Child Support and Employment Services

7/29/2019

Introduction

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In fiscal year 2018, noncustodial parents were obligated to pay nearly $33.6 billion in current child support on behalf of the 15 million children served by the Title IV-D child support program. One-third of that, or $11 billion, was not collected.

Unemployment is the leading reason for non-payment of child support by noncustodial parents. The federal Office of Child Support Enforcement (OCSE) estimates that 13% of noncustodial parents are unemployed for extended periods. A Colorado study found that difficulty finding employment was the No. 1 barrier to paying child support for one-third of noncustodial parents surveyed. Unemployment among noncustodial parents is particularly relevant because income withholding accounts for 75% of child support collections each year. Getting noncustodial parents to work not only puts them on a path toward increased financial security, it also ensures some financial support for their children.

States, along with the federal government, have recently renewed their focus on noncustodial parent employment. State child support programs have experimented with services to help noncustodial parents get jobs. These programs have primarily been small and limited by funding and regulatory restrictions. Recent federal guidance supports partnerships between state child support and Temporary Assistance for Needy Families (TANF) agencies, as well as workforce programs and other community-based organizations, to provide employment services to noncustodial parents.

Several states implementing TANF-funded, employment-focused child support programs are seeing their efforts pay off. These states have experienced significant increases in child support collections, long-term employment among participants, and significant savings to the state when factoring in the reduced need for public assistance among custodial parents receiving child support.

This brief will explore the opportunities at the state and federal levels to provide employment services to noncustodial parents and increase child support payments in the process.

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Federal Perspective

OCSE defines its core mission as establishing paternity and securing regular child support payments in order to encourage responsible parenting, family self-sufficiency and child well-being. The TANF program, administered by the federal Office of Family Assistance (OFA), is designed to help needy families become self-sufficient, in part by promoting job preparation, work and marriage. Given that both programs identify family self-sufficiency as part of their program mission or purpose, officials in both offices have prioritized coordination between their programs.

In 2018, OCSE and OFA released two related federal memoranda encouraging states to leverage existing child support incentive funds and TANF funds to support employment services for noncustodial parents. In his memo, OCSE Commissioner Scott Lekan stated, “HHS is eager to grant exemption requests that would allow states to use their incentive payments to provide employment programs for noncustodial parents,” when certain requirements are met. Clarence Carter, director of OFA, reminded states that TANF funds may be used to provide employment services to noncustodial parents, in addition to state maintenance-of-effort funds.

Child Support Compliance and Nontraditional Work

The nature and demographics of the workforce are changing, with nontraditional employment and the gig economy chipping away at traditional employment relationships and structures. Nontraditional employment is defined as having unpredictable schedules and variable earnings across pay periods, potentially leading to income instability. A 2019 report, Independent Contractors and Nontraditional Workers: Implications for the Child Support Program, details the relationship between the changing workforce and child support. The report cites a study that suggests that 94% of net employment growth between 2005 and 2015 was in temporary employment or independent contracting.

Another study estimates that more than 30% of Americans received some income from self-employment or independent contracting in 2017. With the continued rise of ride- and home-sharing services and other app-based employment, this trend looks to continue, impacting the workforce and income stability. While there is no specific data on the gig economy and parents who are paying child support, trends in nontraditional employment clearly have implications for child support collections.

Federal law requires employers to report basic information on new and rehired employees to the state new hire reporting system. That information is then maintained in the National Directory of New Hires. State child support agencies use the directory to issue income withholding orders for parents who owe child support. Some states require independent contractors to report to the new hire database to address nontraditional work and its impact on child support compliance. Currently, at least 16 states and Guam require employers to report the income of independent contractors to the new hire database.

Including independent contractors and nontraditional work in the federal new hire database allows income withholding orders to be enforced on those earnings. Potential challenges to implementing this policy are the timing of reporting and payment to independent contractors, and the fact that not all payments to independent contractors are income.

required reporting of independent contractors

State Action

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State child support programs are taking steps to increase employment and earnings of noncustodial parents. A 2014 scan found 30 states and the District of Columbia had small-scale, local employment programs targeting noncustodial parents with active child support cases. It is unclear how many of these programs are still active. Some are statewide, others are county specific. Some are voluntary; others are court ordered. Some provide referrals to job training; while others offer more intensive services addressing barriers to employment.

In 2012, OCSE awarded five-year Child Support Noncustodial Parent Employment Demonstration (CSPED) grants to eight states (California, Colorado, Iowa, Ohio, South Carolina, Tennessee, Texas and Wisconsin), directing them to develop, implement and evaluate employment programs that assisted noncustodial parents struggling to pay child support due to unemployment or underemployment. The services provided by the CSPED projects included case management, enhanced child support services, employment services and parenting peer support. The project’s final report, released in March 2019, showed modest increases in child support compliance and payment across the eight states, with marked improvements in the perception by noncustodial parents of the child support program as helpful. In addition, the evaluation showed improvements in parents’ engagement in their children’s lives.

In addition to, or in combination with, these programs, at least eight states have leveraged TANF or child support incentive dollars for employment services within the child support program. Because employment services are not currently an eligible use for routine child support program operation funds, many states have struggled to convert pilot or demonstration projects into core services. The following states have moved beyond that challenge using TANF funds.

Colorado

In 2019, the Colorado legislature appropriated nearly $1 million in TANF funds for a pilot program and evaluation. The budget directs the state’s Department of Human Services’ Division of Child Support Services to implement a pilot program serving 5,000 low-income noncustodial parents per year. Colorado has also received approval from the OCSE for a time-restricted waiver of federal funding eligibility requirements to use a limited amount of child support funds for noncustodial parent employment activities. This pilot is in response to two long-term local projects in Arapahoe and El Paso counties, as well as Colorado’s CSPED grant program, Colorado Parent Employment Project (CO-PEP). These three programs are described below.

Parents to Work is a partnership between the Arapahoe County Child Support Enforcement Division and Arapahoe Works! Workforce Center. Arapahoe Works! staff are co-located in the Arapahoe County child support office, where they offer case management, assessments, skills training, connections to employers and assistance with job applications to noncustodial parents. Participation can be voluntary or court ordered. Results showed increased collections from 36.6% to 41.3% of current support due.

El Paso County’s Parent Opportunity Program partners with local fatherhood programs, the county Department of Human Services, Goodwill Industries and others to provide individualized case management to noncustodial parents. This includes working with noncustodial parents on “personal family and career-oriented goals,” and may also include legal assistance or mental health counseling. Participation can be voluntary or court ordered.

CO-PEP, Colorado’s five-year CSPED demonstration project, offered a fast-track review of child support orders and right-sizing orders, and conducted fatherhood workshops. It also connected parents to mediators to facilitate parenting time arrangements; partnered with Goodwill Industries, workforce centers and other community-based organizations to create employment opportunities; and paid for certain work supports. Participation for noncustodial parents was voluntary. Within six months of completing the program, 65% of CO-PEP participants found full-time employment and were paying child support. For more about CO-PEP, listen to NCSL’s “Our American States” podcast, “Child Support Program Changes Result in Stronger Families.”

Kansas

Beginning in 2013, the Kansas Child Support Services program awarded grants for the Fatherhood Initiative. In 2019, five grantees serving 17 counties were selected to provide employment services embedded in a fatherhood or responsible parenting program provided by community-based organizations. More than 655 noncustodial parents were served in 2018, and grantees are on track to meet or exceed this number again in 2019. In 2018, 67% of participants entered the workforce or improved their employment status (i.e., increased hours or wages), while 67% were also making child support payments.

Maryland

Launched in 2006, Maryland’s statewide Noncustodial Parent Employment Program connects noncustodial parents to employment services. Participation can be voluntary or court ordered. From 2006 through 2015, more than 18,000 noncustodial parents were referred to employment services by the child support program. Of those referred, 12,000 enrolled in the program and 3,300 completed it. In the same period, nearly $121 million in child support was collected from participants.

New York

The New York Division of Child Support Enforcement operates in six counties. The county workforce agency provides services in five of the counties, and the Center for Court Innovation provides services in the other county. Noncustodial parents voluntarily participate or are referred by the state’s child support agency. Approximately 280 noncustodial parents are projected to be served.

North Dakota

North Dakota’s PRIDE-Employment Resources provides employment services through Job Services North Dakota, the state’s workforce agency. The program operates statewide in eight service delivery regions.

Participation is primarily court ordered, and Job Service North Dakota staff are present in court for contempt hearings of noncompliant parents. Those not court ordered are administratively referred. Nearly 1,000 noncustodial parents are referred to the program each year, and approximately 400 noncustodial parents are participating at any given time. In fiscal year 2017, the program produced a 43% increase in the amount of child support paid and a 32% increase in frequency of payments.

South Carolina

South Carolina’s Department of Social Services, Child Support Services Division provides employment services through the state’s fatherhood program, South Carolina Center for Fathers and Families. The program operates statewide through 20 sites. Approximately 1,700 noncustodial parents are enrolled at any given time, either voluntarily or through a court order. In fiscal year 2018, 58% of noncustodial parents who weren’t paying child support when they entered the program started paying support while in the program. Approximately $1.9 million in child support payments from 1,321 noncustodial parents were attributed to the program in 2018. In addition, 56% of participants became employed while in the program.

Tennessee

The Tennessee Child Support Employment & Parenting Program and the Child Support Noncustodial Parent Employment Demonstration project serve Nashville, Chattanooga, Memphis and five counties in East Tennessee. Employment services are provided by the Tennessee Department of Labor and two community-based organizations. The programs serve approximately 500 noncustodial parents per year on a voluntary basis. Participants are referred primarily by child support staff and the court system.

Texas

Launched in 2005, NCP Choices helps noncustodial parents address the reasons they are not paying child support. The program operates in 21 of Texas’ 28 workforce board areas, covering more than 75% of the state’s population. NCP Choices provides employment services through local workforce centers and partnerships with the state’s judiciary system. The program authorizes Title IV-D courts to share information related to noncustodial parents’ efforts to find work. Participation is court ordered, primarily through enforcement and establishment cases. Staff from workforce centers are co-located in courthouses so they can begin working with parents immediately after a case is heard.

In addition to TANF funds, Texas also has applied for and received an exemption to use child support performance incentive funds to support NCP Choices. This combined funding allows the state to serve approximately 5,000 new noncustodial parents annually, and more than 40,000 have been served since 2005. In fiscal year 2018, just under 4,500 enrolled parents paid almost $6 million in child support. For every dollar spent on the program, Texas collects $8 in child support, which exceeds the national average of $5.13 for each dollar spent on child support enforcement. More than $440 million in child support has been collected through the program since 2007. To learn more about NCP Choices, listen to NCSL’s “Our American States” podcast, “Child Support Program Changes Result in Stronger Families.”

Funding for Employment Services

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state tanf funds employment services noncustodial parents graphState child support programs are financed through a cost-sharing formula using federal, state and local funds. Employment services for noncustodial parents are not currently allowable activities under child support program funding requirements. Federal incentive payments earned when states meet performance measures are required to be reinvested into the program. Incentive payments can be used to carry out a state’s Title IV-D plan or “for any activity approved by the Secretary, whether or not the expenditures for the activity are eligible for reimbursement under this part, which may contribute to improving the effectiveness or efficiency of the State program operated under this part.” As indicated in the 2018 memo from OCSE, states are encouraged to seek an exemption to use incentive payments for employment services.

While states can request to use the incentive dollars they have earned for innovative activities, including employment services, this is a small amount compared to the full funding for routine child support services. Therefore, states wanting to provide employment services have had to find alternative funding sources, most notably TANF.

The above-mentioned eight states (Colorado, Kansas, Maryland, New York, North Dakota, South Carolina, Tennessee and Texas) reported using TANF dollars for employment services to noncustodial parents in the child support program. Unobligated TANF funds—federal appropriations from TANF that were not spent, allocated, or appropriated for other purposes—can be used for employment services. In fiscal year 2017, 38 states and the District of Columbia had unobligated TANF balances.

unobligated TANF funds 50-state map

Conclusion and Resources

Changing workforce demographics and a surge in nontraditional work has required state child support programs to change the way they do business. Some states are including nontraditional work in the federal new hire database and are encouraging long-term employment for noncustodial parents who pay child support. Through partnerships between child support and TANF agencies, states have experienced improved child support collections, cost savings to the state, and improved relationships between noncustodial parents and their children.

Resources