Child Support Pass-Through and Disregard
IRP Reports
Under the Temporary Assistance for Needy Families (TANF) program, states were given greater flexibility in determining how to distribute child support paid on behalf of children whose mothers were receiving welfare payments. The Wisconsin approach was unique. Wisconsin alone allowed all child support paid by noncustodial parents to pass through to the family and disregarded such payments in calculating welfare benefits; most other states decided to retain all the child support paid to offset welfare payments. This policy was put in place in 1997, as part of the original Wisconsin Works (W-2) program.
The Wisconsin policy was the subject of a full evaluation from its inception. The Child Support Demonstration Evaluation (CSDE), conducted by the Institute for Research on Poverty, included several primary components: a statewide random assignment experimental evaluation; quantitative nonexperimental evaluations using Wisconsin and national data on child support policies; analyses of policy implementation and monitoring; and qualitative explorations of family dynamics and responses to the new state policies. The results of all these analyses are summarized here.
This report builds on earlier work, and relied on face-to-face interviews with randomly selected fathers of children receiving W-2 benefits, followed, where possible, by an interview with the mother of one of the father's children. This work again explores the level of knowledge about child support pass-through/disregard policy among parents receiving public assistance in Dane County. It is unique in that it explores the experiences, knowledge, and attitudes of couples–rather than focusing on results by gender–associated with W-2 and also allows for comparisons across and within races.
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.
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 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.
We explore the effects of a full pass-through and disregard of child support payments on the marriage and cohabitation rates of mothers using data from the Wave 3 Survey of Wisconsin Works Families. Findings indicate that mothers who receive full pass-through and disregard are significantly less likely to cohabit with men who are not the father of their child(ren). The findings support the hypothesis that increased child support increases women's economic independence, reducing their incentive to cohabit with men who are not the father of their children. We found no evidence of an increase in marriage rates for parents receiving a full pass-through and disregard.
This report evaluates the extent of knowledge of custodial and noncustodial parents by race, gender, and geographic location about Wisconsin's pass-through and disregard of child support payments. Sixteen focus groups were conducted in seven counties, four urban and three rural, of custodial parents and noncustodial parents who received public benefits in Wisconsin. The intent of the research was to explore similarities and differences in perspectives and experiences across sites, and between mothers and fathers.
IRP researchers are interested in knowledge of the pass-through among families who entered W-2 later in the program, after the Child Support Pass-Through and Disregard experiment (CSDE) had ended and all W-2 participants received all current child support paid on their behalf. Because these participants were not part of the CSDE survey, this report relies on an alternative approach to assessing their knowledge, through two rounds of interviews with W-2 and child support agency staff who had contact with them. The interviews were conducted in 2002 and 2005.
The interviews suggest that the policy of passing-through all current child support matches the philosophy of personal responsibility emphasized by the state's TANF program. Respondents in Milwaukee County, which has the largest concentration of families affected by the pass-through, believed that the adoption of the pass-through has increased custodial parents' cooperation in the establishment of child support. Staff in several counties also noted that the pass-through policy facilitates the efforts of W-2 case managers to build constructive relationships with program applicants. If this is correct, the benefits of the pass-through policy extend beyond the immediate financial gain experienced by families who receive it, helping to improve the cooperation of program participants with both W-2 and child support agency staff.
The results of the first phase of the CSDE evaluation suggested that most participants had very little understanding of how any child support paid to them would be treated. In this report we explore whether knowledge of the child support pass-through and disregard policy has changed since the initial implementation of the policy. We use the additional questions in the follow-up Survey of Wisconsin Works Families (SWWF) to explore whether knowledge about child support pass-through and disregard policy has increased among the initial W-2 families, and, if so, for which types of families. Our results suggest that many parents do not fully understand policy. We find evidence that child support agency staff provided useful information, and that those mothers who reported having heard media information were also better informed. This suggests that there are ways to directly improve policy knowledge. On the other hand, we also find that people learn from experience. This experiential learning takes time, and when policy changes, it again takes time for participants to adjust their understanding.
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 analysis estimates the state and federal costs of a full pass-through policy (where both federal and state shares of child support are paid to families) compared to a partial pass-through policy (where only the state share of child support is paid to families) for the population of W-2 cases subject to child support pass-through policy in Wisconsin. The majority of the net cost to the federal government is attributable simply to the loss of the federal share of child support that is passed through. To the state, the full pass-through policy results in a net savings, largely because of lower child care subsidies for those in the full pass-through group.
This report examines the experiences of the American Indian population served by Wisconsin's W-2 program. While participation in W-2 among American Indians in the state is a small percentage of the total, the study examines this subgroup of the population within its unique context of demographics, socioeconomic status, and different regulatory jurisdictions (e.g., tribal courts). The report describes study findings concerning American Indians' participation in public-assistance programs, child support payments, paternity establishment, and earnings in the years after entry into the W-2 program using administrative data to examine the effects of child support pass-through and disregard policies of the CSDE on the American Indian population on W-2.
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.
Are fertility decisions are responsive to the strength of child support enforcement efforts? This project uses individual-level data from the 2001 panel of the Survey of Income and Program Participation (SIPP) along with state-level data on child support collection rates, welfare rules, and unemployment rates to assess whether the strength of state child support enforcement efforts has an effect on fertility and marriage among single women. The report finds little evidence that child support enforcement efforts have any effect on nonmarital fertility or marriage.
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 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).
The Caretaker Supplement (CTS) of the CSDE, which began in 1997, provides a cash benefit to parents who are receiving SSI payments and raising minor children in the State of Wisconsin. In January 2004, almost 6,000 SSI parents were receiving benefits for 12,300 children. With data drawn from state administrative records, the Survey of Wisconsin Works Families, and focus groups, this report employs quantitative and qualitative methodologies to gain a deeper understanding of CTS and its role in the economic well-being of families headed by parents with disabilities.
We found that, overall, participants were appreciative of the CTS program, especially in comparison to W-2. However, participants described in detail the use of many community resources (e.g., food pantries and used clothing stores) to make ends meet and stated that CTS payments were not enough. Some participants described problems with CTS such as confusion about the workings of the program and complaints about interaction with caseworkers. Only a minority of the participants received child support and those who did reported receiving insubstantial amounts.
IRP Discussion Papers
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.
There is surprisingly limited information on how much individuals know about the policy rules that could affect them, either in general or in evaluations of new programs. In this article we examine the level of knowledge that participants in a Wisconsin child support and welfare demonstration had about child support policy rules. We find very low levels of knowledge. Our results suggest that people tend to learn policy rules by experience; we find less consistent support for knowledge being primarily imparted through interactions with caseworkers. Implications of the lack of participants' knowledge for policy evaluations are discussed.
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.