Child Support 101 is a compilation of online documents that explain the child support process and services.
It is divided into three series: state functions, enforcement and family centered services. The first series, Child Support 101: State Functions, offers information about state child support administration and the basics of child support. The second series, Child Support 101.2: Enforcement, features a collection of documents explaining the many aspects of and options for enforcement of child support. Child Support 101.3: Family Centered Services, the third of the series, is not yet available but will address various issues including child support prevention, fatherhood programs and economic stability. You may view the full contents of this project by visiting the comprehensive table of contents.
Below is information regarding the collection and disbursement of child support. States are required to offer child support collection and disbursement services to both TANF and non-TANF child support recipients. In order to achieve success in collection and distribution, each state must operate a State Disbursement Unit, discussed below. In addition, a growing trend in the disbursement arena are pass-through and disregard policies where the state passes through a portion of the child support collected directly to the family, rather than retaining it as reimbursement for TANF benefits.
State Disbursement Unit
As part of the child support enforcement process, states are required to establish and maintain a state disbursement unit (SDU) to receive and disburse all payments under a child support order for (1) for all IV-D cases and (2) for all non-IV-D cases with income withholding orders (if those orders were initially issued on or after Jan. 1, 1994).
The SDU is a centralized collection and disbursement unit for child support payments from employers, income withholders, and others. Some states have received limited waivers to this general rule. To the maximum extent possible, SDUs must use automated procedures. The SDU must process all IV-D cases and non-IV-D cases with income withholdings, and must distribute all payments, except disputed arrears, within two business days of receipt by the SDU. Disputed arrears disbursement may be delayed until the resolution of any appeal.
In addition to receiving and distributing all payments, an SDU is responsible for:
- Accurately identifying payments.
- Promptly disbursing payments to custodial parents (as appropriate).
- Furnishing payment records to any parent or to the court.
The state IV-D agency, a consortium of IV-D agencies, or a private contractor may operate an SDU. They may also link local disbursement units within a state. If states chose to link local units, employers completing income withholding can only be required to send payments to one place.
Federal law also requires the use of a standard withholding process to increase child support collections for all families, promote self-sufficiency for low-income families, and reduce the burden on employers. The income withholding order, or IWO, is the standard form approved by the Office of Management and Budget (OMB) that must be used by all entities to direct employers to withhold income for child support payments.
Pass-Through and Disregard
Under federal law, states are allowed to retain collected child support to reimburse themselves and the federal government for any welfare (Temporary Assistance to Needy Families or TANF) payments to the family, up to the amount of the child support order. States also have the option to pass through a portion or all of the child support directly to the family. Some states have chosen to retain most of the child support paid on behalf of children in families receiving TANF benefits to offset welfare expenditures incurred by the state. These collections are shared between the state and federal governments according to the state’s Medicaid federal matching rate (FMAP).
Current TANF Recipients
Families currently receiving TANF assistance are required to assign their rights to child support to the state in order to receive benefits. Accordingly, any child support collected on behalf of the family is shared between the state and federal governments. States have the option to pass through all or a portion of the child support payments directly to the custodial parent and child when they are currently receiving TANF.
States allowing the pass-through must decide how it will be counted when calculating eligibility and benefits for their TANF assistance programs. They may pass-through any or all child support and disregard those payments when determining eligibility for benefits. The state can choose to pass through any or all of the child support but not disregard those payments as income when determining TANF eligibility or benefits. If the state does not disregard the child support amount, child support may reduce TANF benefits dollar-for-dollar.
Former TANF Recipients
When a family leaves TANF, they regain their rights to currently owed child support, and they receive all of the current child support collections made unless arrearages accrued while on assistance. In these cases, the state retains the right to child support arrears and will continue to collect payments on behalf of the state to reimburse the costs of welfare benefits paid to the family. Once the arrears are paid, any support collected is paid to the family.
Research shows that more generous pass-through and disregard policies increase the amount of child support received by custodial parents on welfare. Evidence shows that these policies encourage fathers to work and pay child support, reduce fathers’ participation in the underground economy, assist families making the transition from welfare to work, and increase the financial security for families on TANF.
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For more information or to request technical assistance on state or federal child support policies and programs, please send a message to Children & Families staff. As a membership organization serving state legislators and legislative staff, we do not respond to inquiries or provide legal advice related to individual child support or family law cases.