Changes Are Coming to the Child Support Program
Diane Potts, Vice President for Child Support and Workforce Services at Public Knowledge® and NCSEA Policy and Government Relations (PGR) Committee Co-chair, responded to the changes regarding Title IV-A cost recovery, foster care referrals, and Medicaid birth cost from the proposed Strengthening Families for Success Act (SFSA 2020) on behalf of NCSEA.
Title IV-A Cost Recovery
Under the SFSA 2020, effective October 1, 2025, states would need to:
- Pay all the current support and arrearage payments collected by the state on behalf of a Temporary Assistance for Needy Families (TANF) family to the family.
- Disregard the current support amount to determine Title IV-A eligibility, the amount, and type of assistance.
- Pay all of the current support and arrearage payments collected by the state to the former TANF family. Additionally, the amounts collected according to an assignment would be treated as if they were never assigned.
How NCSEA Addressed These Changes
NSCEA acknowledged the benefit of expanded state pass-through and disregarded policies to families and programs. Passed-through support speed up families becoming economically self-sufficient. State child support programs are closely aligned with familial self-sufficiency—not to mention eliminating cost recovery that would simplify program administration.
The Organization Proposed:
- States should have the option to eliminate TANF cost recovery from their programs. According to NCSEA, federal mandates would affect each state differently due to the diversity of their child support funding structures and TANF and child support policies. Also, because states used collections as a source of state funding for their support program and draw federal matching funds that triple the value of the recoveries, there is a significant financial impact. It could harm not only the child support program but also the millions of families it serves.
- NCSEA pointed out variations in how states have acted on existing pass-through and disregarded options currently in federal law. NCSEA cited how as of May 2021, half of the states, including the District of Columbia and Puerto Rico, pass-through some or all child support without reducing the family’s cash assistance grant. The TANF block grant allows states to set TANF income criteria and benefit levels.
- NCSEA urged Congress for more funding support to the states choosing to pass through all current support and arrear payments. While SFSA contained some fiscal relief, the federal share of the retained collection was overlooked. Temporarily increasing to 90 percent federal financial participation for system changes in distribution would allow most states to move out of cost recovery. The organization included several incentive options to this, including:
- Backfilling the loss of state IV-A recoveries to help states manage the negative revenue impact on state child support programs and state services.
- Increasing federal child support performance incentive funding.
- Allowing states to pilot expanded pass-through, disregard policies, defray the loss of state-retained collections with Section 1115 waivers.
- Expanding allowable IV-D program expenditures to include employment services for parents who owe support.
- States should be able to maintain distribution provided by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). SFSA 2020 required states to distribute support in under the Deficit Reduction Act (DRA) of 2005. This means 49 of the 54 states and territories currently using the PRWORA distribution would have had to implement a new distribution method. PRWORA distribution, according to NCSEA, should remain a state option due to the significant impact it would have on almost every state.
Read More About NCSEA’s Recommendations
To read more about NCSEA’s recommendations for foster care referrals and Medicaid birth cost read the full article.