As With Any Hustle, Child Support Officials Searching for New Victims

Kenya N. Rahmaan

With the passing of The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), the government was guaranteed child support payments that were paid on behalf of children enrolled in the Temporary Assistance for Needy Families (TANF) and Medicaid programs.  A huge portion of child support money that is retained by the government is from TANF and Medicaid cases. On the other hand, minus any fees charged by the state, custodial parents who were not receiving welfare benefits, were paid the collected child support. Now that the children who were babies during the initial implementation of the child support program are reaching the age of majority, there is a need to find new parents to enroll into the child support system.  And with any Ponzi scheme, the overseers of The Child Support Hustle must identify new ways to recruit participants into the child support system. 

One of the key elements of the TANF and child support enforcement relationship is the pass-through guideline.  Pass-through occurs when a potion of collected child support is paid to the family receiving TANF benefits. According to the National Conference of State Legislatures or NCSL (2017), the pass-through money is disregarded when determining TANF assistance meaning the amount would not be considered income for purposes of determining TANF eligibility.  Currently 27 jurisdictions refuse to pass-through any child support collected to families receiving TANF benefits. All jurisdictions have the authority to pass-through all of the child support collected, however, the remaining states that choose to pass-through only pay between $50 and $200 child support collected.  

Two hundred dollars is the maximum amount paid when there are at least two children or more living within the household.  It appears that Michigan will be the first state to use the pass-through regulation as a recruitment tool in order to increase the number of  new child support applicants. On October 1, 2011, Michigan discontinued implementing irs $50 pass-through and disregard status due to budgetary constraints (NCSL).  There was no further explanation given by Michigan officials identifying what budgets would be affected by the discontinuance of the pass-through policy. Nor was there any mention of how the new policy would affect the families relying on the pass-through money.

Even with the refusal to pass-through child support collected, Michigan and every other state and jurisdiction receives block grants that are supposed to be used to assist low-income and poor families.  As the pass-through amounts in Michigan dwindled from $300 in 2014 to $-2 in 2017, the state continued to receive money from the Federal government in the form of a block grant. Based on the Topics of Legislative Interest released by John Maxwell on behalf of the Michigan government in the summer of 2016, the state annually receives a $775.3 in a TANF block grant from the Federal government.  However, block grants differ greatly from traditional grants paid to the state by the Federal government for the purposes of assisting the most vulnerable citizens. This is the reason that Michigan officials were permitted to collect TANF money but refuse to pass-through any child support for those families receiving welfare benefits. 

Block grants do not have to be used on the TANF program or any other specific program, for that matter.  To put this in perspective, consider that even though in 2017 Michigan reportedly spent about $1.2 billion in Federal and State funds under the TANF program, for every 100 poor families with children, only 12 received TANF cash assistance, (Center on Budget and Policy Priorities (CBPP), 2019).  In order for these states to continue receiving TANF block grants, they must not only meet certain criteria set by the Federal government, they must also increase the number of TANF applicants, which in turn, increase the child support caseload. Likewise, there must be some type of incentives offered to potential applicants in order to gain their cooperation.

Since the PRWORA limits the amount of time one can receive benefits and requirements are very stringent, there must be other “perks” offered in order to persuade custodial parents to sign up for TANF benefits.  The TANF in Michigan has been renamed the Family Independence Program or FIP. Recently, Governor Gretchen Witmore has overturned the refusal to pass-through of child support collections when custodial parents are enrolled in FIP.  According to Will Kriss (2019), the new state budget for 2020 contains a provision for $946,000 to support child support pass-through payments of up to $200 a month for qualifying households that receive assistance through FIP. 

Even though Michigan has only raised the TANF benefit by $33 once since 1996 (the total monthly benefit for a mother and two children is $492),  the state will own the rights to all child support payments collected on behalf of those children for at least 18 years. It should be mentioned that the $200 is only paid to a family with at least two children or more while the amount will decrease to $100 for one child.  Additionally, families enrolled in FIP will receive the pass-through only if the parent who owes child support pays it, (Kriss). In other words, the pass-through incentive sounds wonderful on paper, but if nothing is paid by the other parent, nothing extra will be received.  And child support cases filed through state agencies for welfare benefits are very easy to open, but very difficult to close.

Research has proven very early in the implementation of the child support system that most debt is owed by non-custodial parents with low or no reported income.  Meaning that the chances of child support going unpaid or not being paid on time and in-full is far greater than if the non-custodial parent has steady income where income withholding are regularly deducted from their paychecks.   When a parent pays less than $100, the family will only receive the amount that he/she pays, (Kriss). It is clear that recruitment of new applicants for TANF benefits is much more beneficial to the state of Michigan than for the low-income and poor children and families enrolled in the TANF and other social programs.

Another source of new revenue that the government may use is the requirement that custodial parents receiving other public benefits besides TANF be forced to sue the non-custodial parents for child support in exchange for benefits.  Currently programs such as subsidies child care and Supplemental Nutrition Assistance Program (SNAP) are left to the discretion of the states. However, that may soon change as the United States Department of Agriculture (USDA) released a memo in 2019 encouraging states to implement the cooperation with child support enforcement mandate.

The memo recommends denying both parents who refuse to cooperate with child support enforcement SNAP benefits until they comply.   USDA involvement initiates quite a different and significant impact for non-custodial parents in a couple of ways. First, unlike custodial parents, a low-income non-custodial parent does not qualify for TANF and Medicaid benefits.  He or she is required to work and pay child support, which can mean a garnishment of up to 65% (sometimes more) of their income. This can often leave them living in deep poverty and as a last resort, they must apply for SNAP benefits in order to eat.  

However, the USDA is not asking parents to essentially put themselves on child support or be denied benefits and go hungry.  The recommendation for fathers in Section 6(m) of the Food and Nutrition Act 7 U.S.C. (2008), 

“allows a state agency to determine a putative or identified non-custodial parent ineligible to participate in SNAP for refusal to cooperate in establishing paternity of a child (if the child is born out of wedlock) and providing support for the child.”

Not only does this mandate almost guarantee an increase in the number of newly opened child support cases based on the 40 million people who face hunger in America, the increase will be the result of not just the custodial, but both parents agreeing to open child support cases.  This mandate can mean a new stream of billions of dollars in new revenue per year for the government, but not for the children and parents.

It looks like State Representative Dottie Bailey (R) HD-110 of Missouri will be the first to introduce bill mandating cooperation with child support enforcement in exchange for SNAP  benefits for low-income parents/families. House Bill 1597, according to Representative Bailey (2020), would mean that if a parent, caretaker relative, putative father, or identified non-custodial parent wants to qualify for food stamps, they must be willing to cooperate with Missouri’s child support program.  Like the USDA, Bailey mentions the potential revenue that the state is missing by not mandating child support cooperation in exchange for SNAP. Bailey mentions that if child support cooperation were enacted in Missouri, there would be a more than $7 million increase in child support collections. The problem with this is that Missouri is one of the states refusing to pass-through any child support collected to families receiving public benefits.

Finally, there will be more child support agencies advertising their services via social media.  Why? Because child support arrears will continuously decrease as the number of child support and TANF cases close. According to Elaine Surrensen (2019) between 2008 and 2018, TANF arrears declined by 32%.  This decrease is a direct result of the decline in the number of TANF applicants and recipients. In order to increase those numbers, new people, like with any hustle, scam, or Ponzi scheme, must be recruited.  And like any hustler, there must be a plan in order to gain the trust of the new victims. 

One of the ways that the Federal government is going about finding new parents is by  providing grants to several jurisdictions around the country to help with the costs of advertising the child support program to parents.  Based on the Office of the Administration for Children and Families (ACF), 

“the Using Digital Marketing to Increase Participation in the Child Support Program (Digital Marketing) demonstration project tests digital marketing approaches and partnerships to reach parents that could benefit from child support services, and create or improve two-way digital communication and engagement with parents.”

The $2.2 million awarded to 14 child support agencies will mainly target potential child support hustle victims through social media and will surely and conveniently ignore important downfalls to the program.  TANF cooperation mandates and pass-through guidelines will likely be missing from recruitment techniques as they were missing during the child support/TANF reform rollout in the late 1990s. Reportedly, the largest amount of child support cases were opened by parents who have never received public assistance. However, the government needs public assistance cases to increase because the government owns all of their child support collected, whereas, never assisted parents own all of the child support collected minus any fees.  

Due to this, states like California, while experiencing increases in former assisted and never assisted cases, continue to experience decreases in their overall caseloads.  The amount of current assistance cases have dropped from 350,579 reported in 2014 to 252,182 in 2018, (OCSE, 2019). The California Department of Child Support Services shows that six counties will receive grant money to be utilized for new client recruitment purposes.  LA County sends mobile units to the local neighborhoods hoping to recruit new parents. According to OCSE (2019) the Orange County Child Support Support Services (OC CSS) ,

“will run a digital media campaign with Pandora and iHeart radio to reach the target population.  The digital media method will allow OC CSS to intentionally target custodial parents with specific demographics and in geographical locations identified as particularly underserved using caseload and census data.”

By working with particular media platforms, the OC CSS is hoping to benefit from the $170,000 grant and increase participation in the child support system.  They will definitely reach larger numbers of potential applicants as Pandora has guaranteed that the advertisement will run 35,143 times and will reach 33,953 listeners, (OC OSS).  Advocates must be active in educating these recruiting techniques to potential new clients and victims so that they are made aware of everything that can occur when participating with the state-operated child support system.  One of the most important lessons should be that participation is voluntary and if parents can reach a support agreement without government interference, that should be their first and only choice in the matter.

Although emphasis will always be focused on the welfare and child support relationships, states are extremely interested in recruitment of non-Title IV-D cases.  This is because they are permitted to charge several fees when child support is collected through the state. The mandatory fee for processing child support through the state is currently $35 annually per child support case.  Public law (P.L.) 115-123 of the Bipartisan Budget Act of 2018 amended the Social Security Act concerning child support enforcement fees and increased the minimum amount of collections to authorize the collection amount from $500 per year to $550.

The fee of $35  is important considering recruitment plans when grant recipients are targeting non-TANF parents for hold support programs.  While non-assistance case amounts are currently higher than assistance cases, these cases are declining as well. Washington state has experienced a decrease from 118,3441 in 2014 to 116,499 in 2018 (OCSE).  In an effort to best spend its grant money, Washington child support officials have chosen to target non-TANF receiving custodial parents. The state, according to OCSE (2019),

  • will develop and implement three promising interventions,
  • raise awareness through social media,
  • use fee-based digital advertisement (DCS ad buys) and,
  • use email marketing to generate leads and nurture relationships.

When putting these objectives into dollar signs and based on the 100,000 plus open non-assistance cases reported in 2018, the state stands to generate over $4 million in child support enforcement fees alone.  Of course, this amount excludes the 12% interest charged on late payments, any court costs, and all other fees that the state decides to charge the parents once they have been convinced to participate in the Ponzi scheme disguised as child support.  As with every scheme to take money from unsuspecting victims, when the numbers of those being hustled declines or when the scheme has been exposed, new investors must be located as quickly as possible as to keep the cash flowing. The Child Support Hustle is no different.

To all parents, whether you have new babies or are new to raising your children in the roles of custodial and non-custodial parents, remember that you have choices in how you provide for your children.  Even though the child support system is advertised as a program that operates in the ‘best interest of children’, that is not and has never been its actual mission. The real mission of this system is to generate revenue for the government by preying on unmarried parents and children born out of wedlock.  Since the enrollment numbers are dropping, the government has started looking for new ways to recover lost revenue. Know your rights so that you and your children do not become victims of the Ponzi scheme known as The Child Support Hustle.

References:  
Administration for Children & Families. (2018, September 28). $2.2 million awarded to explore link between digital marketing and child support payments. Retrieved from https://www.acf.hhs.gov/media/press/2018-22-million-awarded-to-explore-link-between-digital-marketing-and-child-support-payments

Bailey, D. (2020, January 31). Opinion: Supporting children’s futures with child support cooperation. Retrieved from https://themissouritimes.com/opinion-supporting-childrens-futures-with-child-support-cooperation/?fbclid=IwAR2vtZ0Wj2QvWhiPCHdACB1re78YrOGF8kh43oyRKBIojFRJ3H_mLHtHC4M

California Department of Child Support Services. (n.d.). Digital marketing campaigns to improve awareness to underserved populations. Retrieved from https://www.acf.hhs.gov/sites/default/files/programs/css/ca_orange_county_dm.pdf

Kriss, W. (2019, December 22). MDHHS announces additional funds for family independence program (FIP). Retrieved January 12, 2020, from https://wkzo.com/news/articles/2019/dec/22/mdhhs-announces-additional-funds-for-family-independence-program-fip/968851/

Maxwell, J. (2016). Michigan’s state budget and temporary assistance for needy families: Fiscal year 2008-09 through fiscal year 2016-17. Retrieved from https://www.senate.michigan.gov/sfa/publications/notes/2016notes/notessum16jm.pdf

National Conference of State Legislatures. (2017, July 18). Child support pass-through and disregard policies for public assistance recipients. Retrieved from https://www.ncsl.org/research/human-services/state-policy-pass-through-disregard-child-support.aspx

Office of Child Support Enforcement. (2019, June 13). FY 2018 annual report to congress. Retrieved January 19, 2020, from https://www.acf.hhs.gov/sites/default/files/programs/css/fy_2018_preliminary_data_report.pdf

Social Security Administration. (2018, February 22). P.L. 88-525P.L. Retrieved January 21, 2020, from https://www.ssa.gov/OP_Home/comp2/F088-525.html

Sorensen, E. (2019, October 18). TANF arrears continue to decline. Retrieved January 19, 2020, from https://www.acf.hhs.gov/css/ocsedatablog/2019/10/tanf-arrears-continue-to-decline

State fact sheets: How states have spent funds under the TANF block grant. (2019, May 29). Retrieved from https://www.cbpp.org/research/family-income-support/state-fact-sheets-how-states-have-spent-funds-under-the-tanf-block

Washington State Division of Child Support. (n.d.). Using digital marketing to increase participation in the child support program. Retrieved from https://www.acf.hhs.gov/sites/default/files/programs/css/washington_dm.pdf