Presumptive State Child Support Guidelines:

A Decade of Experience

 

 

Maureen A. Pirog

Professor and Chair, Public Policy Analysis Faculty

Co-Director, IU Institute for Family and Social Responsibility

School of Public and Environmental Affairs 241

Bloomington, IN  47405

(812) 856-5926

(812) 855-4605 FAX

 

Tara Grieshop

Indiana University, School of Public and Environmental Affairs

 

Brooks Elliot

Indiana University, Department of Economics

 

Abstract

This article examines the financial burden placed on low-income noncustodial parents by state child support guidelines, variability in this burden across states and over time, policy rationales for this variability, and the effects of high or low support orders on state child support collections.   We find tremendous variability in the support orders of low-income obligors across states, suggesting that states are adopting very different strategies for meeting the income needs of low-income children and obligors.  Also, child support orders are quite regressive, although this regressivity has abated somewhat over the past decade.  There is some evidence, albeit mixed, that states with low child support orders for low-income families have generous welfare programs, using cash assistance from TANF and child support as substitutes for one another in sustaining poor children.  The data also support the notion that states with high support orders for low-income parents collect a smaller percentage of the amount ordered. The data was gathered from a series of mail surveys from 1988-1999 of the State Courts and Child Support Enforcement Agencies of the 50 states and the District of Columbia.      

Introduction

            Since the passage of the Family Support Act of 1988, each state has been required to develop and use income-based child support guidelines.  The evolution in setting child support orders from loose judicial discretion to the mandatory adoption of a predetermined set of objective and numeric formulas largely was motivated by three observations.  Many researchers maintained that existing child support obligations were of inadequate size to meet the needs of children, created both horizontal and vertical inequities, and hence, resulted in inefficiencies in the child support enforcement system (Garfinkel, 1992; Pearson, Thonnes, and Tjaden, 1989; White & Stone, 1976; Williams, 1987; Yee, 1979).  However, state changes have primarily addressed horizontal inequities.  That is, the guidelines established insured that equals were treated equally – noncustodial parents in similar economic situations within the same state should pay similar amounts of child support (Garfinkel, 1992; Garfinkel, Meyer, and McLanahan, 1998; Morgan, 1996, 1998; Pirog-Good, 1993; Sorensen, 1999; Williams, 1994).

            Recently, increasing attention has been given to the treatment of low-income noncustodial fathers under welfare reform.[1]  The persistent pattern of meager compliance with, or complete nonpayment of, child support obligations by low-income obligors has prompted observers to reconsider enforcement strategies.  Focus, in part, has turned to the effects of presumptive child support guidelines on poor, nonresident fathers (Meyer 1998; Primus & Castro, 1999; Roberts 1999a; Sorensen, 1999).  In particular, researchers are examining the extent to which state guidelines require low-income obligors to provide unreasonable proportions of their incomes as child support and the effects of these vertical inequities on their ability to pay (see Garfinkel, Meyer, et al., 1998 for a brief review of this literature).

A 1998 report by the U.S. General Accounting Office (GAO) examined the collection of child support for families leaving welfare due to the expiration of time limits.[2]  The study found that the majority of families leaving welfare due to time limits would not receive substantial amounts of child support.  For example, 29-41% of families with support orders received no support during the 12 months prior to the termination of assistance; 46-59% reported receiving some of the support owed.  Only 2-13% reported receiving the full amount due over the same time period.  These are rather discouraging figures in light of the increasingly aggressive collection efforts made by state and local child support enforcement (CSE) agencies across the country.  However, the continued resolve of policy makers and CSE officials is manifest in the passage of the Child Support Performance and Incentive Act of 1998.[3]    

                Some researchers, though, rather than urge the imposition of harsher penalties for failure to meet obligations, suggest that more realistic child support orders be established for low-income noncustodial fathers up-front (Garfinkel, Meyer, et al., 1998; Primus & Castro, 1999; Roberts, 1999a; Sorensen, 1999).  Suggestions to lower child support orders for poor fathers will likely face strong opposition – reductions in child support awards imply less income for poor children.  On the other hand, if lower child support orders affect greater compliance by these fathers, it is possible that reliable and proportionate streams of income through child support can occur.

In this article, we analyze variability in the amounts and regressivity of child support orders across states over time based on data from a series of biannual mail surveys.  Next, we explore one rationale for the variability in states’ treatment of low-income obligors:  the notion that states use cash assistance from welfare and child support income as two alternative ways to support poor children.  It is possible that some states have more generous welfare benefits to offset losses to custodial families resulting from lower child support orders and vice versa (Primus and Castro 1999).  Finally, we assess the extent to which the amount of child support ordered is related to child support compliance.               

Background

            Welfare and child support legislation enacted during the past decade has placed increasing emphasis on family self-sufficiency and parental obligations.  Welfare reform under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) eliminated the entitlement status for receiving cash assistance and imposed time limits on the receipt of welfare, while often making eligibility contingent on education/training and work requirements.  Welfare laws require single, custodial parents to enter the workforce.  The laws also created an expectation for nonresident parents to remain involved in their children’s lives, at least in terms of the provision of financial support.  The push for reduced reliance on public assistance and increased reliance on private means has rendered the child support system a crucial component to the children of low-income families.  This awareness certainly has contributed to the aggressive enforcement of child support legislation by state child support enforcement agencies.

            Many researchers, however, question this policy approach. Some studies suggest that unless considerable improvements are made in the formal child support system, this approach will exacerbate the poverty experienced by poor custodial families.  Simulation studies have long indicated that even in an ideal environment (that is, the setting of child support obligations for all eligible resident parents and full compliance with both hypothetical and existing orders) child support awards are too low to appreciably increase welfare exit rates or the labor supply of women (Beller & Graham, 1993; Garfinkel, Robins, Wong, & Meyer, 1990; Hu, 1999; Meyer, 1993; Robins, 1986).[4]  As a result, these authors prescribed policy initiatives establishing higher child support award amounts.  In light of historically low compliance rates among fathers of children receiving cash assistance, one wonders whether this is realistic or beneficial.                  

A national portrait of noncustodial fathers and their ability to pay child support has been painted in a series of articles (see Mincy and Sorensen, 1998; Sorensen, 1999, 1997; Sorensen and Halpern, 1998). Using two surveys, the 1987-1988 National Survey of Families and Households (NSFH) and the 1990 Survey of Income and Program Participation (SIPP), Sorensen, et al. created the well-accepted profile of low-income obligors.  While nonresident fathers as a whole were found to be able to pay more in child support (an estimated $34 billion under Wisconsin child support guidelines), 13-26% of noncustodial fathers were poor or had extremely low incomes.  In 1990, 23% of fathers had incomes below the gross income standard for food stamp eligibility and did not pay any support.  These fathers were young, half had not completed high school, and most were black.  While 90% were employed or actively seeking employment at some point in 1990, only 18% had full-time, year-round employment. 

Recently, Garfinkel, McLanahan, and Hanson (1998) used NSFH data to show that a “large minority” of nonresident fathers has very low incomes.[5]  They found that nearly all of the fathers of children on welfare have incomes below $20,000, while 50% have incomes below $6,000 (in 1995 dollars).  Moreover, noncustodial fathers have fewer assets than custodial fathers and are less likely to own a car or a home (see Pirog-Good and Amerson, 1997, for similar results using data from the National Longitudinal Survey of Youth from 1979 to 1993).  These results strongly suggest that even when willing, low-income obligors possess limited ability to meet their child support obligations.

Complicating matters, Sorensen (1997) found that resident mothers in the NSFH and SIPP surveys are considerably worse off economically as compared to noncustodial fathers.  These single mothers had poverty rates that were two to three times higher.  And, while national surveys are not matched samples and are unable to prove conclusively that low-income nonresident fathers and poor resident mothers are necessarily partners, many believe that this is the case (Beller and Graham, 1993; Garfinkel, McLanahan, et al., 1998; Sorensen, 1999).  Policymakers find themselves in a very difficult position. 

Poor single-parent families desperately need child support income to augment their own earnings and public assistance, while low-income obligors seem unable to meet their existing obligations, let alone withstand higher award amounts. Yet for child support to effect welfare exit rates and the supply of labor by women, higher award amounts are crucial.  Some researchers believe that efforts to cull greater child support amounts from these fathers actually could be counterproductive (Garfinkel, Meyer, et al., 1998; Primus & Castro, 1999; Roberts, 1999a; Sorensen, 1999).  At best, it seems such efforts might simply shift poverty from one group to another.  At worst, poor, nonresident fathers may find their obligations impossible to meet, stop paying child support altogether, and possibly enter the underground economy.  Indeed, anecdotal evidence shows that for some fathers, their relatively high child support orders along with low child support pass-through amounts have this effect (Edin, 1995; Edin & Lein, 1997; Furstenberg, Sherwood, & Sullivan, 1992).

Several policy changes have been prescribed or undertaken to varying degrees by some states to address the lack of compliance with child support awards by poor nonresident fathers.  The provision of employment-related services to low-income noncustodial fathers likely would have the greatest long-term effects.  The TANF program allows states to use welfare block grant funds and maintenance-of-effort money to assist in providing education and training, obtaining transportation, etc. for nonresident fathers of children receiving cash assistance.  Increasingly, revisions of the child support pass-through program have been suggested (Garfinkel, Meyer, et al., 1998; Primus & Castro, 1999; Sorensen, 1999).  PRWORA allowed each state to determine the amount of child support passed through to custodial TANF families without a dollar-for-dollar reduction in their welfare grants.  At the time, most states passed-through the first fifty dollars of child support paid each month and disregarded this income in the calculation of their welfare benefits.  As of January 1, 1999, some thirty states had decided to discontinue the program completely.  In 1998, Senator Herb Kohl (D-WI) offered legislation requiring states to pass through all support collected; it was not enacted.  Researchers also have proposed revisions of arrearage policies – the amounts established and the stringency of related penalties.

Methods and Data

In 1988, the National Center for State Courts (NCSC) computed child support orders for every state and the District of Columbia using each state’s child support guideline.  The calculations were based on a scenario describing a family and its circumstances at four different income levels (Munsterman, 1990).  In 1988, the four income levels represented the 25th, 50th, and 75th income percentiles as well as a high-income level for a family of four (Cases A-D).  The four scenarios and levels are as follows:

Mother and father are divorced.  Father lives alone.  Mother and the party’s two children, ages 7 and 13, live together.  Father pays union dues of $30 per month and the health insurance for the two children at $25 per month.  Mother incurs monthly employment-related childcare costs of $150.  There are no extenuating factors to be added or considered for this unit.  The gross combined monthly income for this family is as follows:   

 

Case A:  Combined $1200       -   Father $720       Mother $480

Case B:  Combined $2500       -   Father $1500     Mother $1000

Case C:  Combined $4400       -   Father $2640     Mother $1760

Case D:  Combined $10500     -   Father $6300     Mother $4200

Finally, the father files taxes as a single person with one deduction, while the mother files taxes as the head of a household with three deductions.  The father spends less than 10% of this time with his children.  Union dues are a mandatory condition of employment.

The results of the NCSC calculations were sent to the director of each state’s CSE program and the administrative director of each state court for verification or modification.  At least one agency responded to the 1988 survey.  When both agencies responded and discrepancies occurred, efforts were made to reconcile the differences.  However, when the agencies used different methods to compute the child support orders and both methods were consistent with the state’s guidelines, the NCSC reported the higher figure.

            The scenarios and process used by the NCSC to determine the size of child support orders were replicated in 1991 by Pirog-Good (1993); in 1993 by Pirog-Good and Mullins (1995); in 1995 and 1997 by Pirog-Good and Brown (1996) and Pirog, Klotz, and Byers (1998); and in 1999 by the current authors.  All of the bi-annual survey data are used in this article.  The same scenario and income levels have been used for each survey.  While the income levels certainly do not represent the income percentiles originally set in 1988, we believe maintaining these amounts provides a way to determine the extent to which child support orders have changed over time solely because of the evolution of state guidelines.  This process abstracts from changes in nominal income levels due to changes in inflation or real factors. 

            Garfinkel, Meyer, et al. (1998) noted that order levels had increased since the implementation of guidelines but were unable to determine whether the increase resulted from the existence of guidelines or from an increase in men’s incomes during the same time period.  We feel this process goes a way towards addressing the question of whether guidelines cause an increase in the levels of child support orders.  Moreover, Williams (1994) notes that studies of child support based on the Current Population Survey (CPS) suggest that the average constant-dollar value of orders had increased by 1987 when many states had implemented guidelines.  He warns, however, that his results are only suggestive, as this value might be biased upwards by the inclusion of updated awards.  Again, this problem is avoided here.  The simple scenario developed by the NCSC does not include updated awards, second families, post-secondary educational expenses, or other extraordinary factors that tend to be treated differently by states.  All changes in child support orders can be directly attributed to state guidelines.    

The 1991, 1993, 1995, 1997, and 1999 calculations were computed as of January 1st.  In each of these years, responses were received from both the state CSE office and the state court regarding child support levels.  Many of the responses by state agencies differed from each other.  For the surveys from 1991-1999, correspondence was undertaken with each state to determine the actual amount of the orders as specified by the state’s guidelines.  The vast majority of the discrepancies were resolved and stemmed from the miscalculation of taxes, computing orders for one rather than two children, and other relatively simple errors.  Pirog-Good and Brown (1996) found that such errors are common and tend to be related to the complexity of the guidelines, the training of personnel using the guidelines, and the availability of computer software to assist with the calculations.   However, following the lead of the NCSC, whenever differences arose from the use of different procedures that were both consistent with the state guidelines, the higher figure was reported.  Data on CSE awards for 1988-1999 by state are presented in Appendix A.

Results

            Summary statistics regarding the amount of child support obligations between 1988 and 1999 for Cases A-D are provided in Table 1.  Average child support obligations have dropped over the years for Cases A and D.  On the other hand, fathers in the two middle-income scenarios, Cases B and C, are paying more on average than they paid in previous years, though the average order for Case B dropped slightly between 1997 and 1999.  Cross-state variability in Case A orders is large and has increased consistently from 1988 to 1999.  The standard deviation represents 54 percent of the average child support order for case A, compared to 18 percent for the more consistent orders for fathers in Cases B-D.  As has been the trend for several years, courts use discretion in setting orders at the income extremes, particularly in high-income cases.  In those states, individual judges determine the level of child support that they deem appropriate for the situation.  Hence, the award amounts for families in similar economic situations may differ substantially. 


Table 1:

Summary Statistics:  Monthly State Child Support Orders, 1988-1999.

 

Year

 

Mean

 

Standard Deviation

 

Coefficient of Variation

 

Median

 

 Court Discretion

 

 

 

 

 

 

 

 

 

 

 

 

Case A

1999

 

176.65

 

95.35

 

0.54

 

187.00

 

CAa

 

1997

 

179.12

 

91.36

 

0.51

 

180.00

 

VT

 

1995

 

193.32

 

88.78

 

0.46

 

201.50

 

VT

 

1993

 

202.49

 

80.36

 

0.40

 

197.00

 

CT, DC, MA, VT

 

1991

 

202.71

 

80.56

 

0.40

 

204.50

 

CT, DC, WV

 

1988

 

202.84

 

78.06

 

0.38

 

191.00

 

MA, PA

 

 

 

 

 

 

 

 

 

 

 

 

Case B

1999

 

416.71

 

68.45

 

0.16

 

433.00

 

None

 

1997

 

424.04

 

94.66

 

0.22

 

433.00

 

None

 

1995

 

417.47

 

62.25

 

0.15

 

431.00

 

None

 

1993

 

393.82

 

65.75

 

0.17

 

411.00

 

DC

 

1991

 

401.43

 

56.39

 

0.14

 

411.00

 

None

 

1988

 

389.64

 

61.04

 

0.16

 

391.00

 

PA

 

 

 

 

 

 

 

 

 

 

 

 

Case C

1999

 

632.81

 

84.66

 

0.13

 

634.00

 

None

 

1997

 

620.71

 

92.63

 

0.15

 

626.00

 

None

 

1995

 

627.37

 

122.08

 

0.19

 

616.00

 

None

 

1993

 

607.98

 

87.91

 

0.14

 

618.00

 

DC

 

1991

 

616.10

 

84.51

 

0.14

 

617.00

 

FL

 

1988

 

616.46

 

125.05

 

0.20

 

613.00

 

PA