Child Support Orders and Payments
IRP Reports
This is the second of two reports in a research project documenting the effects of the economic downturn on child support. The first report used interviews with child support staff and family court commissioners in five Wisconsin counties. This second report uses recent Wisconsin data to assess whether the patterns reported in those five counties are reflected in administrative data for the state as a whole.
The data show that earnings decreased over time, and a significant proportion of noncustodial father experiences large changes in earnings. Most child support orders remained unchanged over the study period, though orders were more likely to be changed when significant changes in earnings occurred. The proportion of fathers who paid any child support decreased over time, although the amount of child support paid among fathers who paid remained relatively stable during the four-year period. Moreover, the results indicate that both earnings changes and order changes were strongly associated with changes in payments, particularly among those with large change in earnings and orders.
The findings highlight the importance of policies that provide additional income and employments supports for single-parent families, as child support receipts are likely to decline as their own earnings drop. Providing and extending work support to noncustodial fathers would also enhance those fathers' ability to pay child support. Finally, the extent to which child support orders remained stable is notable, even as earnings declined during an economic downturn.
Interviews with child support staff and family court commissioners in five Wisconsin counties (Burnett, Lincoln, Marinette, Milwaukee and Rock) were used to assess the effects on child support of the severe recession that began in late 2008. Key objectives of the interviews were to assess (1) how child support and court staff set original orders when the obligor is unemployed; (2) whether and how child support and court staff adjust existing orders when obligors lose their jobs or experience reductions in earnings; and (3) whether child support agencies and courts have changed their practices on these questions since the severe economic downturn began.
Interviews indicate that the recession has increased the sympathy of child support staff and family court commissioners to the difficulties faced by noncustodial parents, who all said they had been altering orders as circumstances changed. The setting of initial orders appears to have changed more slowly with the recession, although counties are apparently somewhat more likely to slightly delay cash orders. In addition, child support agencies and courts have lowered the hours expected in imputed income cases from 40 hours per week to 30 or 35.
The second part of this research project will assess whether these reported tendencies are reflected in administrative data for the state as a whole.
Despite the employment of an automated enforcement system, recent statistics show that only half of noncustodial parents pay the full amount of what they owe. Understanding the reasons for noncompliance is critical in improving the child support enforcement system and providing suitable financial support to custodial-parent families. In this report, we explore potential reasons why some orders are not fully paid despite the routinization of the enforcement system. We use a unique set of merged Wisconsin administrative data covering a six-year time period and examine noncustodial fathers in couples who had their first child support order in 2000 to document the potential reasons for noncompliance.
We found that the child support enforcement system generally works as intended. When fathers had earnings throughout the year and the earnings were more than $20,000, and when they also had no employer change or order change, about 85 percent paid the full amount of child support owed. Nearly all fathers who did not pay had unstable employment or earnings, and a significant minority of them was incarcerated.
Using detailed administrative records for custodial mothers in the couples who had their first child support orders in Wisconsin in 2000, the authors analyzed child support receipts over the subsequent five years. They were particularly interested in whether child support was a regular source of income and in whether child support contributed to reducing the irregularity of income of custodial-parent families.
The authors show that in the first year, although 86 percent of mothers with child support orders receive some support, only 49 percent receive support during at least 10 months, and only 43 percent receive a regular amount of support for at least 10 months. The proportion of mothers with regular receipt does not change substantially over time. They also find that child support contributes a critical part of income for many custodial-parent families.
In this report IRP examines the most current child support guidelines used in other states in shared placement cases. This study includes time-share threshold levels for defining shared placement, formulas used to calculate child support, factors used in those formulas, and the consideration of "variable costs" such as medical, educational, and child care expenses.
Eight to ten of the more common or most promising formulas are then applied to a variety of common and uncommon parental income and time-share situations to compare their effect on equity issues: for example, which parent is the child support obligor, what is the level of child support obligation, and whether "cliff effects" in the formula outcomes would provide incentives for parents to litigate or would generate substantial financial inequities among obligors.
This report is divided into two parts. Part 1, "A Comparison of Outcomes across Cohorts," corroborates the results from earlier reports showing positive effects of the full pass-through and disregard policy on paternity establishment among later entrants which persisted throughout the observation period, higher likelihood of child support payment in the early years of the program, and lower levels of W-2 use in the first year of the evaluation.
Part 2 of the report, "Outcomes among Caretaker Supplement Cases," examines outcomes for participants in Wisconsin’s Caretaker Supplement program (CTS), which provides assistance for parents receiving Supplemental Security Income benefits, and compares those outcomes to those for W-2 participants. We do find some differences between the two groups; CTS participants continue to receive CTS payments much longer than W-2 participants receive W-2 payments. In line with the requirements of the CTS program, the employment, earnings, and child care subsidy participation among this clientele is substantially lower than for those who participated in W-2. In both programs early entrants (many of whom transitioned from AFDC) remained in the programs (and on other assistance programs) longer than those coming in later. W-2 cases having a higher likelihood of child support payment and higher amounts paid, which is likely attributable to the higher earnings of the noncustodial fathers of W-2 children.
This difference-in-difference evaluation makes use of the opportunity provided by the end of the child support pass-through experiment to assess the changes in outcomes for custodial and noncustodial parents associated with the full pass-through and disregard policy. The analysis compared the differences in outcome means between the group consistently receiving the full pass-through and the group that formerly received a partial pass-through, but began to receive the full pass-through as of July 2002, for the year prior to the policy change (July 2001-June 2002) and the two years after the policy change. The report posted here examines differences between the year prior and the year from July 2003 – June 2004. The authors found that the difference in difference was consistently larger for those in the group formerly receiving the partial pass-through but that only the difference arising from the mechanical effect of the change to full pass-through on child support received was statistically significant.
Wisconsin’s policy providing a full child support pass-through and disregard of child support payments in calculating eligibility offers a new source of income for W-2 families. It also requires that both custodial and noncustodial parents comply with new rules. This report investigates the effects of both changes, as well as how participants perceive the trade-offs. The researchers reviewed child support policy documents, and in three counties conducted short interviews with local child support administrators and longer ethnographic interviews with a stratified sample of 42 women. The interviews covered family transitions, work history, and changing sources of formal and informal income in an effort to determine how child support income and child support enforcement policies affect economic well-being and family structure.
This report examines changes in earnings in a cohort of noncustodial fathers, focusing on the extent to which orders and payments change when earnings change. The analysis provides the basis for the companion analysis of the impact of changes in noncustodial fathers’ orders and payments on the stability of custodial mothers’ incomes. The report includes couples who had their first child support order in 2000 and examine patterns over the next 4 years.
Regarding patterns of earnings, the authors find that a substantial proportion of fathers experience large changes in earnings during this five-year period. They also find that relatively few of the cases with large changes in earnings have a large change in their owed amount. Finally, they find that changes in the amount of child support orders are a stronger predictor of changes in payments than are changes in earnings.
This report considers the factors that influence how a father supports his noncustodial children, with attention both to fathers’ economic resources and to multiple-partner fertility. Data come from the Time, Love, Cash, Caring, and Children (TLC3) project, a longitudinal, qualitative study of 75 romantically involved couples who also participated in the Fragile Families survey. In 2002, at the time of the first survey, all couples had just had a child, and yearly data collection continued until the child was approximately 3 or 4 years old. The author considers the amount of money and goods that fathers provided for their noncustodial children from two perspectives.
In this report the author explores the emerging set of concerns about incarcerated noncustodial parents and whether they should be held to the terms of child support orders given their change in circumstances. The report provides background information about the extent to which NCPs are incarcerated, an outline of major policy and practice options under consideration nationwide, examples of the policies and practices of six states, reviews of the extent to which the outcomes of current policies have been evaluated, and an outline of the implications of the information provided.
In this report the author describes alternative policies used in other states concerning child support orders for complicated families, those in which one or both parents have had children with multiple partners. The information, collected through interviews with state officials, is used in the Wisconsin Simulation, below, to analyze the implications of alternative policies through a simulation model that estimates the effect of current and potential alternative policies for families in Wisconsin.
The authors consider a variety of policy approaches to the question of what to do with child support payments paid by a noncustodial parent on behalf of a family receiving public benefits. The report includes an analysis of the variation in pass-through/disregard policy over different periods in different states to evaluate the relationship between the disregard and pass-through level and such outcomes as paternity establishment and child support collections. The results show that higher child support disregards are associated with increased paternity establishment, while a pass-through without a disregard is less likely to yield the same benefits as a pass-through with a disregard.
The notion that arrears have a deterrent effect on child support payments has been raised repeatedly in the qualitative literature, but there have only been limited efforts to examine this quantitatively. This report examines the relationship between child support arrearages owed to the state and subsequent compliance with ongoing support obligations. The author uses a framework that recognizes that the determinants of compliance differ for employed and nonemployed fathers and attempts to disentangle the effects of overall arrearages from the effects of having an obligation to pay birth-related costs (known as lying-in costs).
In this report the author examines alternative approaches to calculating child support in complicated families and finds that the analysis does not yield any clear answers regarding what alternative method is preferred. The analysis does suggest, however, a number of directions that states are following in this context. First, states are considering a broader range of relevant data when determining child support orders in complicated families. Second, some states have implemented provisions that seek to consider a parent’s support obligation to all their children in one unified proceeding. Application of formulaic guidelines will be difficult when more dependent children and sources of income are subject to the court’s consideration. In the end, these families’ situations may best be evaluated on a case-by-case basis.
The federal government has strongly promoted increased use and enforcement of medical support orders. This report seeks to answer the question: What proportion of low-income noncustodial parents has access to affordable health insurance from which their children might benefit? The researchers find that some children covered by the Wisconsin Medicaid program have noncustodial parents not known to that program who have health insurance, and that savings would be possible if those carriers could be identified and billed. In addition, it is likely that some children not on Medicaid and with no insurance coverage could receive coverage as a result of this kind of data match.
Some observers have asserted that orders that are too high will discourage those who owe child support, and will result in lower payments. In this research, the authors find no evidence for this assertion. For the vast majority of cases in their data, fathers with higher orders make higher payments. This holds even after controlling for income. Orders above 35 percent of income are associated with lower compliance, which makes for a more active (and potentially more expensive) enforcement system, but the average amounts that are paid are higher. These results are generally consistent with a child support system in which most discretion has been taken away from those who owe support.
IRP Discussion Papers
Despite substantial technological improvements to the child support enforcement program, many single parents do not receive child support. Particularly for families whose incomes are below the poverty level, child support is frequently a vital financial resource. The federal government’s primary motivation for establishing the federal Child Support Enforcement (CSE) program was to recover the costs associated with public assistance payments to poor single-parent families by collecting payments from the noncustodial parents. In this study, we use variation in the birthing costs over time and across counties in Wisconsin to identify the effect of child support debt on nonresident fathers’ child support payments and formal earnings. Our results suggest that higher arrears, in themselves, substantially reduce both child support payments and formal earnings for the fathers and families that already likely struggle in securing steady employment and coping with economic disadvantage, a serious unintended consequence of child support policy.
In this paper the authors argue that in order to assess the child welfare impact of family policies, one must consider their influence on parents' investments in their children as well as the stability of the marginal marriage. Further, the authors expect that changes in the regulatory environment induce changes in the distribution of resources within both intact and divided families. The authors develop a continuous time model of parents' marital status choices and investments in children, with the main goal being the determination of how policies toward divorce influence outcomes for children. Estimates are derived for model parameters of interest using the method of simulated moments, and simulations based on the model explore the effects of changes in custody allocations and child support standards on outcomes for children of married and divorced parents. The authors find that, while small changes in children's academic attainment are induced by significant shifts in custody and support, the major effects of these policies in both intact and divided households are on the distribution of welfare between parents. In addition, children's attainments are not necessarily best served by the divorce-minimizing policy.
Single-parent families are economically vulnerable. Some child support policies have been aimed at improving the economic well-being of these families, while others have been focused on decreasing welfare costs. Since 1996, states have been free to decide how to treat child support when it is paid on behalf of a welfare participant. States decide both how much child support income to ignore in the calculation of benefits (the disregard) and whether to send a separate child support check to the participant (the pass-through). Disregard and pass-through policies have potential impacts on economic well-being and on governmental costs, but little research has focused on their effects. This paper uses variation in child support disregard and pass-through policy across states and years to estimate whether these policies are associated with paternity establishment, child support collections, and the average dollar amount of child support collected, as reflected in state-level administrative data. We find that the disregard is positively associated with paternity establishment in all models, and is positively associated with collections in two of the four models examined. The pass-through has insignificant, or negative, effects.
In all developed countries, single-parent families are particularly vulnerable to poverty. In contrast to many European countries that provide some guaranteed income support for children, the United States has emphasized private responsibility, increasingly requiring child support from the other parent. The reliance on a private approach raises several questions concerning the adequacy and distribution of child support. Using detailed administrative records for virtually all mothers with new child support orders in one U.S. state in 2000, we analyze child support receipts over the subsequent three years. We find that most mothers with child support orders receive support, and many receive substantial amounts. However, the amount received varies substantially from year to year. Moreover, we find substantial instability within years–a characteristic of private support that has been difficult to measure with prior data. Our analysis of child support outcomes across the income distribution shows remarkably similar proportions of families receiving at least some support. Considering amounts received over the distribution of pre-child-support income, we find a U-shaped pattern, with amounts declining slightly with income over the first three deciles, and then increasing steadily. Lower-income families are also less likely to receive regular child support. Nonetheless, child support plays an important role in the income packages of many low-income families, reducing pre-child-support poverty rates by 16 percent and closing the poverty gap by an average of 44 percent in 2001.
Multiple-partner fertility might not be a significant policy issue if the number of children affected was fairly small. However, the authors show here that family complexity resulting from multiple-partner fertility is quite common, and has important implications for understanding child support outcomes and for designing and evaluating welfare and family policy. Using a unique set of merged administrative data, this paper provides the first comprehensive documentation of levels of family complexity among a broad sample of welfare recipients. The authors examine the extent to which complexity is associated with systematically different child support outcomes and outline the implications of family complexity for policy.
Although there is a large body of research devoted to the issue of the determinants of welfare caseloads, none of these studies has incorporated the effects of child support. Given that stronger child support enforcement is expected to reduce caseloads by deterring entrances and promoting exits from welfare and by deterring divorce and nonmarital births, this is a surprising and potentially serious omission. The authors employ annual state panel data from 1980 to 1996 first to replicate previous models and then to incorporate the effects of child support. They find support for the hypothesis that strong child support enforcement decreases welfare caseloads.
Nonmarital childbearing is important because it is increasing and because there is concern (and some evidence) that it is damaging to children and perhaps parents as well. We refer to the unions of unwed parents as fragile families because they are similar to traditional families in many respects, but more vulnerable. Most people believe that children in fragile families would be better off if their parents lived together and their fathers were more involved in their upbringing. Indeed, public policy is now attempting to enlarge the role of unwed fathers both by cutting public cash support for single mothers and by strengthening paternity establishment and child support enforcement. Yet the scientific basis for these policies is weak. We know very little about the men who father children outside marriage, and we know even less about the nature of their relationships with their children and their children's mothers. The Fragile Families and Child Wellbeing Study (FFS) is designed to remedy this situation by following a new birth cohort of approximately 4,700 children, including 3,600 children born to unmarried parents. The new data will be representative of nonmarital births in each of 20 cities and in U.S. cities with populations over 200,000. Both mothers and fathers will be followed for at least 4 years, and in-home assessments of children's heath and development will be carried out when the child is 4 years old. The survey is designed to address the following questions: (1) What are the conditions and capabilities of new unwed parents, especially fathers? (2) What is the nature of the relationships in fragile families? (3) What factors push new unwed parents together and what factors pull them apart? In particular, how do labor markets, welfare, and child support public policies affect family formation? (4) How do children fare in fragile families and how is their well-being affected by parental capacities and relationships, and by public policies? The paper discusses what we know about each of these questions and how the FFS addresses each of them. It also presents preliminary findings based on data from Austin, Texas, and Oakland, California.
This paper provides national estimates of the short-term economic outcomes of marital dissolution for mothers, fathers, and children. In addition, the paper estimates the current and potential impact of private child support transfers on the economic well-being of the various parties involved. Data are from the Survey of Income and Program Participation. Mothers and children fare dramatically worse than fathers; however, these differences would be much more pronounced in the absence of private child support. Substantial increases in custodial family income are possible within the structure of the existing child support system, with minimal impact on poverty among nonresident fathers.
This paper examines how the perceptions of nonresident fathers about the fairness of their child support orders affect their compliance with these orders. In particular, the study asks whether routine income withholding affects compliance in the absence of perceived fairness. The analytic sample includes 392 nonresident fathers who filed for divorce between 1986 and 1988 in the state of Wisconsin. Using the reports made by these fathers along with court records as an independent measure of their subsequent compliance with child support obligations over a 24-month period, the author concludes that fathers' perceptions of fairness increase their compliance with support orders. Moreover, routine income withholding has a greater effect on compliant behavior when fathers think their child support agreements are unfair than when they think their agreements are fair.
In an effort to make Wisconsin's child support cases more equitable and up-to-date, child support staff reviewed "old" child support orders in thirteen of the state's seventy-two counties. Of the reviewed cases, only 21 percent were revised. Primary reasons for non-revision were the economic circumstances of the noncustodial parent (among welfare cases) and a lack of permission by the custodial parent to proceed (among non-welfare cases). Revised orders increased substantially, an average of $116/month (77 percent). An alternative method of keeping orders current is to express them as a percentage of the noncustodial parent's income; these orders are kept up-to-date automatically and are associated with large increases in collections.
If the government offered a refundable tax credit for children, national health insurance, and an assured child support benefit to all families with children–poor families as well as nonpoor families–what would happen to poverty, welfare dependency, and other related issues? The authors simulate the effects of each program operating on its own and of all three acting in concert. They find that the impacts of the programs interacting with one another would be much larger than the sum of the impacts produced by each program alone. With the three programs in place, the poverty rate would fall by 43 percent, the AFDC caseload would shrink by 22 percent, and the annual incomes of poor families would rise by $2,500. In addition, AFDC recipients would work more hours. Data come from the 1987 Survey of Income and Program Participation.
Assured child support benefits are an important component of many proposals to reform the child support system. The authors estimate the likely effects of assured benefits on poverty and welfare participation when (a) parents eligible for child support work the same number of hours as they currently work and (b) parents eligible for child support change the number of hours they work in order to maximize their income and leisure time. They find that in each situation assured benefits will reduce poverty rates and the poverty gap; welfare caseloads and expenditures will also fall. When parents are allowed to change the number of hours they work, the impact of assured benefits will be about the same, but the costs of the assured benefit program will increase.
This paper examines compliance with child support orders by divorced fathers in Wisconsin. Compliance increases as the income of the father increases, although it falls in the highest income category. The "burden" of awards does not affect compliance unless more than 30 percent of income is owed. More stringent enforcement systems increase compliance. We find that most divorced fathers who are not complying with their orders do not have very low incomes, in contrast to noncomplying fathers in nonmarital cases. This suggests that the best policies to increase compliance among divorced fathers may differ from those for nonmarital fathers.
The authors examine the determinants of child support compliance in nonmarital child support cases in Wisconsin, focusing on the father's ability to pay and the stringency of the child support enforcement system. They find that tougher enforcement rules positively affect compliance rates. Higher incomes are associated with higher compliance rates, and lower incomes, with lower rates. The percentage of income that is owed in child support also has an effect on compliance. Orders which represent a high percentage of income relative to existing guidelines are associated with lower compliance rates. However, owing a low percentage of income only has an effect on compliance for fathers with very low incomes; for these fathers, obligating them to pay low amounts of support positively affects compliance. These results suggest that a father's to pay, in addition to his willingness to pay, determines the extent to which he fulfills his child support obligation. The authors conclude that to increase child support collections, we should increase both the earning power of noncustodial parents and the stringency of the enforcement system.
Many children born to mothers who are not married are very poor, and in many instances their mothers do not receive child support. Some excuse this by asserting that the fathers of these children do not and never will earn enough to pay adequate support. But the records of paternity cases that came to court in Wisconsin between 1980 and 1988 show that half of the fathers aged twenty-five and older had incomes over $10,000. More important, the men who had the lowest incomes when they became fathers–such men were usually teenagers–were the ones whose incomes increased the most over the years. Even so, the records reveal that there was no relationship between changes in the incomes of the fathers and changes in the amounts of child support awards, a situation the Family Support Act of 1988 is seeking to rectify.
The 1984 Child Support Amendments and the 1988 Family Support Act increased the ability of state child support offices to enforce child support obligations. The authors estimate the impact of several provisions of these two pieces of legislation on child support payments and awards. They find that withholding child support payments from the wages of noncustodial parents, allowing paternity to be established until a child's eighteenth birthday, and advertising enforcement services lead to more money collected in child support, more (and higher) child support awards, and higher collection rates. Requiring child support to be paid through a third party and generous spending by states on their enforcement programs also positively affect payments and awards. Data are from the Child Support Supplement of the Current Population Survey.