IRP Research in Child Support Policy: The Child Support Assurance Proposal, 1982-1992
Contract Projects 2003–2005
The Need for a Program to Aid Children
Federal Child Support Programs
The Wisconsin Child Support Assurance System
Getting the Project Going
Implementation of Collection-Side Programs
The Collapse of the Benefit-Side Program
Child Support Policy: IRP Special Reports 1982–1992
The following article, describing the Child Support Assurance Program, was written in 1992 by Elizabeth Uhr, then a Senior Editor at IRP.
The Wisconsin effort to develop a Child Support Assurance System illustrates the continuing effectiveness as well as limitations of the Wisconsin Idea—the partnership between university faculty and state policymakers, first espoused by John R. Commons, from which emerged such revolutionary social programs as unemployment insurance and workers' compensation. In some respects the Child Support Assurance System was more revolutionary than were the earlier programs: It completely altered the way that child support obligations are determined, taking away from family courts their historic prerogative to decide on a case-by-case basis the appropriate amount of a child support award.
The Wisconsin Child Support Assurance System grew out of an idea conceived in 1978 by a Wisconsin Welfare Reform Study Advisory Committee, appointed by Governor Martin Schreiber to explore means for improving the situation of the poor in Wisconsin. The committee, whose chair was Robert Haveman, a professor of economics at the University of Wisconsin–Madison and former director of the Institute for Research on Poverty, designed a reform package that included an earned income tax credit at the state level and expanded training and job opportunities. Its central component, however, was a child support plan.
The plan called for the Wisconsin Department of Health and Social Services to set up a project to design and implement on an experimental basis a universal child support tax program to replace much of the existing AFDC program. This program would be financed through a specific tax on natural or adoptive parents which varied with the number of dependent children and income, plus state general revenues and federal funds normally expended in this programmatic area. ("Report and Recommendations of the Welfare Reform Study Advisory Committee," Wisconsin Department of Health and Social Services, Madison, Wis., 1979, p. 45).
The Need for a Program to Aid Children
The focus on child support represented a growing awareness of the deteriorating circumstances of children in the United States. Children were increasingly likely to live in single-parent families (this was the fate of one child in twelve in the 1960s, and one in five in the 1980s). The vast majority of these children had living fathers who failed to support them. Most single parents had no child support award, and of those with awards, few received the amount stipulated.
In 1982 only 59 percent of women potentially eligible to receive support had awards, and among those with awards only half received the full amount owed them while 28 percent received nothing at all (Garfinkel and Melli, Child Support: Weaknesses, vol. I, p. vi).
At the same time that the number of children in single-parent households was growing, the public program for supporting poor children in these households—Aid to Families with Dependent Children (AFDC)—was shrinking. The real value of AFDC benefit guarantees declined by over 40 percent between 1970 and 1980, and the proportion of poor children receiving help through AFDC declined from 80 percent in 1973 to 60 percent a decade later.
In 1974 children replaced the elderly as the most economically disadvantaged group in society and through the 1980s, approximately 20 percent of children were poor.(1) In 1991 Daniel Patrick Moynihan quoted a report of the Senate Democratic Caucus, which he in part authored, "There are some 64 million children in the United States. At current dependency rates, 16 million or one-quarter will be on welfare before they have reached the age of 18.... Children now make up the largest proportion of poor persons in the United States. There is no equivalent in our history to such a number or such a proportion."(2)
Federal Child Support Programs
Starting in 1950, Congress began to address the needs of children living with only one parent (usually their mother) by means of a number of amendments to the Social Security Act designed to obtain child support from absent parents. Emphasis was placed on collection of child support from parents whose children were being supported by the state (by the AFDC program). The first enforcement tool required state welfare officials to notify appropriate law enforcement agencies when opening an AFDC case in which the child had been deserted or abandoned by a parent. In 1967 welfare agencies were given authority to obtain information about absent parents from the Social Security Administration and from the IRS. These procedures, however, were insufficient to deal with a rapidly worsening problem. The most significant legislation was passed in 1975, when Part D was added to Title IV of the Social Security Act, establishing the Child Support Enforcement program. This legislation created the Office of Child Support Enforcement in the U.S. Department of Health, Education, and Welfare (which became the U.S. Department of Health and Human Services in 1979) and required the states to establish corresponding agencies to help enforce child support in all AFDC cases and in non-AFDC cases at the request of the custodial parent. This bill provided the machinery for enforcing child support obligations, with the federal government reimbursing the states for 75 percent of the costs incurred in establishing paternity, securing child support, and seeing that it was paid.
The Wisconsin Child Support Assurance System
As the federal government began putting in place the means for enforcing child support, the State of Wisconsin was forging a child support plan derived from the ideas of the Welfare Reform Committee. The philosophical premise underlying what became known as the Wisconsin Child Support Assurance System is that all parents bear economic responsibility for their children. The role of government was therefore to change. No longer would it support children of absent fathers by means of AFDC. Instead, it would see to it that parents carried out their obligations toward their offspring. The system that was devised was not to aid poor children, as AFDC had done, but rather to prevent poverty and welfare dependence.
As first designed, the system consisted of three parts: (1) A standardized sharing rate for child support, known as the percentage-of-income standard. This rate was based only on the income of the noncustodial parent and the number of children to be supported: 17 percent of the gross income of the absent parent for one child, 25 percent for two children, 29 percent for three children, 31 percent for four children, and 34 percent for five or more children. These percentages were derived from studies estimating the proportion of their incomes that parents in intact families spent on their children. (2) The payments were to be withheld from payrolls whenever possible (immediate withholding). (3) Each custodial family would receive an assured benefit, no matter how little the noncustodial parent paid. If the payments of the noncustodial parent fell below this assured benefit level, the difference would be made up by the state from the AFDC savings that resulted from increased child support collections.
Getting the Project Going
Child support reform in Wisconsin began in the mid-1970s, with federal impetus, when the Office of the Assistant Secretary for Planning and Evaluation (ASPE), of the U.S. Department of Health and Human Services, which provided core funding for the Institute for Research on Poverty, asked University of Wisconsin social work professor Irwin Garfinkel, then about to become director of IRP, to carry out research on the topic.
Despite the earlier proposal of the Wisconsin Welfare Reform Advisory Committee, Garfinkel, whose name, more than any other, became associated with the Wisconsin child support reform, was skeptical about a child support program to replace AFDC. He, like many in the social work field, viewed it initially as an increased economic burden on poor noncustodial parents, who, it was assumed, had nothing to share with their children. Nevertheless, Garfinkel encouraged one of his graduate students, Judith Cassetty, to write her dissertation on the topic. This dissertation, eventually published as Child Support and Public Policy (Lexington Books, 1978), was the first piece of child support research done at IRP. The various parts of the plan known as the Wisconsin Child Support Assurance System came not only from Cassetty and the Welfare Reform Advisory Committee, but also from such individuals as Isabel Sawhill (then at the Urban Institute), Harold Watts, a former director of IRP, and various programs already in use in other nations. It fell to Garfinkel and his colleagues, however, to fashion the conceptual pieces into a workable program and test it in the state.
Starting with a grant from the Ford Foundation of $10,000 and a number of key supporters in the state (e.g., Sherwood Zink, then legal counsel for the state child support agency, and State Representative Thomas Loftus, who became the speaker of the Assembly in 1983), a small group of IRP workers and state officials were able to progress slowly on the project in the years 1980–82, translating the essentially abstract set of concepts into detailed specifications for a new program, spelling out eligibility, benefit structures, financing, integration with other programs, and administrative procedures. A model law for implementing both the collection and benefit sides of the proposal was drafted by University of Wisconsin law professor Margo Melli.
In 1981 IRP and the Wisconsin Department of Health and Social Services (DHSS) cosponsored a national conference to learn what work had been done on child support elsewhere in the country, to seek feedback on the direction proposed for Wisconsin, and to provide publicity for the project.
In 1982 IRP published a three-volume report, Child Support: Weaknesses of the Old and Features of a Proposed New System, edited by Garfinkel and Melli. This report explained why a new plan was needed, described the Wisconsin plan and the factors that determined its design, and proposed a method for implementing the plan in Wisconsin. The proposal called for implementation of the collection-side proposals (the percentage-of-income standard and immediate income withholding) first. At a later date the assured benefit would be introduced. The strategy was fiscally conservative—collecting rather than spending money first—and reflective of the complexities of the benefit side of the package. All that could be done on a drawing board had been done.
The Wisconsin legislature included in its budget for 1983–85 directives for the state Department of Health and Social Services to test the automatic wage withholding provision in ten counties and publish a percentage-of-income standard as an alternative guideline for family courts to use in establishing support obligations. At the same time the budget bill required all Wisconsin counties to begin to use immediate-income withholding in all child support cases after July 1987 if the results in the ten experimental counties were promising.
From the perspective of the designers of the plan, this was a slow first step toward full implementation. To others the new legislation was an extreme and alarming measure. It engendered a great deal of argument and debate.
Many thought the percentage-of-income standard was unfair because it did not take into account any unusual debts encumbering the noncustodial parent or any new obligations (such as a new family) the noncustodian might incur. Nor did it take into account the income or remarriage of the custodial parent. It was thought to be inflexible as well, diminishing the ability of the parents to negotiate a child support arrangement uniquely tailored to their circumstances. Furthermore, critics pointed out that it eroded judicial discretion, both in the initial determination of the support order and in subsequent revisions, since if expressed as a percentage, the order would vary automatically with the income of the noncustodial parent and no revisions would be needed.
The immediate income withholding was applauded by those who thought it the most efficient mechanism for collecting child support. But it too evoked controversy. Some insisted it was an unnecessary intrusion of government into a private transaction. Others argued it was punitive—treating obligors as derelict before they failed to make their payments. Some feared it would create problems for employees because of the costs to their employers associated with administering a wage assignment and the stigma attached to divorce and separation.
Yet the diplomatic wording of the legislation effectively muted most concerns. Immediate withholding would depend upon the success in the counties tested. And the judiciary was not required to use the guidelines; their use was offered merely as an alternative.
The 1983 legislation had another important effect. It demonstrated to the world at large that the Wisconsin plan was more than an academic exercise; it could be implemented and it could be evaluated. Which is not to say that implementation and evaluation were easy.
Implementation of Collection-Side Programs
After a number of false starts (during which one county was prevented from participating by a large turnout of noncustodial parents), ten counties signed contracts to participate in the demonstration of automatic withholding. At first results were disappointing, but it soon became clear that the problems had to do with comparing control and pilot counties and not with withholding as such. The new system became so popular that many counties sought to institute it before it became state law in July 1987. Milwaukee County, the state's largest jurisdiction, became a withholding pilot in January 1986, over a year before the state mandate took effect. And the Ford Foundation began to contribute substantial amounts to support the demonstration.
The percentage-of-income standard also proved effective, although most judges used the percentage to set a child support award in dollar amounts, which would not automatically adjust to changes in the noncustodial parent's income. In July 1987 the percentage-of-income standard was made presumptive, meaning that awards can depart from the standard only if the judge makes a written finding that justifies such a departure.
Both automatic withholding and the percentage-of-income provisions were incorporated in federal legislation—the Family Support Act of 1988.
The Collapse of the Benefit-Side Program
The Assured Child Support Benefit, though considered an integral part of the Child Support Assurance System, was never tested in Wisconsin and never became part of the program. This minimum benefit was designed to provide security for children in the event that their noncustodial parent faced a sudden decline in income and, for custodial families with low child support, to provide a base on which they could build by working, as an alternative to welfare. It was thought that because the assured benefit would not be reduced by one dollar for every dollar earned, as is AFDC, it would enable families to avoid the trap of dependency. As such it would be an appropriate way to reinvest the money saved through more stringent collection of child support.
The Assured Benefit was, from the start, more controversial than the percentage-of-income standard and withholding, principally because it would cost the taxpayers money. It was also viewed as an unwarranted extension of public responsibility at a time when AFDC caseloads were extremely high and political pressure was directed at reducing government's role in aiding individuals. That the Assured Benefit was an improvement over welfare and a step toward independence was not a point that could be easily made clear.
Although Congress in 1984 passed legislation allowing Wisconsin to use the money normally paid to the state as part of the AFDC match formula to finance the Assured Benefit if a formal waiver request was sent to the Secretary of the U.S. Department of Health and Human Services, the request for the waiver stalled. Eventually, in 1988, the waiver application was resubmitted. But before permission was granted, the pilot counties which had been selected withdrew from the program. And in a political environment that looked upon the Assured Benefit as welfare and social engineering, work on the program eventually ceased. Nor could the state and the federal government agree about the terms of the state’s proposed evaluation plan, which was eventually rejected by the federal government, thereby rescinding the waiver to proceed with the Assured Benefit pilots. So all efforts to implement the total Child Support Assurance program ended in Wisconsin.
Child Support Policy: IRP Special Reports 1982–1992
Bartfeld, J. and I. Garfinkel. 1992. Utilization and Effects on Payments of Percentage-Expressed Child Support Orders. SR 55. July. 35 pp.
Douthitt, R. A. 1988. An Evaluation of Vertical Equity in Wisconsin's Percentage-of-Income Standard for Child Support. SR 47. May. 54 pp.
Garfinkel, I. 1986. Utilization and Effects of Immediate Income Withholding and the Percentage-of-Income Standard: An Interim Report on the Child Support Assurance Demonstration. SR 42. December. 42 pp.
Garfinkel, I. and M. Melli. 1982. Child Support: Weaknesses of the Old and Features of a Proposed New System. 32A. February. 68 pp.
________. 1982. Child Support: A Demonstration of the Wisconsin Child Support Reform Program and Issue Papers. SR 32B. February. 132 pp.
________. 1982. Child Support: Technical Papers. SR 32C. February. 152 pp.
Garfinkel, I. and Q. Sullivan. 1986. Immediate Income Withholding: A Preliminary Analysis of Its Effects on Child Support Collections for AFDC Cases. SR 39. June. 22 pp.
McDonald, T., J. Moran, and I. Garfinkel. 1983. Wisconsin Study of Absent Fathers' Ability to Pay More Child Support. SR 34. September. 74 pp.
Melli, M. 1984. Child Support: A Survey of the Statutes. SR 33. July. 400 pp.
Oellerich, D. 1984. The Effects of Potential Child Support Transfers on Wisconsin AFDC Costs, Caseloads and Recipient Well-Being. SR 35. February. 200 pp.
Various authors. 1992. Paternity Establishment: A Public Policy Conference. Vol I: Overview, History, and Current Practice. SR 56A. August. 185 pp.
________. 1992. Paternity Establishment: A Public Policy Conference. Vol II: Studies of the Circumstances of Mothers and Fathers. SR 56B. August. 263 pp.
Notes
(1) S. H. Danziger and D. H. Weinberg, eds., Fighting Poverty: What Works and What Doesn't (Cambridge, MA: Harvard University Press, 1986); Green Book, 1991, p. 1138.
(2) D. P. Moynihan, "Social Justice in the Next Century," America 165, September 14, 1991, p. 136.