Child Support Enforcement: $25 Annual User Fee







Prepared for Members and Committees of Congress



P.L. 109-171, the Deficit Reduction Act of 2005, required states to impose a $25 annual user fee
for Child Support Enforcement (CSE) services provided to families with no connection to the
welfare system. The user fee is to be assessed if the state CSE agency collects at least $500 in
child support payments on behalf of the family in a given fiscal year. The law gives the states four
options on how to obtain the user fee. According to a survey of the 54 jurisdictions with CSE
programs, 26 jurisdictions impose the user fee on the custodial parent, 20 jurisdictions pay the fee
with state funds, 2 jurisdictions get the fee from the noncustodial parent, 1 jurisdiction charges
half of the fee to the noncustodial parent and the other half to the custodial parent, and 3
jurisdictions retain the fee from the family’s child support payment (after $500 per year has been
collected on behalf of the family); the other 2 jurisdictions did not respond to the survey or the
issue is still unresolved. This report will be updated as new information becomes available.






Backgr ound ..................................................................................................................................... 1
New Annual CSE User Fee.............................................................................................................2
Implementation of CSE User Fee....................................................................................................3
Table 1. Method By Which $25 CSE Annual User Fee Is Imposed................................................4
Author Contact Information............................................................................................................6






The Child Support Enforcement (CSE) program was enacted in 1975 as a federal-state program
(Title IV-D of the Social Security Act) 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.
The CSE program provides seven major services on behalf of children: (1) parent location, (2)
paternity establishment, (3) establishment of child support orders, (4) review and modification of
child support orders, (5) collection of child support payments, (6) distribution of child support
payments, and (7) establishment and enforcement of medical child support. Collection methods
used by state CSE agencies include income withholding, intercept of federal and state income tax
refunds, intercept of unemployment compensation, liens against property, reporting child support
obligations to credit bureaus, intercept of lottery winnings, sending insurance settlement
information to CSE agencies, authority to withhold or suspend driver’s licenses, professional
licenses, and recreational and sporting licenses of persons who owe past-due support, and
authority to seize assets of debtor parents held by public or private retirement funds and financial
institutions.
All 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands operate CSE
programs and are entitled to federal matching funds. The federal government and the states share
CSE program costs at the rate of 66% and 34%, respectively. The CSE program serves both 1
welfare and non-welfare families. Families receiving Temporary Assistance to Needy Families
(TANF) assistance (Title IV-A), foster care payments (Title IV-E), Medicaid coverage (Title
XIX), or food stamp recipients who, at state option, are required by law to cooperate with the
CSE agency, automatically qualify for CSE services free of charge. Other families must apply for 2
CSE services, and states must charge an application fee that cannot exceed $25.

1 In FY2007, of the nearly 15.8 million CSE cases, 13.6% (2.1 million) were in the TANF program, 45.7% (7.2
million) had formerly been in the TANF program, and 40.8% (6.4 million) had never been in the TANF program.
2 The CSE program enacted in 1975 (P.L. 93-647) at first permitted, and then in 1984 (P.L. 98-378) required, the CSE
agency to charge a one-time application fee for families not on welfare. In 1975, the law required that the application
fee be reasonable, as determined by federal regulations. In 1984, the law specified that the fee could not exceed $25.
The CSE agency may charge this fee to the applicant (i.e., the custodial parent) 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
of costs may be either from the custodial parent or the noncustodial parent. Although the application fee is mandatory,
federal law allows the state to charge an amount that can range from 1 cent to $25. Many of the states that charge a $1
or less application fee do so to maximize non-TANF clients access to CSE services. Many state CSE officials view
application fees as a barrier to clients who do not have the financial means to apply for services. They also claim that
fees and other charges may discourage clients from seeking services, because the fee is paid regardless of whether any
child support is collected on behalf of the family. Others view application fees for non-TANF families as a way to
reduce CSE program costs. The legislative history of P.L. 98-378 (S.Rept. 98-387, p. 30-31; April 9, 1984) says: “The
Committee believes that this minimal fee requirement represents a reasonable way to help defray some of the costs
incurred in processing the application and in providing support enforcement services. This fee would still be
significantly less costly to the non-AFDC applicant nethan the cost of pursuing support enforcement through a private
attorney.”






P.L. 109-171 (Section 7310), the Deficit Reduction Act of 2005 (enacted February 8, 2006),
required families that have never been on the TANF program to pay a $25 annual user fee when
the Child Support Enforcement (CSE) program collects at least $500 in child support annually 3
(from the noncustodial parent) on their behalf.
P.L. 109-171 provides the state with four options on how to collect the fee. The $25 user fee may
be (1) retained by the state from child support collected on behalf of the family (but the $25
cannot be part of the first $500 collected in any given federal fiscal year); (2) paid by the
custodial parent; (3) recovered/recouped from the noncustodial parent; or (4) paid by the state out 4
of state funds.
The intent of the $25 user fee is to recoup in part the costs of the CSE program to the federal and 5
state governments by decreasing CSE program expenditures. The $25 user fee (from custodial
and noncustodial parents) is considered income to the CSE program. The federal and state
governments share income to the CSE program (sometimes referred to as cost recovery) at the
same rate that they share program costs (i.e., 66% federal and 34% state). The Congressional
Budget Office (CBO) estimated that the $25 CSE annual user fee provision would save the
federal government $172 million and the state governments $93 million over the four-year period
FY2007-FY2010.
After the $25 user fee was enacted, there was a lot of interest in how it would be implemented.
Most of the arguments about the user fee (for and against) concerned the option that permitted
states to charge the custodial parent.
Persons in favor of the mandatory $25 annual user fee maintain that it will, to a limited extent,
compensate the federal government and the states for operating a CSE program. They claim that
even on top of the CSE application fee, the CSE program is still a bargain for custodial parents.
They argue that there is no comparison between the nominal fees that the CSE program charges
and the much higher fees that a private attorney or collection agency would charge for obtaining
child support payments. They say that unlike the CSE application fee, it only applies to those who
have received a certain amount of child support payments. They also point out that 75% of
custodial parents had income above the poverty level (2005 Census data) and that on the basis of 6
earlier data, a significant percentage of families (16%) had income above 300% of poverty level

3 Provision of a mandatory $25 annual user fee for non-welfare CSE families has been discussed for many years. Such
a proposal was included in the George H. W. Bush Administration’s FY1992 budget proposals and in the George W.
Bush Administration’s FY2003 budget proposals. For additional information, see States’ Practices and Perspectives
for Assessing Fees for Child Support Services to Applicants not Receiving Aid to Families with Dependent Children.
Department of Health and Human Services, Office of Inspector General. July 8, 1992 http://oig.hhs.gov/oas/reports/
region6/69100048.pdf. Also see Feasibility of Collecting Fees for Child Support Services, by Carol Welch. Washington
State. Department of Social and Health Services, Division of Child Support, Fiscal Management. June 2001
http://www1.dshs.wa.gov/pdf/esa/dcs/reports/feestudy.pdf.
4 If the $25 annual user fee is paid by the state out of state funds, it is not considered an administrative cost of the CSE
program and thus is not eligible for 66% federal matching funds.
5 In FY2007, CSE program expenditures amounted to nearly $5.6 billion; child support payments collected from
noncustodial parents by CSE agencies totaled $24.9 billion.
6 Characteristics of Families Using Title IV-D Services in 1995, by Matthew Lyon. May 1999. According to the report,
16% of CSE families had income above 300% of the poverty level in 1995; see http://aspe.hhs.gov/hsp/CSE-Char99/
(continued...)





and thereby could probably afford to pay the user fee without it negatively affecting their standard
of living. In addition, they assert that it is normal practice to charge a fee or user charge for
services rendered.
Persons opposed to the mandatory $25 annual user fee (that is imposed on the custodial parent)
contend that it treats similarly situated families in an unequal manner. They argue that a low-
income custodial parent who has not had to go on welfare needs child support just as much as a
custodial parent who formerly was on welfare (i.e., the TANF program). They contend that the
$25 annual fee would impose a new surcharge on working poor families who were previously
successful in remaining self-sufficient. They contend that fees generally take away funds that
otherwise could be available to the child and the family. They also point out that because the $25
user fee is considered CSE program income, the state gets 34% of the $25 fee ($8.50) and the
federal government gets the remaining 66% ($16.50). They claim that the administrative cost of
reprogramming a state’s automated computer system to account for the fee would outweigh the
financial benefit of the fee’s increased income to the state. They also say that the financial benefit, 7
if any, to the federal government would be negligible.
According to the Lewin Group/ECONorthwest report entitled Anticipated Effects of the Deficit
Reduction Act Provisions on Child Support Program Financing and Performance Summary of
Data Analysis and IV-D Director Calls (July 20, 2007):
Many directors noted potential benefits of the fee, including program revenue and instilling a
sense of ownership in ones child support case. Directors, though, identified more drawbacks
to the fee. All directors expected the cost of programming the statewide automated system
would exceed the revenue generated from the fee, at least in the short-term. This occurs at a
time when they are already facing budget cuts or foregoing other project enhancements.
Some expressed concern that it will take money from low-income families; others fear it will
drive customerslargely consistent payers—from the program, hurting not only child
support program performance but families as well. One-fourth of the surveyed directors
stated that their programs would not charge the fee and would pay the federal share out of 8
program resources.

The provision mandating a $25 annual user fee became effective on October 1, 2006. However,
some states had to enact the provision into state law before they could impose the mandatory $25 9
user fee. The proposed regulations on the user fee were published in January 2007. Final
regulations are expected to be published in the summer of 2008.
Table 1 is based on a survey of the states by the National Council of Child Support Directors and
information from state CSE agencies. Table 1 indicates that of the 54 jurisdictions with CSE

(...continued)
CSE-Char99.htm.
7 National Child Support Enforcement Association (NCSEA). Resolution on $25 Annual Fee. June 17, 2002. See
http://www.ncsea.org/files/Resolution-AnnualFee.pdf.
8 See http://www.nccsd.net/documents/nccsd_final_report_revised_2_437782.pdf.
9 Federal Register, vol. 72, no. 15. January 24, 2007. Child Support Enforcement Program, p. 3093-3102. The
proposed regulations can be found at http://www.acf.dhhs.gov/programs/cse/pol/AT/2007/at-07-01.htm.





programs, 26 jurisdictions impose the user fee on the custodial parent, 20 jurisdictions pay the fee
with state funds, 2 jurisdictions get the fee from the noncustodial parent, 1 jurisdiction charges
half of the fee to the noncustodial parent and the other half to the custodial parent, and 3
jurisdictions retain the fee from the family’s child support payment (after $500 per year has been
collected on behalf of the family). The other 2 jurisdictions did not respond to the survey or the
issue is still unresolved.
Table 1. Method By Which $25 CSE Annual User Fee Is Imposed
Fee Paid by Fee Paid by Fee Paid by Fee Paid Out of
Implementa-State Out of Noncustodial Custodial Child Support
State tion Date State Funds Parent Parent Paymenta
Alabama 10/1/07 X
Alaska 10/1/06 X
Arizona 10/1/07 X
Arkansas 10/1/07 X
California 10/1/07 X
Colorado 10/1/07 X
Connecticut 10/1/07 X
Delaware 10/1/07 X
District of 10/1/07 X
Columbia
Florida 10/1/07 X
Georgia 10/1/07 X (split) X (split)
Guam 10/1/07 X
Hawaii 10/1/07 X
Idaho 10/1/07 X
Illinois 10/1/07 X
Indiana 01/1/08 X
Iowa 10/1/07 X
Kansas pending
Kentucky 7/1/2008 X
Louisiana 10/1/06 X
Maine 10/1/06 X
Maryland 10/1/07 X
Massachusetts 10/1/07 X
Michigan 09/1/08 X
Minnesota 9/30/07 X
Mississippi 10/1/06 X
Missouri 10/1/07 X
Montana 10/1/07 X





Fee Paid by Fee Paid by Fee Paid by Fee Paid Out of
Implementa-State Out of Noncustodial Custodial Child Support a
State tion Date State Funds Parent Parent Payment
Nebraska 10/1/07 X
Nevada 10/1/07 X
New 12/1/07 X
Hampshire
New Jersey 7/1/08 X
New Mexico 10/1/07 X
New Yorkb 10/01/08 X
North Carolina 10/1/07 X
North Dakota 10/1/07 X
Ohio 10/1/07 X
Oklahoma 10/1/07 X
Oregon 10/1/07 X
Pennsylvaniac 03/31/08 X
Puerto Rico pending
Rhode Island 10/1/07 X
South Carolina 10/1/07 X
South Dakota 10/1/07 X
Tennessee 10/1/07 X
Texas 10/1/07 X
Utah 7/1/07 X
Vermont 10/1/06 X
Virgin Islands d X
Virginia 10/1/07 X
Washington 10/1/07 X
West Virginia 10/1/07 X
Wisconsin 10/1/08 X
Wyoming 11/1/07 X
Source: Table prepared by the Congressional Research Service on the basis of information collected by the
National Council of Child Support Directors and from state CSE agencies.
a. The $25 CSE annual user fee may be retained by the state from the child support payment made to the
custodial parent but only after $500 has been collected (in a given fiscal year) from the noncustodial parent
on that family’s behalf.
b. New York will pay the $25 CSE annual user fee from state funds during the period from April 1, 2008,
through September 30, 2008.
c. Pennsylvania pays the $25 CSE annual user fee out of state funds for cases in which the annual child support
collection is between $500 and $1,999.99. If the annual child support collection is $2,000 or more, the $25
annual user fee is collected from the custodial parent.
d. The documentation for the Virgin Islands (Office of Child Support Enforcement, Virgin Islands State Profile
at http://ocse.acf.hhs.gov/ext/irg/sps/selectastate.cfm) does not include the implementation date.





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