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This Congressional Budget Office (CBO) memorandum analyzes the potential costs and other impacts of proposals for a government program of child support assurance. Such a program would provide payments to children who were living apart from at least one of their parents if the child support paid by the noncustodial parent fell below a specified amount. The memorandum was prepared as part of the response to a 1993 request from Dan Rostenkowski, then Chairman of the House Committee on Ways and Means. In accordance with CBO's mandate to provide objective, impartial analysis, the memorandum contains no recommendations.

Janice Peskin, formerly of CBO's Health and Human Resources Division, prepared the memorandum under the direction of Joseph R. Antos, Nancy M. Gordon, and Ralph Smith. Special thanks are due to John Tapogna, who provided helpful comments and suggestions throughout the project. The estimates of costs and other aspects of child support assurance programs (CSAPs) are based on the Urban Institute's TRIM2 microsimulation model. The estimates could not have been made without the work of institute staffers Sandy Clark, Daniel Dowhan, Linda Giannarelli, Elaine Sorensen, and Laura Wheaton. The contributions of Linda Mellgren and Don Oellerich of the Department of Health and Human Services were essential in developing specifications for simulating CSAPs. At CBO, Julia Matson reviewed the paper and Cori Uccello provided research assistance. Paul Cullinan, Irwin Garfinkel, Daniel Meyer, Daniel Mont, and Laura Wheaton also commented on earlier drafts.

Leah Mazade edited the manuscript, and Christian Spoor proofread it. Sharon Corbin-Jallow typed the several versions and prepared the final document for publication.
 
 

SUMMARY AND INTRODUCTION

• Summarizing the Costs of CSAPs and Their Effects on Families
• Summarizing a CSAPs Potential Effects on Behavior

DESIGNING A CSAP AND ESTIMATING ITS EFFECTS

• Designing a CSAP
• CBO's Approach to Estimating the Effects of a CSAP

ALTERNATIVE PROGRAM DESIGNS AND THEIR EFFECTS

• Varying Conditions of Eligibility
• Setting the Level and Structure of the Maximum Benefit
• Imposing a Means Test
• Integrating a CSAP with Other Government Programs
• Other Design Issues

BEHAVIORAL CHANGES

• Securing Awards
• Reducing Child Support Payments
• Changes in How Much People Work
• Increasing Family Dissolution and Out-of-Wedlock Births
• Altering Relationships Between Parents and Between Parents and Their Children
• Illustrative Effects of Selected Behavioral Changes

APPENDIXES

A - Supporting Tables
B - Comparing Costs and Effects of a Child Support Assurance Program in 1989 and 1995
C - The Trim2 Model as the Basis for CBO's Estimates
 

TABLES
1.	Estimated Costs and Effects Under Three Standard Designs of a Child Support Assurance Program, 1995
2.	Estimated Costs and Effects of Varying Eligibility in a Child Support Assurance Program with a Medium Maximum Benefit, 1995
3.	Estimated Distribution of Child Support Awards and Payments by Number of Children, 1995
4.	Estimated Costs and Effects of Changing the Maximum Benefit Level in a Child Support Assurance Program, 1995
5.	Estimated Costs and Effects of Capping Benefits from a Child Support Assurance Program at the Amount of a Family's Child Support Award, 1995
6.	Estimated Income Distribution and Poverty Status of Eligible Families Under Three Standard Designs of a Child Support Assurance Program, 1995
7.	Estimated Costs and Effects of Means-Testing Benefits Under Three Standard Designs of a Child Support Assurance Program, 1995
8.	Estimated Costs and Effects of Counting as Income in the AFDC Program 67 Percent of Benefits Under Three Standard Designs of a Child Support Assurance Program, 1995
9.	Illustrative Costs of and Effects on a Child Support Assurance Program of Increasing the Number of Women Who Have Child Support Awards, 1995
10.	Illustrative Costs of and Effects on a Child Support Assurance Program of Decreasing the Number of Mothers Who Receive Partial Child Support Payments, 1995
11.	Illustrative Costs of and Effects on a Child Support Assurance Program of Increasing the Number of Mothers with Awards by 30 Percent and Decreasing the Number of Mothers with Partial Child Support Payments by 30 Percent, 1995
A-l.	Estimated Costs and Effects of Imputing Child Support to Cooperators, 1995
A-2.	Estimated Costs and Effects of Varying Eligibility in a Child Support Assurance Program with Low and High Maximum Benefits, 1995
A-3.	Estimated Costs and Effects of Means-Testing Benefits Under Three Standard Designs of a Child Support Assurance Program Using an Alternative Means Test, 1995
B-l.	Estimated Costs and Effects of a Child Support Assurance Program That Has a Low Maximum Benefit and Requires an Award for Eligibility, 1989 Versus 1995
B-2.	Estimated Costs and Effects of a Child Support Assurance Program That Has a Medium Maximum Benefit and Requires an Award or Cooperation for Eligibility, 1989 Versus 1995
B-3.	Estimated Costs and Effects of a Child Support Assurance Program That Has a High Maximum Benefit and Requires an Award or Cooperation for Eligibility, 1989 Versus 1995
BOX
1.	General Estimating Assumptions

 

SUMMARY AND INTRODUCTION

When a marriage dissolves or an out-of-wedlock birth occurs, the affected children may become eligible for child support from their noncustodial parent. In recent decades, the number of those children has grown dramatically. Yet most receive no child support and suffer the reduced standard of living that lack of support entails.

Legislators, program administrators, and policymakers at all levels of government have responded strongly to the inadequacies of the child support system by expanding enforcement tools and adding resources in an effort to improve its effectiveness. Reform of the system has been under way for at least two decades, beginning with the enactment of the Child Support Enforcement (CSE) program in 1975. The CSE program, which is funded jointly by federal and state governments, establishes paternity, locates noncustodial parents, secures awards, enforces obligations, and collects and distributes support to custodial parents who receive Aid to Families with Dependent Children (AFDC) and to other parents who apply for its services. It is one part of a complex set of institutions, including local courts and related administrative bodies, that together form the child support system.

Throughout the 1980s and early 1990s, the federal government imposed more requirements on state child support agencies and courts as a means of improving performance. In 1984, the Child Support Enforcement Amendments required child support agencies to use specific procedures (such as withholding support from the wages of noncustodial parents who were delinquent in their payments) and to provide services to families who were not receiving AFDC. The Family Support Act of 1988 imposed many new requirements including those for the establishment of paternity, the use of state guidelines in setting child support awards, the periodic review and modification of awards, and the mandatory withholding of child support from the wages of most noncustodial parents immediately after an award has been issued or modified. In 1993, the Omnibus Budget Reconciliation Act further strengthened rules regarding the establishment of paternity. More recently, the Congress and the Administration have proposed another round of major changes, including reporting by employers of information on newly hired workers and suspension of driver's and professional licenses for failure to pay child support.

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