Child Support Provisions Considered But Not Enacted During the 2002-2005 Welfare Reauthorization Debate

^Pr^ep^ar^{ed f}^o^r^M^e^m^b^ers^an^d^Com^mⁱ^t^t^ees^of^C^ong^r^e^ss

The Child Support Enforcement (CSE) program, Part D of Title IV of the Social Security Act,
was enacted in January 1975 (P.L. 93-647) and most recently amended by the Deficit Reduction
Act of 2005 (P.L. 109-171). The CSE program is administered by the Office of Child Support
Enforcement (OCSE) in the Department of Health and Human Services (HHS), and is funded by
general revenues. All 50 states, the District of Columbia, Guam, Puerto Rico, the Virgin Islands,
and nine tribal nations operate CSE programs and are entitled to federal matching funds. In
FY2005, the CSE program collected $23 billion in child support on behalf of more than 17
million children. The CSE program is intended to help strengthen families by securing financial
support for children from their noncustodial parent on a consistent and continuing basis.
Although the Deficit Reduction Act of 2005 (enacted February 8, 2006) included significant
changes to the CSE program, it did not include many of the child support provisions that had been
considered during the preceding four-year debate within the context of welfare reauthorization.
This report discusses 12 such provisions that were passed by either the House or the Senate
Finance Committee (or both). The Administration has included several of these provisions in its
FY2008 budget. Of the 12 provisions, five aimed at enhancing CSE collection tools would have
(1) eased the collection of child support from veterans’ disability compensation benefits; (2)
facilitated the collection of child support from Social Security benefits; (3) allowed the HHS
Secretary to act on behalf of states to seize financial assets (held by a multi-state financial
institution) of noncustodial parents who owed child support; (4) facilitated the collection of child
support from longshore and harbor workers’ compensation; and (5) required states to adopt a later
version of the Uniform Interstate Family Support Act (UIFSA) so as to facilitate the collection of
child support payments in interstate cases.
Other provisions included an array of measures aimed at making the CSE program more efficient
and effective. The provisions would have (1) required the HHS Secretary to submit a report to
Congress on the problems of undistributed child support collections; (2) designated Indian tribes
and tribal organizations as persons authorized to have access to information in the Federal Parent
Locator Service (FPLS); (3) changed the language of current law to require the Secretary of
Education to reimburse the HHS Secretary for any costs incurred by the HHS Secretary in
providing requested information on new hires (from the National Directory of New Hires, which
is part of the FPLS) to help the Education Secretary locate persons who had defaulted on student
loans; (4) increased federal funding for the CSE access and visitation program; (5) prohibited
states from collecting child support from noncustodial fathers to repay Medicaid costs associated
with the birth of a child; and (6) required each health care plan administrator to notify the state
CSE agency when a child has lost health care coverage. The final provision discussed in this
report would have gradually reduced the federal matching rate for CSE expenditures, from 66%
to 50%. Table A-1 shows the welfare reauthorization legislation in which these 12 child support
provisions appeared. This report will not be updated.

Backgr ound ..................................................................................................................................... 1
Child Support Provisions Considered But Not Enacted..................................................................2
Expansion of CSE Collection/Enforcement Tools....................................................................3
Garnishment of Compensation Paid to Veterans for Service-Connected
Disabilities in Order to Enforce Child Support Obligations............................................3
Improving Federal Debt Collection Practices.....................................................................4
Identification and Seizure of Assets Held by Multi-State Financial Institutions................5
Claims Upon Longshore and Harbor Workers’ Compensation for Child Support..............7
State Law Requirement Concerning the Uniform Interstate Family Support Act
(UIFSA) ........................................................................................................................ ... 8
Other Provisions........................................................................................................................9
Report on Undistributed Child Support Payments..............................................................9
Tribal Access to the Federal Parent Locator Service.........................................................11
Reimbursement of HHS Secretary’s Costs of Sharing Information in the National
Directory of New Hires with the Department of Education..........................................12
Grants to States for Access and Visitation Programs........................................................13
Ban on Repayment of Medicaid Birth Costs....................................................................14
Required Notice to State Child Support Enforcement Agency When a Child Loses
Health Care Coverage....................................................................................................15
Reduction in Rate of Federal Reimbursement of Child Support Administrative
Expenses ....................................................................................................................... .15
Table A-1. Selected Child Support Provisions in Selected Welfare Reauthorization Bills,
2002-2005................................................................................................................................... 17
Appendix. Child Support Provisions in Welfare Measures...........................................................17
Author Contact Information..........................................................................................................19

The Child Support Enforcement (CSE) program, Part D of Title IV of the Social Security Act,
was enacted in January 1975 (P.L. 93-647). The CSE program is administered by the Office of
Child Support Enforcement (OCSE) in the Department of Health and Human Services (HHS),
and is funded by general revenues. All 50 states, the District of Columbia, Guam, Puerto Rico, the
Virgin Islands, and nine tribal nations operate CSE programs and are entitled to federal matching
funds.
When the CSE program was first enacted in 1975, one of its primary goals was to recover the
costs (of federal and state governments) of providing cash welfare to families with children. Over
the years, the CSE program has evolved into a multifaceted program. While cost-recovery still
remains an important function of the program, other aspects of the program include service
delivery and promotion of self-sufficiency and parental responsibility. In FY2005, the CSE
program collected $23 billion in child support on behalf of more than 17 million children, of
which $21 billion went to families and $2 billion was retained by the states and federal
government as recovered welfare costs. The CSE program is intended to help strengthen families
by securing financial support for children from their noncustodial parent on a consistent and
continuing basis and by helping some families to remain self-sufficient and off public assistance
by providing the requisite CSE services. In FY2004, more than 331,000 families were able to end
their enrollment in the Temporary Assistance for Needy Families (TANF) program due to receipt
of child support payments according to the federal Office of Child Support Enforcement (OCSE).
Although the CSE program generally garners bipartisan support, for most of its history changes to
the program have been achieved in tandem with more controversial changes to other social
programs. This was illustrated in the 1996 welfare reform law. P.L. 104-193, the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996, was a major piece of social
legislation, most known for ending the cash welfare entitlement for needy families with children,
creating the Temporary Assistance for Needy Families (TANF) block grant, setting a five-year
time limit on aid, and requiring more work from welfare recipients. In addition to making
changes to a number of other social programs, the 1996 welfare reform law included over 40
provisions that made significant changes to the CSE program.
The original funding authority for TANF and mandatory child care provided in the 1996 welfare ¹
law expired at the end of FY2002 (September 30, 2002). President Bush submitted his welfare
reauthorization proposals to Congress in February 2002. Many policymakers and child support
advocates maintained at the start of the welfare reauthorization debates that child support should
be included in the discussions in light of the key role that child support plays in promoting self-
sufficiency. Though Congress debated welfare legislation throughout the four years 2002 through

2005, it did not pass comprehensive welfare reauthorization legislation (the major areas of ²

contention were work requirements and child care funding, not the proposed CSE changes).

¹^A^lthoug^{h t}^h^e¹⁹⁹⁶^w^e^lf^a^r^e^law⁽^P^.L^{. 10}^4-¹⁹³⁾^inc^l^ude^{d m}^a^ny^C^S^{E pr}^ov^isⁱ^ons^,^un^lik^e^the^T^A^N^F^pr^ov^is^ions^,^the^y
^w^e^r^e^{not tim}^e^-^lim^ite^{d. T}^h^e^{CSE prog}^ra^m^{is pe}^rm^aⁿ^eⁿ^tly^a^u^thoriz^e^d^.
²^T^h^e^H^ous^e^a^nd^Se^na^te^v^e^r^s^ions^o^f^the^C^S^{E pr}^ov^is^ionsⁱⁿ^c^l^u^d^e^dⁱⁿ^P.L^.¹⁰^9-¹^71,^the^D^e^fⁱ^c^{it R}^e^duc^ti^{on A}^c^{t of}²⁰⁰^{5 (}^S^.
¹⁹³²⁾^,^w^e^{re si}^mⁱ^l^a^{r i}^fⁿ^o^tⁱ^d^eⁿ^tⁱ^calⁱⁿ^m^o^st^cases.^T^h^{e n}^o^t^ab^l^e^excep^tⁱ^oⁿ^w^a^{s t}^h^{e CS}^E^p^r^o^vⁱ^sⁱ^oⁿ^rel^a^t^e^d^t^o^{a st}^at^e’s
^opti^oⁿ^{to “}^p^a^{ss thro}^ug^h”^t^o^T^A^N^F^f^a^m^ilie^{s so}^m^e^of^the^c^h^ild^su^pp^{ort c}^o^lle^c^t^e^d^on^the^f^a^mⁱ^l^y^’^s^be^ha^lf⁽^w^{ith the}^f^e^de^ra^l
^g^o^v^e^rn^m^e^{nt s}^h^a^r^ing^{in s}^o^m^e^of^the^c^o^s^t^s⁾^{. A}^lthoug^h^theⁱⁿ^te^nt^of^pr^ov^iding^T^A^N^F^f^a^m^ilie^s^w^{ith m}^o^r^e^of^the^c^h^ild
^su^p^p^o^r^t^col^l^ect^ed^f^o^{r t}^h^em^{was t}^h^{e sa}^m^eⁱⁿ^b^o^t^h^t^h^{e Ho}^u^s^{e and}^S^e^nat^e^versi^oⁿ^s^o^f^S^.¹⁹³²^,^t^h^{e ap}^p^r^oach^{es u}^s^ed^t^o
⁽^c^onti^nue^d.^..)

However, a scaled-back version of welfare reauthorization legislation was ultimately included in
broader budget spending reconciliation legislation, the Deficit Reduction Act of 2005 (P.L. 109-³

171).

P.L. 109-171 was signed into law on February 8, 2006. The act, among other things, extended
funding for the basic TANF block grant through FY2010, increased the percentage of TANF
families that are required to participate in work or work activities, increased funding for child
care, established healthy marriage promotion grants and responsible fatherhood initiatives, and ⁴
revised the CSE program.
Although P.L. 109-171 included significant changes to the CSE program,⁵ it did not include many
of the child support provisions discussed and considered within the four-year welfare
reauthorization debate. This report provides a brief discussion of 12 child support provisions that
were considered during 2002-2005 within the context of welfare reauthorization but not enacted ⁶
in P.L. 109-171 or any other federal law. To the extent that some of these provisions had broad ^th
support, they may be considered again in the 110 Congress. The Administration has included
several of the provisions in its FY2008 Budget.

The child support provisions discussed below were all either passed by the House or by the
Senate Finance Committee (or both), and many also were supported by the Administration.
Although few of the provisions elicited controversy, they were not included in P.L. 109-171 or ⁷
any other federal law. Because the welfare and child support provisions were included in budget
reconciliation legislation, there was concern that some provisions would be struck during the ⁸
Senate’s consideration of the bill due to the Byrd rule. This report describes these child support

^(...c^on^tin^ue^d)
^at^t^aⁱⁿ^t^h^at^o^b^j^ectⁱ^v^{e vari}^ed^si^gnⁱ^fⁱ^can^t^l^y^.^P^.^L^.¹⁰⁹^-¹⁷^{1 i}ⁿ^cl^u^d^e^{s a c}^o^m^p^ro^mⁱ^{se o}^f^t^h^{e t}^w^o^ap^p^r^o^ach^es^.
³^Se^e^C^R^S^R^e^por^{t R}^L³³⁴¹⁸^,^W^e^lfar^e^Re^aut^hor^iz^atio^{n i}ⁿ^t^h^e¹⁰⁹^th^C^ongr^e^s^s^:^Aⁿ^O^v^e^r^vⁱ^e^w^{, by}^G^e^{ne Fa}^lk^{, Me}^lin^da
^Gⁱ^s^h^{, a}^{nd C}^a^r^m^eⁿ^Solom^on-^Fe^a^r^s^.
⁴^Ibid^{., p. 1.}
⁵^Forⁱⁿ^f^o^r^m^a^{tion on}^the^c^h^ild^s^u^p^por^t^pr^ov^isⁱ^onsⁱⁿ^c^l^u^d^e^dⁱⁿ^P.L^.¹^09-¹⁷^{1, s}^e^e^C^R^S^R^e^p^o^r^t^R^S²²³⁷^7,^Ch^ild^S^u^p^port
^Prov^isions^{in t}^h^e^De^fic^{it Re}^d^u^c^tio^{n Ac}^t^{of 2}⁰⁰⁵⁽^P^.L.¹⁰^9-¹⁷¹⁾^{, by}^C^a^r^m^eⁿ^Solom^on-^Fe^a^r^s^.
⁶^S^e^veralⁿ^a^tⁱ^oⁿ^a^l^CS^E^o^r^ganⁱ^zatⁱ^oⁿ^s^an^{d so}^m^e^chⁱ^l^d^ren^’^{s ad}^vo^cacy^gr^oups^ha^v^e^e^x^pre^s^s^e^{d c}^onc^e^r^{n a}^{nd c}^r^itic^is^m^ov^e^r
^the^pr^ov^is^ionsⁱⁿ^P.L^.¹⁰^9-1⁷¹^re^g^a^rding^the^fⁱ^na^nc^ing^of^the^CS^E^prog^ra^m^.^T^h^e^s^e^g^r^oups^a^r^e^c^a^llin^g^f^o^{r (1) re}^s^t^ora^tioⁿ
^of^the^a^u^th^ority^{to f}^e^de^ra^ll^y^m^a^tc^{h CSE}^inc^eⁿ^tiv^e^pa^y^m^eⁿ^ts^t^h^at^st^at^{es rei}ⁿ^vest^b^{ack i}ⁿ^t^o^t^h^{e C}^S^E^pr^o^g^ra^m^,⁽²⁾
^re^stora^tion^of^the⁹⁰^%^f^e^de^ra^l^m^a^tc^{h f}^o^{r g}^e^ne^tic^te^sting^a^ssocⁱ^a^t^e^d^w^{ith pa}^te^rnity^de^te^r^m^ina^{tion, a}^nd^{(3) re}^pe^a^l^of^the
^$25^aⁿⁿ^u^a^l^C^S^E^us^e^r^f^e^e^f^o^r^c^e^r^{tain c}^u^s^t^odia^l^pa^r^e^nts^.^Suc^h^pr^op^os^a^l^s^or^pr^ov^is^ions^a^r^e^not^dis^c^us^s^e^{d in}^this^r^e^por^t
^b^ecau^{se t}^h^ey^w^e^r^eⁿ^o^t^p^a^rt^o^f^t^h^e²⁰⁰²^-²⁰⁰⁵^w^e^l^f^ar^{e reau}^t^h^o^rⁱ^zatⁱ^oⁿ^d^e^b^a^t^eⁿ^o^r^h^a^{ve su}^ch^p^r^o^p^o^s^al^s^b^eenⁱⁿ^t^r^o^d^u^cedⁱⁿ^th
^the¹¹⁰^C^ong^r^e^s^s^.
⁷^{In som}^e^c^a^s^e^s^{, the}^c^h^{ild su}^pp^ort^prov^is^io^{ns in}^the^H^ouse^aⁿ^{d Se}^na^t^e^{bills w}^e^re^ideⁿ^tic^a^l^{. In}^ot^he^{r c}^a^s^e^s^the^y^we^re
^sim^ila^r.^T^h^{is re}^port^doe^{s n}^o^t^disc^{uss a}ⁿ^y^diff^e^r^eⁿ^c^e^s^{in bill}^la^ng^ua^g^e^.
⁸^Unde^{r t}^h^e^By^{rd rule}^{, the}^Se^na^teⁱ^s^pro^h^ibi^t^e^d^f^r^om^c^ons^ide^r^ing^e^x^traⁿ^e^{ous m}^a^tte^{r a}^s^pa^{rt of}^a^re^c^onc^ilia^tio^{n bi}^{ll o}^r
^c^onf^e^r^eⁿ^c^e^re^{port on}^a^re^c^onc^ilia^tⁱ^on^bill^{. “}^E^x^t^ra^ne^{ous m}^a^tte^r”^g^e^ne^ra^ll^y^m^e^aⁿ^{s tha}^t^the^pr^ov^ision^do^e^s^not^pro^duc^e^a
^c^h^aⁿ^g^e^{in o}^u^tla^y^s^{or re}^v^e^nue^{s or i}^s^outsi^de^the^j^u^risd^ic^tio^{n of}^the^c^o^m^m^itte^e^tha^t^subm^itte^{d the}^prov^is^{ion f}^o^{r i}ⁿ^c^l^usi^on
^{in t}^h^e^re^c^onc^ilia^ti^{on m}^e^a^s^ure^;^ho^w^e^v^e^{r, the}^te^r^m^re^m^a^{ins s}^ubje^c^t^{to in}^te^rpre^ta^tio^{n by}^the^pre^sⁱ^d^ing^o^f^fⁱ^c^e^r⁽^w^{ho re}^lie^s
^{on t}^h^e^Se^na^te^P^a^r^l^ia^m^e^nta^r^iaⁿ⁾^{. The}^B^y^r^d^r^u^le^is^eⁿ^f^o^r^c^e^d^w^h^eⁿ^a^Se^na^tor^r^a^is^e^s^a^poi^nt^of^or^de^r^durⁱⁿ^g^c^ons^ide^r^a^tⁱ^on
⁽^c^onti^nue^d.^..)

provisions and includes a table that highlights the major welfare reauthorization measures in
which these 12 provisions were included during the 2002-2005 period. (See Table A-1.) The 12
provisions below are not arranged with respect to importance or any other measure. However,
they are classified into two categories: (1) expansion of CSE collection/enforcement tools and (2)
other provisions.
The CSE agency is second only to the Internal Revenue Service (IRS) in terms of its
collection/enforcement apparatus. Child support collection methods used by CSE agencies
include income withholding, interception of federal and state income tax refunds, interception of
unemployment compensation, liens against property, security bonds, reporting child support
obligations to credit bureaus, regular billings, delinquency notices, garnishment of wages,
revocation of various types of licenses (drivers’, business, occupational, recreational), denial of
passport, attachment of lottery winnings and insurance settlements, and seizure of assets held by
public or private retirement funds and financial institutions. Income withholding continues to be
the most effective method of collecting child support. In FY2005, income withholding accounted
for 69% of total child support collections. All jurisdictions also have civil or criminal contempt-
of-court procedures and criminal nonsupport laws.
Even with its array of collection procedures, the CSE program has consistently collected only a
small fraction of the child support obligations for which it has responsibility—18% in FY2005.
Although this percentage is higher if past-due child support payments (i.e., arrearages, which
generally are hard to collect) are not considered in the equation, it is still relatively low at 60%—
that is, in FY2005, the CSE program collected only 60% of current child support ⁹
payments/obligations .
The provisions discussed below seek to expand and/or enhance the ability of states to collect
child support payments by revising some CSE enforcement tools and adding others.
The disability compensation benefits of veterans are treated differently than most forms of
government payment for purposes of paying child support. Whereas most government payments
are subject to being automatically withheld to pay child support, veterans’ disability ¹⁰
compensation is not subject to intercept. Thus, in general, veterans’ disability compensation

^(...c^on^tin^ue^d)
^of^a^re^c^onc^ilia^tion^bil^l^or^c^onf^e^r^eⁿ^c^e^re^port.^If^the^po^int^of^or^de^{r is}^sustaⁱ^ne^d,^the^pr^ov^isio^{n or}^a^m^e^ndm^eⁿ^{t in}^que^sti^{on is}
^s^t^rⁱ^c^k^eⁿ^unle^s^s^its^pr^op^one^{nt c}^aⁿ^m^u^s^t^e^r^a^{3/5 (}⁶⁰⁾^Seⁿ^a^te^m^a^jor^ity^v^o^te^{to w}^a^iv^e^the^rule^{. F}^o^{r m}^o^re^de^ta^{ils, se}^e^CRS
^R^e^por^{t R}^L³⁰⁸⁶^2,^The^B^u^d^g^e^t^Re^c^onc^ili^ati^{on Pr}^oc^e^s^s^:^The^Seⁿ^a^te^’^s^“By^r^{d R}^u^le^”^,^by^Robe^{rt K}^e^ith.
⁹^U^.^{S. D}^e^pa^r^t^m^e^{nt of}^H^e^a^{lth a}^nd^H^u^m^a^{n Se}^r^v^ic^es^{. O}^f^fⁱ^ce^of^C^h^ild^Sup^por^t^Enf^o^r^c^e^m^eⁿ^t.^{Child Su}^pp^ort^En^forc^e^m^eⁿ^t,
^FY20⁰⁵^Pr^e^limⁱⁿ^ar^y^Re^por^t^{. Ma}^y²⁰^06.
^http:^//w^w^w^.a^cf^.dhhs^.g^ov^/pr^o^g^r^a^m^s^/^c^s^e^/^pu^bs^/²⁰⁰^6/^r^e^por^ts^/^p^r^e^lim^inar^y^_^r^e^por^t/
¹⁰^P^u^r^s^ua^{nt t}^o^Se^c^tioⁿ⁴⁵⁹⁽^h)^of^the^Socⁱ^a^l^Se^c^u^rⁱ^ty^A^c^{t c}^e^r^taⁱⁿ^f^e^de^r^a^{l be}^ne^f^its^or^pa^y^m^eⁿ^ts^w^h^ic^{h a}^r^e^ba^s^e^{d o}ⁿ
^“^r^em^une^r^a^tion”^f^r^om^em^plo^y^m^eⁿ^t^a^r^e^s^ubje^c^t^t^o^inc^o^m^e^w^ithhol^din^g^,^g^a^rⁿ^is^hm^eⁿ^{t or}^othe^r^le^g^a^{l pr}^oc^e^e^d^ing^s^f^o^r
^pa^y^m^eⁿ^{t of}^c^h^{ild s}^u^pp^or^t^or^a^lim^ony^{. Mone}^y^s^c^ons^ide^r^e^d^to^be^ba^s^e^{d o}ⁿ^r^e^m^une^r^a^{tion f}^r^om^em^ploy^m^e^{nt inc}^l^ude
^w^a^g^e^s^,^s^a^l^a^r^y^{, c}^o^m^m^is^sⁱ^{on, bo}^nus^{, pa}^y^,^a^llow^a^nc^es⁽ⁱ^nc^ludi^ng^sⁱ^c^k^pa^y^a^{nd inc}^eⁿ^tiv^e^pa^y⁾^{; Soc}ⁱ^a^l^Se^c^u^r^ity^be^ne^f^its^,
⁽^c^onti^nue^d.^..)

benefits are exempt from being considered moneys paid or payable to an individual (based on
remuneration from pay) for purposes of paying child support or alimony. Prior to 2004, there was
one exception to this rule. The exception occurred when a disabled veteran elected to forego some ¹¹
of his or her retirement pay in order to collect additional disability payments. In other words, if
a disabled veteran accepted disability compensation instead of retirement pay, he or she was
subject to having his or her disability benefits offset to meet child support obligations.
P.L. 108-136, enacted November 24, 2003, enables veterans to receive both military retired pay ¹²
and veterans’ disability compensation. P.L. 108-136 eliminated the need to forego retirement
pay for disability compensation payments.
Given that veterans’ disability compensation is not subject to intercept, several House and Senate
bills included a provision that would have allowed veterans’ disability compensation benefits to
be intercepted (withheld) and paid on a routine basis to the custodial parent. The proposed
provision would have made all veterans’ income subject to income withholding for child support
obligations.
Supporters of the provision maintain that the provision would provide more child support
collections to families of disabled veterans and make the treatment of veterans’ disability
payments more consistent with other forms of government payment with regard to obtaining child
support obligations. Opponents of the provision contend that Congress should stand by its long
history of protecting the payments made to disabled veterans from garnishment or other legal
claims. They argue that the federal government should put protections in place so that veterans’
disability compensation payments will not be diverted from the children to others (e.g., former ¹³
spouses) who need them less than the disabled veteran.
Federal law (the Debt Collection Improvement Act of 1996—P.L. 104-134) stipulates that the
Treasury Department has the authority to compare the names and taxpayer identifying numbers of
debtors with the names and taxpayer identifying numbers of recipients of federal payments. The
Department of the Treasury (or other designated federal disbursing agency) has the authority to

^(...c^on^tin^ue^d)
^inc^l^u^d^ing^dⁱ^sa^bility^pa^y^m^eⁿ^{ts; f}^u^nds^prov^ide^d^by^the^f^e^de^ra^{l g}^o^v^e^rⁿ^m^e^{nt f}^o^{r the}^pa^y^m^eⁿ^{t of}^pe^nsioⁿ^s^{, re}^tire^m^eⁿ^{t or}
^re^tire^d^pa^y^,^{or a}ⁿⁿ^u^itie^s;^de^a^t^{h be}^ne^f^{its; Bla}^c^k^L^ung^be^ne^f^{its; W}^o^rk^e^r^{s’ Co}^m^p^eⁿ^sa^tion^be^ne^f^{its; a}ⁿ^d^Ra^ilroa^d
^Re^tire^m^eⁿ^{t be}^ne^f^its.
¹¹^T^h^e^a^d^v^a^nta^g^e^{to v}^e^te^r^a^ns^of^r^e^pla^cⁱ^ng^r^e^tir^em^eⁿ^{t pa}^y^w^{ith di}^sa^bili^ty^pa^y^{is tha}^t^the^disa^bil^ity^pa^y^{is not s}^ubje^c^t^t^o
^ta^x^a^tion.
¹²^P^u^rsua^{nt t}^o^P^.^L^.¹⁰^8-1^36,^a^s^of^Ja^nua^ry^{1, 20}^04,^q^u^a^lif^ie^{d disa}^ble^d^m^ilita^r^y^re^tire^e^{s now}^g^e^{t pa}^{id bo}^t^h^theⁱ^r^f^u^ll
^m^ilita^r^y^re^tire^m^eⁿ^{t pa}^y^a^{nd the}ⁱ^r^v^e^te^ra^{ns’ disa}^bility^c^o^m^p^eⁿ^sa^tion^.^P^.^L^.¹^08-¹³^{6 p}^h^a^s^e^s^out^(ov^e^{r ni}^ne^y^e^a^r^{s) the}
^v^e^te^ra^{ns’ disa}^bility^off^s^e^t^,^w^h^ic^{h m}^e^aⁿ^{s tha}^t^m^ilita^r^y^re^tire^e^{s w}^{ith 20}^{or m}^o^re^y^e^a^r^{s of}^s^e^rv^ic^e^a^{nd a}^50%^(or^hig^h^e^r)
^v^e^te^ra^ns^{’ ra}^te^{d dis}^a^bility^w^{ill no l}^ong^e^r^ha^v^e^theⁱ^{r m}^ilita^r^y^re^tirem^{ent pa}^y^re^duc^e^d^by^the^a^m^{ount of}^t^h^eⁱ^{r v}^e^te^ra^ns^’
^disa^bility^c^o^m^p^eⁿ^sa^{tion. How}^e^v^e^{r, p}^u^rsua^nt^to^P.L^.¹^09-¹⁶^{3 (t}^he^Na^tiona^{l De}^f^e^nse^A^u^thor^iz^a^{tion A}^c^{t of}^Fisc^a^l^Ye^a^r
²⁰⁰⁶⁾^,^dⁱ^sab^l^e^d^vet^e^ran^s^(d^eemed^t^o^b^e¹⁰⁰^%^“un^e^m^p^l^o^yab^l^e”)^w^o^u^l^d^b^e^elⁱ^gⁱ^b^l^e^f^o^{r f}^u^l^l^con^c^u^rren^t^recei^p^t^o^f^t^h^ei^r
^disa^bility^c^o^m^p^eⁿ^sa^{tion a}ⁿ^d^theⁱ^r^m^ilita^r^y^re^tire^m^eⁿ^{t pa}^y^be^gⁱ^nning^Oc^tobe^{r 1}^,²⁰⁰⁹^{, f}^our^y^e^a^r^{s e}^a^r^li^e^r^thaⁿ^t^h^e
^p^r^ev^io^u^s^law^’^{s p}^r^o^v^isioⁿ^.^(F^o^r^ad^d^itioⁿ^a^{l i}ⁿ^f^o^rm^atioⁿ^oⁿ^c^oⁿ^c^u^rreⁿ^t^receip^t^o^f^m^ilitar^y^retire^m^en^{t p}^a^y^an^d^v^e^teran^s^’
^disa^bility^be^ne^f^{its, se}^e^{CRS Re}^po^{rt RL}³³⁴^49,^M^ilita^ry^Retiremen^{t, Co}ⁿ^c^u^rren^t^Recei^p^t^{, a}ⁿ^d^Rela^te^d^M^a^jo^r^Legⁱ^sl^a^tive
^Issu^es^{, by}^C^h^a^r^le^s^A^.^H^e^nning^.)
¹³^U.^S^.^Hou^s^{e o}^f^Rep^r^esen^t^a^tⁱ^v^es.^Co^mmⁱ^t^t^ee^{on V}^e^te^ra^{ns’ A}^ffa^{irs. Me}^e^ting^to^disc^uss-^Garnis^hmeⁿ^t^{of Be}^ne^fits^Pai^d^t^o
^Ve^te^r^ans^for^C^h^il^{d S}^u^p^por^t^a^{nd O}^t^he^r^C^our^t-^O^r^de^r^e^{d O}^b^li^gati^ons^.^A^u^gu^st⁵^,¹⁹⁹⁸^.

offset Social Security benefits, certain Black Lung Board benefits, and certain Railroad
Retirement benefits to collect delinquent nontax debt owed to the United States (if the debt is ¹⁴
more than 180 days past-due), subject to an annual $9,000 ($750 per month) exemption. The
law only applies to federal debts such as student loans, housing loans, and small business loans. It
does not apply to a debt owed to a state. Thus, the law prohibits the offset of federal benefit
payments to collect delinquent state-enforced child support obligations because child support debt
is owed to states rather than the federal government. Child support arrearage payments, which are
enforced by states, cannot be offset from Social Security benefits/payments.
Generally, Social Security benefits are not subject to garnishment, attachment, or other legal
process, pursuant to Section 207(a) of the Social Security Act. However, Social Security benefits
are attachable for child support purposes, because Section 207 of the act is expressly overridden
by Section 459(a) of the act, which provides that payments from the federal government, the
entitlement to which is based upon remuneration for employment, are subject to income
withholding, garnishment, or other legal process brought by a state CSE agency or custodial
parent for purposes of enforcing child support obligations.
Over the last several Congresses, both the House and the Senate have considered a provision to
expand the federal administrative offset program by allowing states to collect past-due child
support via the Department of Treasury’s withholding of Social Security benefit payments. This
provision also was proposed in the Administration’s FY2003 and subsequent budgets. The
Congressional Budget Office (CBO) has estimated that these offsets could yield about $65
million annually by 2010, but it notes that some (perhaps half) of this child support money would ¹⁵
have been collected anyway through the federal income tax refund offset program.
The proposed federal debt collection improvement provision would add another enforcement
method for states to collect past-due child support obligations. It would increase child support
payments to custodial families of children who have a noncustodial parent who is the recipient of
Social Security benefits, while maintaining a specified amount of income for those Social ¹⁶
Security beneficiaries.
P.L. 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996
(often referred to as the 1996 welfare reform law) required states to enter into agreements with

¹⁴^Gⁱ^ve^{n tha}^t^S^o^cⁱ^a^l^Se^c^u^r^ity^be^ne^f^{it pa}^y^m^eⁿ^ts^a^r^e^inte^nde^{d t}^o^pr^ov^id^e^the^e^l^de^r^l^y^,^blin^{d, a}ⁿ^d^dis^a^ble^d^,^a^{nd r}^e^tir^e^e^s^w^ith
^{a m}ⁱⁿⁱ^m^a^l^so^u^r^{ce o}^fⁱⁿ^co^m^e^,^t^h^es^{e p}^a^ymen^t^s^h^a^{ve gen}^e^ral^l^y^b^een^c^oⁿ^sⁱ^d^{ered o}^f^f^lⁱ^mⁱ^t^s^f^r^o^m^t^h^{e reac}^h^o^f^credⁱ^t^o^rs.
^A^c^k^now^le^dg^ing^this^{, C}^ong^r^e^s^s^pr^ov^ide^d^pr^ote^c^tⁱ^ons^f^o^r^c^o^ns^um^e^r^s^f^a^cⁱ^ng^of^f^s^e^t^s^.^Iⁿ^a^dditi^on^to^the^d^u^e^pr^oc^e^s^s
^r^e^quir^e^m^e^nts^,^C^ong^r^e^s^s^e^x^em^pte^d^the^fⁱ^r^s^{t $9}^,0⁰⁰^of^a^nnua^l^be^ne^f^its^a^{nd la}^te^r^,^by^r^e^g^u^la^{tion, s}^p^e^cⁱ^fⁱ^c^a^lly^e^x^em^pte^d
^Sup^p^le^m^e^nta^l^Se^c^u^rity^Inc^o^m^e^{(SSI) be}^ne^f^its.
¹⁵^T^h^e^f^e^de^r^a^{l inc}^o^m^e^ta^x^r^e^f^{und of}^f^s^e^t^pr^og^r^a^m^inte^r^c^e^p^ts^inc^o^m^e^only^onc^e^a^y^e^a^r^a^{nd g}^e^ne^r^a^ll^y^is^fⁱ^r^s^{t a}^pplie^d^to^aⁿ^y
^s^t^a^t^e^de^{bt w}^h^e^r^e^a^s^the^a^d^mⁱ^nis^t^r^a^tiv^e^of^f^s^e^t^pr^oc^e^dur^e^is^a^c^oⁿ^tin^uo^us^pr^oc^e^s^s^a^{nd a}^d^mⁱ^nis^t^r^a^tiv^e^of^f^s^e^t^f^unds^a^r^e^fⁱ^r^s^t
^a^pplie^d^{to a}ⁿ^y^de^{bt ow}^e^d^the^c^u^s^t^odia^l^f^a^mⁱ^l^y^.
¹⁶^A^lthoug^{h S}^o^cⁱ^a^l^Se^c^u^r^ity^be^ne^f^its^c^aⁿ^be^a^tta^c^h^e^d^vⁱ^a^inc^o^m^e^w^ithhol^ding^or^g^a^rⁿ^is^he^{d v}ⁱ^a^c^o^ur^t^pr^o^ceedⁱⁿ^gs,^t^h^e
^pr^o^pos^a^l^t^o^e^x^pa^nd^f^e^de^r^a^{l de}^{bt c}^o^lle^c^tio^{n pr}^a^c^tic^e^s^w^{ould a}^d^{d a}ⁿ^o^t^he^r^v^e^nue^thr^oug^h^w^h^ic^{h s}^t^a^t^e^s^c^oul^{d c}^o^lle^c^t^pa^s^t^-
^due^c^h^il^{d s}^u^p^por^t^ob^lig^a^tions^.^Aⁿ^of^f^s^e^t^is^de^fⁱ^ne^{d a}^s^aⁿ^a^m^{ount of}^m^oney^inte^r^c^e^p^te^{d f}^r^o^m^a^pa^r^e^nt’^s^s^t^a^t^e^or^f^e^de^r^a^l
^inc^o^m^e^ta^x^r^e^f^{und, or}^f^r^om^aⁿ^a^d^mⁱ^nis^t^r^a^tiv^e^pay^m^eⁿ^{t s}^u^c^h^a^s^f^e^der^a^{l r}^e^tir^e^m^eⁿ^{t be}^ne^f^its^{, in}^or^de^r^t^o^s^a^tis^f^y^a^c^h^ild
^s^upp^or^t^de^bt.^Aⁿ^of^f^s^e^t^is^pe^r^f^or^m^e^{d a}^d^mⁱ^nis^t^r^a^tiv^e^l^y^w^h^e^r^e^a^s^g^a^rⁿ^is^hm^eⁿ^{t (}^w^hic^h^is^a^l^e^ga^l^p^r^o^ceedⁱⁿ^g^un^de^r^w^h^ic^h
^p^a^rt^o^f^{a p}^e^rsoⁿ^’^{s w}^a^{ges an}^d^/^o^r^asset^sⁱ^s^wⁱ^t^h^h^e^l^d^f^o^{r p}^a^ym^en^t^o^f^a^d^e^b^t^{) m}^u^st^b^e^ob^t^aⁱⁿ^e^d^t^h^rou^g^h^a^co^u^r^t^p^r^o^ceedⁱⁿ^g.

financial institutions conducting business within their state for the purpose of conducting a
quarterly data match. The data match is intended to identify financial accounts (in banks, credit
unions, money-market mutual funds, etc.) belonging to parents who are delinquent in the payment
of their child support obligation. Under current law, HHS matches lists of noncustodial parents
who owe child support arrearages against data from financial institutions to identify assets that
might be seized to pay past-due child support. HHS forwards any matches to states so that states
can pursue the collection. When a match is identified, state CSE agencies may issue liens or
levies on the accounts to collect the past-due child support from the noncustodial parent. During
2004, the Financial Institution Data Match program found over 1.9 million financial accounts
belonging to about 1.1 million noncustodial parents nationwide; child support collections totaling ¹⁷
$98 million were seized by the states and distributed to custodial parents.
State CSE officials maintain that the seizure of assets through the Financial Institution Data
Match program has been a successful addition to the array of CSE tools. But, they also state that
the financial match program works best when the custodial parent has an account at a bank or
banks within the state. This is because in some cases, multi-state financial institutions will not
honor a seizure by a state unless the institution has branch offices in the state. Also, some states
have policies of pursuing matching only when a large financial asset is identified or only when
the arrearage is longstanding or no current payments are being made. Moreover, in some cases,
state law prohibits the placement of liens or levies on accounts outside of the state.
In 1998, Congress made it easier for multi-state financial institutions to match records by
permitting the Federal Parent Locator Service (FPLS) to help them coordinate their information.
Pursuant to P.L. 105-200, the FPLS uses its national file of delinquent noncustodial parents (i.e.,
noncustodial parents who owe past-due child support payments) for the data match with multi-
state financial institutions and transfers matched data to state CSE agencies. Under P.L. 105-200,
the state CSE agency and not the FPLS has the authority to seize assets to obtain child support
payments.
Given that interstate cases make up about one-third of the CSE caseload but represent only about ¹⁸
6% of total child support collections, and that effective use of the Financial Institution Data
Match program in cases dealing with multi-state financial institutions reportedly has been elusive
for many states, several Senate bills (but not House bills) included a provision that would have
allowed for federal seizure of accounts in multi-state financial institutions for child support
purposes. This proposal was also included in several Administration budgets beginning with
FY2004.
The proposed provision would have authorized the HHS Secretary, via the FPLS, to assist states
to perform data matches comparing information from states and participating multi-state financial
institutions with respect to persons owing past-due child support. The proposed provision would
have authorized the Secretary via the FPLS to seize assets, held by such financial institutions, of
noncustodial parents who owe child support arrearage payments, by issuing a notice of a lien or
levy and requiring the financial institution to freeze and seize assets in accounts in multi-state
financial institutions to satisfy child support obligations. It would have required the Secretary to

¹⁷^{U.S. De}^pa^rtm^e^{nt of}^He^a^{lth a}^nd^Hum^a^{n Se}^rv^ic^e^s^{. A}^d^mⁱ^nistra^tion^f^o^{r Childre}ⁿ^aⁿ^d^Fa^m^ilie^{s. P}^a^y^m^eⁿ^{ts to}^Sta^t^e^s^f^o^r
^C^h^ild^Su^pp^or^{t E}ⁿ^f^o^r^c^e^m^eⁿ^{t a}^{nd F}^a^mⁱ^l^y^Supp^or^t^P^r^og^r^a^m^s^{. FY}²⁰⁰⁷^J^u^s^tif^ic^a^{tion of}^Es^tim^a^t^e^s^f^o^r^A^p^pr^o^p^rⁱ^a^tioⁿ
^Com^m^itte^e^s^{. p. F-}¹³^.
¹⁸^C^h^il^{d S}^u^p^por^t^Enf^o^r^c^e^m^eⁿ^{t, FY}²⁰⁰⁵^Pr^e^limⁱⁿ^ar^y^Re^por^t^{. Ma}^y²⁰⁰^6.

transmit any assets seized under the procedure to the state for accounting and distribution. The
provision would have stipulated that the Secretary must inform affected account holders/ asset
holders of their due process rights.
The proposed provision would have given the federal government the authority to act on behalf of
states to seize financial assets for the purpose of paying child support. This proposed authority
would have resolved problems of jurisdiction in cases where a state is pursuing an asset in a
different state. Supporters of this provision contend that it would make the existing financial
institution match program more effective.
This provision had many opponents. Opponents of the provision contend that federalizing the
multi-state financial institution levy process is not the appropriate answer. Instead they say that
federal law should be clarified/strengthened by stipulating that a state must have laws requiring
all financial institutions doing business in the state to honor levies issued by any CSE agency,
regardless of whether it is an in-state or out-of-state financial institution. They argue that a
federalized levy program would preempt state law governing property rights. They say that
although the levy process should be made more uniform and easier to follow for financial
institutions, states should continue to have exclusive control of the levy process. Opponents of the
provision also claim that customer service issues would arise from wrongly attached accounts,
confusion regarding appeals, and lack of conformity regarding the priority of accounts for ¹⁹
freezing and minimum/maximum amounts that are subject to seizure.
The Longshore and Harbor Workers’ Compensation Act, administered by the U.S. Department of
Labor, provides medical benefits, compensation for lost wages, and rehabilitation services to
longshoremen, harbor workers and other maritime workers who are injured during the course of
employment or suffer from diseases caused or worsened by conditions of employment. These
benefits are paid directly by an authorized self-insured employer; or through an authorized
insurance carrier; or, in particular circumstances, by a Special Fund administered directly by the
Division of Longshore Compensation. Benefits paid by the federal Special Fund are subject to
attachment or garnishment for payment of child support obligations. However, benefits paid by
employers or private insurers of longshore, harbor, or other maritime workers are not subject to ²⁰
attachment or garnishment.
Several Senate bills (but not House bills) included a provision that would have amended the
Longshore and Harbor Workers’ Compensation Act to ensure that longshore or harbor workers
benefits that are provided by both the federal government or by private insurers are subject to
garnishment for purposes of paying child support obligations. This provision also was proposed
in several Administration budgets, beginning with the FY2004 budget. Although some opponents
of the provision contend that longshore and harbor workers’ compensation should not be subject
to further garnishment, supporters of the provision argue that longshore and harbor workers
compensation laws are out of sync with federal policy which generally is to make benefits based

¹⁹^Na^tiona^{l C}^h^il^{d S}^u^p^port^Enf^o^rc^e^m^eⁿ^{t A}^ssocⁱ^a^tion.^Re^s^o^lu^tio^{n O}^p^posⁱⁿ^{g Fe}^de^r^a^liz^at^io^{n of}^the^M^u^lt^i-^State^Fin^ancⁱ^a^l
^Institutⁱ^oⁿ^Dat^a^M^a^tc^h^Pro^g^ram^,^a^dopte^d^Fe^br^ua^r^y^{12, 2}⁰⁰⁵^.
²⁰^U^.^{S. D}^e^pa^r^t^m^e^{nt of}^L^a^bor^{. Em}^ploy^m^e^{nt Sta}^nda^r^d^s^A^d^mⁱ^nis^t^r^a^tion^.^Dⁱ^vⁱ^sⁱ^on^of^L^ong^s^hor^e^aⁿ^d^H^a^r^b^or^W^o^r^k^e^r^s^’
^Com^p^eⁿ^s^a^{tion. C}^h^a^p^te^{r 6-}²⁰^3—^Pay^m^eⁿ^{t P}^r^oc^e^d^ure^s^ht^t^p^://w^w^w^.dol.g^ov^/^e^s^a^/^o^w^c^p/dlhw^c^/ls^pm^/^l^s^p^m⁶^-203.h^t^m^.

on remuneration from employment (which includes worker’s compensation benefits paid or
payable under federal or state law) available for the payment of child support.
Several Senate bills (but not House bills) included a provision that would have required that, to
receive CSE funding, each state’s Uniform Interstate Family Support Act (UIFSA) include any
amendments officially adopted as of August 2001 by the National Conference of Commissioners
on Uniform State Laws (NCCUSL).
Some of the 2001 changes adopted by the NCCUSL included increased emphasis on the need to
determine the controlling order in the case of multiple child support orders, modification of
current rules regarding the enforcement of modified orders, more direction regarding international
child support cases, clarification regarding duration of child support, and procedures regarding
use of telephone hearings. With respect to controlling orders, the 2001 changes clarify current law
by stipulating that a court of a state that has established a child support order has continuing,
exclusive jurisdiction to modify its order if the order is the controlling order and the state is the
child’s state or the residence of any individual contestant; or if the state is not the residence of the
child or an individual contestant, the court has the contestant’s consent in a record or in open
court that the court may continue to exercise jurisdiction to modify its order.
The main reason that Congress (as part of the 1996 welfare reform law) required states, as a
condition of receiving CSE funding, to adopt the Uniform Interstate Family Support Act (UIFSA)
was to reduce the problems associated with the establishment and enforcement of child support in
interstate cases. One of the major barriers to interstate collection of child support prior to UIFSA
was the “multiple-order” world under the Uniform Reciprocal Enforcement of Support Act
(URESA). URESA expressly provided that a URESA order did not nullify, and was not nullified ²¹
by, any other child support order.
By the early 1990s, it was universally recognized that uniform processing of interstate cases
would increase the efficiency and effectiveness of the CSE program. Thus a major purpose of
UIFSA was to establish a “one-order” world, meaning that a court or child support agency would
have continuing, exclusive jurisdiction if it has issued a child support order and is the residence of
the custodial parent, noncustodial parent, or child.
The 1996 welfare reform law (P.L. 104-193) required that, to receive CSE funding, on and after
January 1, 1998, each state must have in effect the Uniform Interstate Family Support Act
(UIFSA), as approved by the American Bar Association on February 9, 1993, and as in effect on
August 22, 1996, including any amendments officially adopted as of such date by the National
Conference of Commissioners on Uniform State Laws.
UIFSA requires states to treat past-due child support obligations as final judgments that are
entitled to full faith and credit in every state. This means that a person who has a child support

²¹^T^h^e^Uⁿ^if^or^m^R^e^cⁱ^pr^oc^a^l^Enf^o^r^c^e^m^eⁿ^{t of}^Sup^por^t^A^c^{t (}^U^R^E^SA⁾^w^a^s^e^s^ta^blis^he^{d in}¹⁹⁵⁰^by^the^N^a^ti^ona^{l C}^onf^e^r^eⁿ^c^e
^o^f^Co^mmⁱ^s^si^oⁿ^e^{rs o}ⁿ^Unⁱ^f^o^r^m^S^t^at^{e L}^a^ws.^F^o^{r st}^at^{es t}^h^at^a^d^o^p^t^e^dⁱ^t^,ⁱ^t^w^a^{s t}^h^{e p}^rⁱ^m^ar^y^w^a^y^t^o^en^f^o^r^{ce an}^o^t^h^e^{r st}^at^e’s
^c^h^{ild s}^u^p^por^t^or^de^r^s^{. B}^e^f^o^r^e¹⁹⁵⁰^,^a^U^.^S.^pa^r^e^{nt w}^{ho w}^a^nte^d^t^o^o^b^t^a^{in c}^h^il^{d s}^u^pp^or^{t a}^g^aⁱ^ns^{t t}^h^e^ot^he^r^pa^r^e^{nt w}^{ho liv}^e^d
^{in a}ⁿ^othe^r^s^t^a^t^e^ha^{d t}^o^tr^a^v^e^l^{to t}^h^e^nonc^us^to^dia^l^pa^r^e^nt^’^s^s^t^a^t^e^{to ta}^k^e^le^g^a^{l ac}^tion.

order in one state does not have to obtain a second order in another state to obtain child support
should the noncustodial parent move from the issuing court’s jurisdiction. The 1996 welfare
reform law (P.L. 104-193) clarified the definition of a child’s home state, made several revisions
to ensure that the full faith and credit laws can be applied consistently with UIFSA, and clarified
the rules regarding which child support orders states must honor when there is more than one
order.
Given that about 33% of all CSE cases involve more than one state, it is generally considered
important that states have the same basic laws for handling interstate cases. After all of the states
had adopted UIFSA as required by the 1996 welfare reform law, the National Conference of
Commissioners on Uniform State Laws adopted amendments in 2001 (at the request of the CSE
officials and workers) to improve the processing of interstate child support cases. Supporters of
the provision that would require states to incorporate these amendments maintain that it would
make the CSE program more effective by requiring all states to adopt the more current version of
UIFSA. They contend that the provision would ensure that all interstate cases are handled under a
similar statutory framework, thus moving closer to the “one-order” world in which a child would
not be seriously disadvantaged in obtaining child support just because his or her parents do not
live in the same state.
In the last section, the five provisions discussed sought to expand and/or enhance the ability of
states to collect child support payments by revising some CSE enforcement tools and adding
others. The rest of this report discusses an array of unrelated provisions that proponents argued
would make the CSE program more efficient and effective. The provisions would have (1)
required the HHS Secretary to submit a report to Congress on the procedures states use to locate
custodial parents for whom child support has been collected but not yet distributed; (2) designated
Indian tribes and tribal organizations as persons authorized to have access to information in the
Federal Parent Locator Service; (3) changed the language of current law to require the Secretary
of Education to reimburse the HHS Secretary for any costs incurred by the HHS Secretary in
providing requested information on new hires (from the National Directory of New Hires which
is part of the FPLS) to help the Education Secretary locate persons who had defaulted on student
loans; (4) increased federal funding for the CSE access and visitation program; (5) prohibited
states from collecting child support from noncustodial fathers to repay Medicaid costs associated
with the birth of a child; and (6) required the health care plan administrator to notify the state
CSE agency when a child lost health care coverage.
The seventh provision discussed in this section would have reduced the federal matching rate for
CSE expenditures from 66% to 62% in FY2007, 58% in FY2008, 54% in FY2009, and 50% in
FY2010 and each fiscal year thereafter.
In recognition that custodial parents rely heavily on child support to meet their children’s basic
needs, both House and Senate bills over the last several Congresses have included a provision that
would have required the Secretary of HHS to submit to the House Ways and Means Committee
and the Senate Finance Committee a report on the procedures states use to locate custodial
parents for whom child support has been collected but not yet distributed. According to the
proposal, the report must include an estimate of the total amount of undistributed child support

and the average length of time it takes undistributed child support to be distributed. Also, to the
extent the Secretary deems appropriate, the report must include recommendations as to whether
additional procedures should be established at the state or federal level to expedite the payment of
undistributed child support.
Although data are available from FY1999-FY2005 on Undistributed Child
undistributed child support collections, the Government Support Collections,
Accountability Office (GAO) has stated that during much of that 1999-2005
period the amounts may not have been accurate because state CSE (in millions of $)
agencies had different interpretations of what constituted ²²^{Net Yearly}
undistributed collections. In 2002, a former Commissioner of the ^Amou^nt
Office of Child Support Enforcement, Sherri Heller, said that the ¹⁹⁹⁹^545.⁴
problem of undistributed collections has always existed. However,
the Commissioner stated, “automation is helping us to quantify the ²⁰⁰⁰^647.⁰
problem that has always been there. I don’t think that automation ²⁰⁰¹^738.²
or state disbursement units created the problem of undistributed ²³²⁰⁰²^656.⁹
collections. I think it’s shone a spotlight on it.”
²⁰⁰³^532.²
Undistributed child support collections increased from $545 ²⁰⁰⁴^479.³
million in FY1999 to a record $738 million in 2001, and dropped ²⁰⁰⁵^496.⁵
to $479 million in 2004. In FY2005, nearly $497 million in child
support was collected but was not distributed to custodial parents; ²⁴^Source:^Prepa^{red by t}^he^{Congressional Research Service}

60% of that amount was in the process of being distributed and ²⁵^{using data from t}^{he O}^{ffice of}

40% ($201 million) was considered unresolved, and thereby had ^{Child Support E}^nforceme^nt,

a lower probability of being distributed to custodial parents. In ^Department^{of HHS.}
FY2005, undistributed child support collections as a percentage of ^Note:^{The accuracy of t}^{he data}
total distributed collections ranged from a low of 0.6% in Montana ^{is in dispute beca}^{use in}^earlier
to a high of 6.8% in Hawaii; the percentage for the nation as a ^{years state definitions of}
whole was 2.2%. (The text box shows the yearly, not cumulative, ^{“undistributed collections”}
amount of child support payments collected from noncustodial ^differed.

parents by state CSE agencies but not distributed to custodial
parents.)
Some of the reasons given for the delay of distribution or nondistribution of child support
collections include incomplete information accompanying the payment, payment exceeds the
amount owed, incorrect address, insufficient information to link the payment to the proper case,
collections held by the State Disbursement Unit pursuant to a court order, and the federal law that
allows child support collections from joint tax refunds to be held for up to 180 days.

²²^U^.^{S. G}^o^v^e^rnm^e^nt^A^c^c^ounta^b^ility^O^f^fⁱ^c^e^.^{Child S}^u^p^port^Enf^o^rc^e^m^eⁿ^{t: Be}^tte^r^D^a^t^a^an^{d M}^o^r^e^Iⁿ^f^o^r^m^atioⁿ^on
^Un^dⁱ^st^ri^bu^t^e^{d Co}^l^l^ectⁱ^oⁿ^s^A^r^{e Ne}^ed^ed^{, G}^A^O^-^04-³⁷^{7. A}^p^r^il¹⁵^{, 2}⁰⁰⁴^.
²³^U^.^{S. D}^e^pa^r^t^m^e^{nt of}^H^e^a^{lth a}^nd^H^u^m^a^{n Se}^r^v^ic^es^{. O}^f^fⁱ^ce^of^C^h^ild^Sup^por^t^Enf^o^r^c^e^m^eⁿ^t.^Child^Su^pp^{ort Re}^p^o^{rt, V}^o^l.
^{XXIV, N}^o^.¹⁰^,^Se^pte^m^be^r²⁰^02.
²⁴^T^h^e^am^ount^of^c^h^{ild s}^upp^or^{t c}^o^ll^e^c^tionsⁱⁿ^the^pr^oc^e^s^s^of^be^ing^dⁱ^s^t^rⁱ^bute^d⁽^o^r^peⁿ^dⁱⁿ^g^a^m^ount)^is^d^e^fⁱ^ne^{d a}^s
^uⁿ^dⁱ^s^t^rⁱ^b^u^t^ed^c^o^l^l^ectⁱ^oⁿ^s^t^h^at^h^a^{ve b}^eenⁱ^d^entⁱ^fⁱ^e^d^an^d^al^l^o^cat^ed^t^o^{a p}^a^rtⁱ^c^u^l^{ar acco}^uⁿ^t^and^w^hⁱ^c^h^t^h^{e st}^at^{e reaso}ⁿ^a^b^l^y
^e^x^pe^c^t^s^{to dis}^t^rⁱ^bute^aⁿ^d^dis^b^ur^s^e^thr^o^ug^{h n}^o^r^m^a^l^pr^oc^e^s^sⁱ^ng^a^t^a^da^te^c^e^r^ta^{in or}^a^da^te^de^te^r^m^ine^d^by^la^w^.^T^h^e^pe^ndi^ng
^am^{ount i}ⁿ^c^l^u^d^e^s^c^o^lle^c^tio^ns^f^r^om^f^e^de^r^a^{l inc}^o^m^e^ta^x^r^e^f^{und of}^f^s^e^t^s^tha^t^by^la^w^m^a^y^be^he^{ld f}^o^r^up^to^sⁱ^x^m^onths^.
²⁵^Uⁿ^r^e^s^o^lv^e^d^a^m^ounts^a^r^e^de^fⁱ^ne^d^a^s^undis^t^rⁱ^b^u^te^{d c}^o^lle^c^tions^tha^t^e^ithe^r^ha^v^e^no^{t be}^eⁿ^f^u^lly^ideⁿ^tif^{ied or}^a^lloc^a^t^e^d
^a^{nd d}^o^not^ha^v^e^a^de^fⁱ^nite^dis^b^ur^s^e^m^e^{nt da}^te^due^t^oⁱⁿ^s^u^f^fⁱ^cⁱ^eⁿ^{t inf}^o^r^m^a^tion.

The issue of undistributed collections has generated considerable interest among parents,
advocacy groups, and Congress. States contend that they have focused on the problem and have
made some progress in reducing the amount of undistributed child support collections, but also
indicate that there are in some cases good reasons for not distributing some payments. For
example, they cite legal issues, such as the pending determination of custody, that may need to be
resolved before payments are released; states could lose anywhere from thousands to millions of
dollars a year if they prematurely distributed the IRS income tax refund intercept collections from
joint tax returns. Parents and advocacy groups maintain that unresolved undistributed child
support collections ultimately go into state and federal treasuries.
According to the National Council of Child Support Directors:
^S^t^at^es^s^u^pport^t^h^e^es^t^a^blⁱ^s^hm^eⁿ^t^o^f^aⁿ^a^tⁱ^oⁿ^a^l^g^o^al^f^o^{r a red}^u^ctⁱ^{on i}ⁿ^U^D^C^[un^dⁱ^s^t^rⁱ^b^u^t^ed
^co^llectioⁿ^s^{]. T}^h^{e settin}^g^o^f^su^c^h^{a g}^o^{al can}^b^e^acco^m^p^lis^h^e^d^oⁿ^{ce th}^{e d}^a^{ta f}^r^o^m^th^e^r^e^p^o^r^tⁱⁿ^g
^categ^o^r^{ies o}^f^UD^{C o}ⁿ^th^{e O}^C^{SE 3}⁴^A^f^o^r^m^aⁿ^d^th^{e d}^r^af^{t sc}^h^e^d^u^{le is a}^v^ailab^l^{e. Un}^{til s}^u^ch
^d^a^{ta is av}^ailab^l^{e it}^w^o^u^l^d^b^e^dⁱ^f^f^icu^l^{t to}^{set a r}^ealisticⁿ^a^tioⁿ^a^{l g}^o^{al f}^o^r^{UDC a}^s^w^e^w^illⁿ^o^t
^h^a^v^e^{a clear un}^ders^taⁿ^d^ing^as^{to th}^{e lev}^e^{l o}^f^UDC^f^o^{r in}^divi^du^{al s}^t^ates^{or th}^eⁿ^a^tioⁿ^as^a
^w^hol^{e. O}ⁿ^{ce su}^ch^dat^aⁱ^s^av^ai^l^a^bl^{e, i}^t^wⁱ^l^l^provⁱ^d^{e t}^h^{e oppo}^rt^uⁿⁱ^t^y^t^o^es^t^a^blⁱ^s^h^{a ben}^c^hm^ark
^f^o^{r i}^m^prov^e^m^en^t^.
^Un^{til all sta}^t^{es k}ⁿ^o^w^w^h^er^{e t}^h^e^y^ar^{e th}^r^o^u^g^h^coⁿ^sⁱ^s^teⁿ^t^{, n}^a^tioⁿ^a^ll^y^staⁿ^d^a^r^d^ized^r^e^p^o^r^tin^g^o^f
^U^D^C^{, rat}^h^{er t}^h^aⁿ^s^e^t^tⁱⁿ^g^{a c}^oⁿ^c^ret^e^s^t^aⁿ^{dard, N}^C^C^S^D^support^s^{a g}^o^al^of^con^tⁱⁿ^u^o^u^s
ⁱ^m^prov^e^m^en^{t b}^y^each^s^t^{ate, n}^o^m^a^tter^w^h^{ere th}^e^y^{are alon}^g^{the path}^to^w^a^{rd redu}^ciⁿ^g^U^D^C^.
^Aⁿ^a^tioⁿ^a^l^g^o^{al o}^f^coⁿ^tin^u^o^u^sⁱ^m^p^r^o^v^e^m^eⁿ^{t b}^y^each^state^w^ill^req^u^{ire a w}^a^y^to^tra^c^k^a^s^t^a^t^e^’^s²⁶
^perf^orm^aⁿ^{ce ov}^{er t}ⁱ^m^e^.
States were historically required to provide CSE services to Indian tribes and tribal organizations
as part of the CSE caseloads. The 1996 welfare reform law (P.L. 104-193) allowed direct federal ²⁷
funding of tribal CSE programs at a 90% federal matching rate. Currently, nine Indian tribes or
tribal organizations operate CSE programs. They are the Chickasaw Nation, Navajo Nation,
Puyallup Tribe, Sisseton-Wahpeton Sioux Tribe, Lac du Flambeau Tribe, Menominee Tribe, Port
Gamble S’Klallam, Lummi Nation, and the Forest County Potawatomi. In FY2005, tribes ²⁸
collected $10.9 million on behalf of 25,000 families.
Although locating the noncustodial parent and his or her assets is a major component in a
successful CSE program, tribes and tribal organizations are legally precluded from direct access
to the Federal Parent Locator Service (FPLS); however, they can receive FPLS data from a state
if an Intergovernmental Agreement exists between the tribe and the state.
The Federal Parent Locator Service (FPLS) is a national location system operated by the federal
Office of Child Support Enforcement to assist states in locating noncustodial parents, putative

²⁶^N^a^tiona^{l C}^o^uⁿ^c^{il of}^C^hⁱ^l^d^Su^pp^o^r^{t D}ⁱ^r^e^c^t^or^s^.^P^o^sitio^{n P}^ape^r^{on U}^ndistri^bute^d^Chil^d^Su^pp^{ort Co}^lle^c^tions^.^Dece^m^b^er
^{19, 20}⁰³^.
²⁷^T^h^{e 9}⁰^%^f^e^d^e^ral^m^a^t^c^hⁱⁿ^g^rat^e^oⁿ^l^y^ap^p^lⁱ^e^{s f}^o^{r t}^h^{e f}ⁱ^rst^t^h^{ree y}^e^ar^s.^Af^t^e^{r t}^h^{e t}^hⁱ^r^{d y}^e^ar,^t^rⁱ^b^{es recei}^{ve 8}⁰^%^dⁱ^rect^-
^f^e^de^r^a^l^f^unding^of^theⁱ^r^pr^og^r^a^m^ne^e^d^s^.^T^r^ibe^s^tha^t^a^r^e^uⁿ^a^b^le^t^o^m^e^e^t^the^no^n-^f^e^de^r^a^{l m}^a^tc^{h m}^a^y^r^e^que^s^t^a^w^a^iv^e^r^.
²⁸^C^h^il^{d S}^u^p^por^t^Enf^o^r^c^e^m^eⁿ^{t, FY}²⁰⁰⁵^Pr^e^limⁱⁿ^ar^y^Re^por^t^{, Ma}^y²⁰⁰^{6 ht}^tp:/^/w^w^w^.a^cf^.dhhs^.g^ov^/pr^o^g^r^a^m^s^/^c^s^e^/^pu^bs^/
²⁰⁰^6/^r^e^por^ts^/^p^r^e^lim^ina^r^y^_^r^e^por^t/.

fathers, and custodial parties for the establishment of paternity and child support obligations, as
well as the enforcement and modification of orders for child support, custody and visitation. It
also identifies support orders or support cases involving the same parties in different states. The
FPLS consists of the Federal Case Registry, Federal Offset Program, Multi-state Financial
Institution Data Match, National Directory of New Hires, and the Passport Denial Program.
Additionally, the FPLS has access to external sources such as the Internal Revenue Service (IRS),
the Social Security Administration (SSA), Department of Veterans Affairs (VA), the Department
of Defense (DOD), and the Federal Bureau of Investigation (FBI). The FPLS is only allowed to
transmit information in its databases to “authorized persons,” which include (1) child support
enforcement agencies (and their attorneys and agents); (2) courts, (3) the resident parent, legal
guardian, attorney, or agent of a child owed child support; and (4) foster care and adoption
agencies.
Both House and Senate bills have included a provision that would have designated Indian tribes
and tribal organizations as persons authorized to have access to information in the Federal Parent
Locator Service. This provision also was proposed in several Administration budgets beginning
with the FY2004 budget. Supporters of the provision maintain that the provision would give tribal
CSE programs access to the FPLS, to which state CSE agencies currently have access, so that
they can use it to locate noncustodial parents to establish paternity and collect child support
payments (especially those made on behalf of tribal families). Supporters mention that the FPLS
is an integral part of the general success of the CSE program and argue that allowing tribes and
tribal organizations direct access to it will increase the effectiveness of the tribal CSE programs.
Direct access to the FPLS is considered especially beneficial for jurisdictions or entities that do
not have a computerized system. Direct access to the FPLS would help tribal CSE programs to
quickly locate the assets of noncustodial parents.

Federal law (P.L. 106-113) authorized the Department of Education to have access to the National
Directory of New Hires. The provisions were designed to improve the ability of the Department
of Education to collect on defaulted loans and grant overpayments made to individuals under the
Higher Education Act of 1965. The Federal Office of Child Support Enforcement (OCSE) and the
Department of Education negotiated and implemented a Computer Matching Agreement in
December 2000. Under the agreement, the Secretary of Education is required to reimburse the
HHS Secretary for the additional costs incurred by the HHS Secretary in furnishing requested
information. Although several other agencies have access to the National Directory of New Hires,
they are required to reimburse the HHS Secretary for any cost incurred by the HHS Secretary in
providing requested information on new hires, not just the additional costs.

²⁹^T^h^{e Natio}ⁿ^a^{l Directo}^r^y^o^f^Ne^w^{Hires (NDNH) is a d}^a^tab^a^{se th}^{at i}ⁿ^clu^d^e^{s i}ⁿ^f^o^rm^atioⁿ^oⁿ⁽¹^{) all}ⁿ^e^w^l^y^hⁱ^red
^em^ploy^ee^s^,^c^o^m^p^ile^{d f}^r^o^m^s^t^a^t^e^r^e^por^ts⁽^aⁿ^d^r^e^p^o^r^t^s^f^r^om^f^e^de^r^a^{l em}^plo^y^e^r^s⁾^{, (}²⁾^the^w^a^g^e^r^e^por^ts^of^ex^is^ting
^em^ploy^ee^s^,^a^{nd (}³⁾^une^m^p^loy^m^eⁿ^{t c}^o^m^p^eⁿ^s^a^{tion c}^l^aⁱ^m^s^{. T}^h^e^w^a^g^e^a^{nd u}ⁿ^e^m^ploy^m^e^{nt c}^o^m^p^eⁿ^s^a^tion^inf^o^r^m^a^{tion is}
^f^u^rn^ish^e^d^b^y^th^{e S}^t^{ate Directo}^r^ies^o^f^Ne^w^{Hires o}ⁿ^{a qu}^ar^terly^b^a^si^s.^T^h^{e NDNH co}^{llects in}^f^o^rmatioⁿ^th^atⁱⁿ^cl^u^d^e^{s th}^e
^na^m^e^{, a}^ddr^e^s^s^a^{nd Soc}ⁱ^a^l^Se^c^u^rⁱ^t^y^nu^m^b^e^r^of^the^e^m^plo^y^e^e^a^{nd th}^e^em^ploy^e^r^’^s^nam^e^{, a}^ddr^e^s^s^,^a^nd^t^a^x^ideⁿ^tif^ic^a^tion
^num^be^{r. T}^h^e^{NDNH is a}^c^o^m^pone^{nt of}^the^Fe^de^ra^l^P^a^re^{nt L}^o^c^a^t^or^Se^rv^ic^e^(FP^L^{S), w}^h^ic^{h is m}^a^inta^ine^d^by^the^f^e^de^ra^l
^O^f^fⁱ^ce^of^C^h^{ild S}^u^p^por^t^Enf^o^r^c^e^m^eⁿ^{t (}^O^C^S^E)^aⁿ^{d is}^ho^us^e^d^a^t^t^h^e^Socⁱ^a^l^Se^c^u^rⁱ^ty^A^d^mⁱ^nis^t^r^a^tion’^s^N^a^tiona^{l C}^o^m^pute^r
^Ce^nte^r^{in Ba}^ltim^ore^,^Ma^ry^la^nd.

Pursuant to the 1996 welfare reform law, the HHS Secretary is required to share information from
the National Directory of New Hires with state CSE agencies, state agencies administering the
TANF program, the Commissioner of Social Security, the Secretary of the Treasury (for Earned
Income Tax Credit purposes and to verify income tax return information), and researchers under
certain circumstances. Subsequently, the following agencies have been granted access to the
National Directory of New Hires: (1) The Department of Education (to collect on defaulted
student loans and grant overpayments); (2) the Department of Housing and Urban Development
(to verify the employment and income of persons receiving federal housing assistance); (3) State
Workforce Agencies responsible for administering state or federal Unemployment Compensation
programs (to determine whether persons receiving unemployment compensation are working);
and (4) the Department of the Treasury (to collect non-tax debt (e.g., small business loans, VA
loans, agricultural loans, etc.) owed to the federal government).
Federal law stipulates that a state or federal agency that receives information from the HHS
Secretary from the National Directory of New Hires must reimburse the Secretary for costs
incurred by the Secretary in providing the information (i.e., meaning “all” or “any” costs incurred
in providing the specified information). Unlike the provisions related to other agencies, the
section of the law pertaining to reimbursement of HHS costs by the Department of Education
specifies that the Department of Education only needs to reimburse the HHS Secretary for
“additional” costs incurred. Both House and Senate bills have included a provision that would
have amended the reimbursement of costs provision by eliminating the word additional, thereby
requiring the Secretary of Education to reimburse the HHS Secretary for any costs incurred by the
HHS Secretary in providing requested information on new hires.
Many noncustodial parents argue that it is unfair to look at the child support issue only from the
viewpoint of the custodial parent. Traditionally, courts have sided with mothers in awarding
custody, and, in this view, have paid insufficient attention to enforcing visitation rights of fathers.
As a result, they say, mothers have had the rewards and obligations connected with rearing
children, while fathers have sometimes had no share in the rewards, but have the continuing
obligation to pay support. To be fair, some say federal laws and procedures should be reformed
not only with respect to enforcement of the child support obligation, but also with respect to
visitation and custody rights. Historically, Congress has held that visitation and child support
should be legally separate issues; and that only child support should be under the scope of the
CSE program. However, Congress also has indicated that fathers should be involved in their
children’s lives.
The 1996 welfare reform law (P.L. 104-193) authorized grants to states (via CSE funding) to
establish and operate access and visitation programs. The purpose of the grants is to facilitate
noncustodial parents’ access to and visitation of their children. An annual entitlement of $10
million from the federal CSE budget account is available to states for these grants. Eligible
activities include but are not limited to mediation, counseling, education, development of
parenting plans, visitation enforcement, and development of guidelines for visitation and
alternative custody arrangements. The allotment formula is based on the ratio of the number of
children in the state living with only one biological parent in relation to the total number of such
children in all states. The amount of the allotment available to a state is this same ratio to $10
million. The allotments are to be adjusted to ensure that there is a minimum allotment amount of
$100,000 per state for any year after FY1998. States may use the grants to create their own
programs or to fund programs operated by courts, local public agencies, or nonprofit

organizations. The programs do not need to be statewide. States must monitor, evaluate, and
report on their programs in accord with regulations issued by the HHS Secretary.
Senate bills (but not House bills) included a provision that would have increased funding for the
Access and Visitation program. This provision also was proposed in several Administration
budgets, beginning with the FY2004 budget. Under the Senate bills, the Access and Visitation
grants would have increased from $10 million annually to $12 million in FY2006, $14 million in
FY2007, $16 million in FY2008, and $20 million annually in FY2009 and each succeeding fiscal
year. The proposed Senate provision would have extended the Access and Visitation program to
Indian tribes and tribal organizations that had received direct child support enforcement payments
from the federal government for at least one year. The proposed provision included a specified
amount to be set aside for Indian tribes and tribal organizations: $250,000 for FY2006; $600,000
for FY2007; $800,000 for FY2008; and $1.670 million for FY2009 or any succeeding fiscal year.
The provision would have increased the minimum allotment to states to $120,000 in FY2006,
$140,000 in FY2007, $160,000 in FY2008, and $180,000 in FY2009 or any succeeding fiscal
year. The minimum allotment for Indian tribes and tribal organizations would have been $10,000
for a fiscal year. The tribal allotment would not be able to exceed the minimum state allotment for
any given fiscal year.
Research indicates that children raised by married biological parents (who live together) are more
successful in school, are emotionally and socially healthier, more likely to avoid teen pregnancy,
delinquency, and crime during their teenage years, and are more likely to have stable above-³⁰
poverty level incomes as adults. Supporters of the provision contend that families need more
than child support alone. They maintain that Access and Visitation programs facilitate
noncustodial parents’ access to their children and help both parents create a more stable and
supportive environment in which to raise their children. Supporters of the provision say that states
are serving an increased number of families with their Access and Visitation programs and claim
that many families requesting the services are on “waiting lists.”
Currently, if a custodial parent has no private medical coverage at the time of her child’s birth, the
father can be held financially responsible for payment of the birth costs even in cases where the
costs associated with the birth of the child are very high. Federal law permits states to use the
CSE program to collect money from noncustodial fathers to reimburse the Medicaid agency for
birth costs of children receiving Medicaid benefits and services.
Several House and Senate bills included a provision that would have prohibited states from
collecting child support from noncustodial fathers to repay Medicaid costs associated with the
birth of a child.
Among the reasons given for the high percent of child support arrearages, especially among low-
income noncustodial fathers, are that too many child support orders are established by default

³⁰^Sa^r^a^Mc^L^a^na^ha^{n a}^{nd G}^a^r^y^Sa^nd^e^f^ur^,^G^r^ow^{ing U}^p^W^ith^a^Sin^g^le^P^a^r^e^nt:^W^h^a^t^H^u^r^t^s^,^W^h^{at H}^e^l^p^s⁽^C^a^m^bridg^e^{, MA}^:
^H^a^r^v^a^r^{d U}ⁿ^iv^e^r^sⁱ^t^y^P^r^e^s^s^,¹⁹⁹⁴⁾^,^s^e^e^a^l^s^o^L^.^B^u^m^p^a^s^s^,^“^C^hildr^e^{n a}^nd^Ma^r^ita^{l D}ⁱ^s^r^u^p^tio^{n: A}^R^e^plic^a^{tion a}^{nd U}^pda^te^,”
^D^e^m^ogr^ap^hy^,^vo^l^.²¹⁽¹⁹⁸⁴⁾^,^p^p^.⁷¹^-⁸²^;^Re^b^{ecca A}^.^M^a^yⁿ^ard^,^ed^.^,^Kⁱ^d^s^Ha^vi^ng^Kⁱ^d^s^:^A^Ro^biⁿ^H^o^{od F}^o^un^da^tⁱ^oⁿ
^Spe^cⁱ^al^Re^por^t^oⁿ^the^C^o^s^t^s^o^f^A^d^ole^s^c^eⁿ^{t C}^h^il^dbe^arⁱⁿ^g^(New^Yo^rk^{, 1}⁹⁹⁶^).

(resulting in orders that are too high relative to the noncustodial parent’s ability to pay), too many
orders automatically include retroactive support for TANF families (including Medicaid birth
costs), and too few noncustodial parents have their support orders modified when they have a
change in financial circumstances. Supporters of the provision contend that the prohibition on
collecting child support to repay Medicaid costs associated with the birth of a child has the
potential to prevent many low-income noncustodial fathers from accumulating significant debt.
Federal law requires a health care plan administrator to notify qualified beneficiaries (i.e., the
custodial parent) of their beneficiary rights with regard to health care coverage (of the child)
when or if one of the following events occurs: (1) the noncustodial parent with the health care
coverage dies; (2) the noncustodial parent with the health care coverage loses his or her job or
starts working fewer hours; (3) the noncustodial parent with the health care coverage becomes
eligible for Medicaid benefits; (4) the noncustodial parent with the health care coverage becomes
involved in a bankruptcy proceeding pertaining to his or her former employer; (5) the
noncustodial parent with the health care coverage gets divorced or obtains a legal separation; or
(6) the child of the noncustodial parent with the health care coverage ceases to be a dependent
child. (With respect to (5) and (6), the noncustodial parent (i.e., the covered employee) is required
to notify the health care plan administrator of such an event.)
Several Senate bills (but not House bills) included a provision that would have required the health
care plan administrator to notify the state CSE agency if the noncustodial parent with the health
care coverage dies, loses his or her job or is working fewer hours, becomes eligible for Medicaid
benefits, or is involved in a bankruptcy proceeding pertaining to the noncustodial parent’s former
employer. This provision also was proposed in several Administration budgets, beginning with
the FY2005 budget. The proposed provision also would have required the health care plan
administrator to notify the state CSE agency if the noncustodial parent with the health care
coverage gets divorced or obtains a legal separation, or if the noncustodial parent’s child ceases to
be a dependent child (in cases where the noncustodial parent has notified the plan administrator
of such an occurrence).
Supporters of the provision maintain that it is important for children to have continuous health
care coverage. They contend that if the state CSE agency (the agency responsible for establishing
and enforcing medical child support) is made aware of information related to a child’s loss of
health care coverage, it can take appropriate action to ensure that the child’s coverage does not
lapse.
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
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. 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 ³¹
programs reviewed government-wide.
The House budget reconciliation bill in 2005 (but not the Senate bill) included a provision that
would have gradually reduced the general CSE federal rate of 66% to 50% (over the period
FY2007-FY2010). The Senate was opposed to this reduction in CSE funding and included “Sense
of the Senate” language in its deficit reduction omnibus budget reconciliation bill (which at the
time did not include welfare reauthorization or CSE provisions) that said it affirmed that the
federal funding levels for the rate of reimbursement of child support administrative expenses ³²
should not be reduced below the levels provided in present law (i.e., 66%).
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 comprised of a larger share of
nonwelfare families should not be confronted with higher CSE costs. They also argue 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 impact states’ ability to serve families.
It contends that continued implementation of the state requirements mandated in 1996 without
stable federal funding would result in a significant cost shift to the states, which could jeopardize
the timely and effective implementation of reform provisions and therefore could have a negative ³³
impact on the children and families the CSE program is designed to serve.
According to the National Council of Child Support Directors, a reduction in the federal matching
rate for CSE expenditures from 66% to 50% would unravel many of the significant gains that
have been realized since enactment of the 1996 welfare reform law and have a negative impact on
the families that have transitioned off welfare or avoided welfare altogether due to collections ³⁴
made by the CSE program.

³¹^{U.S. De}^pa^rtm^e^{nt of}^He^a^{lth a}^nd^Hum^a^{n Se}^rv^ic^e^s^{, A}^d^mⁱ^nistra^tion^f^o^{r Childre}ⁿ^aⁿ^d^Fa^m^ilie^{s, HHS Ne}^w^s^,^Child
^Sup^por^t^Effe^c^tiv^eⁿ^e^s^s^C^ite^{d By}^O^M^B^{, Ma}^r^c^{h 3}¹^,²⁰^04.
³²^A^lthoug^{h C}^B^O^didⁿ^o^{t pr}^ov^ide^a^c^o^s^t^e^s^tim^a^t^e^f^o^r^r^e^duc^ing^f^e^de^r^a^l^m^a^tc^hing^f^unds^f^r^om^66%^{to 5}⁰^%⁽^a^s^a^s^t^a^nd-
^a^l^one^pr^ov^is^ion)^{, its}^c^o^s^t^e^s^tim^a^t^{e f}^o^r^r^e^duc^ing^t^h^e^f^e^de^r^a^l^m^a^tc^{h r}^a^te^toge^t^h^e^r^with^e^lim^ina^ting^t^h^e^f^e^de^ra^{l m}^a^tc^{h on}
^sta^t^e^inc^eⁿ^tiv^e^pa^y^m^eⁿ^{ts re}^inv^e^ste^d^ba^c^k^into^the^C^S^{E p}^r^og^ra^m^w^a^{s $4.}⁸⁵⁴^billi^{on f}^o^{r t}^h^e^pe^ri^od^FY²⁰⁰^6-²⁰^{10. A}
^se^pa^ra^te^{CBO c}^o^{st e}^s^tim^a^t^e^of^e^lⁱ^m^ina^ting^the^f^e^de^ra^l^m^a^tc^h^oⁿ^st^at^{e i}ⁿ^cen^tⁱ^v^{e p}^a^ymen^t^s^reiⁿ^vest^ed^{back i}ⁿ^t^o^t^h^{e C}^S^E
^prog^ra^m^w^a^{s $1.636}^bi^llio^{n f}^o^{r t}^h^e^pe^riod^FY2⁰⁰⁶^-2⁰¹^{0. A}^ltho^u^g^h^a^stra^ig^{ht subtra}^c^tio^{n t}^o^is^ola^t^e^th^e^f^e^de^ra^l^m^a^tc^h
^prov^isio^{n is}^not^a^ppr^opria^te^,^the^c^o^{st e}^s^tim^a^t^e^s^{do illustra}^te^t^h^e^sigⁿ^if^ic^aⁿ^{t sa}^vⁱ^ng^{s tha}^t^w^{ould ha}^v^e^be^eⁿ^ob^ta^ine^d^if^the
^pr^ov^is^io^{n ha}^{d pa}^s^s^e^d.
³³^Na^tiona^{l G}^o^v^e^{rnor’s A}^ssocⁱ^a^tion^.^H^R^-¹^4:^C^hⁱ^l^d^Su^pp^or^{t Fi}^na^ncⁱⁿ^g^{; a}^v^a^ila^ble^on^line^a^t^htt^p^://w^ww^.ⁿ^g^a^.org^/Pubs/
^Polic^ie^s/^HR/hr14.a^s^p^Wⁱ^nte^r^Me^e^ting^,¹⁹⁹⁹^.^]
³⁴^Na^tiona^{l C}^o^uⁿ^c^{il of}^Chi^l^d^Su^pp^o^r^{t Dire}^c^t^{ors. L}^e^tte^{r Re}^la^te^{d to Re}^duc^ti^{on i}ⁿ^Fe^de^ra^{l Fina}^nc^ia^l^P^a^rti^c^ipa^tionⁱⁿ^the
^C^S^E^P^r^og^r^a^m^.^N^o^v^e^m^b^e^r^{8, 2}⁰⁰⁵^.^A^l^s^o^{, s}^e^e^N^a^tiona^{l C}^hⁱ^l^d^Su^pp^or^{t Enf}^o^r^c^e^m^eⁿ^{t A}^s^s^o^cⁱ^a^{tion. L}^e^tte^r^R^e^g^a^r^d^ing
^P^r^op^os^e^d^C^u^tsⁱⁿ^C^S^E^Fu^ndi^ng^.^D^e^c^e^m^b^e^r^{2, 20}^05.

Table A-1. Selected Child Support Provisions in Selected Welfare Reauthorization Bills, 2002-2005
^{Provision Administration}^H.R.^{H.R. 4}^737—^{H.R. 4—}^{H.R. 4—}^{S. 66}^7—^{S. 19}^32—
^Budget⁴⁷³^7—^{as reported by}^{as passed}^{as reported by}^{as passed by}^{as passed by}
^Propos^als,^{as passed}^{Senate F}^inance^{by the}^{Senate F}^inance^Senate^{the House}
^FY20^03-2⁰⁰⁷^{by the}^{Comm. (2002)}^House^{Comm. (2003)}^Finance^{(Nov. 18,}
^(2002-²⁰⁰⁶⁾^House⁽²⁰⁰³⁾^{Comm. (2005)}²⁰⁰⁵⁾
⁽²⁰⁰²⁾
^Garnish^{ment of Com}^{pensation P}^{aid to}
^{Veterans for Service-Conn}^ected^X^X^X^X^X
^Disabilit^{ies in order to Enforce C}^hild
^{Support O}^bligations
^{Improving Federal Debt Collection}^{X X}^X^X^X
^Practices
ⁱ^{ki/CRS-RL33881}^{Identification and Seizure of Asse}^{ts Held by}^X^X^X
^g/w^{Multi-State Financial Institutions}
^s^.or^{Claims Upon Longshore a}^{nd Har}^bor
^le^ak^{Workers’ Compensation for C}^{hild Support}^X^X^X
^://wiki^{State Law Requireme}^{nt Concer}ⁿⁱ^{ng the}^{Uniform Inte}^{rstate Family Sup}^{port Act}^X^X^X
^h^ttp^(UIFSA)
^{Report on Undistributed C}^{hild S}^upport^X^{X X X}^X^X
^Payments
^{Tribal Access to the Federal Pare}^nt^X^X^X^X
^{Locator Service}
^Reimburseme^{nt of H}^{HS Secretar}^{y’s Costs}
^{Associated With Sharing Informa}^{tion in the}^X^X^X
^{National Directory of New Hires}^{With the}
^Department^{of Education}
^Grants^{to States for Access}^and^Visitati^on^X^X^X
^Programs
^{Ban on Repayme}^{nt of M}^{edicaid Bi}^{rth Costs}^X

^{Provision Administration}^H.R.^{H.R. 4}^737—^{H.R. 4—}^{H.R. 4—}^{S. 66}^7—^{S. 19}^32—
^Budget⁴⁷³^7—^{as reported by}^{as passed}^{as reported by}^{as passed by}^{as passed by}
^Propos^als,^{as passed}^{Senate F}^inance^{by the}^{Senate F}^inance^Senate^{the House}
^FY20^03-2⁰⁰⁷^{by the}^{Comm. (2002)}^House^{Comm. (2003)}^Finance^{(Nov. 18,}
^(2002-²⁰⁰⁶⁾^House⁽²⁰⁰³⁾^{Comm. (2005)}²⁰⁰⁵⁾
⁽²⁰⁰²⁾
^{Required Notice to State Child S}^upport
^Enforce^{ment Age}^{ncy W}^{hen a}^{Child Loses}^X^X
^{Health Care Coverage}
^{Reduction in Rate of Reimburse}^{ment of}^X
^{Child Support Administrative E}^x^p^enses
^Note:^{The FY2003 Budget, relea}^{sed in Febr}^uary²⁰^{02, included th}^{e improvement}^{of federal debt c}^ollecti^{ons provision. The FY2004}^Budget^{, released in 20}^{03, include}^d
^{provisions related to garnishme}^nt^{of Longshoreme}^{n’s be}^{nefits; fre}^e^{zing and seizing of assets in m}^ulti-^{state financial instituti}^{ons; allowing tribes and t}^{ribal organizations to}
^{have direct acces}^{s to the Federal}^{Parent Locator Service (FPLS); and increasing f}^{unding for t}^{he CSE}^{Access and Visitation progr}^{am. The FY20}^{05 B}^{udget, released in 2}⁰^04,
^{included a provision related to notifying CSE agencies whe}^{n a c}^{hild loses health care coverage. The}^FY200^{6 and FY2}⁰⁰^{7 Budgets,}^rel^{eased in 20}⁰⁵^{and 2}⁰⁰^{6, res}^pectively,
^{included each of th}^{e earlier provi}^{sions. Each of t}^{he b}^{udgets incorp}^{orated the provisions of th}^{e earlier b}^{udgets. Moreover, the}^Admin^{istration’s budget proposals inclu}^ded
^{many other}^{CSE p}^{rovisions, most of which we}^{re incorporated in}^{P.L. 109-1}^71.
ⁱ^{ki/CRS-RL33881}^{H.R. 4737, t}^{he Personal Responsi}^{bility, Work}^{, and Family Promot}ⁱ^{on Act of 2}⁰⁰^{2, a compre}^hensive^{welfare reaut}^{horization bill, w}^as^{introduced by t}^{he Hou}^{se Rep}^ublican
^g/w^{leadership on May}¹^{5, 20}^{02. It}^wa^{s passed}^{by the}^{House o}ⁿ^May¹⁶^{, 200}^{2 b}^y^{a vote of 2}^29-¹⁹^{7. A m}^{ore bipartisan}^{version of the}^b^{ill (renamed t}^{he Work, Op}^portu^{nity, and}
^s^.or^{Responsibility for Kids Act of 20}^{02), unde}^{r the}^{leadership of Sena}^{te Finance Committee Chairma}ⁿ^{Baucus, was re}^{ported (with an}^a^{mendment in}^the^natu^{re of a s}^u^b^stitute)
^le^ak^{by the}^{Senate Finan}^{ce Committee on July}^{25, 2}⁰⁰²^(ap^{proved 1}³^-^{8). No furt}^{her action too place o}ⁿ^{H.R. 473}^7.
^{H.R. 4, the Personal Responsibility, Work, and Family Promot}^{ion Act of 20}^{03, a com}^preh^{ensive we}^{lfare reaut}^{horization bill (back}^{ed by the}^{Administration) was introduced}
^://wiki^{on Februa}^ry^{4, 20}^{03. It wa}^{s pas}^se^{d by the}^{House on}^Febr^uary^13,²⁰⁰³^{by a vote of}²³^0-19^{2. The S}^{enate Finance}^{Committee, under}^{the leadership of Se}^{nate Finance}
^h^ttp^{Committee Chairman G}^{rassley, r}^{eported H.R. 4 (with an ame}^ndm^{ent in th}^{e nat}^{ure of a}^su^bstitute)^{on October}^{3, 2}⁰⁰³^(app^{roved 9-}⁸^{). The bill was renamed t}^{he Pers}^onal
^{Responsibility and Individual Development for E}^{veryone A}^{ct, i.e.,t}^{he PRIDE Act. The con}^{sideration of the bill on the Se}^{nate flo}^{or was broug}^{ht to a close (after seve}^r^{al days}
^{of debate) on April 1, 2}⁰⁰^{4. The}^{Senate did not complete action on the}^{bill and the f}^{unding of t}^{he T}^{ANF block grant wa}^{s tempora}^{rily extended via seve}^{ral short-term}
^{extension mea}^sure^s.
^{S. 667, the Per}^{sonal Responsibility and Individual Development for}^Everyon^{e Act (i.e. PRIDE Act), a comprehe}^{nsive welfare}^reaut^{horization bill}^{, was reported by t}^{he S}^enate
^{Finance Committee on Mar}^ch^30,²⁰^05.
^{S. 1932, t}^{he Deficit Reduction O}^mnibus^{Reconciliation Act of 200}^{5, was passed}^{by t}^{he Senate on}^N^ovember^{3, 20}^{05, b}^y^{a vote of 5}²^{-47. The Senate}^{bill did not includ}^e
^{provisions related to welfare rea}^{uthorization. The House pas}^sed^{H.R. 4241 (t}^{he Deficit Reduction Act of 20}^05)—w^{hich contained a}^{ll but one of the}^{CSE p}^{rovisions in H.R.}
²⁴⁰^{as ap}^{proved b}^y^the^House^{Ways and Mea}^{ns Su}^bcommittee^{on Huma}^{n Resource}^{s on Ma}^rch^{15, 2}⁰⁰^{5—on Novem}^ber^18,²⁰⁰⁵^{by a}^{vote of}²^17-2¹⁵^{and th}^{en i}^nserted
^{the text}^{into S. 193}^{2. Thus, S. 19}^{32 as}^passed^{by t}^{he House}^{contained welfare rea}^{uthorization meas}^{ures, including c}^{hild support}^prov^isions.

^Car^m^eⁿ^So^lo^m^o^n-^Fear^s
^Specialis^{t i}ⁿ^{Social P}^o^lic^y
^cs^ol^o^m^onf^ears@^crs^.^l^o^c.g^o^v^,⁷^-⁷³⁰⁶