment covered current support and any arrearages (past-due support), and lasted as long
as the family received AFDC benefits. When the family stopped receiving AFDC, the assignment
ended. The custodial parent regained her right to collect current support. However, if there were
arrearages, the state could claim those arrearages up to the amount paid out in AFDC benefits.
Readers should note that the child support payments made on behalf of TANF children are paid to
the state for distribution rather than directly to the family. If the child support collected is
insufficient to lift the family’s income above the state’s TANF eligibility limit, the family receives
its full TANF grant (i.e., not reduced by the child support payment), and the child support is
collected by the state and distributed to the state treasury and the federal government in
proportion to their assistance to the family. If the family’s income, including the child support
payments, exceeds the state’s TANF limitations, the family’s TANF cash benefits are ended and
all current child support payments are then sent directly to the family (via the state’s child support
disbursement unit).
As mentioned above, when the CSE program was first enacted in 1975, one of its primary goals
was to recover the costs of providing cash welfare to families with children. To accomplish this
cost-recovery goal, child support collected on behalf of families receiving AFDC directly offset
AFDC benefit costs, and was shared between the federal and state governments in accordance
with the matching formula used for the given state’s AFDC program. Under old AFDC law, the
rate at which states reimbursed the federal government for child support was the federal matching
rate (i.e., the federal medical assistance percentage, or “Medicaid matching rate”) for the AFDC
program, which varied inversely with state per capita income (i.e., poor states have a high federal
matching rate; wealthy states have a lower federal matching rate). In a state that had a 50%
matching rate, the federal government was reimbursed $50 for each $100 collected in child
support on behalf of an AFDC family, while in a state that had a 70% federal matching rate, the
federal government was reimbursed $70 for each $100 collected. In the first example, the state
kept $50, and in the second example, the state kept $30. Thus, states with a larger federal medical
assistance matching rate kept a smaller portion of the child support collections. The match ranged
from a minimum of 50% to a statutory maximum of 83%. (Although AFDC was replaced by the
TANF block grant under the welfare reform law of 1996, the same matching rate procedure is still
used.)
In terms of CSE collections, this cost-recovery procedure means that poorer states are rewarded
less for their CSE efforts than wealthier states. In other words, states that are entitled to a
relatively small proportion of child support collections because of paying a smaller share of
AFDC benefit costs have to collect more child support payments per administrative dollar than
other states to recover their costs (other things being equal).
There has been movement away from the cost-recovery goal, in part because of the changing
nature of the CSE program. As discussed earlier (in the Caseload section), the component of the
caseload that is composed of TANF families is shrinking. Even though overall child support
collections increased by 27% over the six-year period FY1999-FY2004 (see Table A-3), child
support collections made on behalf of TANF families decreased by 11% (see Table A-4). In
FY2004, only 17% of the CSE caseload was composed of TANF families. Thus, the policy
shift—from using the CSE program to recover welfare costs to using it as a mechanism to
consistently and reliably get child support income to families—is not surprising. In FY2004, only

5% of CSE collections ($1.1 billion) were made on behalf of TANF families (see Table A-7);


about 16% of that amount went to the families (pursuant to state child support “pass through”
provisions), and the rest was divided between the state and federal governments to reimburse





them for TANF benefits paid to the families. This meant that in FY2004, 90% of CSE collections
($19.0 billion) went to the families on the CSE rolls. The comparable figure in FY1999 was 85%
($13.5 billion); and the comparable figure in FY1996 was 80% ($12.0 billion).
The CSE program is funded with both state CSE Funding Elements
and federal dollars. There are five funding —State dollars
streams for the CSE program. First, states —Federal matching funds
spend their own money to operate a CSE —66% of general state CSE expenditures —90% of laboratory costs for paternity establishment
program; the level of funding allocated by the (through FY2006)
state and/or localities determines the amount —Retained child support collections from noncustodial
of resources available to CSE agencies. parents on behalf of welfare families
—Incentive payments to states
Second, the federal government generally —Fees


reimburses each state 66% of all allowable
expenditures on CSE activities. The federal government reimburses states at a higher 90%
matching rate for the laboratory costs associated with establishing paternity. Pursuant to P.L. 109-
171, the higher federal matching rate for laboratory costs of paternity testing will be reduced to
the general federal CSE reimbursement rate of 66% beginning October 1, 2006. The federal
government’s funding is “open-ended” in that it pays its percentage of expenditures by matching
the amounts spent by state and local governments with no upper limit or ceiling. Given that
paternity-related expenditures generally amount to significantly less than 1% of total CSE
expenditures, the CSE reimbursement formula resulted in the federal government paying 66.1%
of total CSE program expenditures in FY2004.
Third, states collect child support on behalf of families receiving TANF to reimburse themselves
(and the federal government) for the cost of TANF cash payments to the family. Federal law
requires families who receive TANF cash assistance to assign their child support rights to the
state in order to receive TANF. In addition, such families must cooperate with the state if
necessary to establish paternity and secure child support. Collections on behalf of families
receiving TANF cash benefits are used to reimburse state and federal governments for TANF
payments made to the family (i.e., child support payments go to the state instead of the family,
except for amounts that states choose to “pass through” to the family as additional income that 13
does not affect TANF eligibility or benefit amounts). The formula for distributing the child
support payments collected by the states on behalf of TANF families between the state and the
federal government is still based on the old AFDC federal-state reimbursement rates described
earlier, even though the AFDC entitlement program was replaced by the TANF block grant
program. Under existing law, states have the option of giving some, all, or none of their share of 14
child support payments collected on behalf of TANF families to the family. Pursuant to P.L.

13 The 1996 welfare reform law (P.L. 104-193) repealed a previous requirement that $50 be passed through to the
family, and gave states the choice to decide how much, if any, of the state share (some, all, none) of child support
payments collected on behalf of TANF families to send the family. States also decide whether to treat child support
payments as income to the family. Moreover, P.L. 104-193 required states to pay the federal government the federal
government’s share of TANF collections. (As of August 2004, 21 states were, on a monthly basis, providing a pass
through and disregard up to $50higher in a couple of states—of child support collected on behalf of TANF families.)
14 Under pre-1996 law, a small percentage of AFDC collections was paid to the family as a result of the $50pass
through” payment, or in cases when the child support payment exceeded the AFDC benefit. Under old law, the first $50
of current monthly child support payments collected on behalf of an AFDC family was given to the family and
(continued...)



109-171 (effective October 1, 2008), states that choose to pass through some of the collected
child support to the TANF family do not have to pay the federal government its share of such
collections if the amount passed through to the family and disregarded by the state does not
exceed $100 per month ($200 per month to a family with two or more children) in child support
collected on behalf of a TANF (or foster care) family.
Fourth, the federal government provides states with an incentive payment to encourage them to
operate effective programs. Federal law requires states to reinvest CSE incentive payments back
into the CSE program or related activities. (Through FY2007, if incentive payments are
reinvested in the CSE program, they are reimbursed at the appropriate CSE federal matching rate,
i.e., 66% for general activities or, through FY2006, 90% for laboratory testing for paternity
determination.) In FY2004, the statutorily set maximum incentive payment for all states was $454
million. Effective October 1, 2007, P.L. 109-171 (enacted February 8, 2006) prohibits federal
matching of state expenditure of federal CSE incentive payments. This means that on the
effective date, CSE incentive payments that are received by states and reinvested in the CSE
program will no longer be eligible for federal reimbursement.
Fifth, application fees and costs recovered from nonwelfare families may help finance the CSE
program. In the case of a nonwelfare family, the custodial parent can hire a private attorney or
apply for CSE services. As one might expect, hiring a private attorney is more expensive than
applying for services under the federal/state CSE program. The CSE agency must charge an
application fee, not to exceed $25, for families not on welfare. The CSE agency may charge this
fee to the applicant or the noncustodial parent, or pay the fee out of state funds. In addition, a
state may at its option recover costs in excess of the application fee. Such recovery may be either
from the custodial parent or the noncustodial parent. Such fees and costs recovered from
nonwelfare cases must be subtracted from the state’s total administrative costs before calculating 15
the federal reimbursement amount (i.e., the 66% matching rate). Effective October 1, 2006, P.L.
109-171 requires families that have never been on TANF to pay a $25 annual user fee when child
support enforcement efforts on their behalf are successful (i.e., at least $500 annually is collected
on their behalf). Thus, it is likely that the amount collected through fees from non-TANF
families—especially persons who have never been in the cash welfare caseload—will increase
significantly.
Readers should note that the CSE financing provisions included in P.L. 109-171, which was
enacted on February 8, 2006, are estimated by the Congressional Budget Office (CBO) to save 16
the federal government about $1.8 billion over the five-year period FY2006-FY2010. CBO’s
estimates assume that states will use their own funds to replace about half of the reduction in
federal spending. Based on this assumption, CBO contends that states could lose $2.9 billion

(...continued)
disregarded as income to the family so that it did not affect the familys AFDC eligibility or benefit status. P.L. 104-
193 repealed the $50 disregard/pass through provision.
15 A lower administrative cost figure for a state may result in a greater federal incentive payment by improving the
state’s collections-to-costs ratio.
16 The CSE financing changes made pursuant to P.L. 109-171 include provisions that (1) establish a $25 annual user fee
for individuals who have never been on TANF but receive CSE services and who have received at least $500 in any
given yearsaving the federal government $172 million over the five-year period FY2006-FY2010; (2) reduce the
CSE federal matching rate for the laboratory costs associated with establishing paternity from 90% to 66%saving
$28 million over the five years; and (3) eliminate the federal match on CSE incentive payments that states, in
compliance with federal law, reinvest back into the CSE programsaving $1.6 billion over the five years.





(over five years) in child support collections (that is, states would not have the resources—due to
reduced federal funding—to collect $2.9 billion worth of child support payments owed by
noncustodial parents).
When the CSE program was first enacted in 1975, welfare cost recovery was one of the primary
goals of the program. There has been movement away from this goal, in part because of the
changing nature of the CSE program. As discussed earlier, the size of the component of the
caseload that is composed of TANF families is shrinking. Thus, the share of collections that are
retained by the state or federal government as reimbursement for cash assistance payments is also
shrinking.
Figure 2 shows the distribution of child support collections for FY2004. The bulk of distributed
collections (9 out of 10 dollars) are for nonwelfare families and are paid to families. Child
support collections made on behalf of welfare families (1 out of 10 dollars) are split among the
federal government (federal share), state governments (state share), and families. In addition,
medical child support is also collected from noncustodial parents. In FY2004, 9% of the
collections made on behalf of nonwelfare families was medical child support payments that went
to the families (0.3%) or to the Medicaid program (8.7%). Less than 1% of the collections made
on behalf of welfare families was medical child support that went to the families or the Medicaid
program.





Figure 2. Percentages of Total Child Support Collections Distributed to Families, and
the Federal and State Governments, FY2004
Federal Share of CSE
Collections Made on
Behalf of TANF
Families, 5.2%
CSE Collections Paid
to Non-TANF State Share of CSE
Families, 89.6%Collections Made on
Behalf of TANF
Families, 4.2%
, CSE Collections Paid
to TANF Families,

0.9%


Source: Figure prepared by the Congressional Research Service (CRS) based on data from the Department of
Health and Human Services (HHS).
The 1996 welfare reform law established a “family first” policy that required states to give child
support arrearage payments collected on behalf of former welfare families to the family first, 17
prior to any state or federal reimbursement. Before the enactment of P.L. 104-193, these
collections could either be sent on to the families or retained by the state and federal government
as reimbursement for past public assistance. This “family first” policy was intended to help

17 It was recognized that thefamily first” policy also would reduce the amount of child support that states and the
federal government would be able to keep. To protect states from losses expected to result from this new “family first”
policy, Congress included ahold harmless provision in the 1996 welfare reform law (P.L. 104-193), ensuring that if
states did not reach their FY1995 level of child support collections, the federal government would make up the
difference. One result of the hold harmless provision is that it also helped states affected by declining welfare
collections caused by a drop in the TANF caseload. The hold harmless grant came out of the federal share of CSE
collections attributable to that state (i.e., the same source of funding as the incentive payment). Some observers argued
successfully that the hold harmless provision was not sustainable. They noted that at some point, the federal share of
child support collections would be depleted by the incentive payments and the hold harmless awards. They maintained
that when this occurred, money would have to be found elsewhere to finance the hold harmless payment, and that it
was unlikely that Congress would provide states with the additional funding when the federal government was already
paying 66% of CSE expenditures. P.L. 106-169 (enacted Nov. 18, 1999) limited the hold harmless requirement in
FY2000 and FY2001, and repealed the hold harmless provision, effective Oct. 1, 2001 (FY2002).





former welfare families stay self-sufficient and enhance cooperation with CSE efforts. The CSE
strategic plan for the period FY2005-FY2009 states the following:
Child support is no longer primarily a welfare reimbursement, revenue-producing device for
the Federal and State governments; it is a family-first program, intended to ensure families 18
self-sufficiency by making child support a more reliable source of income.
One of the goals of the 1996 welfare reform law with regard to CSE distribution provisions was
to create a distribution priority that favored families once they leave the TANF rolls. This “family
first” policy has been further advanced by P.L. 109-171. Generally speaking, under the new law,
child support that accrues before a family receives TANF and after the family stops receiving
TANF will go to the family, whereas child support that accrues while the family is receiving 19
TANF goes to the state and federal governments. This additional family income is expected to
reduce dependence on public assistance by both promoting exit from TANF and preventing entry
and re-entry to TANF. (For more detailed information on the “family first” policy, see Appendix
B.)
Concurrently, the rules regarding the CSE Changes Made by P.L. 109-171 (Deficit
distribution of arrearage payments Reduction Act of 2005)
to former TANF families first, rather Reduces the federal matching rate for laboratory costs associated
than to the states or federal with paternity establishment from 90% to 66%
government, may also result in Ends the federal matching of state expenditures of federal CSE
reduced collections to be kept by the 20incentive payments reinvested back into the program
states and federal government. Requires states to assess a $25 annual user fee for child support
Further, the proportion of services provided to families with no connection to the welfare
nonwelfare families receiving CSE system
services continues to increase. As Simplifies CSE distribution rules and extends the “family first” policy
mentioned earlier, collections made by providing incentives to states to encourage them to allow more
on behalf of nonwelfare families go child support to go to both former welfare families and families still
directly to the family (usually on welfare
through the disbursement unit). Revises some child support enforcement collection mechanisms and
Thus, while both the federal and adds others


state governments pay their share of
the administrative costs for these families, neither gets a share of current collections made to
these families.

18 See http://www.acf.hhs.gov/programs/cse/pubs/2004/Strategic_Plan_FY2005-2009.pdf.
19 With respect to the Deficit Reduction Act (P.L. 109-171), the Congressional Budget Office (CBO) estimated that the
child support passthrough and disregard provision related to current TANF families would cost the federal government
$140 million over the five-year period FY2006-FY2010. CBO estimated that the provision related to the pass-through
of all arrearages to former TANF families would cost the federal government $283 million over the five-year period
FY2006-FY2010.
20 P.L. 109-171 gives states the option of distributing to former TANF families the full amount of child support
collected on their behalf (i.e., both current support and all child support arrearages—including arrearages collected
through the federal income tax refund offset program). Thereby, P.L. 109-171 allows states to simplify the CSE
distribution process by eliminating the special treatment of child support arrearages collected through the federal
income tax refund offset program.




Some policymakers view the federal reimbursement of state CSE expenditures as too high. They
contend that states should pay a higher proportion of CSE costs. They assert that a less generous
federal matching rate would induce states to operate more efficiently. Others contend that states
faced with enforcing an array of federal laws and caseloads composed of a larger share of
nonwelfare families should not be confronted with higher CSE costs. They also point out that the
large interstate segment of the CSE program demonstrates the need for relatively high federal
funding. They support a continuation of the federal financial commitment to the CSE program.
The National Governors’ Association has argued that any reduction in the federal government’s
financial commitment to the CSE system could negatively affect states’ ability to serve families.
It contends that continued implementation of CSE requirements without stable federal funding
would result in a significant cost shift to the states, which could jeopardize the effectiveness of
the CSE program and thereby could have a negative impact on the children and families the CSE 21
program is designed to serve.
Many commentators agree that the mission of the CSE program has changed over the years. It
began as a program to recover the costs of providing cash welfare to families with children, but
the Child Support Enforcement Amendments of 1984 (P.L. 98-378) broadened the mission to
reflect service delivery. In 1984, the criteria for making incentive payments to the states was
broadened to include collections for nonwelfare families.
Some commentators assert that the service-delivery goal was reemphasized in the 1996 welfare
reform legislation, which established the “family first” policy. To help assure that former welfare
recipients stay off the TANF rolls, the family first policy requires that such families are to receive
any child support arrearage payments collected by the state before the state and federal
governments retain their share of collections. Additionally, the sharp decline in the TANF rolls
and reduced expenditures on TANF have helped shift the program from recovering declining
costs for a smaller population to collecting and paying child support to nonwelfare families.
Figure 3 and Table 1 show the trend in child support collections for welfare and nonwelfare
families from FY1979 through FY2004 in constant (inflation-adjusted) dollars. Collections for
nonwelfare families increased in every year over this period, except for FY1982. Collections for
welfare families increased in all but one year (FY1980) through FY1996, but have had several up
and down fluctuations since FY1997. In real (inflation-adjusted) terms, nonwelfare collections
increased tenfold over the FY1979-FY2004 period, while collections for welfare families
increased by 57%. It should be noted that the increase in nonwelfare collections is not merely the
result of welfare families going off assistance and becoming nonwelfare families. In the early
years of the program, many states failed to provide services to nonwelfare families. This changed
over time, and for many years now, the nonwelfare portion of the CSE caseload has exceeded the
welfare portion of the caseload.

21 National Governor’s Association, HR-14: Child Support Financing, Winter Meeting, 1999.





Figure 3. Welfare and Nonwelfare Collections, FY1979-FY2004
(in constant 2004 dollars)
Source: Figure prepared by the Congressional Research Service (CRS) based on data from the Department of
Health and Human Services (HHS).
Table 1. Welfare and Nonwelfare Collections, FY1979-2004
(in constant 2004 dollars)
Welfare CSE Non-Welfare Total CSE
Collections CSE Collections Collections
1979 $1,438,264,270 $1,775,287,086 $3,213,551,356
1980 1,309,436,917 1,898,756,702 3,208,191,448
1981 1,331,112,833 1,902,062,439 3,233,173,288
1982 1,473,093,037 1,845,752,342 3,318,845,379
1983 1,583,061,061 2,058,881,506 3,641,942,566
1984 1,730,443,017 2,383,578,862 4,114,021,879
1985 1,824,731,770 2,685,247,249 4,509,979,019
1986 2,015,128,054 3,326,860,105 5,341,988,159
1987 2,160,897,779 4,036,089,101 6,196,986,879
1988 2,279,351,560 4,786,129,349 7,065,479,374
1989 2,343,597,496 5,366,081,475 7,709,678,971
1990 2,452,671,358 5,970,076,414 8,422,747,771





Welfare CSE Non-Welfare Total CSE
Collections CSE Collections Collections
1991 2,683,323,236 6,629,527,240 9,312,850,476
1992 2,980,374,026 7,528,211,117 10,508,585,142
1993 3,110,670,400 8,355,670,101 11,466,340,501
1994 3,214,614,103 9,204,170,227 12,418,784,330
1995 3,310,298,609 10,016,563,322 13,326,861,932
1996 3,422,347,088 10,985,687,570 14,408,034,658
1997 3,336,269,382 12,348,153,388 15,684,422,770
1998 3,066,872,694 13,538,319,178 16,605,191,872
1999 2,813,016,992 15,210,964,945 18,023,981,938
2000 2,844,331,498 16,739,839,538 19,584,171,035
2001 2,765,435,027 17,464,335,976 20,229,771,000
2002 3,038,921,190 18,112,862,434 21,151,783,624
2003 3,052,130,549 18,693,389,632 21,745,520,181
2004 2,263,607,596 19,597,651,280 21,861,258,876
Source: Table prepared by the Congressional Research Service (CRS) based on data from the Department of
Health and Human Services (HHS), Office of Child Support Enforcement Annual Reports.
The child support program generates both income and expenditures for both the federal
government and the states. States make expenditures to administer the program, but receive from
the federal government both partial reimbursement for these costs and incentive payments. States
also retain a share of collections made by noncustodial parents on behalf of welfare and foster
care families. The federal government pays the above-mentioned share of state CSE expenditures
and all incentive payments, but also retains a share of child support collections made on behalf of
welfare families.
The income and outgo of the child support program can be examined from at least two different
perspectives. The first shows how the CSE program by itself affects the cash flow of both federal
and state budgets. However, collections retained to reimburse the federal government and the
states for welfare and foster care costs represent some of the child support “income” for the states
and all of the child support income for the federal government. Another view of child support
finances looks at collections as reimbursement for a state’s welfare and foster care costs, rather
than as child support income.
One perspective on the revenue gains and losses generated by the child support program
compares expenditures with the income generated by retained child support collections and, for
states, the federal reimbursement for certain expenditures and incentive payments. On this basis,
the federal budget has been negatively affected by the CSE program for each year since 1979, as
the federal share of state CSE expenditures and federal incentive payments to the states have





exceeded the federal share of collections for TANF and foster care families. On the other hand,
state budgets (in aggregate) have been positively affected by the CSE program until recent years,
in the sense that the income generated by the CSE program for the state (the federal share of state
CSE expenditures—i.e., the amount of federal matching funds provided to the state—plus
incentive payments to the states, plus the state share of child support collections made on behalf
of TANF and foster care families) exceeded CSE program costs.
In FY1999, federal child support enforcement outgo exceeded income by $1.795 billion. In that
year, state child support enforcement income exceeded outgo by $87 million (see Table 2). Since
FY2000, both the federal government and the states have “lost” money on the CSE program.
Table 2 and Figure 4 show the trends in the difference between income and outgo generated by 22
the CSE program for both federal and state governments. Table 3 shows the long-term trend for
the period FY1979-FY2004 in dollars adjusted for inflation (constant 2004 dollars).
The increasing federal “losses” on the CSE program and the switch from “gain” to “loss” for the
state governments are in part attributable to the decline in the AFDC/TANF caseload. Table 3
shows that when inflation is taken into account, the “gain” to the states dropped from $579
million in FY1997 to $334 million in FY1998 and to $99 million in FY1999; since FY2000, the
states in aggregate have experienced a “loss” on the CSE program. In FY2000, state “losses”
attributable to the CSE program amounted to $41 million, and have increased each year since
FY2000; in FY2004 state “losses” amounted to $422 million. In other words, beginning in
FY2000, almost all of the states have had to pay out more to operate their CSE programs than
they received back in recovered welfare payments, incentive payments, and federal matching 23
funds.
The cash flow for child support programs at the state level has implications for funding of the
program in some states. Some state administrators have “sold” their CSE program to their state
legislatures on the basis that the child support program has added money to the state treasury,
whereas most other social welfare programs reduce the state coffers. This meant that some state
legislatures did not have to appropriate funds to pay for their CSE program.

22 The federal “loss” was computed by summing the gross federal share of administration, actual incentive payments,
and hold harmless payments and then subtracting the gross federal share of child support collections. The financial
“gain to states was computed by subtracting from total administrative expenses the federal share of administrative
expenses, actual incentive payments, hold harmless payments, and the state share of child support collections.
Differences in methodologies might yield different “loss and “gain figures.
23 General Accounting Office, Child Support Enforcement: Effects of Declining Welfare Caseloads Are Beginning to
Emerge, GAO/HEHS-99-105, June 1999, p. 2.





Table 2. Federal, State, and Taxpayer “Savings” and/or “Costs” from Income and
Expenditures Generated by the Child Support Enforcement (CSE) Program,
FY1979-FY2004
(in current dollars)
Federal CSE State CSE Taxpayer (Total
Savings Savings Federal and State)
or Costs or (Costs) CSE Savings/Costs
1979 -$42,601,000 $243,541,000 $200,940,000
1980 -102,698,000 230,152,000 127,454,000
1981 -128,376,000 260,968,000 132,592,000
1982 -147,869,000 307,378,000 159,509,000
1983 -138,078,000 312,296,000 174,218,000
1984 -105,049,000 365,523,000 260,474,000
1985 -230,888,000 317,335,000 86,447,000
1986 -264,338,000 273,782,000 9,444,000
1987 -337,278,000 351,345,850 14,067,850
1988 -355,424,000 381,000,764 25,576,764
1989 -480,056,000 372,529,985 -107,526,015
1990 -528,135,000 333,289,471 -194,845,529
1991 -602,591,000 401,249,537 -201,341,463
1992 -644,999,000 474,550,791 -170,448,209
1993 -764,544,000 486,539,478 -278,004,522
1994 -946,391,000 449,456,532 -496,934,468
1995 -1,273,306,000 408,421,381 -864,884,619
1996 -1,146,758,000 409,419,373 -737,338,627
1997 -1,281,773,000 493,678,078 -788,094,922
1998 -1,438,441,890 288,470,575 -1,149,971,315
1999 -1,795,452,888 87,339,827 -1,708,113,061
2000 -2,048,367,863 -37,759,819 -2,086,127,682
2001 -2,337,502,397 -185,991,554 -2,523,493,951
2002 -2,252,204,361 -351,107,650 -2,603,312,011
2003 -2,282,818,396 -357,033,610 -2,639,852,006
2004 -2,372,833,802 -422,292,852 -2,795,126,654
Source: Table prepared by the Congressional Research Service (CRS) based on data from the Department of
Health and Human Services (HHS), Office of Child Support Enforcement Annual Reports.
Note: These numbers are in current dollars, and thereby do not take inflation into account.





Table 3. Federal, State, and Taxpayer “Savings” and/or “Costs” from Income and
Expenditures Generated by the Child Support Enforcement (CSE) Program,
FY1979-FY2004
(in constant 2004 dollars)
Federal CSE State CSE Taxpayer (Total Federal
Costs Savings/Costs and State) CSE Savings/Costs
1979 -$102,712,840 $587,187,810 $484,474,969
1980 -222,985,160 499,722,298 276,737,138
1981 -254,806,909 517,981,939 263,175,030
1982 -277,103,283 576,019,672 298,916,389
1983 -248,432,033 561,887,702 313,455,669
1984 -181,754,591 632,423,757 450,669,166
1985 -386,593,358 531,338,153 144,744,794
1986 -434,664,577 450,193,833 15,529,255
1987 -536,330,508 558,700,829 22,370,321
1988 -545,327,063 584,569,493 39,242,430
1989 -706,221,420 548,037,427 -158,183,993
1990 -740,142,326 467,080,660 -273,061,666
1991 -815,008,771 542,692,958 -272,315,814
1992 -851,027,458 626,133,921 -224,893,536
1993 -984,211,766 626,331,354 -357,880,412
1994 -1,193,181,320 566,661,283 -626,520,037
1995 -1,567,277,318 502,714,639 -1,064,562,679
1996 -1,374,610,570 490,768,059 -883,842,511
1997 -1,504,333,414 579,397,778 -924,935,636
1998 -1,664,768,043 333,858,878 -1,330,909,166
1999 -2,035,142,520 98,999,532 -1,936,142,988
2000 -2,246,834,127 -41,418,366 -2,288,252,493
2001 -2,494,363,497 -198,472,756 -2,692,836,253
2002 -2,365,717,525 -368,803,797 -2,734,521,322
2003 -2,344,170,738 -366,629,138 -2,710,799,876
2004 -2,372,833,802 -422,292,852 -2,795,126,654
Source: Table prepared by the Congressional Research Service (CRS) based on data from the Department of
Health and Human Services (HHS), Office of Child Support Enforcement Annual Reports.
Although in the aggregate, the income generated by the CSE program for states exceeded their
outgo for the first 24 years of the program, this was not true for all states (and is no longer true in
the aggregate). In FY1999, only 13 states experienced increased income from operating a CSE
program (down from 41 states in FY1994); the other states and jurisdictions operated at a “loss.”
(See Table A-1.) In FY2004, the comparable number of states whose income exceeded outgo
with respect to the CSE program fell to 10. (See Table A-2.)





In the past, the states with income exceeding outgo tended to be high-income states with a 24
relatively low federal medical assistance percentage (FMAP). A poor state like Mississippi used
to pay for about 20% of its AFDC benefit costs (the federal government paid for about 80% of the
state’s AFDC benefit costs). Therefore, the state got to “keep” only 20% of its child support
collections made on behalf of welfare families. Mississippi has consistently “lost” money on the
CSE program if its finances are viewed from the perspective of income and outgo generated by
the program. On the other hand, New Hampshire used to pay about 47% of the AFDC benefit
costs, and therefore got to keep 47% of its child support collections on behalf of welfare families.
New Hampshire has consistently gained financially from operating a CSE program, when viewed
from this perspective. Of course, New Hampshire bore a greater share of welfare expenditures
than did Mississippi. When viewed from the perspective of child support collections as
reimbursement for welfare costs, high-income states retain more of their collections because they 25
paid for more of their welfare costs.

24 The federal medical assistance percentage (FMAP), which determines the federal share of CSE collections made on
behalf of TANF and foster care families, has a statutorily set maximum and minimum rate. The maximum federal
matching rate for child support is 83% and the minimum federal matching rate for child support is 50%. The reader
should note that in the past the FMAP generally was referred to as the Medicaid matching rate.
25 Although AFDC was replaced by the TANF block grant pursuant to P.L. 104-193 (enacted Aug. 22, 1996), the same
matching rate (i.e., FMAP) procedure is still used.





Figure 4. Federal, State, and Taxpayer “Savings” and/or “Costs” from Income and
Expenditures Generated by the Child Support Enforcement Program, FY1979-
FY2004
(in constant 2004 dollars)
Source: Figure prepared by the Congressional Research Service (CRS) based on data from the Department of
Health and Human Services (HHS).
An examination of FY2004 data indicates that the pattern of state income exceeding outgo
primarily in states with a relatively low federal medical assistance percentage (FMAP) is not as
clear as it was in the past. For example, although New Hampshire, with its relatively low FMAP
of 53% in FY2004, gained financially from operating a CSE program, so too did the state of
Maine, which had a relatively high FMAP of 69% in FY2004.
The last column of Table A-2 shows a measure of CSE program effectiveness, obtained by
dividing total state collections by total state administrative expenditures (costs). This measure is
generally referred to as the collections-to-costs ratio. The table shows that in FY2004, $4.38 in
child support was collected for every dollar spent on CSE activities (i.e., national average). In
other words, for every dollar that was spent by federal, state, and local governments, $4.38 was
collected by the states from noncustodial parents for the financial support of their children (i.e.,
private funds). The table shows that there were wide differences among states in how much child
support was collected for each dollar spent on the CSE program, ranging from $1.87 in New
Mexico to $8.70 in Hawaii. It is interesting to note that the collections-to-costs ratio did not seem
to affect whether a state financially gained from operating a CSE program, given that both Maine
(a state with a ratio that was below the national average) and Hawaii (a state with a ratio that was
almost twice the national average) financially gained from operating a CSE program in FY2004.





Some analysts claim that the collections-to-costs or cost-effectiveness ratio indicate that states do
not have an incentive to control their expenditures on the CSE program; these analysts further
contend that the 66% reimbursement rate may provide states with an incentive to spend money
inefficiently. Others maintain that although state finances are generally on more stable footing
than they were during the past couple of years, state resources are still limited with respect to the
many state programs and activities that need to be funded every year, and thus the nature of state
budgets in and of themselves provides the incentive for states to keep CSE expenditures
reasonable.
One explanation of why states have been consistently “losing” money on the CSE program in
recent years is that nonwelfare collections are growing at a faster rate than welfare collections;
child support collections on behalf of nonwelfare families increased by 44% over the period
FY1999-FY2004, while child support collections on behalf of welfare families decreased by 18%
over that period. While the state and federal governments share in a portion of welfare
collections, nonwelfare collections go exclusively to the custodial parent via the state
disbursement unit.
An alternative analysis of the revenue gains and losses of the CSE program takes into account the
consideration that child support collections retained by the federal government and states are
offsets to expenditures on TANF cash benefits, rather than offsets to CSE programs. That is, it is
possible to view retained child support collections as a method of financing a portion of a state’s
cash welfare expenditures rather than its child support expenditures. In a study for HHS,
researchers surveyed states in 1998 and found that 25% of the states used their share of CSE 26
collections to finance their TANF programs, rather than their CSE programs. The states that
used their collections to finance TANF expenditures included California and New York, the two
largest states in terms of the TANF caseload and TANF expenditures.
Even though TANF is a block grant program with fixed grant amounts (i.e., no federal matching
rate), federal law requires (1) families receiving “assistance” under state TANF programs to 27
assign their child support to the state; and (2) states to pay the federal government the federal
share of child support collections made on behalf of TANF and former TANF families. As
described earlier, the federal share is the formula used to determine the federal medical assistance
percentage, the same formula that was used under prior law as the matching rate for AFDC and to
divide child support enforcement collections.
Figure 5 compares total federal and state cash assistance (AFDC/TANF) payments with child
support collections made on behalf of AFDC/TANF families for FY1994-FY2004. The share of
AFDC and TANF cash expenditures reimbursed by child support collections has grown
consistently over time. The reason for this is that CSE collections for welfare families have
remained relatively stable, while cash welfare payments decreased dramatically, from $22.8
billion in FY1994 to $10.4 billion in FY2004. In FY1994, retained child support collections for

26 Levin Group, Inc. and ECONorthwest, State Financing of Child Support Enforcement Programs, Nov. 23, 1998.
27 The 1996 welfare law prohibits use of TANF funds for a family that includes a person who has not assigned support
rights to the state, and it requires states to cut a family’s TANF benefit by at least 25% if a recipient does not cooperate
with child support rules (and may expel the family from TANF).





welfare families as a percentage of total cash welfare expenditures was less than 9%; by FY2004,
it had increased to 20% (see Figure 5).
Figure 5. Cash Welfare (AFDC/TANF) Payments and Child Support Collections
Made on Behalf of AFDC/TANF Families, FY1994-FY2004
(in billions of dollars)
Source: Figure prepared by the Congressional Research Service (CRS) based on data from the Department of
Health and Human Services (HHS).
P.L. 105-200, the Child Support Performance and Incentive Act of 1998 (enacted July 16, 1998), 28
replaced the old incentive payment system with a revised incentive payment system that
provides (1) incentive payments based on a percentage of the state’s collections (with no cap on
non-TANF collections), (2) incorporation of five performance measures related to establishment
of paternity and child support orders, collections of current and past-due support payments, and
cost-effectiveness; (3) phase-in of the incentive system, with it being fully effective beginning in

28 Under the old incentive payment system, each state received a minimum incentive payment equal to at least 6% of
the states total amount of child support collections made on behalf of AFDC/TANF families for the year, plus at least
6% of the states total amount of child support collections made on behalf of non-AFDC/TANF families for the year.
The amount of a states incentive payment could reach a maximum of 10% of the AFDC/TANF collections, plus 10%
of the non-AFDC/TANF collections, depending on the states ratio of CSE collections to CSE expenditures. There was
a limit (i.e., cap), however, on the incentive payment for non-AFDC/TANF collections. The incentive payment for such
collections could not exceed 115% of incentive payments for AFDC/TANF collections.





FY2002; (4) mandatory reinvestment of incentive payments into the CSE program; and (5) an
incentive payment formula weighted in favor of TANF and former TANF families.
P.L. 105-200 stipulated that the aggregate incentive payment to the states could not exceed the
following amounts: $422 million for FY2000, $429 million for FY2001, $450 million for
FY2002, $461 million for FY2003, $454 million for FY2004, $446 million for FY2005, $458
million for FY2006, $471 million for FY2007, and $483 million for FY2008. For the years after
FY2008, the aggregate incentive payment to the states is to be increased to account for inflation.
The CSE incentive payment system adds uncertainty to states’ reliance on what used to be a
somewhat predictable source of income. Although in the aggregate, states receive higher
incentive payments than under the earlier incentive payment system, these totals are a fixed 29
amount, and individual states have to compete with each other for their share of the capped
funds. The CSE incentive payment system was fully implemented in FY2002. It caps the federal
incentive pool, thereby forcing states for the first time to compete against each other for these
incentive dollars. Under the revised incentive system, a state may be eligible to receive an
incentive payment for good performance. The total amount of the incentive payment depends on
four factors: the total amount of money available in a given fiscal year from which to make
incentive payments, the state’s success in making collections on behalf of its caseload, the state’s
performance in five areas (mentioned earlier), and the relative success or failure of other states in 30
making collections and meeting these performance criteria.
Moreover, unlike the old incentive system, which allowed states and counties to spend incentive
payments on whatever they chose, the revised incentive system requires that the incentive
payment be reinvested into either the CSE program or some other activity that might lead to
improving the efficiency or effectiveness of the CSE program (e.g., mediation, parenting classes,
efforts to improve the earning capacity of noncustodial parents, etc.). A 2003 report
commissioned by HHS indicated that for the nation as a whole, federal CSE incentive payments
to states represented 25% of CSE financing for the states (in aggregate).
Usual cost accounting overlooks savings from the avoidance of welfare payments. Many program
analysts argue that indirect savings occur when child support collections keep a family off
welfare, and that these savings make the CSE program worthwhile, despite the apparent loss
under the current accounting system. Some analysts assert that although it is difficult to determine
how much money might have been spent on various public assistance programs had it not been
for the collection of child support payments, these indirect benefits of the CSE program should 31
not be dismissed or ignored.

29 In FY1998, the incentive payment, which at that point in time came out of the gross federal share of child support
collected on behalf of TANF families, was $395 million. Beginning in FY2002, child support incentive payments were
no longer paid out of the federal share of child support collections made on behalf of TANF families. Instead, federal
funds have been specifically appropriated out of the U.S. Treasury for CSE incentive payments.
30 Under the old incentive payment system, HHS made incentive payments to states for their child support enforcement
systems, based solely on one factor: cost-effectiveness.
31 Some observers also contend that there are intangible benefits (such as personal responsibility and parental
involvement) associated with the collection of child support that should be taken into account in determining the merits
of the CSE program. This discussion does not address the intangible benefit concept.





Some observers argue that a strong CSE program encourages noncustodial parents to fulfill their
child support obligation because they fear the consequences of not doing so. They contend that
these child support payments reduce government spending by providing families with incomes
sufficient enough to make them ineligible for programs such as TANF, food stamps, and
Medicaid.
The indirect effects of changes in the CSE program on other programs are “scored” in cost
estimates of legislation. That is, CBO estimates the impact of changes in the CSE program on
outlays for programs such as Food Stamps and Medicaid. Some have argued that the budget itself
ought to reflect welfare cost avoidance, by crediting the CSE budget account with these indirect
savings from other programs. The budget would then reflect the net cost of the program to the
federal government, after taking into account savings achieved in other programs. This can be
viewed as preferable to showing the gross cost of the program for purposes of helping Congress
and the President make decisions about the allocation of resources within the federal budget.
However, there are both practical and conceptual issues about explicitly including welfare cost
avoidance in federal budgeting:
• On a practical level, it is difficult to reliably measure those who would be eligible
for and are receiving TANF and other assistance programs in the absence of the
CSE program. Doing so requires estimating what the world would look like
under a counterfactual (i.e., what if the child support program did not exist),
which requires making numerous assumptions. TANF “welfare” savings are
generally redirected by states to other activities allowable under the block grant,
as opposed to reduced state spending.
• Conceptually, the budget is meant to be a document that helps make decisions
about both resource allocation and the federal government’s fiscal policy. In
terms of fiscal policy, attributing welfare cost avoidance “savings” to the child
support enforcement program is simply a book-keeping transaction: it does
nothing in and of itself to change the revenues to or the outlays from the federal
government. It could be argued that complicating the accounting of child support
obfuscates its fiscal impact, which is how much the program spends and how
much it generates in collections (its transactions with the public). It could also be
argued that policy makers routinely ignore such book-keeping rules, particularly
when overall spending or deficit/surplus goals drive policy.
A report contracted by the federal Office of Child Support Enforcement (OCSE) entitled “Child
Support Cost Avoidance in 1999, Final Report” concludes by stating the following:
Unlike cost recovery, cost avoidance can only be estimated. It cannot be directly measured.
But when even a lower-bound estimate of cost avoidance exceeds the total amount of cost
recovery, it is clear that cost avoidance is an important part of the picture. As the child
support enforcement community calls attention to child support’s ability to improve families
financial stability and independence, it is worth recognizing that this increased independence 32
also implies financial benefits to government through cost avoidance.

32 Urban Institute, prepared for the Department of Health and Human Services, Administration for Children and
Families, Office of Child Support Enforcement, Child Support Cost Avoidance in 1999, Final Report, by Laura
Wheaton, June 6, 2003, Contract No. 105-00-8303 http://www.acf.dhhs.gov/programs/cse/pubs/2003/reports/
cost_avoidance/#N10026, p. 6 of 32.





Readers should note that the CSE program, unlike other social services programs, ensures the
transfer of private—not public—funds to nonwelfare families enrolled in the program. Thus, as
implied earlier, the CSE program imposes personal responsibility on noncustodial parents by
requiring them to meet their financial obligations to their children, thereby alleviating taxpayers
of this responsibility.
In March 2004, the CSE program was cited by the Office of Management and Budget (OMB) as
being the most cost-effective program among all social services and block grant/formula 33
programs reviewed government-wide.
During the 27-year period FY1978-FY2004, child support payments collected by the CSE
agencies increased from $1 billion in FY1978 to $21.9 billion in FY2004, and the number of
children whose paternity was established (or voluntarily acknowledged) increased from 111,000
in FY1978 to 1.606 million in FY2004. During that period, the CSE caseload expanded from
4.146 million in FY1978 to 15.854 million in FY2004. However, the program still collects only
18% of child support obligations for which it has responsibility, and collects payments for only
51% of its caseload. In FY2004, $130.3 billion in child support obligations ($28.0 billion in
current support and $102.4 billion in past-due support) was owed to families receiving CSE
services, but only $23.2 billion was paid ($16.5 billion in current support and $6.7 billion in past-
due support). During the period FY1978-FY2004, total expenditures on CSE activities increased
from $312 million in FY1978 to $5.322 billion in FY2004. (See Appendix A for state
information on CSE collections and expenditures for FY1999-FY2004.) OCSE data indicate that
in FY2004, paternity had been established or acknowledged for about 80% of the 10 million
children in the CSE caseload without legally identified fathers. In FY2004, the CSE program
collected $4.38 in child support payments (from noncustodial parents) for every dollar spent on
the program.
Many child support advocates are concerned that reductions in federal financing of the CSE
program will result in a less cost-effective program. They argue that it does not make sense to
hamper a successful program.
The National Child Support Enforcement Association maintains that “The enhanced federal
matching rate and the ability to re-invest federal incentives and receive the federal match make
child support a worthwhile investment for state legislatures, who often simply do not have the
budgetary resources to otherwise adequately fund the program. Reducing federal funding at this 34
critical juncture may mean that significant innovations will be scrapped midstream.” Some
advocates of children maintain that CSE funding cuts will erode the tremendous progress made
by the states in making their CSE programs more efficient and effective, and that this could result
in fewer noncustodial parents supporting their children and more families enrolling in welfare 35
programs. Many advocates of children agree that as CSE federal funding is reduced, states will

33 U.S. Department of Health and Human Services, Administration for Children and Families, HHS News, Child
Support Effectiveness Cited By OMB, Mar. 31, 2004.
34 National Child Support Enforcement Association, Position Statement on Proposed Reduction in CSE Program
Funding, Nov. 1, 2005 http://www.ncsea.org/pubpol/statements/20051101_cse.pdf.
35 Center for Law and Social Policy, Families Will Lose At Least $8.4 Billion in Uncollected Child Support If Congress
Cuts Fundsand Could Lose Billions More, by Vicki Turetsky, updated Jan. 18, 2006, p. 4.





be forced to cut back on their CSE funding as well because of reduced resources. They argue that
the likely result will be fewer enforcement actions directed toward the more difficult and costly
cases, and thus they contend that low-income children could bear the brunt of the CSE funding 36
reductions and could receive much less of the child support they are owed.
According to the final report on State Financing of Child Support Enforcement Programs,
published in 2003, the state share of CSE expenditures, in aggregate, comes from state general
fund appropriations (42%), federal incentive payments (25%), the state share of retained child
support payments collected on behalf of TANF families (15%), county general fund 37
appropriations (9%), and fees and cost-recovery efforts (2%).
As noted earlier, enactment of P.L. 109-171 (February 8, 2006) gave states the option of
implementing a “family-first” policy. Acceptance of a family-first policy raises some concerns
regarding the funding of the CSE program. Under a family-first policy, more child support dollars
would go to families (both TANF families and non-TANF families), and thereby less money
would go to the states and the federal government for reimbursement of cash welfare assistance to
the family.
Also, pursuant to P.L. 109-171, states will no longer be entitled to receive federal matching funds
for CSE incentive payments that the state reinvests in the CSE program. Thus, one source of
funding, federal matching of incentive payments, will be totally eliminated, and another source of
funding (the state share of retained child support payments collected on behalf of TANF families)
probably will continue to decline.
The elimination of federal reimbursement of CSE incentive payments will result in a significant
reduction in CSE financing. Under previous law, the federal match resulted in a near tripling of
state CSE funding/expenditures. For example, in FY2004, actual incentive payments to states
amounted to $454 million; the federal match (at the 66% rate) on the incentive payments
amounted to almost twice that figure, $881 million, which translates into the state spending 38
$1.335 billion on CSE activities.
Whereas CSE used to be unique in that it was a social welfare program that added money to state
treasuries, this is no longer the case, with the exception of a handful of states. After the provisions

36 Center on Budget and Policy Priorities, Unshared Sacrifice: Who’s Hurt, Who’s Helped, and What’s Spared under
the Emerging House Budget Reconciliation Plan, by Sharon Parrott and Isaac Shapiro, Nov. 2, 2005
http://www.cbpp.org/10-28-05bud.htm.
37 State Financing of Child Support Enforcement Programs: Final Report, prepared for the Assistant Secretary for
Planning and Evaluation and the Office of Child Support Enforcement, Department of Health and Human Services,
prepared by Michael E. Fishman, Kristin Dybdal of the Lewin Group, Inc. and John Tapogna of ECONorthwest, Sept.
3, 2003, p. iii.
38 The general CSE federal matching rate is 66%. This means that for every dollar that a state spends on its CSE
program, the federal government will reimburse the state 66 cents. So if the state spends $1 on its program, the federal
share of that expenditure is 66 cents and the state share of that expenditure is 34 cents. The algebraic formula for this
relationship is represented by .66/.34=x/1. Thereby, if the state share of the expenditure is $1, the federal share is $1.94
(i.e., the federal share is 1.94 times the state share), and the total expenditure by the state is $2.94 ($1+$1.94).
Similarly, if the state share of expenditures amounted solely to the incentive payment of $454 million, the federal share
would amount to 1.94 times that amount, or $881 million, translating into $1.335 billion in CSE expenditures/funding.





of P.L. 109-171 take effect, state CSE programs will be in the position of having to compete with
all other state interests in obtaining funds from the general treasury or county treasuries.






Appendix A presents several state-by-state tables.
Table A-1. Financing of the Federal-State Child Support Enforcement Program,
FY1999
Federal State Share Federal State CSE State Net Collections
State Share of CSE of Incentive Expenditures (Savings or to Costs
Expenditures Collections Payments Costs) Ratio
Alabama $35,611,163 $5,241,898 $2,925,629 $53,533,869 -$9,755,179 $3.78
Alaska 11,892,504 8,124,670 2,683,407 17,964,120 $4,736,461 4.41
Arizona 38,907,328 7,908,214 3,978,350 58,657,247 -$7,863,355 3.29
Arkansas 24,408,488 2,678,949 2,072,889 36,804,856 -$7,644,530 3.28
California 405,195,689 298,330,943 82,935,948 612,709,196 $173,753,384 2.78
Colorado 34,459,151 14,837,153 5,377,881 51,970,056 $2,704,129 3.65
Connecticut 25,500,777 23,648,357 7,570,416 38,575,967 $18,143,583 4.96
Delaware 12,097,749 3,071,513 981,294 18,204,947 -$2,054,391 2.97
District of Columbia 8,761,188 2,507,042 829,254 13,240,866 -$1,143,382 3.27
Florida 126,081,489 32,227,673 13,486,222 190,501,671 -$18,706,287 3.53
Georgia 59,553,919 13,972,035 7,399,714 89,929,572 -$9,003,904 4.16
Guam 2,518,316 579,865 212,137 3,803,786 -$493,468 2.25
Hawaii 13,853,295 4,259,798 1,524,364 20,129,474 -$492,017 3.25
Idaho 6,933,950 1,220,776 926,483 10,486,201 -$1,404,992 7.09
Illinois 91,778,835 35,626,059 10,783,073 138,846,999 -$659,032 2.52
Indiana 25,536,707 7,366,308 3,948,769 38,548,504 -$1,696,720 7.45
Iowa 28,716,250 15,577,006 6,357,855 42,592,938 $8,058,173 5.01
Kansas 32,764,235 11,286,869 4,301,156 49,627,981 -$1,275,721 2.98
Kentucky 37,249,397 10,425,186 5,070,254 56,187,842 -$3,443,005 3.9
Louisiana 31,631,370 5,188,683 2,573,418 47,330,767 -$7,937,296 4.41
Maine 12,331,480 8,957,322 4,352,601 18,622,365 $7,019,038 4.87
Maryland 54,963,710 12,142,185 3,487,062 82,662,138 -$12,069,181 4.42
Massachusetts 50,191,367 26,955,285 7,003,813 75,075,897 $9,074,568 4.07
Michigan 108,662,792 56,952,941 16,937,698 164,473,879 $18,079,552 7.81
Minnesota 74,863,180 27,771,128 8,416,633 113,148,820 -$2,097,879 4.06
Mississippi 20,364,999 2,399,038 1,937,334 30,617,658 -$5,916,287 4.53
Missouri 62,432,181 13,358,740 5,601,102 94,391,679 -$12,999,656 3.26
Montana 7,776,191 1,573,860 968,243 11,640,510 -$1,322,216 3.87
Nebraska 21,194,022 4,668,984 2,800,715 31,973,151 -$3,309,430 3.61
Nevada 25,118,585 3,552,729 2,049,489 38,022,688 -$7,301,885 3.08





Federal State Share Federal State CSE State Net Collections
State Share of CSE of Incentive Expenditures (Savings or to Costs
Expenditures Collections Payments Costs) Ratio
New Hampshire 11,465,868 4,035,135 1,343,250 16,919,544 -$75,291 4.24
New Jersey 91,926,796 35,984,052 10,384,931 139,127,636 -$831,857 4.86
New Mexico 21,372,665 2,738,442 1,524,652 32,341,992 -$6,706,233 1.18
New York 140,805,327 88,099,847 26,353,184 212,809,547 $42,448,811 4.58
North Carolina 86,026,282 15,263,427 6,565,419 130,060,394 -$22,205,266 2.93
North Dakota 6,840,076 1,433,106 832,665 9,957,810 -$851,963 4.42
Ohio 181,533,385 35,691,105 13,003,442 274,378,160 -$44,150,228 4.91
Oklahoma 21,367,112 5,982,850 3,243,588 32,252,862 -$1,659,312 3.37
Oregon 27,941,846 9,165,538 4,673,083 42,336,273 -$555,806 6.08
Pennsylvania 122,633,135 40,339,166 12,683,050 183,526,973 -$7,871,622 6.21
Puerto Rico 19,678,756 519,976 384,110 29,797,384 -$9,214,542 5.77
Rhode Island 7,458,854 8,153,600 2,888,831 10,920,203 $7,581,082 4.36
South Carolina 24,393,946 3,244,212 2,331,956 36,672,072 -$6,701,958 5.06
South Dakota 4,422,754 1,499,266 2,290,352 6,554,522 $1,657,850 6.75
Tennessee 34,897,180 5,971,748 3,886,480 52,191,331 -$7,435,923 4.69
Texas 135,875,645 40,379,443 13,965,567 202,946,289 -$12,725,634 4.23
Utah 24,222,336 5,455,212 3,132,907 36,312,567 -$3,502,112 3.24
Vermont 6,065,541 2,670,478 1,176,980 9,047,583 $865,416 4.15
Virgin Islands 1,693,368 105,345 57,285 2,559,423 -$703,425 2.86
Virginia 50,303,090 17,724,145 6,332,102 75,708,963 -$1,349,626 4.74
Washington 78,023,327 45,326,692 13,956,503 118,133,123 $19,173,399 4.68
West Virginia 18,986,263 1,338,056 4,223,837 28,668,536 -$4,120,380 4.09
Wisconsin 64,579,502 13,523,868 5,162,502 96,688,882 -$13,423,010 5.64
Wyoming 5,900,784 1,330,007 633,827 8,764,286 -$899,668 4.84
Total $2,679,764,145 $1,048,385,925 $360,523,706 $4,038,951,999 $49,721,777 $4.21
Source: Table prepared by the Congressional Research Service based on data from the Department of Health
and Human Services, Office of Child Support Enforcement.
Note: The “State Net” total of $49.7 million in this table differs from the state total for FY1999 in Table 3
($87.3 million) because a hold harmless payment (from the federal government) in the amount of $37.6 million
was paid to the states in FY1999—$49.7 million + $37.6 million = $87.3 million.





Table A-2. Financing of the Federal-State Child Support Enforcement Program,
FY2004
Federal State Federal Incentive State State Net Collections
State Share of CSE Share of Payments Expenditures (Savings or -to-Costs
Expenditures Collections (Actual) Costs) Ratio
Alabama $41,878,446 $1,853,453 $3,923,947 $62,916,747 -$15,260,901 $3.95
Alaska 13,802,424 6,895,135 1,934,767 20,889,915 $1,742,411 $4.50
Arizona 41,691,702 9,273,216 4,992,036 63,112,674 -$7,155,720 $4.42
Arkansas 27,096,681 1,663,967 3,361,187 40,962,098 -$8,840,263 $3.88
California 712,257,021 303,957,249 43,917,140 1,078,618,454 -$18,487,044 $2.12
Colorado 46,105,648 10,506,573 4,833,238 69,830,659 -$8,385,200 $3.55
Connecticut 50,500,252 20,996,405 3,455,259 76,443,536 -$1,491,620 $3.20
Delaware 15,748,564 2,216,934 1,265,209 23,836,341 -$4,605,634 $3.01
District of Columbia 10,844,775 2,437,930 597,907 16,413,838 -$2,533,226 $3.14
Florida 163,004,508 31,526,122 25,086,328 246,281,985 -$26,665,027 $4.50
Georgia 74,317,016 12,125,961 10,574,394 112,113,933 -$15,096,562 $4.67
Guam 3,079,605 337,703 80,188 4,656,068 -$1,158,572 $2.26
Hawaii 6,605,777 3,925,434 1,566,788 9,987,322 $2,110,677 $8.70
Idaho 13,503,603 1,197,899 2,335,547 20,414,880 -$3,377,831 $5.94
Illinois 114,187,371 16,673,041 8,440,244 172,726,567 -$33,425,911 $3.22
Indiana 43,156,405 8,917,114 7,080,909 65,083,192 -$5,928,764 $7.04
Iowa 34,840,160 13,762,266 7,247,439 52,734,715 $3,115,150 $5.59
Kansas 33,511,759 7,590,193 3,306,309 50,754,022 -$6,345,761 $3.15
Kentucky 37,841,507 9,885,753 7,627,918 57,067,459 -$1,712,281 $5.95
Louisiana 39,245,539 3,947,929 5,878,940 59,120,674 -$10,048,266 $5.04
Maine 15,945,077 8,579,100 2,339,229 24,120,328 $2,743,078 $4.35
Maryland 66,306,822 9,941,965 5,478,845 100,371,995 -$18,644,363 $4.57
Massachusetts 62,511,709 21,194,785 9,168,115 94,611,214 -$1,736,605 $4.88
Michigan 176,461,712 44,020,873 29,072,933 267,174,735 -$17,619,217 $5.42
Minnesota 94,516,910 22,613,125 13,048,434 142,912,641 -$12,734,172 $4.10
Mississippi 16,148,807 1,574,890 3,246,021 24,185,977 -$3,216,259 $7.96
Missouri 58,125,720 15,707,242 10,525,886 87,678,856 -$3,320,008 $5.40
Montana 8,859,284 1,388,608 1,061,120 13,399,195 -$2,090,183 $3.94
Nebraska 29,817,974 3,777,618 3,635,367 45,084,471 -$7,853,512 $3.63
Nevada 26,761,682 2,869,280 1,355,443 40,497,262 -$9,510,857 $3.31
New Hampshire 10,745,289 4,386,680 1,803,991 16,244,978 $690,982 $5.27
New Jersey 122,794,430 28,367,270 16,335,761 185,918,148 -$18,420,687 $4.89
New Mexico 26,349,330 2,335,711 970,705 39,892,937 -$10,237,191 $1.87





Federal State Federal Incentive State State Net Collections
State Share of CSE Share of Payments Expenditures (Savings or -to-Costs
Expenditures Collections (Actual) Costs) Ratio
New York 214,702,411 57,072,810 26,298,854 324,634,090 -$26,560,015 $4.31
North Carolina 75,469,189 13,208,939 12,807,092 114,005,360 -$12,520,140 $5.01
North Dakota 7,824,566 1,775,067 1,542,418 11,843,765 -$701,714 $5.37
Ohio 203,632,344 29,156,779 30,840,836 308,380,120 -$44,750,161 $5.46
Oklahoma 30,862,130 5,526,645 3,437,279 46,684,484 -$6,858,430 $3.64
Oregon 34,567,709 8,447,376 5,956,034 52,335,329 -$3,364,210 $6.17
Pennsylvania 133,509,782 38,875,623 26,532,361 202,107,979 -$3,190,213 $7.01
Puerto Rico 21,044,351 390,648 3,273,456 31,845,329 -$7,136,874 $7.88
Rhode Island 7,817,476 5,638,100 1,270,822 11,820,855 $2,905,543 $5.01
South Carolina 23,467,802 2,469,645 3,605,396 35,384,236 -$5,841,393 $7.00
South Dakota 5,463,363 1,397,238 1,517,780 8,273,943 $104,438 $7.49
Tennessee 53,205,964 8,464,696 7,766,731 80,101,558 -$10,664,167 $5.16
Texas 183,603,791 32,392,934 35,018,030 276,817,795 -$25,803,040 $5.95
Utah 24,463,269 4,771,869 3,677,929 36,952,849 -$4,039,782 $4.08
Vermont 8,040,693 4,421,366 1,197,334 12,157,120 $1,502,273 $4.22
Virgin Islands 3,636,911 49,476 105,718 5,506,548 -$1,714,443 $1.83
Virginia 56,964,053 21,278,220 10,673,373 86,120,479 $2,795,167 $6.33
Washington 92,013,706 36,906,521 13,445,851 139,275,739 $3,090,339 $4.52
West Virginia 25,252,781 3,047,288 3,775,411 38,168,078 -$6,092,598 $4.42
Wisconsin 68,468,736 13,701,550 14,529,242 103,405,275 -$6,705,747 $5.91
Wyoming 6,862,165 1,090,956 1,180,509 10,382,385 -$1,248,755 $5.16
Total $3,519,436,701 $926,531,170 $454,000,000 $5,322,261,132 -$422,293,261 $4.38
Source: Table prepared by the Congressional Research Service based on data from the Department of Health
and Human Services, Office of Child Support Enforcement.
Table A-3. Trend in Total CSE Collections, by State, FY1999-FY2004
(in millions of dollars)
Percent
State 1999 2000 2001 2002 2003 2004 Change 1999-
2004
Alabama $185.9 $192.1 $200.2 $210.8 $223.3 $226.5 18%
Alaska 67.1 71.1 77.9 81.3 79.3 82.1 18%
Arizona 169.2 196.8 212.4 229. 233.5 247.7 32%
Arkansas 108.5 120.5 122.2 128.8 135.3 144.7 25%
California 1,604.2 2,059.5 1,987.8 1,761.4 2,132.0 2,177.8 26%
Colorado 163.5 176.1 189.7 202.5 203.1 217.2 25%





Percent
State 1999 2000 2001 2002 2003 2004 Change 1999-
2004
Connecticut 175.5 190.8 203.0 216.7 222.4 226.6 23%
Delaware 45.0 49.0 53.4 59.5 61.5 63.6 29%
District of 35.1 35.0 37.8 40.5 44.3 44.7 21%
Columbia
Florida 579.8 648.0 700.4 803.4 891.0 982.7 41%
Georgia 330.6 361.9 383.5 415.2 453.7 465.4 29%
Guam 7.7 7.7 7.5 7.9 8.3 8.7 12%
Hawaii 60.5 66.5 69.3 73.5 75.7 80.8 25%
Idaho 64.3 75.1 87.4 95.7 103.1 110.9 42%
Illinois 325.6 361.3 424.1 460.1 471.0 511.2 36%
Indiana 271.1 366.2 366.8 430.2 417.1 442.6 39%
Iowa 201.2 218.7 236.9 255.5 270.0 280.4 28%
Kansas 138.0 139.2 127.2 134.2 139.3 142.7 3%
Kentucky 206.2 226.4 249.0 280.9 281.2 322.1 36%
Louisiana 188.1 213.9 233.5 260.4 273.0 279.6 33%
Maine 80.7 89.4 95.1 96.1 97.6 99.5 19%
Maryland 350.2 367.9 379.4 396.3 409.2 427.6 18%
Massachusetts 291.5 318.6 363.1 402.7 425.1 439.9 34%
Michigan 1,274.6 1,347.4 1,385.2 1,443.7 1,403.9 1,414.4 10%
Minnesota 442.7 477.4 512.1 537.1 558.6 567.4 22%
Mississippi 128.9 144.4 158.1 169.0 175.1 182.0 29%
Missouri 285.8 339.0 372.7 410.9 433.0 449.7 36%
Montana 38.2 40.8 41.0 43.5 44.3 45.0 15%
Nebraska 110.6 142.5 159.9 143.2 146.7 153.6 28%
Nevada 92.1 79.3 84.1 91.4 99.6 107.7 14%
New Hampshire 66.2 71.4 73.2 76.0 79.5 79.6 17%
New Jersey 635.1 679.2 724.7 774.7 815.0 861.9 26%
New Mexico 34.9 39.5 43.6 51.9 59.8 66.4 47%
New York 909.8 1,102.0 1,148.8 1,289.2 1,341.1 1,312.1 31%
North Carolina 348.0 395.6 430.3 468.7 496.1 527.4 34%
North Dakota 40.9 41.8 47.6 50.8 54.5 57.7 29%
Ohio 1,301.3 1,411.2 1,461.4 1,617.6 1,566.1 1,636.4 20%
Oklahoma 96.2 107.2 116.2 131.8 142.4 154.0 38%
Oregon 231.9 248.2 271.0 275.9 289.0 298.3 22%
Pennsylvania 1,107.7 1,167.4 1,252.2 1,331.9 1,356.7 1,371.0 19%
Puerto Rico 166.0 182.8 195.9 211.6 232.3 240.5 31%





Percent
State 1999 2000 2001 2002 2003 2004 Change 1999-
2004
Rhode Island 44.3 48.4 48.9 53.3 52.5 54.7 19%
South Carolina 173.8 188.2 208.2 224.3 232.5 235.6 26%
South Dakota 38.3 43.5 47.5 50.6 52.5 55.8 31%
Tennessee 224.2 248.2 276.3 318.3 353.7 382.3 41%
Texas 802.9 964.9 1,174.2 1,346.9 1,507.4 1,502.6 47%
Utah 107.3 118.1 127.4 133.1 137.1 140.6 24%
Vermont 34.9 38.7 40.7 41.5 42.2 48.7 28%
Virgin Islands 6.1 7.5 7.2 7.2 7.6 8.5 28%
Virginia 312.8 347.8 403.2 436.7 467.5 495.1 37%
Washington 515.9 548.7 572.9 590.9 597.3 591.2 13%
West Virginia 109.4 120.3 137.2 151.2 157.1 158.5 31%
Wisconsin 532.5 569.0 583.7 574.2 577.8 588.9 10%
Wyoming 38.5 41.9 44.7 46.6 47.4 48.6 21%
Total $15,901.2 $17,854.3 $18,957.6 $20,136.9 $21,176.4 $21,861.3 27%
Source: Table prepared by the Congressional Research Service based on data from the Department of Health
and Human Services, Office of Child Support Enforcement.
Table A-4. Trend in TANF/Foster Care Collections, by State, FY1999-FY2004
(in millions of dollars)
Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
Alabama $18.0 $12.3 $13.4 $13.1 $12.3 $8.5 -53%
Alaska 17.6 16.9 17.4 16.5 16.1 15.2 -13%
Arizona 23.3 26.4 24.7 28.5 27.6 29.1 25%
Arkansas 10.8 10.1 9.7 15.7 40.3 7.0 -36%
California 620.2 750.7 695.5 583.0 634.6 625.0 1%
Colorado 31.9 30.2 25.6 24.8 23.3 21.8 -32%
Connecticut 54.1 50.0 59.5 63.1 62.1 45.9 -15%
Delaware 7.4 7.2 9.8 7.2 6.8 6.3 -15%
District of Columbia 5.1 4.5 4.3 4.7 5.2 5.4 7%
Florida 73.1 75.2 69.7 296.5 336.4 78.8 8%
Georgia 47.8 43.8 41.4 43.2 44.2 39.6 -17%
Guam 1.6 1.4 1.3 1.6 1.6 1.4 -16%
Hawaii 10.4 11.7 12.6 12.2 10.5 10.8 4%
Idaho 4.1 4.3 4.5 4.3 4.2 4.1 1%





Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
Illinois 72.8 81.3 56.0 49.7 41.7 35.0 -52%
Indiana 25.2 24.2 23.7 27.8 31.4 25.0 -1%
Iowa 44.1 43.7 50.9 87.5 95.3 39.0 -12%
Kansas 28.9 28.2 16.5 20.0 21.5 20.4 -30%
Kentucky 35.9 33.5 34.4 35.7 32.3 33.5 -7%
Louisiana 17.8 16.4 17.6 17.9 17.4 15.8 -11%
Maine 32.6 34.0 33.3 30.0 29.4 28.6 -12%
Maryland 25.1 25.3 22.4 21.6 21.0 20.3 -19%
Massachusetts 54.2 46.7 44.1 47.1 45.3 42.8 -21%
Michigan 129.1 130.0 96.6 140.2 119.7 105.6 -18%
Minnesota 60.7 56.7 55.8 57.2 59.0 55.1 -9%
Mississippi 11.0 8.3 8.2 8.3 8.1 7.4 -33%
Missouri 37.0 46.8 46.3 50.9 45.7 41.7 13%
Montana 6.1 5.7 5.1 5.9 6.1 5.3 -12%
Nebraska 12.9 12.0 15.5 15.1 13.5 9.9 -23%
Nevada 7.4 8.4 6.1 6.2 6.6 6.7 -9%
New Hampshire 8.6 9.5 8.1 8.5 10.8 9.0 4%
New Jersey 72.5 65.7 63.4 63.3 60.5 58.8 -19%
New Mexico 10.8 7.9 7.7 8.9 9.0 9.7 -10%
New York 182.0 193.1 179.3 168.3 141.4 122.2 -33%
North Carolina 44.0 44.9 42.5 41.3 38.4 37.1 -16%
North Dakota 4.8 4.3 5.6 5.4 5.8 5.7 19%
Ohio 93.9 99.5 82.1 80.0 73.9 77.3 -18%
Oklahoma 20.5 20.0 19.9 20.0 19.8 19.0 -8%
Oregon 23.8 22.9 22.1 25.4 24.7 23.1 -3%
Pennsylvania 97.4 95.3 98.9 98.7 94.1 96.2 -1%
Puerto Rico 2.1 2.7 2.4 2.2 2.2 2.0 -4%
Rhode Island 18.1 17.0 15.8 15.0 14.0 13.1 -28%
South Carolina 15.4 13.4 13.1 14.0 13.6 12.4 -19%
South Dakota 13.7 16.4 18.8 21.4 22.7 4.2 -70%
Tennessee 30.1 31.3 37.7 45.9 53.3 59.1 96%
Texas 108.2 82.4 102.6 174.5 199.1 83.2 -23%
Utah 20.4 19.2 21.3 20.8 20.5 18.0 -12%
Vermont 8.4 8.8 7.9 6.3 5.6 11.5 38%
Virgin Islands 0.5 0.8 0.5 0.9 0.3 0.2 -49%
Virginia 37.8 36.4 138.5 148.1 158.4 43.8 16%





Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
Washington 95.2 92.7 88.4 84.8 80.2 74.5 -22%
West Virginia 5.8 16.1 45.0 66.0 67.3 12.6 116%
Wisconsin 37.7 43.2 44.5 34.7 34.4 34.0 -10%
Wyoming 3.7 3.4 3.4 3.3 2.8 2.8 -26%
Total $2,481.7 $2,593.1 $2,591.5 $2,893.1 $2,972.2 $2,220.6 -11%
Source: Table prepared by the Congressional Research Service based on data from the Department of Health
and Human Services, Office of Child Support Enforcement.
Table A-5. Trend in Non-TANF Collections, by State, FY1999-FY2004
(in millions of dollars)
Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
Alabama $167.9 $179.8 $186.8 $197.7 $211.0 $218.0 30%
Alaska 49.6 54.2 60.5 64.8 63.3 66.9 35%
Arizona 145.9 170.4 187.6 201.1 205.9 218.6 50%
Arkansas 97.7 110.4 112.4 113.1 95.0 137.8 41%
California 984.0 1,308.8 1,292.3 1,178.4 1,497.4 1,552.8 58%
Colorado 131.7 145.9 164.2 177.7 179.8 195.4 48%
Connecticut 121.4 140.9 143.5 153.5 160.3 180.7 49%
Delaware 37.5 41.8 43.7 52.3 54.7 57.3 53%
District of Columbia 30.1 30.5 33.5 35.8 39.1 39.3 31%
Florida 506.7 572.8 630.7 507.0 554.6 903.9 78%
Georgia 282.9 318.1 342.1 372.0 409.5 425.8 51%
Guam 6.0 6.3 6.2 6.3 6.7 7.3 22%
Hawaii 50.2 54.8 56.7 61.2 65.2 70.0 40%
Idaho 60.2 70.8 82.9 91.3 98.9 106.8 77%
Illinois 252.7 279.9 368.1 410.4 429.4 476.2 88%
Indiana 245.9 342.0 343.1 402.4 385.7 417.7 70%
Iowa 157.1 175.0 186.0 168.0 174.6 241.4 54%
Kansas 109.1 111.0 110.6 114.2 117.7 122.4 12%
Kentucky 170.4 192.9 214.6 245.2 248.9 288.6 69%
Louisiana 170.3 197.5 215.9 242.4 255.6 263.8 55%
Maine 48.0 55.4 61.8 66.1 68.2 71.0 48%
Maryland 325.0 342.6 357.0 374.8 388.2 407.2 25%
Massachusetts 237.3 271.9 318.9 355.6 379.8 397.1 67%
Michigan 1,145.6 1,217.4 1,288.6 1,303.5 1,284.2 1,308.8 14%





Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
Minnesota 381.9 420.7 456.3 479.9 499.6 512.3 34%
Mississippi 117.9 136.1 149.9 160.8 166.9 174.6 48%
Missouri 248.9 292.2 326.4 360.0 387.3 408.0 64%
Montana 32.1 35.0 35.9 37.6 38.1 39.7 23%
Nebraska 97.7 130.5 144.3 128.1 133.2 143.7 47%
Nevada 84.7 70.9 78.0 85.2 93.0 101.0 19%
New Hampshire 57.6 61.9 65.1 67.5 68.7 70.6 23%
New Jersey 562.6 613.5 661.3 711.3 754.5 803.1 43%
New Mexico 24.1 31.7 35.9 42.9 50.8 56.7 135%
New York 727.8 908.9 969.5 1,121.0 1,199.7 1,189.9 64%
North Carolina 304.0 350.7 387.8 427.5 457.7 490.3 61%
North Dakota 36.1 37.6 42.0 45.5 48.7 52.0 44%
Ohio 1,207.5 1,311.7 1,379.3 1,537.6 1,492.2 1,559.1 29%
Oklahoma 75.7 87.2 96.3 111.8 122.6 135.1 78%
Oregon 208.1 225.3 249.0 250.5 264.3 275.2 32%
Pennsylvania 1,010.3 1,072.1 1,153.3 1,233.2 1,262.6 1,274.8 26%
Puerto Rico 163.9 180.1 193.5 209.4 230.1 238.5 46%
Rhode Island 26.2 31.4 33.2 38.3 38.5 41.6 59%
South Carolina 158.4 174.8 195.0 210.3 218.9 223.2 41%
South Dakota 24.6 27.1 28.7 29.3 29.9 51.6 110%
Tennessee 194.1 216.9 238.6 272.3 300.4 323.2 66%
Texas 694.7 882.5 1,071.6 1,172.4 1,308.3 1,419.3 104%
Utah 86.9 98.9 106.1 112.2 116.6 122.6 41%
Vermont 26.5 29.9 32.8 35.2 36.6 37.2 40%
Virgin Islands 5.7 6.7 6.7 6.2 7.3 8.3 45%
Virginia 275.0 311.4 264.6 288.6 309.1 451.3 64%
Washington 420.7 456.0 484.5 506.1 517.0 516.7 23%
West Virginia 103.6 104.2 92.2 85.2 89.8 145.9 41%
Wisconsin 494.8 525.8 539.3 539.4 543.4 554.9 12%
Wyoming 34.7 38.5 41.3 43.3 44.6 45.8 2%
Total $13,419.5 $15,261.2 $ 16,366.1 $17,243.8 $18,204.1 $19,640.6 46%
Source: Table prepared by the Congressional Research Service based on data from the Department of Health
and Human Services, Office of Child Support Enforcement.





Table A-6. Average Monthly Child Support Payments in Cases with Collections, by
State, FY1999-FY2004
Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
Alabama $147 $149 $151 $154 $158 $158 7%
Alaska 204 209 224 228 219 220 8%
Arizona 183 193 197 208 207 211 15%
Arkansas 135 145 139 151 156 163 20%
California 174 215 212 185 220 229 32%
Colorado 163 191 223 269 284 315 94%
Connecticut 194 199 209 214 220 217 12%
Delaware 145 150 163 180 188 194 34%
District of Columbia 181 187 200 200 217 211 16%
Florida 170 177 179 189 195 203 19%
Georgia 138 165 171 177 187 188 36%
Guam 199 191 109 107 103 100 -50%
Hawaii 198 198 197 200 222 225 14%
Idaho 188 158 171 176 179 187 0%
Illinois 167 172 183 187 193 205 23%
Indiana 173 216 214 250 233 238 37%
Iowa 172 155 160 166 166 168 -2%
Kansas 254 181 165 171 174 175 -31%
Kentucky 165 168 165 177 172 187 13%
Louisiana 144 156 164 175 180 182 26%
Maine 169 180 188 194 199 204 21%
Maryland 203 212 214 217 224 236 16%
Massachusetts 246 256 279 304 273 318 29%
Michigan 197 236 265 265 268 276 40%
Minnesota 267 273 281 292 297 299 12%
Mississippi 120 125 129 135 136 138 15%
Missouri 164 181 190 199 206 211 28%
Montana 138 141 144 150 149 149 8%
Nebraska 216 215 234 207 207 208 -4%
Nevada 271 185 185 195 200 150 -45%
New Hampshire 212 225 229 235 249 249 17%
New Jersey 249 259 272 284 300 312 25%
New Mexico 144 170 168 181 193 209 44%
New York 189 208 217 241 252 244 29%





Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
North Carolina 187 149 153 159 163 169 -10%
North Dakota 215 184 197 200 206 208 -3%
Ohio 497 270 253 275 266 263 -47%
Oklahoma 245 143 150 155 170 171 -30%
Oregon 180 186 201 200 205 215 20%
Pennsylvania 234 245 252 263 263 272 16%
Puerto Rico 161 165 172 179 191 192 19%
Rhode Island 188 199 200 209 213 219 17%
South Carolina 162 168 174 184 189 195 21%
South Dakota 863 170 179 182 186 194 -78%
Tennessee 158 169 179 186 196 200 26%
Texas 266 265 282 226 234 218 -18%
Utah 173 177 186 192 195 201 17%
Vermont 192 202 208 220 222 239 25%
Virgin Islands N.A. N.A. N.A. 159 165 177 N.A.
Virginia 153 159 172 182 189 197 29%
Washington 200 201 205 208 210 205 2%
West Virginia 177 192 199 213 215 206 16%
Wisconsin 217 212 220 217 220 221 2%
Wyoming 179 176 175 174 173 174 -3%
Total $201 $206 $212 $215 $221 $224 12%
Source: Table prepared by the Congressional Research Service based on data from the Department of Health
and Human Services, Office of Child Support Enforcement.
N.A.—Not Available.
Table A-7. Collections on Behalf of TANF Families as a Percentage of Total CSE
Collections, by State, FY1999-FY2004
State 1999 2000 2001 2002 2003 2004
Alabama 10% 6% 7% 6% 5% 1%
Alaska 12% 10% 8% 8% 7% 6%
Arizona 5% 4% 4% 5% 6% 6%
Arkansas 4% 4% 3% 9% 27% 3%
California 18% 17% 15% 14% 14% 16%
Colorado 13% 11% 9% 8% 8% 6%
Connecticut 15% 12% 16% 16% 16% 9%
Delaware 8% 7% 12% 7% 6% 6%





State 1999 2000 2001 2002 2003 2004
District of Columbia 10% 9% 8% 7% 7% 7%
Florida 4% 4% 3% 32% 33% 4%
Georgia 13% 8% 7% 8% 7% 5%
Guam 20% 17% 16% 15% 15% 13%
Hawaii 16% 11% 11% 9% 7% 6%
Idaho 1% 1% 1% 1% 1% 1%
Illinois 22% 23% 10% 4% 3% 2%
Indiana 9% 6% 3% 3% 4% 3%
Iowa 8% 7% 10% 26% 28% 5%
Kansas 7% 7% 5% 6% 7% 7%
Kentucky 9% 7% 7% 6% 6% 5%
Louisiana 8% 3% 3% 3% 3% 3%
Maine 40% 27% 18% 17% 17% 16%
Maryland 4% 3% 3% 2% 2% 2%
Massachusetts 15% 12% 10% 7% 6% 6%
Michigan 3% 4% 2% 4% 4% 3%
Minnesota 6% 6% 6% 6% 6% 5%
Mississippi 4% 3% 3% 3% 3% 2%
Missouri 7% 7% 6% 5% 5% 4%
Montana 5% 7% 6% 7% 7% 5%
Nebraska 11% 5% 5% 7% 7% 4%
Nevada 2% 5% 2% 3% 3% 2%
New Hampshire 12% 9% 8% 8% 7% 6%
New Jersey 6% 5% 4% 4% 4% 4%
New Mexico 18% 12% 8% 7% 6% 5%
New York 20% 11% 10% 7% 5% 4%
North Carolina 7% 5% 5% 4% 4% 3%
North Dakota 4% 4% 4% 4% 4% 4%
Ohio 7% 4% 2% 2% 2% 2%
Oklahoma 20% 11% 6% 4% 4% 3%
Oregon 10% 9% 8% 5% 4% 4%
Pennsylvania 6% 5% 5% 4% 4% 4%
Puerto Rico 1% 1% 1% 1% 1% 1%
Rhode Island 35% 29% 25% 22% 21% 18%
South Carolina 5% 4% 4% 4% 4% 4%
South Dakota 29% 32% 35% 38% 40% 3%
Tennessee 9% 9% 10% 11% 12% 12%





State 1999 2000 2001 2002 2003 2004
Texas 4% 3% 3% 9% 10% 2%
Utah 19% 6% 8% 8% 8% 7%
Vermont 21% 20% 16% 10% 8% 10%
Virgin Islands 7% 11% 7% 13% 1% 1%
Virginia 8% 5% 31% 31% 31% 5%
Washington 8% 6% 6% 6% 5% 5%
West Virginia 3% 11% 30% 41% 40% 5%
Wisconsin 2% 2% 2% 2% 2% 2%
Wyoming 1% 0% 1% 1% 1% 1%
Total 9% 8% 7% 8% 9% 5%
Source: Table prepared by the Congressional Research Service based on data from the Department of Health
and Human Services, Office of Child Support Enforcement.
Table A-8. Trend in Total CSE Expenditures, by State, FY1999-FY2004
(in millions of dollars)
Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
Alabama $53.5 $57.1 $54.3 $62.8 $64.2 $62.9 15%
Alaska 18.0 21.5 22.1 21.0 21.7 20.9 14%
Arizona 58.7 60.6 58.6 61.5 59.0 63.1 7%
Arkansas 36.8 40.5 47.6 53.3 47.7 41.0 10%
California 612.7 676.0 808.7 967.9 972.4 1,078.6 43%
Colorado 52.0 63.1 60.9 63.3 72.1 69.8 26%
Connecticut 38.6 55.4 56.9 62.2 59.3 76.4 50%
Delaware 18.2 18.7 21.7 18.5 22.9 23.8 24%
District of Columbia 13.2 16.0 19.9 18.4 24.5 16.4 19%
Florida 190.5 216.3 221.9 228.9 230.6 246.3 23%
Georgia 89.9 110.4 109.1 110.0 114.1 112.1 20%
Guam 3.8 3.2 6.1 5.2 4.4 4.7 18%
Hawaii 20.1 16.4 11.9 12.2 16.1 10.0 -102%
Idaho 10.5 19.7 21.6 19.9 19.9 20.4 49%
Illinois 138.8 158.7 180.0 175.6 191.7 172.7 20%
Indiana 38.5 50.5 60.7 57.4 54.8 65.1 41%
Iowa 42.6 54.6 47.4 47.7 51.4 52.7 19%
Kansas 49.6 51.2 55.2 57.1 50.1 50.8 2%
Kentucky 56.2 59.7 64.3 62.9 61.0 57.1 2%
Louisiana 47.3 46.5 56.8 57.1 57.1 59.1 20%





Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
Maine 18.6 19.9 16.7 23.6 20.6 24.1 23%
Maryland 82.7 109.8 96.4 101.4 97.1 100.4 18%
Massachusetts 75.1 95.7 74.2 73.2 81.8 94.6 21%
Michigan 164.5 246.9 290.6 318.0 297.0 267.2 38%
Minnesota 113.1 120.2 128.1 136.8 142.5 142.9 21%
Mississippi 30.6 31.4 28.2 25.1 24.6 24.2 -27%
Missouri 94.4 106.6 103.0 93.5 92.1 87.7 -8%
Montana 11.6 13.4 12.4 12.5 14.4 13.4 13%
Nebraska 32.0 38.3 48.6 51.5 47.4 45.1 29%
Nevada 38.0 41.1 33.2 40.1 39.8 40.5 6%
New Hampshire 16.9 16.0 14.7 18.7 18.1 16.2 -4%
New Jersey 139.1 157.0 145.8 169.9 170.2 185.9 25%
New Mexico 32.3 33.6 45.5 39.7 42.9 39.9 19%
New York 212.8 239.9 241.5 306.7 287.1 324.6 34%
North Carolina 130.1 111.6 115.9 114.7 107.7 114.0 -14%
North Dakota 10.0 9.7 12.1 11.8 11.6 11.8 16%
Ohio 274.4 302.0 359.1 344.6 335.3 308.4 11%
Oklahoma 32.3 42.6 44.8 52.3 50.5 46.7 31%
Oregon 42.3 49.5 44.8 51.6 56.0 52.3 19%
Pennsylvania 183.5 199.4 184.7 200.5 205.8 202.1 9%
Puerto Rico 29.8 30.1 36.8 34.9 42.7 31.8 6%
Rhode Island 10.9 11.8 12.4 12.7 12.3 11.8 8%
South Carolina 36.7 39.3 47.8 40.3 38.7 35.4 -4%
South Dakota 6.6 7.1 6.9 7.4 7.5 8.3 21%
Tennessee 52.2 55.8 60.0 76.7 70.0 80.1 35%
Texas 202.9 207.4 238.8 265.1 288.7 276.8 27%
Utah 36.3 37.0 37.4 36.8 35.7 37.0 2%
Vermont 9.0 10.3 11.2 11.1 11.9 12.2 26%
Virgin Islands 2.6 5.3 7.5 5.3 4.8 5.5 54%
Virginia 75.7 79.4 73.4 76.3 79.1 86.1 12%
Washington 118.1 129.4 134.3 127.2 140.2 139.3 15%





Percent
State 1999 2000 2001 2002 2003 2004 Change
1999-2004
West Virginia 28.7 31.2 31.7 32.9 36.7 38.2 25%
Wisconsin 96.7 90.1 99.4 97.3 100.6 103.4 6%
Wyoming 8.8 10.7 12.0 10.2 9.4 10.4 16%
Total $4,039.0 $4,525.8 $4,835.2 $5,183.3 $5,215.7 $5,322.3 24%
Source: Table prepared by the Congressional Research Service based on data from the Department of Health
and Human Services, Office of Child Support Enforcement.







Child support collections are distributed to families or retained by governments as reimbursement
for welfare costs. Nonwelfare collections go to families. Welfare collections can be split among
the federal and state governments, with some payments to families. Under P.L. 104-193, the rules
governing how child support collections are distributed among families, the federal government,
and state governments changed substantially. Pursuant to P.L. 109-171, effective October 1, 2008,
at state option, the child support distribution rules will change again.
Since the CSE program’s inception, the rules determining who actually gets the child support
arrearage payments have been complex. It is helpful to think of the rules in two categories. First,
there are rules in both federal and state law that stipulate who has a legal claim on the payments
owed by the noncustodial parent. These are called assignment rules. Second, there are rules that
determine the order in which child support collections are paid in accord with the assignment
rules. These are called distribution rules.
According to the Massachusetts Associate Deputy Commissioner for CSE, Marilyn Ray Smith,
the distribution rules that were enacted as part of the 1996 welfare reform law (P.L. 104-193)
were difficult for states to follow, for staff to explain, for parents to understand, and for computers
to implement. She says the rules create accounting nightmares for customers, litigation from 39
advocacy groups, headaches for computer programmers, and audit deficiencies for the states.
According to Marilyn Ray Smith, child support distribution rules become extremely complex
once a family leaves welfare:
Most of the problems stem from the requirements that pre-assistance arrears be assigned to
the state, and that certain arrearages otherwise owed to the former welfare family are deemed
to be owed to the state when the collection is made by federal tax refund intercept.
When a family leaves welfare, states are required to keep track of six categories of
arrearages: permanently assigned, temporarily assigned, conditionally assigned, never
assigned, unassigned during assistance, and unassigned pre-assistance. On the computer,
these different categories are called buckets.” The money shifts among the buckets
according to the source of the collection, the family’s status on or off assistance when the
arrearage accrued, the amount of the unreimbursed public assistance balance, and the date of
the assignment of support rights as well as the date the TANF case closed (because of
phased-in implementation dates). Moreover, the distribution rules differ, depending on 40
whether the family went on welfare before or after October 1, 1997.
Much of the complexity of the distribution rules stemmed from their gradual implementation and
federal/state receipt of child support arrearage payments collected through the federal income tax
refund offset program. Thus, some of the complexity of the rules ended when the rules were
completely implemented on October 1, 2000. Many observers contend that if states choose to

39 More Money for Former Welfare Moms: Simplify the Distribution Rules, by Marilyn Ray Smith, presented at a
Congressional seminar for the House Committee on Ways and Means sponsored by the American Enterprise Institute
and the Brookings Institution, Oct. 22, 1999, p. 5.
40 Ibid., pp. 3-4.





implement the “family first” approach authorized by P.L. 109-171, the distribution of child
support will be much easier to explain, understand, and carry out.
As a condition of TANF eligibility, when a family applies for TANF, the custodial parent must
assign to the state the right to collect both current child support payments and past-due child
support obligations that accrue while the family is on the TANF rolls (these are called 41
permanently-assigned arrearages). The assignment requirement for TANF applicants also
includes arrearage payments that accumulated before the family enrolled in TANF (these are
called pre-assistance arrearages).
While the family receives TANF benefits, the state is permitted to retain any current support and
any assigned arrearages it collects up to the cumulative amount of TANF benefits that have been 42
paid to the family. P.L. 104-193 repealed the $50 required pass through and gave states the
choice to decide how much, if any, of the state share (some, all, none) of child support payments
collected on behalf of TANF families to send the family. States also decide whether to treat child
support payments as income to the family. P.L. 104-193 required states to pay the federal
government the federal government’s share of TANF collections.
P.L. 109-171 stipulates that the assignment covers child support that accrues only during the
period that the family receives TANF. Thus, child support owed before a family enrolls in TANF
and after the family leaves TANF belongs to the family, and child support owed during the time
the family is on TANF belongs to the state and federal governments. This provision takes effect 43
on October 1, 2009, or October 1, 2008 at state option.
For families who receive assistance from the state, P.L. 109-171 requires the federal government
to waive its share of the child support collections passed through to TANF families by the state
and disregarded by the state—up to an amount equal to $100 per month in the case of a family
with one child, and up to $200 per month in the case of a family with two or more children. This
provision takes effect on October 1, 2008.

41 This is one of the following six categories of arrearages: (1) permanently-assigned arrearages, (2) temporarily-
assigned arrearages, (3) conditionally-assigned arrearages, (4) never-assigned arrearages, (5) unassigned during-
assistance arrearages, and (6) unassigned pre-assistance arrearages. The six categories are defined in OCSE Transmittal
97-17, Oct. 21, 1997, Instructions for the distribution of child support under Section 457 of the Social Security Act,
http://www.acf.dhhs.gov/programs/cse/pol/AT/at-9717.htm, p. 6.
42 Under prior law, a small percentage of AFDC collections was paid to the family as a result of the $50pass through”
payment or in cases when the child support payment exceeded the AFDC benefit. Under old law, the first $50 of
current monthly child support payments collected on behalf of an AFDC family was given to the family and
disregarded as income to the family so that it did not affect the familys AFDC eligibility or benefit status.
43 P.L. 109-171 gives states the option to discontinue pre-assistance arrearage assignments in effect on Sept. 30, 1997,
or pre-assistance arrearage assignments in effect after Sept. 30, 1997, and before the implementation date of this
provision. If a state chooses to discontinue the child support arrearage assignment, the state would have to give up its
legal claim to collections based on such arrearages, and the state would have to distribute the collections to the family.





Before 1996, once a family went off AFDC, child support arrearage payments generally were
divided between the state and federal governments to reimburse them for AFDC; if any money
remained, it was given to the family. In contrast, under P.L. 104-193, payments to families that
leave AFDC/TANF are more generous. Under P.L. 104-193, arrearages are to be paid to the
family first, unless they are collected from the federal income tax refund (in which case,
reimbursing the federal and state governments is to be given first priority).
If a custodial parent assigns her or his child support rights to the state on or after October 1, 2000,
the parent has to assign all support rights that accrue while the family is receiving TANF benefits.
In addition, the TANF applicant must temporarily assign to the state all rights to support that
accrued to the family before it began receiving TANF benefits. This temporary assignment lasts
until the family stops receiving TANF benefits.
This means that since October 1, 2000, states have been required to distribute to former TANF
families the following child support collections first before the state and the federal government
are reimbursed: (1) all current child support, (2) any child support arrearages that accrue after the
family leaves TANF (these arrearages are called never-assigned arrearages), plus any arrearages
that accrued before the family began receiving TANF benefits. As mentioned above, these rules
do not apply to child support collections obtained by intercepting federal income tax refunds. If
child support arrearages are collected via the federal income tax refund offset program, the 1996
law stipulates that the state and federal government are to retain those collections.
The result of the 1996 welfare reform law distribution changes is that states are required to pay a
higher fraction of child support collections on arrearages to families that have left welfare by
making these payments to families first (before the state and the federal government). If this
change in policy resulted in states losing money relative to previous law (as in effect in FY1995),
the federal government was required to reimburse states for any losses (i.e., the “hold harmless”
provision). This hold harmless provision (included in P.L. 106-169) was repealed, effective
October 1, 2001. (The hold harmless provision was in effect from FY1998-FY2001.)
P.L. 109-171 simplifies child support distribution rules to give states the option of providing
families that have left TANF the full amount of the child support collected on their behalf (i.e.,
both current child support and child support arrearages, including support payments collected via
the federal income tax refund offset program). The federal government will have to share with the
states the costs of paying child support arrearages to the family first. This provision takes effect
on October 1, 2009, or October 1, 2008, at state option.





Carmen Solomon-Fears
Specialist in Social Policy
csolomonfears@crs.loc.gov, 7-7306