The Costs and Benefits of Child Support Enforcement

By Timothy Baker, Ph.D. and John F. Stuff

In 1935 the Social Security Act was passed, Included in the act was a provision for giving money to destitute mothers for the care of their dependent children. This form of public assistance is commonly referred to as Aid to Families with Dependent Children (AFDC). Also incorporated in the act was the provi- sion that the absent parent should pay child support. Although this second provision was included in the law, there was no effective operational mechanism established for its implementation. The act provided no direct benefit which would accrue to the caretaker/ parent for actively seeking a child support order. This was true because even where an order was established and paid directly to the client, the welfarecheck would becut by a like amount, meaning that the caretaker1 parent’s income could never exceed the established public assistance family-size allowance, no matter what the source. As a result, little financial benefit was realized by either the state o r federal governments from these provisions.

Between the years 1950 and 1974, the importance of absent parents and their rela- tionship to the amount of public assistance paid out under the AFDC category grew dramatically. In 1950,49 percent of the recip- ient children (8 18,000) were eligible for AFDC due to parental absence. By 1974, this had risen to 78 percent (6,062,000). Of this group only 26.4 percent were covered by

court orders or voluntary legal agreements for child support. Of these, approximately 21 percent were receiving the full amount of the orders and agreements.

This situation was to change greatly with the passage of the Child Support and Estab- lishment of Paternity Amendments in 1975 which added Title IV-D to the Social Security Act. The following quote, taken from a November 1975 staff report of the Senate Finance Committee, fairly well states the congressional intent of the new Title IV-D amendments.

The committee believes that all children have the right to receive support from their fathers. The committee bill is designed to help children attain this right, including the right t o have their fathers identified so that support can be obtained. The immediate result will be a lower welfare cost to the taxpayer but. more impor- tantly, as an effective support collection system is established fathers will be deterred from deserting their families t o welfare and the child- ren will be spared the effects of family breakup.

Thus, Title IV-D went beyond the question of recouping monies from absent fathers of children receiving AFDC. It dealt, too, with the establishment of paternity and the collec- tion of support for children not on the welfare rolls. The social benefit of such a program was obvious. T o the extent that absent parents could be held to be financially responsible for their children, to that extent

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these children would not become a financial burden on society in general. Also, to the extent that the psychological stigma of illegit- imacy could be removed from the child, to that extent the general public would be relieved of the expense of treating that child for any emotional disturbances which might have resulted from it.

To these ends, the Federal Office of Child Support Enforcement (OCSE) was estab- lished. Also, the states were held responsible for establishing programs within their juris- dictions to implement Title IV-D. Federal and state welfare officials often looked on the program as a bonanza, seeing it as a way to cut into the spiraling expenditures of welfare. Local judicial and prosecutorial officers often viewed it as a windfall, too, providing federal assistance to them for doing an expanded and improved job of what many had been doing all along. And, while individuals and groups of absent fathers raised a cry; the public in general was pleased to see a burden which they had been shouldering passed back to the individuals whom they considered re- sponsible.

With so many direct and indirect benefits accruing, little thought seemed to have been given to the other side of the cost-benefit equation: costs. With the change of adminis- tration in Washington and the extensive belt- tightening which has occurred in the field of public welfare, all this has changed. No pro- gram has escaped the well-honed axes of the Office of Management and Budget. While most who worked in the Child Support field accepted it as a “given truth” that their work with people who were not welfare recipients was of considerable benefit to society in help- ing to avoid the welfare costs, little or no data existed to either support or refute this claim. There is only one line on a statistical report which the states send the federal government concerning the number of AFDC cases ter- minated in which Child Support Enforce- ment was a factor. These data were, however, highly unreliable in painting an accurate pic- ture of the contribution of child support to welfare cost reduction because of ( 1 ) failure of communication between the welfare and Child Support agencies and the differences in

their organizational imperative resulted in information on reasons for case closings not getting from the former to the latter to be included on the federal report; and, (2) this figure failed to consider the numbers of non- AFDC cases which did not come onto welfare because of the work of the Child Support units. The federal government attempted to address this latter questions as part of a larger study being conducted by a private consulting firm, Maximus, Inc. of McLean, Virginia. From data gathered in 13 different sites in 6 different states Maximus concluded, “, . . cost avoidance of the non-AFDC segment of the Title 1V-D program cannot be estimated from data regularly reported to the Office of Child Support Enforcement. . . .” Further, the results of this research disclosed two find- ings that Maximus labeled as having major significance. First, 93 percent of the non- AFDC cases in their sample reported income below the poverty level; and second 55 per- cent reported incomes low enough to be eligi- ble for AFDC.

While these findings tended to strongly support the conclusion that the non-AFDC portion of the child support enforcement program realized considerable welfare cost- avoidance savings, the question remained as to whether or not these conclusions could be generalized beyond the 13 political sub- divisions studied to the nation as a whole. This question was addressed by a study con- ducted by the Pennsylvania Department of Public Welfare in the countries which operate the program in that state. The findings from this study are seen as important both at the state and local level in addressing the question of whether and how the non-AFDC portion of the child support program should be funded.

Collection of Data and Findings In September 198 1, the Pennsylvania Child

Support Program sent a memo to all the counties in the state requesting that they gather specific data on all non-AFDC cases filing new petitions for support during the month of October. In addition, the counties were asked to keep a record of all the AFDC

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cases which were transferred to the non- AFDC caseload during the same month (i.e., that went off public assistance). The data requested on new petition activity was the same as that reviewed by Maximus in its study, and allowed for the calculation of those families who would be eligible (based on their income) for AFDC were they not to receive child support. In addition, it allowed for the calculation of whether or not these individuals would be income eligible for other social services based on the Title XX of the Social Security Act. 56 of the state’s 67 coun- ties responded. These counties constituted 94 percent of the states total population.

The first cost-avoidance figure computed from the data collected was on the numbers of non-AFDC petitioners filing for support whose income was lower than that of the AFDC family size allowance. A total of 1,433 such petitions were filed in these counties in October. Of these, 638 (45 percent) declared income low enough to be eligible for AFDC. To put this into a cost-benefit perspective, should the child support programs be suc- cessful in establishing and collecting a court order for these 638 cases, then society will benefit because the 638 families will not be coming onto welfare. When one considers that the average AFDC grant in Pennsylva- nia is almost $300 per month, and that the figures were for only one month, the conclu- sion that the non-AFDC portion of the child support enforcement program carries its own weight in the welfare cost-benefit calculation is strongly supported. If, for instance, the program helps in keeping an average of 638 persons per month off the Pennsylvania wel- fare rolls, then an annual savings of approxi- mately $2.3 million would be realized.2

In addition to those not on welfare, whom the program aids in sustaining their non- dependent position, there are those who are on the assistance rolls whom the program aids in getting off. In the Pennsylvania report- ing counties during October 198 1, 1,2 10 cases were moved from an AFDC to a non-AFDC status. This meant that in addition to those cases noted above, the program helped to remain off assistance, 1,2 10 families which had formerly been on the welfare rolls were

now able to move off during that month. Since these cases remained open as child sup- port cases, it can be assumed that the reason for the welfare termination was not a return of the father to the home. Again, making the assumptions noted above in determining the amount of cost avoidance, approximately $4.3 million in additional annual savings may be attributed to the non-AFDC program.3

Conclusions As noted previously, with the current move

in Washington, state and local seats of government across the United States to cut back expenditures, all programs and particu- larly those in the field of social welfare, are coming under careful scrutiny. In considering the future of the child support enforcement program, it is important to remember that its benefit is not only measurable in terms of the collections made on AFDC cases which flow directly back to the federal and state coffers, but also in terms of the indirect cost avoid- ance which is realized in the non-AFDC por- tion of the program. While a hard look at the funding structure and level of funding is cer- tainly appropriate, particularly as a discus- sion of the “new federalism” moves forward, it is most important that the indirect benefits of welfare cost avoidance be considered.

Dr. Baker is the director of income mainte- nance research and evaluation. Pennsylvania Department of Public Welfare. He is also a visitingprofessor at Adeelphi University School of Social Work. Mr. Stuff is the director of child support operations, Pennsylvania Department of Public Weyare.

A urhors ’ addresses: Timothy Baker, Ph.D. Director, Income Maintenance Research and Evaluation

John F. Stuff Director, Child Support Operations Pennsylvania Department of Public Welfare Harrisburg, PA I7 120

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Notes I Hearings on Senate Bills 1842 and 208 I before the

Senate Committee on Finance, 93rd Congress, First Session (1973); and Mary Fisher Bernet, “The Child Support Provisions: Comments on the New Federal Laws”in the Youngest Minority I1 edited by S. Katz, American Bar Association, 1977.

?The assumption is made in this calculation that the average grant of $299 will be paid. This would probably tend to overstate the figure. It is also

assumed that only one year’s savings will accrue. This would tend to understate it.

30ther factors not related to child support may have contributed t o the families terminating welfare. A follow-up study is being planned in Pennsylvania to look a t this and other questions relating to the findings which will allow a clearer picture of the role of the child support program in aiding families t o avoid or get off the welfare rolls.

44 Juvenile & Family Court Journal/ Winter 1983-1984