Child Support Reform: What You Need to Know

The federal government reimburses the states for child support services where one parent receives or may receive public assistance.

In the 1970s, divorce rates were increasing. Mothers often did not work outside the home and fathers provided household income. More often than not, courts granted custody to a mother. A father was designated the obligor, or person that paid child support.

Today, over 40% of children are born to unmarried parents. Amendments to the child support provisions of the Social Security Act have led to improved collection of child support. Courts examine the custody arrangement more closely. They base child support orders on economic realities. They review the parents' ability to pay. Child support awards take into account what the custody arrangement actually means to the parties and the children.

Now, non-custodial parents (whether fathers or mothers) may receive child support payments. They may also see reductions based on specific circumstances of the child support case. Read on to learn more about child support reform and its impact on child support orders today.

Determining Child Support

The child support obligation is determined using the income of both parents and the number of children in their households. The goal is for the children's financial well-being to mirror the situation that existed when the parents were together. Of course, this theory presumes that the parents had once lived together with the children. In a more general sense, each parent has a legal obligation for the financial support of the child.

Child support guidelines differ from state to state. Some states use a formula based on gross income (such as Ohio), and others use a formula based on net income (such as Texas). Gross income means income before payroll deductions. Net income means income after such deductions or income families actually receive for household expenses.

Child support orders factor in health care insurance costs when the parent's plan covers the children. Some states will factor in childcare costs and which party pays such costs. In other states, the guidelines may permit childcare expenses as a discretionary factor. Some states have revised guidelines to set a maximum figure for childcare expenses. This can help resolve issues where the custodial parent places a child in an expensive childcare setting to the detriment of the non-custodial parent.

How Does Custody Affect Child Support?

In determining the amount of child support, many state guidelines did not take into account the differences in parenting time. Typically, the non-custodial parent gets designated as the child support obligor. The more time that a child spends with a non-custodial parent, the greater the expenses that parent incurs to support the child in his/her household.

In situations with shared custody or extensive visitation, the child may spend almost the same amount of time with each parent. In such a case, the obligor parent may request that the court reduce child support payments to zero. Differences in the parents' relative incomes will continue to affect the amount of the child support order. For example, the parents have equal parenting time, but the non-custodial parent has a substantially greater income than the custodial parent. A review under state guidelines may not produce a zero child support order in such a situation.

It's possible for support to be higher or lower than the amount determined by the guidelines. A parent may need to show extenuating circumstances for the court to adjust the current support amount.

In the past, child support orders mainly derived from divorce cases. Today, child support cases involve many persons who were never married. Either parent or the State may file a petition to establish paternity and/or child support. The State will file the petition when the unmarried mother receives public assistance. In the court proceeding, the father will be named the respondent. If the court issues findings for paternity and child support, the father will then be named the obligor when the mother is the custodial parent.

Child Support Agencies

The federal government, through the Office of Child Support Enforcement (OCSE), mandates the adoption of child support guidelines in all states. The OCSE is located in the federal Department of Health and Human Services (HHS). This federal agency provides oversight to the National Child Support Program. It also provides technical assistance to federal, state, tribal, and local governments that pursue financial support from both parents for children living in separate households.

Most often, parents work with their local child support agencies. These offices may be a division of the department of social services or part of another government office.

The State may focus child support collection efforts on cases involving needy families. These may be families where the custodial parent receives Medicaid or public assistance. When the custodial parent receives cash benefits, he/she assigns the right to collect child support to the State. The assignment lasts for the period of time covered by the benefits.

Deviation Factors

A non-custodial parent who is low-income could potentially receive child support if state law allows such a result. In contrast, a custodial parent who is low-income may receive an upward deviation in child support payments when a non-custodial parent has a substantially higher income.

States provide child support deviation factors that the court can consider. The court will review the factors when issuing or modifying child support payments. Common factors used for deviation under the guidelines may include:

• Unusual needs of the children
• Other child support obligations of the parties
• Other court-ordered payments of the parties
• Benefits of a second income in the household
• Extended parenting time by the obligor parent
• Disparity of the parents' incomes
• Medical expenditures not covered by health care insurance
• Standard of living of the parties and their children
• Other factors, including the best interest of the children

In many cases, the custodial parent, or the obligee, receives child support from the non-custodial parent, or obligor. However, the custodial parent isn't always the recipient. The non-custodial parent isn't always the payor of child support. Some states give courts discretion to order parents to pay a reasonable and necessary amount of financial support for the child. For example, both parents may face court orders to pay child support when their child is in the custody of a third party or the State.

Reforms Focused on Employment Changes

Welfare reform passed by Congress in 1996 required that states establish a system for collecting information on new hires in the state. State directories of new hires were used to locate and match current child support obligors. This led to the establishment or modification of child support orders to provide funds to needy families.

Federal welfare reform law also established a National Directory of New Hires. This provided states with more help when obligors lived out of state.

Child support agencies match the social security numbers of obligors with the social security numbers of new hires in these new hire databases. The Social Security Office (SSO) verifies social security numbers from reports on new hires, quarterly wage information, and unemployment insurance. After verifying, the SSO submits the information to the National Directory of New Hires.

Federal law changes succeeded in increasing child support collection. This improved the well-being of low-income families who depended on the collection of child support to meet basic needs.

Reforms Based on Exercise of Parenting Time

In many states, child support reforms have focused on the exercise of parenting time. For example, a revision to the child support guidelines in Ohio took effect in 2019. It provided for an automatic 10% reduction in the monthly child support obligation when the court order provided 90 or more overnights of parenting time to the obligor in a calendar year. If the obligor did not exercise the 90 overnights, then the modification could be adjusted.

The law also provides for additional deviation in support if the obligor exercises over 91 overnights of parenting time. If the court order provided for 91 to 146 overnights of parenting time to the obligor, then the court could use its deviation factors and grant a further reduction in child support beyond the 10%. If the court order provided for 147 or more overnights of parenting time to the obligor, then the court had to issue written findings if it did not grant a further downward deviation beyond the 10%.

State case law also provides examples of a court requiring a custodial parent to pay child support when the court finds this is in the best interest of the children. In Illinois, there was a case where the father was designated as the custodial parent. There was not much difference in the amount of time the two children spent with their mother and father. The father had an income of $150,000 a year, but the mother earned less than $10,000.

The Illinois Supreme Court declared that Illinois law does not support the view that custodial parents are exempt from having to pay child support. Therefore, the State could collect child support for the non-custodial mother from the father.

A similar conclusion occurred in an Indiana case. The mother was the primary custodian. She had an annual income of about double the father's income. Although the father was a non-custodial parent, he had the children with him for more than 40% of the year.

The Indiana Supreme Court determined that Indiana's guidelines don't authorize the payment of child support from a custodial to a non-custodial parent. However, it concluded that if the state's guidelines produced an unjust result, a court could order a custodial parent to pay child support to a non-custodial parent.

The courts noted that sometimes non-custodial parents may have visitation schedules that rival those of custodial parents. When a child spends an almost equal number of days with each parent, each parent is providing about the same care for the child. They accrue similar costs. In such situations, the court must take into account the non-custodial parent's income and resources.

In recent years, there have been fatherhood rights groups that promote the concept of joint or shared custody in divorce and parentage cases. They claim that custodial mothers often obtain sole custody due to longstanding bias against single fathers. They emphasize equity in court decisions on child support and child custody.

Reforms Based on a Self-Sufficiency Reserve

Federal rules now require the state guidelines to provide for a "self-sufficiency reserve" for the obligor parent. State law amendments modified child support guidelines to create a reserve amount, such as 116% of the federal poverty level. If an obligor parent's income is at or below the reserve amount, then they can be assigned a minimum child support order.

The reserve concept requires states to determine a reasonable amount that a single parent should have for their own support. It is designed to assist low-income obligors who, in the past, had seen a build-up of child support arrears.

Reforms Based on Parental Incarceration

A local office of child support enforcement has many different ways to collect child support and motivate delinquent obligors. They have administrative remedies like suspension of the obligor's driver's license. They can file civil contempt of court against the obligors in family court. They can pursue misdemeanor or felony non-support cases.

Practically speaking, incarcerating a child support obligor prevents the obligor from working or seeking employment. Child support programs prefer remedies that allow them to collect child support and reduce child support arrears.

The National Conference of State Legislatures reports that the number of children with parents in jail or prison has increased. Over 440,000 incarcerated parents have a child support obligation.

In the past, most state laws provided that incarceration amounted to a voluntary act by a parent. Therefore, the parent's child support obligation could remain imputed at their last known income while they served time. This resulted in an explosion in the child support debt on the books with child support agencies around the country.

In 1996, welfare reform in federal law required that agencies demonstrate child support collection efforts. State child support agencies could be penalized if they were not collecting arrears in a consistent and timely manner.

Reentry programs designed to assist newly released inmates found that child support debt was a significant obstacle to financial stability for their clients. Child support arrearage also became an obstacle for obligors' return to fatherhood. Oftentimes the experience of recurring delinquency causes obligor fathers to reduce contact with the families of their children.

Reentry program staff and advocates communicated with offices responsible for child support services. Reforms in the 2010s led many states to modify their laws. They used concepts like "right-sizing" the child support obligation to match the parent's income or the parent's ability to pay. This led many states to set standards for modifying child support orders due to incarceration.

In Texas and Wisconsin, a child support obligor who is incarcerated for more than 180 days can file a petition. He can request that the child support enforcement office or agency or the court reduce his child support obligation.

In other states, this may occur at 90 days. In Ohio, state law now provides that a court cannot impute income to an incarcerated parent in a child support case. Notably, modification of child support due to incarceration does not reduce or eliminate the child support arrearage. Child support arrearage means past-due child support.

The Child Support Pass-Through and Tax Refund Intercept

States have made efforts to provide a portion of the funds they receive on public assistance cases to the benefit recipients. When the obligee receives TANF cash benefits, they assign collected child support over to the State. TANF stands for Temporary Assistance to Needy Families.

The child support system in some states, like New York and California, has begun paying a portion of the child support they collect on assignment to the obligee parents. The pass-through amount sent to the families may be $100 for one child or $200 for two children for the month. The families will also continue to get their monthly cash benefit.

The pass-through concept provides a way to provide more funds into the household. It promotes the children's well-being and decreases poverty.

The Debt Collection Improvement Act of 1996 included the federal law tax refund intercept program. The law allows the Department of the Treasury to collect past-due child support by intercepting tax refund payments to child support obligors. All child support orders issued through courts and state child support agencies since January 1, 1994, are eligible for the tax refund program. This also provides direct funds to the custodial parent that reduce the child support arrearage of the obligor.

Interest Charged on Child Support Arrears

Another child support reform relates to interest charged on child support arrears. There is a wide variation among the states on this practice. For example, in New York and California, the annual interest rate on child support arrears is high. California charges 10% per year. New York charges 9% per year. Other states, like Texas, charge 6% per year. Some states, like Connecticut, charge no interest on arrears.

An HHS study in 2007 addressed interest rates. It showed that states charging interest on a routine basis had a much higher increase in child support debt over the period of the study.

You may want to review your child support orders to determine if interest on arrears is charged.

Have Child Support Reform Questions?

Get Answers with Legal Help

Understanding your state's child support guidelines can be challenging. Learning about child support reform efforts can be helpful. You may seek direction about modifying child support payments. You may have concerns about your role as a custodial or non-custodial parent. Consider speaking with a qualified child support attorney. An attorney can explain the child support system to you and advocate on your behalf. This may lead to a more equitable child support order.