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Section 11. Child Support Enforcement Program
 
                               BACKGROUND
 
    The enactment of the Child Support Enforcement (CSE)
program in 1975 represented a major new commitment on the part
of the Congress to address the problem of nonsupport of
children. Although prior to that time the Social Security Act
had included provisions which were aimed at improving the
collection of support on behalf of children, these provisions
had not proved to be effective. The 1975 amendments were aimed
at strengthening in a very significant way the efforts of the
Federal and State Governments to improve the enforcement of
child support obligations.
    The 1975 legislation (Public Law 93-647) added a new part D
to title IV of the Social Security Act. The statute, as
amended, authorizes Federal matching funds to be used for
enforcing the support obligations owed by noncustodial parents
to their children and the custodial parent, locating absent
parents, establishing paternity, and obtaining child and
spousal support. Basic responsibility for administering the
program is left to the States, but the Federal Government plays
a major role in funding, monitoring and evaluating State
programs, providing technical assistance, and in certain
instances, in giving direct assistance to the States in
locating absent parents and obtaining support payments from
them. The program requires the provision of child support
enforcement services for both welfare and nonwelfare families
and requires States to publicize frequently, through public
service announcements, the availability of child support
enforcement services, together with information about the
application fee and a telephone number or address to be used to
obtain additional information.
 
  INCENTIVE PAYMENTS TO STATES
 
    In most States, the State share of CSE collections made on
behalf of Aid to Families with Dependent Children (AFDC). AFDC families can be calculated by subtracting the
Federal medical assistance percentage from 100 percent (in some
States, local governments also are entitled to part of the
State's share of collections). In addition, States and
localities receive Federal CSE incentive payments that come
entirely from the Federal share of child support collections.
The revised incentive formula, effective October 1, 1985, was
designed to encourage States to develop CSE programs that
emphasize collections on behalf of both AFDC and non-AFDC
families, and to improve the program's cost effectiveness.
    Under the incentive formula, each State receives an
incentive payment equal to at least 6 percent of the State's
total amount of AFDC support collections for the year, plus at
least 6 percent of the State's total amount of non-AFDC
collections for the year. The amount of the State's incentive
payment could reach a high of 10 percent of the AFDC
collections plus 10 percent of the non-AFDC collections,
depending on the State's ratio of child support collections to
administrative costs. (See table 11-8.)
    There is a limit, however, on the incentive payment for
non-AFDC collections. The incentive payments for such
collections may not exceed 115 percent of incentive payments
for AFDC collections. (This percentage was 100 percent in
fiscal year 1986 and fiscal year 1987, 105 percent in fiscal
year 1988, 110 percent in fiscal year 1989, and 115 percent in
fiscal year 1990 and each year thereafter.)
 
            TABLE 11-8.--INCENTIVE PAYMENT STRUCTURE
------------------------------------------------------------------------
                                                               Incentive
                                                                payment
                                                                received
                                                               (percent)
------------------------------------------------------------------------
Collection-to-cost ratio:
    Less than 1.4 to 1.......................................        6.0
    At least 1.4 to 1........................................        6.5
    At least 1.6 to 1........................................        7.0
    At least 1.8 to 1........................................        7.5
    At least 2.0 to 1........................................        8.0
    At least 2.2 to 1........................................        8.5
    At least 2.4 to 1........................................        9.0
    At least 2.6 to 1........................................        9.5
    At least 2.8 to 1........................................      10.0
------------------------------------------------------------------------
 
    The incentive formula seeks to assure that States provide
equitable treatment for both AFDC and non-AFDC families. Under
the old system, a State that incurred administrative costs to
collect support for a non-AFDC family did not receive an
incentive payment since incentives were paid only for AFDC
collections. This practice generally resulted in the neglect of
non-AFDC cases. The new incentive formula aims to remedy that
by making payments for non-AFDC collections. At the same time
it has placed a limit on non-AFDC incentive payments so as to
lessen the possibility that States would merely transfer to the
CSE program child support activities which were previously
financed out of State and/or local moneys, with no increase in
the level of child support services.
    At State option, laboratory costs (for blood testing, etc.)
to establish paternity may be excluded from the State's
administrative costs in calculating the State's collection-to-
cost ratios for purposes of determining the incentive payment.
In addition, for purposes of calculating these ratios,
interstate collections are credited to both the initiating and
responding States. Incentives are paid according to the
collection-to-cost ratios (ratio of AFDC collections to total
administrative costs and ratio of non-AFDC collections to total
administrative costs) shown in table 11-8.
    Before 1984, a State that initiated a successful action to
collect child support from another State generally did not
receive an incentive payment. Rather, the jurisdiction that
made the collection received the incentive payment. Public Law
98-378 provides that both States involved in an interstate
collection be credited with the collection for purposes of
computing incentive payments. This double-counting is intended
to encourage States to pursue interstate cases as energetically
as they pursue intrastate cases. States now will pay incentive
for interstate cases to themselves out of the Federal share of
collections they distribute.
    In addition to substantial Federal reimbursement, States
may use fees and cost recovery to help finance the CSE program
(discussed later). Such fees and costs recovered from non-AFDC
cases must be subtracted from the State's total administrative
cost before calculating the Federal reimbursement amount;
however, the lower administrative cost figure may result in
greater Federal incentive payments by improving the State's
collection-to-cost ratio


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