The Financial Impact of Child Support on TANF Families: Simulation for Selected States

The Financial Impact of Child Support on TANF
Families: Simulation for Selected States
July 24, 2007
Carmen Solomon-Fears and Gene Falk
Specialists in Social Legislation
Domestic Social Policy Division

The Financial Impact of Child Support on TANF
Families: Simulation for Selected States
Summary
The Child Support Enforcement (CSE) program was enacted in 1975 as a
federal-state-local partnership to help strengthen families by securing financial
support from noncustodial parents. Families receiving cash welfare from the
Temporary Assistance for Needy Families (TANF) block grant must assign (turn
over rights to) child support received from noncustodial parents to the state to
reimburse it and the federal government for their welfare costs. States decide
whether to pay any of the child support collected for TANF families to the family.
The Deficit Reduction Act of 2005 (DRA, P.L. 109-171) provides incentives for
states to allow more of the child support collected on behalf of TANF families to go
to the family without a reduction in welfare benefits. Under DRA, beginning in
October 2008, the federal government will share in the cost of passing through up to
$100 per month for a family with one child, and up to $200 per month for a family
of two or more children, of collected child support to TANF families. This report
illustrates the potential impact of the DRA policy on families and governments in six
states (CA, IL, ME, MD, OK, and WV) chosen because of their diversity in both
TANF and pre-DRA child support pass-through policies. It shows the direct effects
of “what if” the states fully adopted the DRA policy.
The DRA policies can increase the incomes of a TANF cash welfare family
consisting of a mother and two children by up to $200 per month. This can be a
substantial supplement to TANF cash benefits. Actual income increases depend on
how much child support is paid by the noncustodial parent, pre-DRA state policies,
the amount of other income (including earnings) of the family, and TANF benefit
rules. The DRA has its greatest impact on families with no income other than child
support. It mainly affects families who receive TANF; it does not directly affect
families with incomes too high to receive TANF. In some states, a family of three
with a minimum wage earner (the new fully phased-in federal minimum wage of
$7.25 per hour; P.L. 110-28) at 20 hours per week is ineligible for TANF; in most
states, a family with a full-time minimum wage earner is ineligible for TANF.
The increased pass-through and disregard of child support for TANF families
also has its costs. Disregarding additional child support when determining TANF
financial eligibility can make additional families eligible for TANF. The cost of
increasing family income through DRA’s enhanced pass-through and disregard is
often borne by reductions in child support collections kept by the state and federal
governments. However, sometimes the cost could be borne through increased TANF
spending. The DRA rules reduce the “cost” of the pass-through and disregard more
for poorer states than for higher-income states.
This report provides a limited discussion of DRA’s effect on former TANF
families. The report addresses only the “direct” effects of adopting the DRA child
support pass-through and disregard. Adoption of DRA child support policies might
have other, indirect, behavioral effects. This report will not be updated.

Contents
In troduction ......................................................1
Key Findings.....................................................3
Background ......................................................4
Rules That Apply to Families Receiving TANF Cash Welfare...........6
Assignment ..............................................6
Distribution ..............................................7
Pass-Through .............................................7
Disregard ................................................8
Fill-the-Gap States.........................................8
Pre-DRA State Pass-Through and Disregard Policies.....................10
DRA Pass-Through and Disregard Provisions...........................13
Impact of DRA Provisions on Family Income...........................14
Impact of DRA Provisions on the States and the Federal Government........21
Potential Behavioral Implications of DRA Child Support Pass-Through
and Disregard Rules...........................................25
Conclusion ......................................................27
Appendix A. Impact of Child Support Pass-Through and Disregard
Policy on Families with No Earnings or Specified Earnings,
Analysis of Selected States.....................................32
California ...................................................33
Zero Earnings............................................33
Half-Time Earnings at State Minimum Wage...................33
Full-Time Earnings at State Minimum Wage...................34
Illinois .....................................................36
Zero Earnings............................................36
Half-Time Earnings at State Minimum Wage...................36
Full-Time Earnings at State Minimum Wage...................37
Maine ......................................................39
Zero Earnings............................................39
Half-Time Earnings at Federal Minimum Wage.................39
Full-Time Earnings at Federal Minimum Wage.................40
Maryland ...................................................42
Zero Earnings............................................42
Half-Time Earnings at Federal Minimum Wage.................42
Full-Time Earnings at Federal Minimum Wage.................43
Oklahoma ...................................................45
Zero Earnings............................................45
Half-Time Earnings at Federal Minimum Wage.................45
Full-Time Earnings at Federal Minimum Wage.................46

West Virginia................................................48
Zero Earnings............................................48
Half-Time Earnings at Federal Minimum Wage.................48
Full-Time Earnings at Federal Minimum Wage.................48
Appendix B. Impact of DRA Policy on Federal and State Share of
Child Support Collections, Analysis of Selected States...............50
Assignment and Distribution Rules for TANF Families...............50
Current TANF Recipients..................................51
Federal Medical Assistance Percentage (FMAP)....................51
California ...................................................53
Zero Earnings............................................53
Half-Time Earnings at State Minimum Wage...................53
Full-Time Earnings at State Minimum Wage...................54
Illinois .....................................................56
Zero Earnings............................................56
Half-Time Earnings at State Minimum Wage...................56
Full-Time Earnings at State Minimum Wage...................57
Maine ......................................................59
Zero Earnings............................................59
Half-Time Earnings at the Federal Minimum Wage..............60
Full-Time Earnings at the Federal Minimum Wage..............60
Maryland ...................................................62
Zero Earnings............................................62
Half-Time Earnings at Federal Minimum Wage.................62
Full-Time Earnings at Federal Minimum Wage.................63
Oklahoma ...................................................65
Zero Earnings............................................65
Half-Time Earnings at Federal Minimum Wage.................65
Full-Time Earnings at Federal Minimum Wage.................66
West Virginia................................................68
Zero Earnings............................................68
Half-Time Earnings at Federal Minimum Wage.................68
Full-Time Earnings at Federal Minimum Wage.................69
Appendix C. DRA Provisions that Affect Former TANF Families...........70
Former TANF Families........................................72
For Collections Made On or Since October 1, 2000..............72
For Collections Made On or After October 1, 2009, or
October 1, 2008, at State Option.........................72
List of Tables
Table 1. Treatment of Monthly Child Support Income by the
TANF Program, April 2007.....................................11
Table 2. Monthly TANF and Child Support Income of a Mother
with No Earnings and Two Children, Pre- and Post- DRA Policies......16
Table 3. Monthly TANF and Child Support Income of a Mother
with No Earnings and Two Children, With $300 in Child Support.......18

Table 4. Monthly TANF and Child Support Income of a Mother with
Half-Time Earnings and Two Children, With $300 in Child Support.....19
Table 5. Monthly TANF and Child Support Income of a Mother with
Full-Time Earnings and Two Children, With $300 in Child Support.....20
Table 6. Source of Payment for Increase in Monthly Family Income
Resulting From DRA Policy, for a Mother with Two Children,
With $300 in Child Support.....................................22
Table A-1. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in California.....................35
Table A-2. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in Illinois.......................38
Table A-3. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in Maine........................41
Table A-4. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in Maryland.....................44
Table A-5. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in Oklahoma....................47
Table A-6. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in West Virginia..................49
Table B-1. Impact of DRA Policy on Distribution of Child Support
Payments for a Mother with Two Children: California................55
Table B-2. Impact of DRA Policy on Distribution of Child Support
Payments for a Mother with Two Children: Illinois..................58
Table B-3. Impact of DRA Policy on Distribution of Child Support
Payments for a Mother with Two Children: Maine...................61
Table B-4. Impact of DRA Policy on Distribution of Child Support
Payments for a Mother with Two Children: Maryland................64
Table B-5. Impact of DRA Policy on Distribution of Child Support
Payments for a Mother with Two Children: Oklahoma................67
Table B-6. Impact of DRA Policy on Distribution of Child Support
Payments for a Mother with Two Children: West Virginia.............69

The Financial Impact of
Child Support on TANF Families:
Simulation for Selected States
Introduction
On average, child support constitutes 17% of family income for households who
receive it. Among poor households that receive it, child support constitutes about
30% of family income.¹ During the last several years, the importance of child
support payments as an income source for single-parent families has garnered
national attention. The 7^th annual report on the Temporary Assistance for Needy
Families (TANF) block grant program indicates that 23% of adult TANF recipients
have jobs.² Although this is good news, relative to earlier years, welfare studies have
found that many of these recipients and ex-recipients end up with low-wage jobs.
Thus, child support is a critical factor in helping low-income families become self-
supporting.
In 2003, the average yearly child support payment received by custodial parents
with payments was $4,647 for mothers, about 20% more than the average amount
received by fathers ($3,906). These full or partial payments represented 17% of the
custodial mothers’ total yearly income and 8% of the custodial fathers’. In 2003,
child support represented 19% of the income of the 3.3 million custodial parents who
received all of the child support that they were owed.³
However, most child support received on behalf of families receiving TANF
cash welfare is kept by the federal government and the states, rather than paid to
families. This is because TANF families must assign (“turn over” legal rights to)
child support paid by noncustodial parents on their behalf to the state to reimburse
governments for welfare costs.

¹ Urban Institute. Child Support Offers Some Protection Against Poverty, by Elaine
Sorensen and Chava Zibman. March 15, 2000. See also Urban Institute. Child Support
Gains Ground, by Elaine Sorensen. October 6, 2003.
² U.S. Department of Health and Human Services. Administration for Children and Families.
Temporary Assistance for Needy Families (TANF) Program — Seventh Annual Report to
Congress. [contains FY2003 data] December 2006. p. X-74.
³ U.S. Census Bureau. Custodial Mothers and Fathers and Their Child Support: 2003.
Current Population Reports, pp. 60-230, by Timothy S. Grall. July 2006.
[http://www.census.gov/prod/2006pubs/p60-230.pdf] To view the detailed tables, also see
[ h t t p : / / www.census.go v/ hhes/ www/ chi l d suppor t / c hl dsu03.pdf ] .

The Deficit Reduction Act of 2005 (DRA, P.L. 109-171, enacted February 8,
2006) provides incentives for states to allow more of the child support collected on
behalf of TANF families to go to the family and most (if not all) of the child support
collected on behalf of former TANF families to go to the family. This is referred to
as a child support pass-through (see page 7). Adoption of this “family first” policy
is intended to help former TANF families stay self-sufficient and to encourage
cooperation with child support enforcement efforts by custodial and noncustodial
parents, by allowing the family to keep more (or all) of the child support paid on its
behalf. Under DRA, effective October 1, 2008, if a state passes through a child
support payment and disregards it as countable income, the federal government will
waive its share of the child support collections, up to $100 per month for one child
or up to $200 per month for two or more children (see page 12). This is referred to
as a disregard.
This report illustrates “what if” scenarios if six states (California, Illinois,
Maine, Maryland, Oklahoma, and West Virginia) were to adopt the DRA child
support pass-through and disregard policies for TANF families. The states were
selected because of their diversity of both current child support pass-through and
disregard policies and TANF benefit amounts. It is not known whether any of these
states are currently contemplating adopting the DRA rules.
The analysis shows the financial impact⁴ on a mother with two children in
specified earnings categories under current child support distribution rules and under
the DRA rules. It also provides an analysis of the change in the distribution of child
support among the state, federal government, and the family under current rules and
under DRA rules. This report includes three appendices. Appendix A discusses and
presents detailed tables showing the impact of pre-DRA and DRA policy on a mother
with two children in each of the six states. Appendix B discusses and presents
detailed tables showing the impact of pre-DRA and DRA policy on the distribution
of child support collections among families, the state, and the federal government in
each of the six states. Appendix C provides background information on the DRA
provisions that affect former TANF families.

⁴ This report only examines earnings, child support income, and TANF cash benefits. It
does not discuss how higher amounts of child support distributed to a family might result
in benefit reductions in other programs, such as Food Stamps. For an analysis of the effect
of a more generous child support pass-through and disregard policy on various programs and
income streams, see The Urban Institute. Benefits and Costs of Increased Child Support
Distribution to Current and Former Welfare Recipients — Final Report, by Laura Wheaton
and Elaine Sorensen, with Victoria Russell and Jeff Versteeg. October 16, 2005. Available
at [http://aspe.hhs.gov/hsp/05/cs-dist-TANF/index.htm].

Key Findings
This report examines the financial impact of adoption of the Deficit Reduction
Act (DRA) provisions related to the child support pass-through and disregard policy
on TANF families, state governments (particularly California, Illinois, Maine,
Maryland, Oklahoma, and West Virginia), and the federal government. The major
findings are described below.
^!The DRA provides an incentive for states to have a pass-through and
disregard policy by requiring the federal government to share in the
cost, by foregoing the federal share of the child support collected
from the noncustodial parent on behalf of a TANF family. The DRA
requires the federal government to share in the cost of passing
through and disregarding up to $200 per month for a TANF family
with two or more children. If a state that currently has a pass-
through and disregard policy continues with its existing disregard
amounts, the state would financially benefit from the DRA
provisions, for the state would no longer have to fund the policy at
its own expense.
^!If a state opts for the full $200 pass-through and disregard, in most
cases, there would be a cost to the state. The cost would depend on
whether the state had a pre-DRA pass-through and disregard policy,
the amount of the disregard, whether the family becomes eligible for
TANF because of the pass-through and disregard, the custodial
parent’s earnings and other income, TANF benefit rules regarding
treatment of income, and the Federal Medical Assistance Percentage
(FMAP), which determines the federal and state share of child
support collections.
^!The DRA provisions would reduce the “cost” of the pass-through
and disregard policy more for poorer states than for higher-income
states. Poorer states must currently send back to the federal
government a greater share of child support collections than higher
income states. For example, West Virginia sends back 72.82% of its
child support collections (to the federal government) whereas
Maryland sends back 50.00% of its collections. Under the DRA
pass-through and disregard policy, the poorer state, West Virginia,
would not have to send back the federal government’s share
(72.82%) of child support collections; instead the federal
government would be required to forego its share of child support
collections.
^!The cost of a pass-through and disregard policy generally would be
higher for the federal government than for the states. However, in
the case in which a family becomes eligible for TANF payments
because of the DRA child support pass-through and disregard, given
the assumptions of this report, state governments would incur higher
costs than the federal government. (This report considers TANF
expenditures to be state expenditures.)
^!In most cases individual families would benefit from the DRA
provisions. The DRA pass-through and disregard provisions could

increase the income of a TANF parent with two children by as much
as $200 per month.
^!A family ineligible for TANF because its counted earnings are
higher than its state’s income eligibility threshold would see no
increase in income from implementing the DRA pass-through and
disregard provisions. Under the policies in effect in January 2007
and under the new (fully phased-in) minimum wage of $7.25 per
hour, families in many states are ineligible for TANF even at 20
hours of work per week. Among the six states closely examined in
this report, only in California would a mother of two working 40
hours per week at $7.25 per hour be eligible for TANF based on
January 2007 rules.
^!The interests of the Child Support Enforcement (CSE) program and
CSE families are not always compatible. The interests of a family
are usually entirely financial. It is in the best interest of a family to
get the highest amount of income available to it; thus, the higher the
child support pass-through and disregard amount, the more a family
would potentially benefit. However, from a CSE program
perspective, the more dollars that the program has to invest in CSE
activities (e.g., parent location, paternity establishment, support
order establishment, collection of child support payments), the better
the program can serve its entire clientele. Thus, for many states the
ability to retain child support collections outweighs the value of a
pass-through and disregard policy, particularly since the pass-
through and disregard does not benefit persons who never received
cash TANF benefits (such persons represented 39% of the CSE
caseload in FY2006).
Background
The CSE program (Title IV-D of the Social Security Act) was enacted in 1975
as a federal/state/local partnership to help strengthen families by securing financial
support from noncustodial parents. It also was enacted to lower the government costs
of providing cash welfare to families with absent parents, by collecting child support
from noncustodial parents that could help keep families off welfare or by using those
collections to reimburse states and the federal government for the cost of making
welfare payments. All 50 states, the District of Columbia, Guam, Puerto Rico, and
the Virgin Islands operate CSE programs and are entitled to federal matching funds.⁵
In addition, Native American tribes can operate CSE programs with federal funding.
All families with children who live apart from one of their parents are eligible
for CSE services. Families receiving TANF benefits (Title IV-A of the Social
Security Act), Title IV-E foster care payments, or Medicaid (Title XIX) coverage

⁵ For more information, see CRS Report RS22380, Child Support Enforcement: Program
Basics, by Carmen Solomon-Fears.

automatically qualify for CSE services free of charge.⁶ Other families must apply for
CSE services, and states must charge an application fee that cannot exceed $25. The
application fee may be paid by the state, the noncustodial parent, or the custodial
parent.⁷
Child support collected through the CSE system on behalf of families who never
received cash welfare goes to the family, usually through the state disbursement unit.
However, most collections on behalf of families currently receiving cash welfare
from TANF are used to reimburse state and federal governments for TANF payments
made to the family. The fact that cash welfare families directly receive only a small
fraction of child support paid to them has been an ongoing policy concern, as the
program has increasingly emphasized its role in adding to the income of families with
children and de-emphasized its welfare cost-recovery role.
Reinforcing this shift in emphasis has been the large declines in the cash welfare
rolls themselves. Cash welfare payments fell from $25 billion in FY1995 to about
$10 billion in FY2005, meaning that there are far fewer costs to recoup. The number
of families receiving cash welfare fell during this period from about 5 million to 2
million. Thus, the rules affecting those currently on the rolls reach fewer families
and affect fewer dollars than they did in the mid-1990s.
The decline in the cash welfare caseload is also reflected in the changing
composition of the CSE caseload. The component of the caseload that is comprised
of TANF families is shrinking. In FY2006, only 15% of the CSE caseload was
comprised of TANF families (compared to 21% in FY1999 and 38% in FY1996).
Even though overall child support collections increased by 51% over the seven-year
period FY1999-FY2006, child support collections made on behalf of TANF families
decreased by 33%. Thus, the policy shift — from using the CSE program to recover
welfare costs to using it as a mechanism to consistently and reliably get child support
income to families — is not surprising. In FY2006, only 4% of CSE collections
($985 million) was made on behalf of TANF families; about 14% of that amount
went to the families (pursuant to state child support “pass through” provisions), and
the rest was divided between the state and federal governments to reimburse them for
TANF benefits paid to the families. In FY2006, 91% of CSE collections ($21.8
billion) went to the families on the CSE rolls. The comparable figure in FY1999 was

85% ($13.5 billion); and the comparable figure in FY1996 was 80% ($9.6 billion).

⁶ Federal law requires that families who receive TANF benefits and/or Medicaid benefits
must assign their rights to child support payments to the state in order to receive the
respective program benefits. The Title IV-E foster care program requires the assignment of
child support rights in “appropriate” cases.
⁷ P.L. 109-171, effective October 1, 2006, requires families that have never been on TANF
to pay a $25 annual user fee when child support enforcement efforts on their behalf are
successful (i.e., at least $500 annually is collected on their behalf). According to Section
454(6)(B)(ii) of the Social Security Act, the annual $25 fee may be (1) retained by the state
from child support collected on behalf of the custodial parent (but not from the first $500
collected in a given federal fiscal year), or (2) paid by the custodial parent who is applying
for CSE services, or (3) recovered (i.e., collected) from the noncustodial parent, or (4) paid
by the state out of state funds.

In FY2006, the largest group of families who were participating in the CSE
program were families who had left the TANF rolls (i.e., former TANF families,

46%). Families who had never been on TANF represented 39% of the CSE caseload,

and families who were currently receiving TANF benefits comprised 15% of the CSE
caseload. Thus, although the majority of the CSE caseload is composed of non-
TANF families (85%), most of them at some point in their lives received
TANF/AFDC⁸ (61%). This is consistent with the expanded mission of the CSE
program. The expectation is that as child support becomes a more consistent and
stable income source/support, these former TANF families will never have to return
to the TANF rolls, and families that had not resorted to the TANF program will never
have to do so.
Rules That Apply to Families Receiving TANF Cash Welfare
TANF cash welfare is available to families that meet a test of financial need,
with the test determined by the states. A family’s income, including child support,
must be below a specified income threshold determined by the state to qualify for
TANF cash welfare. If child support collections exceed the TANF benefit, the family
may lose TANF eligibility, as its countable income would be too high to qualify for
TANF, and instead it would receive the child support.
A TANF cash welfare family is required to cooperate with the CSE system.
TANF recipients must help in establishing the paternity of the family’s children.
Further, recipients must turn over rights to any child support paid on behalf of the
children while the family is on welfare to the state. The state then decides whether
to pay any received child support to the family. The rules governing division of
child support collected on behalf of families comprise (1) assignment; (2)
distribution; (3) pass-through; and (4) disregard rules. Special rules also apply in
certain states, called “gap” states, based on their historical treatment of child support
in determining cash welfare benefits.
Note that some different rules apply for payment of support that is currently due,
compared with past-due support (arrearages). The current child support pass-
through and disregard rules are only applicable to TANF families and only pertain
to current child support payments. If a TANF family receives child support
payments that are considered arrearages, those arrearage payments are kept by the
state and federal government. This report focuses on collections of current support.
However, one purpose of the DRA is to increase the economic independence of
former TANF families by giving states the option of providing such families with all
of the child support collected on their behalf. Appendix C briefly discusses DRA
provisions that affect former TANF families.
Assignment. As noted above, when a family applies for TANF cash welfare,
the custodial parent must assign (that is, legally turn over) the right to the state for
child support collected on her or his behalf. While the family receives TANF

⁸ The Aid to Families with Dependent Children (AFDC) program was TANF’s predecessor
program; replaced by TANF in 1996 by P.L. 104-193 (the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996).

benefits, the state retains support collections up to the cumulative amount of TANF
benefits which have been paid to the family. If child support collections are less than
the TANF benefit, the collections remain legally with the state and are then subject
to the distribution, pass-through, and disregard rules discussed below.
Distribution. As already discussed, when the CSE program was first enacted
in 1975, one of its primary goals was to recover the costs of providing cash welfare
to families with children. To accomplish this cost-recovery goal, child support
collected on behalf of families receiving cash welfare was used to offset benefit costs
and was shared between the federal and state governments. The sharing arrangement
was based on how the federal government and states shared the cost of paying cash
welfare benefits under the pre-1996 program of Aid to Families with Dependent
Children (AFDC). Under old AFDC law, the rate at which states were reimbursed
by the federal government for the costs of cash welfare was the “Medicaid matching
rate” (which is now usually referred to as the Federal Medical Assistance Percentage
— FMAP), which varies inversely with state per capita income (i.e., poor states have
a higher federal matching rate, wealthy states have a lower federal matching rate).
Consequently, the share of child support collections to be distributed to the federal
government and states also was based on the Medicaid matching rate.
The AFDC program required that the first $50 in child support collected had to
be distributed to the family (passed-through, see below), and remaining collections
be split between the federal and state governments according the Medicaid matching
rate. If a state had a 50% matching rate, the federal government was reimbursed
$50 for each $100 in remaining child support collections; if a state had a 70% federal
matching rate, the federal government was reimbursed $70 for each $100 in
remaining collections. In the first example, the state kept $50 and in the second
example, the state kept $30. Thus, states with a larger FMAP kept a smaller portion
of the child support collections. The match ranged from a minimum of 50% to a
statutory maximum of 83%.⁹
Although AFDC was replaced by the TANF block grant under the welfare
reform law of 1996, the same matching rate procedure for CSE collections is still
used; however, the mandatory $50 pass-through was eliminated. Except for families
in states that allow child support to fill the gap between the cash welfare benefit and
“need” (discussed below), the full amount of current child support collected on
behalf of cash welfare families is divided between the federal and state governments
based on the Medicaid matching rate. The federal government, thus, is still
reimbursed for its share of TANF welfare costs even though TANF is a block grant
program rather than an open-ended entitlement program.
Pass-Through. Though states are required to pay to the federal government
the federal share of child support collections, they have full discretion over the state
share of collections made on behalf of welfare families. They decide whether to
keep the collections or “pass-through” child support to families. If a state does not
pass-through any child support collections and the child support collected is

⁹ For an explanation of the Medicaid matching rate, see CRS Report RL32950, Medicaid:
the Federal Medical Assistance Percentage (FMAP), by April Grady.

insufficient to lift the family’s income above the state’s TANF eligibility limit, the
family receives its full TANF grant (i.e., not reduced by the child support payment).
Passing through child support means that a family receives an identifiable amount
(i.e., a separate check), separate from the welfare benefit, based upon child support
collected from the noncustodial parent. Whether the welfare benefit is then reduced
by the amount of the child support passed through depends on the state’s disregard
policy, discussed below.
Disregard. States decide whether to treat child support payments as income
to the family in determining TANF eligibility and benefits. If a state does pass-
through some child support, but does not disregard it when determining TANF
eligibility and benefits, the family’s TANF grant is reduced by $1 for each $1 in child
support collections. Though the family receives some of the child support collected
on its behalf, its total income is not increased.
A “disregard” of child support income means that a family can keep a certain
amount of child support without a reduction in its TANF benefits or potentially
losing TANF eligibility. Therefore, a $50 disregard of child support means that up
to $50 of child support collections does not affect a family’s TANF eligibility or
benefits. A $200 disregard of child support means that up to $200 of child support
does not affect a family’s TANF eligibility or benefits.
Fill-the-Gap States. Before the CSE program was enacted, child support
was paid directly to the custodial parent. When child support was paid to a family
receiving AFDC, the child support was counted as income in determining the
family’s AFDC eligibility and the amount of AFDC benefits paid to the family. In
most states it resulted in a corresponding dollar-for-dollar decrease in the AFDC
benefit paid to the family. However, some states used AFDC benefit calculation
methods that did not result in a full dollar reduction for each dollar received as
income. These states paid less money than their full “need standard”,¹⁰ and some
permitted AFDC recipients to use their own income to make up all or some of the
difference between the AFDC payment and the standard of need. This additional
income retained by the family increased the total amount of disposable income
available to the family in a month.
However, after enactment of the CSE program in 1975, all child support
payments had to be paid to the CSE agency. In states that had allowed families to
keep part of their child support payments (to fill the gap between the state’s need and
maximum payment standards) without a corresponding reduction in AFDC benefits,
families had less disposable income after the enactment of the CSE program than
before.¹¹

¹⁰ In these states, the AFDC need standard, which was the amount the state deemed needed
for a family of a certain size to subsist in that state, was larger than the state’s AFDC
maximum benefit amount, which was the maximum amount of money that the state paid a
family of a given size in monthly AFDC benefits.
¹¹ Federal Register, Vol. 51, No. 158. Department of Health and Human Services. Office
of Family Assistance. Aid to Families with Dependent Children and Child Support
(continued...)

Concerns were raised that the new law would cause a decrease in the total
income (AFDC and child support income) of AFDC families in states referred to as
“fill-the-gap” states. In essence, before the CSE program was implemented, in some
states, AFDC families were permitted to fill all or part of the gap between the state’s
need standard and maximum benefit with child support payments/income. By
bypassing the family and requiring that child support payments be paid to the state,
the family no longer had access to this extra income and the fill-the-gap procedure
was nullified.¹²
P.L. 94-88 (enacted August 9, 1975) addressed these concerns by requiring that
monthly supplemental payments (often referred to as “gap” payments) be made to
AFDC recipients who would receive less disposable income (because of the new
rules) than they would have received prior to July 1975 when the new child support
rules took effect (Section 402(a)(28) of the Social Security Act).¹³ The gap payment
provision only applied to states that had a fill-the-gap policy in July 1975 and also
in the month of the benefit calculation. In July 1975, 13 jurisdictions paid less than
their full need standards and allowed custodial parents to use any nonwelfare income
to fill all or part of the gap between the state’s maximum benefit/payment and the
state’s standard of need.¹⁴
The five states of Delaware, Georgia, Maine, South Carolina, and Tennessee had
a fill-the-gap policy in July 1975 and currently still have a fill-the-gap policy.¹⁵ The
gap payment is paid for with cash welfare (i.e., TANF) funds. According to the
provisions of Section 457(d) of the Social Security Act which references Section
402(a)(28) of the Social Security Act, these states still have the option of not
applying federal child support distribution rules (Section 457 of the Social Security
Act) to these gap payments.

¹¹ (...continued)
Enforcement Program; Computing a Supplemental Payment in States Required To Do So
by Section 402(a)(28) of the Social Security Act. August 15, 1986.
¹² In other words, before the CSE program AFDC families could receive both the maximum
AFDC payment and whatever child support payments they were able to obtain. Income that
exceeded the AFDC maximum benefit was subject to the regular 100% benefit reduction
rate. After enactment of P.L. 93-647, families were able to receive a child support bonus
(i.e., up to $20 per month in addition to the maximum AFDC benefit available to them), but
they no longer had access to the child support income which they previously were able to
use to fill-the-gap between the maximum AFDC benefit payment and the state’s need
standard. This meant that some families were made worse off by the new CSE program.
¹³ Although the CSE program was enacted by P.L. 93-647 on January 4, 1975 most of the
provisions of the program did not go into effect until July 1, 1975.
¹⁴ The number and names of these jurisdictions are based on unpublished information from
the former U.S. Department of Health, Education, and Welfare.
¹⁵ The remaining eight jurisdictions that had fill-the-gap policies in July 1975 but that no
longer have such policies are Alabama, Alaska, Arizona, Indiana, Missouri, New Mexico,
Wyoming, and Puerto Rico.

Pre-DRA State Pass-Through
and Disregard Policies
Under pre-DRA policies, and through September 30, 2008, a state that chooses
to operate a pass-through policy bears the full cost of the pass-through and
disregard.¹⁶ The state must repay the federal government its share of the collected
child support whether or not any support is passed through to the custodial parent and
disregarded in the custodial parent’s TANF benefit calculation. If the state both
passes through and disregards any child support paid to a TANF family, that amount
is countable toward the state’s TANF spending (maintenance of effort or MOE)
requirement.
Beyond the requirement that TANF cash welfare be restricted to families with
children who meet a test of financial need, there are no federal rules governing TANF
eligibility and benefit amounts. “Financial need” is wholly determined by the states.
States determine the income amounts below which income must fall to make a family
eligible for TANF. They also determine what types of income are counted — and
whether any income is “disregarded” or subtracted from total income when
determining TANF eligibility or benefits. Different states have devised different
rules for how child support is treated when determining a family’s financial need and
benefits.
Table 1 shows the child support pass-through and disregard policies in the
TANF program as of April 2007. The second column of the table indicates the
amount of child support income that states say they count in determining whether a
family is eligible for the TANF program. The states had three answers: none of the
child support received by the custodial parent in the TANF family was counted in
determining the family’s TANF eligibility; all of the family’s child support income
was counted; or all of the child support income was counted except for up to $50 per
month. If after passing this first test the family is eligible for TANF, the state then
applies its rules regarding passing through child support income to the family. The
third column of the table shows the state’s pass-through policy in terms of how
much, if any, of the child support received by the family from the noncustodial parent
is given to the family by the state. The fourth column of the table indicates how
much, if any, of the pass-through amount is disregarded by the state in determining
the family TANF cash payment.

¹⁶ National Conference of State Legislatures. Child Support Project. Issue Brief: State
Child Support Pass-through Programs, by Teresa A. Myers. 2004.

Table 1. Treatment of Monthly Child Support Income
by the TANF Program, April 2007
^P^o^rt^io^{n o}^f^{Child Suppo}^rt^Co^llect^io^{n M}^a^{de o}ⁿ
^B^e^ha^lf^o^f^t^h^e^TANF^F^a^m^ily^t^h^a^t^{Is P}^a^sse^d
^Thro^ug^{h t}^o^t^h^{e TANF}^F^a^m^ily
^Am^o^{unt o}^f^Child^Am^o^unt^o^f
^Suppo^rt^Co^llect^ioⁿ^Am^o^unt^Pas^s^-th^rou^g^h
^St^a^t^e^{Counted for Fam}^ily’s^P^a^sse^d^Dⁱ^s^regard^e^d
^Ta^nf^Elig^ibilit^y^Thr^o^ug^h^{for Ben}^e^fi^t
^Det^erm^ina^t^ioⁿ^Co^m^put^a^t^ioⁿ
^A^rⁱ^z^on^a^N^on^e⁰⁰
^A^r^ka^nsa^s^A^l^l⁰⁰
^Co^lo^r^a^d^o^A^l^l⁰⁰
^Distrⁱ^{ct o}^f^Co^lu^m^b^ia^Noⁿ^e⁰⁰
^Flo^r^id^a^A^ll⁰⁰
^Idah^o^N^on^e⁰⁰
^In^di^an^a^N^A⁰⁰
^Iow^a^Non^e⁰⁰
^Kan^s^as^A^l^l⁰⁰
^K^e^nt^uc^ky^A^l^l^b^u^t^$⁵⁰⁰⁰
^Lo^ui^sⁱ^aⁿ^a^N^oⁿ^e⁰⁰
^Mary^lan^d^A^l^l⁰⁰
^Mⁱ^ssissip^pⁱ^A^l^l⁰⁰
^Mⁱ^sso^urⁱ^A^ll⁰⁰
^Mon^t^an^a^N^on^e⁰⁰
^Neb^r^ask^a^Noⁿ^e⁰⁰
^Nev^a^d^a^A^l^l⁰⁰
^New^Ham^p^sh^ire^N^oⁿ^e⁰⁰
^No^r^t^h^Car^o^lin^a^A^ll⁰⁰
^No^rth^Dak^o^ta^A^l^l⁰⁰
^Oh^io^A^l^l⁰⁰
^Ok^lah^o^m^a^A^l^l⁰⁰
^Oreg^oⁿ^A^l^l⁰⁰
^So^ut^{h D}^a^ko^t^a^A^l^l⁰⁰
^Utah^A^l^l⁰⁰
^W^a^shi^ngt^oⁿ^A^l^l⁰⁰
^Wy^omⁱⁿ^g^N^on^e⁰⁰
^A^l^as^k^a^A^l^l^bu^t^$50^$50^$50
^C^a^lⁱ^f^ornⁱ^a^A^l^l^bu^t^$50^$50^$50
^C^oⁿⁿ^ectⁱ^c^u^t^A^l^l^bu^t^$50^A^l^l^$50
^Illin^ois^A^{ll bu}^{t $50}^$50^$50
^Mas^s^ach^u^s^et^t^s^A^l^l^bu^t^$50^$50^$50
^Mi^chⁱ^g^an^N^A^{$50 $50}
^N^e^w^Jers^ey^A^l^l^bu^t^$50^$50^$50
^N^e^w^Mexⁱ^co^A^l^l^bu^t^$50^$50^$50
^N^e^w^Y^o^rk^A^l^l^bu^t^$50^$50^$50
^Penⁿ^s^y^l^v^aⁿⁱ^a^A^l^l^bu^t^$50^$50^$50
^R^h^{ode Is}^l^aⁿ^d^A^l^l^bu^t^$50^$50^$50
^V^e^rm^on^t^A^l^l^bu^t^$50^A^l^l^$50
^D^e^l^a^w^a^re^A^l^l^bu^t^$50^{$50 pl}^u^s^g^a^{p pay}^m^en^t^A^l^l^a^a
^Maiⁿ^e^A^l^l^bu^t^$50^{$50 pl}^u^s^g^a^{p pay}^m^en^t^A^l^l^a
^G^e^orgⁱ^a^N^on^e^g^{ap pay}^m^en^t^A^l^l
^So^u^t^h^Car^o^lin^a^A^ll^g^a^p^p^a^y^m^en^t^A^ll^a^a

^T^eⁿⁿ^e^s^s^e^e^N^on^e^g^{ap pay}^m^en^t^A^l^l

^P^o^rt^io^{n o}^f^{Child Suppo}^rt^Co^llect^io^{n M}^a^{de o}ⁿ
^B^e^ha^lf^o^f^t^h^e^TANF^F^a^m^ily^t^h^a^t^{Is P}^a^sse^d
^Thro^ug^{h t}^o^t^h^{e TANF}^F^a^m^ily
^Am^o^{unt o}^f^Child^Am^o^unt^o^f
^Suppo^rt^Co^llect^ioⁿ^Am^o^unt^Pas^s^-th^rou^g^h
^St^a^t^e^{Counted for Fam}^ily’s^P^a^sse^d^Dⁱ^s^regard^e^d
^Ta^nf^Elig^ibilit^y^Thr^o^ug^h^{for Ben}^e^fi^t
^Det^erm^ina^t^ioⁿ^Co^m^put^a^t^ioⁿ^b
^Haw^aⁱⁱ^A^l^l^s^{tate su}^p^p^l^em^en^t^A^ll^c
^Vⁱ^rgⁱⁿⁱ^a^A^l^l^bu^t^$50^{$50 pl}^u^s^T^A^N^F^m^a^t^c^h^pay^m^en^t^A^l^l
^Wⁱ^sc^oⁿ^sin^N^oⁿ^e^A^ll^A^l^l^d
^T^e^x^a^s^A^l^l^bu^t^$50^N^o^t^r^an^s^f^{er, u}^p^t^o^{$50 added t}^o^—
^TA^N^F^p^a^y^m^eⁿ^t^e
^Wes^t^Vⁱ^rgⁱⁿⁱ^a^A^l^l^bu^t^$50^N^o^t^r^an^s^f^{er, $25 added t}^o^T^A^N^F^—
^pay^m^en^t
^A^l^abam^a^{$50 $50}⁰
^Minⁿ^e^so^ta^A^l^l^A^ll⁰
^NA^{— No}^{t A}^v^ailab^l^e.
^{a. T}^h^{e g}^a^{p pay}^m^en^tⁱ^s^t^h^e^am^ouⁿ^t^of^chⁱ^l^d^s^u^pportⁱⁿ^com^e^t^h^atⁱ^s^equ^a^l^t^o^t^h^{e g}^a^{p bet}^w^een^t^h^{e s}^t^at^e’^s
^T^A^{NF n}^{eed s}^t^an^{dard an}^{d its}^m^a^xⁱ^m^u^m^pay^m^en^t.
^b^.^T^h^{e am}^o^uⁿ^t^o^f^th^{e state su}^p^p^l^em^en^{t is calcu}^lated^b^y^m^u^ltip^lyⁱⁿ^g⁰^.⁴⁶^o^f^th^{e to}^{tal am}^o^uⁿ^t^o^f^ch^ild
^s^u^pport^pai^d^t^o^t^h^{e s}^t^at^{e on}^beh^a^l^f^of^t^h^{e T}^A^N^F^f^a^mⁱ^l^y^.
^{c. T}^h^{e T}^A^N^F^m^a^t^c^h^pay^m^eⁿ^t^e^q^u^a^l^s^al^l^of^t^h^{e ch}ⁱ^l^d^s^u^pport^col^l^ect^{ed i}ⁿ^ex^ces^s^of^t^h^{e $50 pas}^s^-
^thr^o^{ugh a}^m^o^unt.^I^t^is^a^d^d^e^d^to^the^T^A^NF^p^a^y^m^eⁿ^t,^aⁿ^d^{is c}^o^nsid^e^r^e^d^aⁿ^a^d^d^itio^{n to}^the^T^A^NF
^c^a^s^{h b}^e^ne^fi^t^r^a^t^h^e^r^t^h^aⁿ^a^p^a^ss-t^h^r^o^{ugh o}^f^c^hⁱ^l^d^su^pportⁱⁿ^com^e^.
^{d. T}^h^{e s}^t^at^{e pay}^s^an^am^ouⁿ^t^equ^a^l^t^o^u^p^t^o^{$50 per m}^oⁿ^t^h^of^chⁱ^l^d^s^u^pport^col^l^ect^{ed on}^beh^a^l^f^of^t^h^e
^T^A^{NF f}^a^m^ily^{. T}^h^{is am}^o^uⁿ^t^{is co}ⁿ^s^id^er^ed^an^ad^d^itioⁿ^to^th^{e T}^A^{NF cash}^b^eⁿ^e^f^{it r}^a^th^er^th^an^a
^p^a^ss-t^h^r^o^{ugh o}^f^c^hⁱ^l^d^su^pportⁱⁿ^com^e^.
^{e. T}^h^{e s}^t^at^{e pay}^s^an^am^ouⁿ^t^equ^a^l^t^o^{$25 per m}^oⁿ^t^hⁱ^f^at^l^eas^t^{$25 i}ⁿ^chⁱ^l^d^s^u^pportⁱ^s^c^o^l^l^e^c^t^e^d^oⁿ
^b^e^h^a^lf^o^f^th^e^T^A^{NF f}^a^m^ily^{. T}^h^{is am}^o^uⁿ^t^{is co}ⁿ^s^id^er^ed^an^ad^d^itioⁿ^to^th^{e T}^A^{NF cash}^b^eⁿ^e^fⁱ^t
^r^a^t^h^e^r^t^h^aⁿ^a^p^a^ss-t^h^r^o^{ugh o}^f^c^hⁱ^l^d^su^pportⁱⁿ^com^e^.
^So^urce^{: T}^h^{e data in}^th^is^{table are bas}^e^d^onⁱⁿ^f^o^rm^ation^f^r^om^th^e^s^t^ates^obtain^e^{d in}^{a C}^oⁿ^g^r^es^sⁱ^on^al
^R^e^s^earch^Serv^ice^s^u^rv^ey^tog^e^th^{er w}^ith^s^u^rv^eyⁱⁿ^f^o^rm^ation^f^r^om^th^{e Urban}^In^s^titu^te^an^d^a²⁰⁰⁷^s^u^rv^ey
^con^d^u^c^{ted by}^th^{e C}^eⁿ^t^{er on}^L^a^w^an^{d Social P}^o^licy^.
Table 1 shows that the most common policy among the states is no pass-
through or disregard of child support collected on behalf of a TANF family. That is,
all child support is retained to reimburse the federal government and the states for the
cash welfare payment.
However, some states allow some amount of child support collected on a TANF
family’s behalf to be passed through to the family without negatively impacting the
family’s TANF payment (i.e., with a concurrent disregard of the pass-through
amount). Other states have child support pass-through policies but do not disregard
the income when determining TANF eligibility or payment amounts. Thus, while the
state may send all or a portion of current child support collections to TANF families,
the state simultaneously reduces the family’s TANF grant by the amount passed
through. As of April 2007, 27 states have no pass through or disregard policy; 12
states pass through and disregard up to $50 per month; 7 states pass through a gap
payment or supplement (3 of these states also pass-through an additional $50) and
disregard the entire amount of the monthly gap payment/supplement (plus the $50 if
passed-through); 2 states pass through and disregard an added amount to the TANF
cash benefit, but the amount is not considered a child support pass-through; 1 state

passes through all child support payments to custodial parents but does not disregard
any of that income; 1 state passes through up to $50 monthly but does not disregard
that income; and 1 state passes through and disregards all child support collected on
the family’s behalf.
DRA Pass-Through and Disregard Provisions
Among other things, the Deficit Reduction Act (DRA) of 2005 (P.L. 109-171,
enacted February 8, 2006) seeks to provide a stable source of income for all single-
parent families with a noncustodial parent. It simplifies CSE assignment and
distribution rules, and strengthens the “family-first” policies started in the 1996
welfare reform law.¹⁷
The DRA provides incentives to states in the form of federal cost sharing, to
direct more of the child support on behalf of TANF cash welfare families to the
families themselves (often referred to as a “family first” policy), as opposed to using
such collections to reimburse state and federal treasuries for welfare benefits paid to
families or to finance their child support programs. P.L. 109-171 will allow states
to pay up to $100 per month (or $200 per month for a family with two or more
children) in child support collected on behalf of a TANF or foster care family to the
family, and will not require the state to pay the federal government the federal share
of those collections. In order for the federal government to forgo its share of these
child support collections, the state is required to disregard (i.e. not count) the child
support collection paid to the family in determining TANF cash welfare eligibility¹⁸
and benefits.
The next two sections illustrate the effects of the DRA changes in child support
pass-through and disregard policies on both family budgets and federal and state
budgets. The impact is fairly complex, depending on a number of factors, including
the state’s current TANF policies regarding eligibility rules, benefit amounts, and
current child support pass-through and disregard rules; and a family’s circumstances,
such as earned income and the amount of child support paid by the noncustodial
parent. The impact of DRA policy is examined in six states (California, Illinois,
Maine, Maryland, Oklahoma, and West Virginia) for a mother with two children.
For this hypothetical family, the current TANF and child support policies were
simulated using varying assumptions of child support receipt and earnings of family¹⁹
members.

¹⁷ See CRS Report RS22377, Child Support Provisions in the Deficit Reduction Act of 2005
(P.L. 109-171), by Carmen Solomon-Fears.
¹⁸ The Congressional Budget Office (CBO) estimated that this provision would cost the
federal government $140 million over the five-year period FY2006-2010. This provision
takes effect on October 1, 2008, and thus the cost would apply only to two of these fiscal
years (FY2009 and FY2010).
¹⁹ The simulations were conducted using a computer program developed by the
Congressional Research Service (CRS) known as SysTTIM. For this report, the program
(continued...)

The states were chosen based on their child support pass-through and disregard
policy, and their maximum TANF cash benefit amounts.
^!California and Illinois both pass-through and disregard up to $50
monthly in child support payments. California is a relatively high
TANF benefit state and Illinois is a relatively low TANF benefit
state.
^!Maryland (relatively high benefit state) and Oklahoma (relatively
low benefit state) do not have a child support pass-through and
disregard policy.
^!West Virginia and Maine were chosen because they have special
rules for treating families with child support. Maine is a “gap
payment” (described above) state. West Virginia does not provide
a child support pass-through and disregard, but gives a $25
“incentive payment” added to the TANF grant for those families
with some (any amount) child support collected on their behalf.
The next section examines the impact of the DRA provisions on family income.
It is followed by a section on how the DRA provisions could affect government
budgets through TANF, the federal share of child support collections, and the state’s
share of child support collections.
Impact of DRA Provisions on Family Income
The DRA policies aim to increase the incomes of TANF cash welfare families.
This is a particular policy concern, since in all states the maximum TANF cash
welfare benefit is only a fraction of poverty-level income. California’s maximum
benefit for a family of three in January 2007 was $723 — the highest maximum
benefit of the six states closely examined in this report, but a benefit that represents
only about half of the 2007 federal poverty guideline for a family of three. Allowing
a family to keep $200 per month in child support increases family income by 14%
of the poverty threshold.
The increase in family income that would result from a state implementing
DRA’s full pass-through and disregard provisions depends on a number of factors.

¹⁹ (...continued)
simulates the impact of program rules on families and governments for hypothetical
families. The hypothetical family used in this report is a family with one adult and two
children (the “average” welfare family). The program allows the simulations of total
income, TANF benefits, and federal and state child support shares for this family when both
child support payments of the noncustodial parent and earnings of the custodial parent are
varied. The simulations are best used to illustrate how policy changes affect specific types
of families. However, the simulations are specific to the assumed characteristics of the
hypothetical family, and might not reflect the predominate or distributional effects of a
policy change on the population as a whole.

^!For families eligible and receiving TANF welfare before DRA rules
are implemented, the family can see an increase in income. For a
family composed of a parent with two children the maximum
increase in income would be $200. The increase in income would
be less if the noncustodial parent paid less than $200 in child support
and less in states that already paid some of the collected child
support to a TANF cash welfare family.
^!Implementing the DRA pass-through and disregard rules can make
some families newly eligible for TANF cash welfare. Families with
child support income greater than the TANF benefit are ineligible
for TANF (they receive the collected child support instead).
However, some such families might be made eligible for TANF if
up to $200 in child support were disregarded when determining
eligibility for TANF. If the family actually receives TANF (many
eligible families do not), its income would increase by some amount.
^!A family ineligible for TANF because its counted earnings are
higher than its state’s income eligibility threshold would see no
increase in income from implementing DRA’s pass-through and
disregard. Under the policies in effect in January 2007 and under the
new (fully phased-in) minimum wage of $7.25 per hour, families in
many states are ineligible for TANF even at 20 hours of work per
week. Among the six states closely examined in this report, only in
California would a mother of two working 40 hours per week at
$7.25 per hour be eligible for TANF based on January 2007 rules.
The next four tables illustrate the effects of implementing the new DRA pass-
through and disregard rules on family incomes. Table 2 presents the combined
TANF and child support income a mother of two would receive under a state’s
current pass-through and disregard policies compared with the amount she would
receive if the state implemented the maximum allowed under DRA. The table shows
the combined income for a family with zero earnings, with child support paid by the
noncustodial parent ranging from $0 per month²⁰ to $500 per month (shown in $100
increments). The table’s top panel shows the combined income under pre-DRA
policies; the middle panel shows combined income under DRA policies; and the
bottom panel displays the difference in combined TANF and child support income.
Generally, Table 2 shows that DRA policies would increase this family’s
combined monthly income by as much as $200 in the two states that currently do not
pass-through and disregard child support for TANF welfare families (Maryland and
Oklahoma) and by up to $150 in states that currently pass-through and disregard the
first $50 in child support (California and Illinois). The simulation assumes that West
Virginia would end its $25 child support incentive payment and instead adopt DRA’s
maximum child support pass-through and disregard policies. This would result in a
maximum increase in combined child support and TANF welfare income of as much
as $175 for this family in West Virginia. The maximum increase in Maine is $150;

²⁰ The zero per month amount is represented in the table as the “TANF Grant Only” column.

it has a pass-through and disregard of $50 but is also a “gap” state, that results in an
increase in the income of the hypothetical family by as much as $135 per month. The
simulation assumes that Maine would continue to provide this “gap” payment.
The amounts discussed above are the maximum increase in combined TANF
payments and child support income resulting from the adoption of DRA policies.
The increase would be less if the noncustodial parent paid less than $200 per month
in child support. It also would be less in some cases in Maine, because up to $185
in child support is already paid to the family. It also would be less than $200 for
some cases in other states; those families who would be newly eligible for TANF
because of the greater disregard of child support when determining TANF eligibility.
The mechanics of the increase in income for such newly-eligible TANF families is
discussed when describing Table 3.
Table 2. Monthly TANF and Child Support Income of
a Mother with No Earnings and Two Children,
Pre- and Post- DRA Policies
TANFMaximum ChildCombined TANF and Child Support
Grant Support Pass-Income, by Amount of Child Support
Onlythrough andPaid by the Noncustodial Parent
Disregard
$100 $200 $300 $400 $500
Pre-DRA Policies
California 723 50 773 773 773 773 773
Illinois 396 50 446 446 446 446 500
Maine 535 185^a 635 720 720 720 720
Maryland 549 0 549 549 549 549 549
Oklahoma 292 0 292 292 300 400 500
West Virginia3400365365365400500
DRA Policies
California 723 200 823 923 923 923 923
Illinois 396 200 496 596 596 596 596
Maine 535 335^b 635 735 835 870 870
Maryland 549 200 649 749 749 749 749
Oklahoma 292 200 392 492 492 492 500
West Virginia340200440540540540540
Difference
California 0 150 50 150 150 150 150
Illinois 0 150 50 150 150 150 96
Maine 0 150 0 15 115 150 150
Maryland 0 200 100 200 200 200 200
Oklahoma 0 200 100 200 192 92 0
West Virginia02007517517514040
^Source:^T^a^ble^prepared^by^th^e^C^oⁿ^g^r^es^sⁱ^on^al^R^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation
^m^odel^.
^{a. In}^cl^u^d^es^bot^h^t^h^{e $50 ch}ⁱ^l^d^s^u^pport^pas^s^-^t^h^ro^{ugh a}ⁿ^d^dⁱ^sr^e^g^a^r^d^aⁿ^d^t^h^e^{$135 “}^g^{ap” pay}^m^en^t^.
^{b. In}^cl^u^d^es^bot^h^t^h^{e $200 ch}ⁱ^l^d^s^u^pport^pas^s^-^t^h^ro^{ugh a}ⁿ^d^dⁱ^sr^e^g^a^r^d^aⁿ^d^t^h^e^{$135 “}^g^{ap” pay}^m^en^t^.

Table 3 provides more detail on the impact of DRA policies on the combined
child support and TANF income of a hypothetical mother with zero earnings and two
children. The table separately shows TANF and child support income under both
pre-DRA and DRA policies, assuming that the noncustodial parent makes a child²¹
support payment of $300 per month on behalf of the family. It also shows the
income as a percent of the FY2007 federal poverty guidelines.
DRA policies would increase income for this family by the maximum $200 per
month in Maryland and by $150 in California and Illinois. In FY2007, $200 per
month represents 14% of the federal poverty threshold and $150 represents almost
11% of the poverty threshold. Thus, the additional child support passed-through and
disregarded would significantly supplement the family’s income. The largest TANF
benefit in the table is California’s $723 per month — representing about half the
poverty level. Combined income for the hypothetical family in California, as shown
in Table 3, would rise to $923 per month, or 65% of the poverty threshold, under
DRA policies. Other states pay lower benefits and thus income from TANF
represents a smaller percentage of the poverty threshold, so that child support plays
an even greater role in lifting family income relative to the poverty level.
The hypothetical family of three in West Virginia would net that state’s
maximum increase of $175 (pass-through and disregard of $200 offset by elimination
of the $25 child support incentive payment). The increase in income in Maine is only
$115; the $200 disregard plus the gap payment would result in all $300 in child
support going to the family in Maine, compared with $185 in child support going to
the family under its pre-DRA $50 pass-through and disregard plus the gap payment.
In Oklahoma, the increase in total income from adopting a $200 pass-through
and disregard would be $192 per month for the hypothetical family of three with no
earnings. This example illustrates how the interaction of the child support disregard
and TANF eligibility thresholds can result in a reduced impact. Under pre-DRA
policies, the hypothetical family of three, with $300 in child support income per
month, would be ineligible for TANF cash welfare. The $300 in child support is
higher than the maximum TANF grant of $292 per month in Oklahoma. Thus, under
pre-DRA rules the family would receive $300 in child support but no TANF benefit.
However, if Oklahoma adopted a $200 child support pass-through and disregard, the
family would become eligible for TANF cash welfare. Its “countable” child support
income would be $100 ($300 minus the $200 disregarded), so the family would
receive the $292 TANF cash grant plus $200 in child support. The state and federal

²¹ This roughly corresponds to the average monthly amount of child support received by
custodial parents who received child support in 2003. The United States Census Bureau
periodically collects national survey information on child support. By interviewing a random
sample of single-parent families, the Census Bureau is able to generate an array of data that
is useful in assessing the performance of noncustodial parents in paying their child support.
The survey population includes all persons who have their own children under age 21 living
with them while the other parent lives outside the household. Census Bureau data indicated
that among custodial parents with income below the poverty level who received child
support, the average amount of child support received in 2003 (latest available data) was
$3,713. See U.S. Bureau of the Census. Custodial Mothers and Fathers and Their Child
Support: 2003, by Timothy S. Grail. Current Population Reports, P60-230. July 2006.

government would keep the other $100 in child support. The net gain to the family
would be $192 ($292 TANF cash grant minus the $100 in child support kept by the
state).
The Oklahoma example also illustrates how an increased child support pass-
through and disregard expands eligibility for cash welfare; that is, the hypothetical
family of three with child support of $300 is ineligible for TANF if no child support
is disregarded but becomes eligible if $200 of child support is disregarded. The
increased disregard permits families to receive child support without losing eligibility
for TANF cash.
Table 3. Monthly TANF and Child Support Income of
a Mother with No Earnings and Two Children,
With $300 in Child Support
^{Pre-DRA Po}^licy^{DRA Po}^licy
^Child^Child^C^h^an^ge
^T^ANF^Suppo^rt^Paid^to^To^t^a^l^Inc^o^m^e^T^ANF^Suppo^rt^Paid^to^To^t^a^l^Inc^o^m^e^{in To}^t^a^l^Inc^o^m^e
^Fa^m^ily^Fa^m^ily
^C^a^lⁱ^f^ornⁱ^a^$723^$50^$773^$723^$200^$923^$150
^I^llin^oⁱ^s³⁹⁶⁵⁰⁴⁴⁶³⁹⁶²⁰⁰⁵⁹⁶¹⁵⁰
^Maiⁿ^e⁵³⁵¹⁸⁵^a⁷²⁰⁵³⁵³⁰⁰^b⁸³⁵¹¹⁵
^Mary^l^aⁿ^d⁵⁴⁹⁰⁵⁴⁹⁵⁴⁹²⁰⁰⁷⁴⁹²⁰⁰
^O^k^l^a^h^o^m^a⁰³⁰⁰³⁰⁰²⁹²²⁰⁰⁴⁹²¹⁹²
^Wes^t^Vⁱ^rgⁱⁿⁱ^a³⁶⁵⁰³⁶⁵³⁴⁰²⁰⁰⁵⁴⁰¹⁷⁵
^As^{a Percen}^{t of th}^{e FY2007 Poverty G}^u^id^elin^es
^C^a^lⁱ^f^ornⁱ^a^51%^3%^54%^51%^14%^65%^11%
^I^llin^oⁱ^s²⁸³³¹²⁸¹⁴⁴²¹¹
^M^aⁿ^e³⁷¹⁵⁰³⁷²⁵⁸⁸
^Mary^l^aⁿ^d³⁸^{0 38}³⁸¹⁴⁵²¹⁴
^O^k^h^o^m⁰²¹²¹²⁰¹⁴³⁴¹³
^W^e^{st Vir}^gⁱⁿ^ia²⁶⁰²⁶²⁴¹⁴³⁸¹²
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^al^R^e^s^earch^Serv^ice^u^sⁱⁿ^g^th^e^Sy^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation
^m^odel^.
^No^tes:^S^o^m^e^of^t^h^{e percen}^t^a^g^e^s^h^a^v^e^been^rouⁿ^d^{ed. T}^h^{e F}^Y^{2007 Pov}^e^rt^y^G^uⁱ^d^elⁱⁿ^es^f^o^{r a 3-}^pers^on
^f^a^mⁱ^l^yⁱⁿ^t^h^{e 48 con}^tⁱ^g^u^o^u^s^s^t^at^esⁱ^s^{$17,170 per y}^{ear or $1,431 per m}^oⁿ^t^h^.
^{a. In}^cl^u^d^es^bot^h^t^h^{e $50 ch}ⁱ^l^d^s^u^pport^pas^s^-^t^h^ro^{ugh a}ⁿ^d^dⁱ^sr^e^g^a^r^d^aⁿ^d^t^h^e^{$135 “}^g^{ap” pay}^m^en^t^.
^b^.^Iⁿ^c^l^ud^e^s^bot^h^t^h^{e $200 ch}ⁱ^l^d^s^u^pport^pas^s^-^t^h^ro^{ugh a}ⁿ^d^dⁱ^sr^e^g^a^r^d^aⁿ^d^{$100 of}^t^h^{e $135 “}^g^ap”
^pay^m^en^t^.
Table 4 and Table 5 illustrate the impact of the DRA child support policies for
the hypothetical mother who has earnings and two children. She is assumed to earn
the new fully phased-in federal minimum wage of $7.25 per hour. Table 4 shows her
combined income if she works 20 hours per week; Table 5 shows her combined
income if she works 40 hours per week.

The tables illustrate that not all families with earnings would benefit from the
new DRA child support policies. Whether a family with earnings benefits would
depend on whether they would still qualify for TANF. Table 4 shows that a
hypothetical family of two children and a mother working half-time at the minimum
wage would receive the state’s maximum increase in income ($150) in California and
Maine. However, such a family would be ineligible for TANF under both pre-DRA
and DRA policies in Oklahoma and West Virginia. In both states, countable
earnings and child support would be too high for the family to qualify for a TANF
benefit.
In Illinois and Maryland, the hypothetical family of two children and a mother
working half-time at the minimum wage is ineligible for TANF under pre-DRA rules.
However, if up to $200 in child support was disregarded in those two states, such a
family would become eligible for TANF. The net increase in income in Illinois
would be $80 — the family would receive a TANF benefit of $180 but the state
would keep $100 of child support collections (to be split between itself and the
federal government). For Maryland, the net increase in income would be $101 —
the family would receive a TANF benefit of $201 but the state would keep $100 in
child support collections (to be split between itself and the federal government).
Table 4. Monthly TANF and Child Support Income of
a Mother with Half-Time Earnings and Two Children,
With $300 in Child Support
^{Pre-DRA Po}^licy^{DRA Po}^licy
^Ch^ild^Ch^ild
^S^uppor^t^S^uppor^t^Ch^an^g^e
^Gross^Pa^id^to^To^ta^l^Pa^id^to^To^ta^lⁱⁿ^To^ta^l
^Ea^rnⁱⁿ^g^s^TANF^Fa^m^ily^In^com^e^TANF^Fa^m^ily^In^com^e^In^com^e
^C^a^lⁱ^f^ornⁱ^a^$650^$511^$50^$1,210^$511^$200^$1,360^$150
^I^llin^oⁱ^s⁶⁵⁰⁰³⁰⁰⁹⁵⁰¹⁸⁰²⁰⁰¹^,⁰²⁹⁸⁰
^Maiⁿ^e⁶²⁸⁴¹⁰⁵⁰^1,088⁴¹⁰²⁰⁰^1,238¹⁵⁰
^Mary^l^aⁿ^d⁶²⁸⁰³⁰⁰⁹²⁸²⁰¹²⁰⁰^1,029¹⁰¹
^O^k^l^a^h^o^m^a⁶²⁸⁰³⁰⁰⁹²⁸⁰³⁰⁰⁹³⁸⁰
^We^s^t⁶²⁸⁰³⁰⁰⁹²⁸⁰³⁰⁰⁹³⁸⁰
^Vir^gⁱⁿ^ia
^As^{a Percen}^{t of th}^{e FY2007 Poverty G}^u^id^elin^es
^C^a^lⁱ^f^ornⁱ^a^45%^36%^3%^85%^36%^14%^95%^11%
^I^llin^oⁱ^s⁴⁵⁰²¹⁶⁶¹³¹⁴⁷²⁶
^Maiⁿ^e⁴⁴²⁹³⁷⁶²⁹¹⁴⁸⁷¹¹
^M^a^r^y^l^a^d⁰²¹⁶⁵¹⁴¹⁴⁷²⁷
^O^k^l^a^h^o^m^a⁴⁴⁰²¹⁶⁵⁰²¹⁶⁵⁰
^We^s^t⁴⁴⁰²¹⁶⁵⁰²¹⁶⁵⁰
^Vir^gⁱⁿ^ia
^Source:^T^a^ble^{prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^M^cas^e^sⁱ^m^u^lation
^m^odel^.
^No^tes:^Calif^o^rⁿⁱ^a’^{s an}^d^I^llin^oⁱ^s^’^mⁱⁿⁱ^m^u^m^w^a^g^e^o^f^$⁷^.⁵⁰^p^e^r^h^o^u^r^{is h}ⁱ^g^h^e^r^th^an^th^{e n}^e^w⁽^f^u^lly
^ph^as^ed-ⁱⁿ⁾^f^e^{deral m}ⁱⁿⁱ^m^u^m^w^a^g^e^of^{$7.25 per h}^o^u^r^{. Nu}^m^b^ersⁱⁿ^th^e^table^are^rouⁿ^d^ed^{to th}^{e n}^eares^t
^dol^l^a^{r. S}^o^m^e^of^t^h^e^percen^t^a^g^e^s^h^a^v^e^been^rouⁿ^d^{ed. T}^h^{e F}^Y^{2007 Pov}^e^rt^y^G^uⁱ^d^elⁱⁿ^es^f^o^{r a 3-}^pers^on
^f^a^mⁱ^l^yⁱⁿ^t^h^{e 48 con}^tⁱ^g^u^o^u^s^s^t^at^esⁱ^s^{$17,170 per y}^{ear or $1,431 per m}^oⁿ^t^h^.

Table 5 shows these simulations for the hypothetical family of two children and
a mother working full-time at the minimum wage. Under current policies, $300 in
child support would make such families ineligible for TANF in all six states. Only
in the state with the highest TANF benefit of the six — California — would the DRA
pass-through and disregard rules make a family eligible for TANF. The DRA rules
would produce a net income gain of $86 for such a family in California; it would
receive a TANF benefit of $186, but the state would keep $100 in collected child
support (to be split between itself and the federal government).
Table 5. Monthly TANF and Child Support Income of
a Mother with Full-Time Earnings and Two Children,
With $300 in Child Support
^{Pre-DRA Policy}^{DRA Policy}
^Ch^ild^Ch^ild
^S^uppor^t^S^uppor^t^Ch^an^g^e
^Gross^Pa^id^to^To^ta^l^Pa^id^to^To^ta^lⁱⁿ^To^ta^l
^Ea^rnⁱⁿ^g^s^TANF^Fa^m^ily^In^com^e^TANF^Fa^m^ily^In^com^e^In^com^e
^C^a^lif^or^nia^$1,299^$0^$300^$1,599^$186^$200^$1,685^$86
^I^llinois¹^,299⁰³⁰⁰^1,599⁰³⁰⁰^1,599⁰
^Ma^ine¹^,256⁰³⁰⁰^1,556⁰³⁰⁰^1,556⁰
^Ma^r^y^la^nd^1,256⁰³⁰⁰^1,556⁰³⁰⁰^1,556⁰
^O^k^la^hom^a¹^,256⁰³⁰⁰^1,556⁰³⁰⁰^1,556⁰
^We^s^t^1,256⁰³⁰⁰^1,556⁰³⁰⁰^1,556⁰
^Vⁱ^rg^inia
^{As a P}^ercen^{t of th}^{e F}^Y^{2007 Po}^v^e^r^t^{y G}^u^id^e^lin^e^s
^C^a^lif^or^nia^91%^0%^21%^112%^13%^14%^118%^6%
^I^llinois⁹¹⁰²¹¹¹²⁰²¹¹¹²⁰
^M^aⁱⁿ^e⁸⁸⁰²¹⁰⁹⁰²¹⁰⁹
^Ma^r^y^la^nd⁸⁸⁰²¹¹⁰⁹⁰²¹¹⁰⁹⁰
^O^k^la^hom^a⁸⁸⁰²¹¹⁰⁹⁰²¹¹⁰⁹⁰
^We^s^t⁸⁰²¹⁰⁹⁰²¹⁰⁹
^Vⁱ^rg^inia
^S^o^u^rce:^T^a^b^l^{e p}^r^ep^ared^b^y^t^h^{e Co}ⁿ^g^ressi^oⁿ^a^l^Research^S^e^rvi^{ce u}^sⁱⁿ^{g t}^h^{e S}^y^sT^T^I^M^{case si}^m^u^l^a^tⁱ^oⁿ^m^o^d^e^l^.
^Notes:^C^a^lif^or^nia^’^s^mⁱ^nim^u^m^w^a^g^e^of^{$7.50 pe}^r^hour^is^hig^h^e^r^thaⁿ^the^ne^w⁽^f^ully^pha^s^e^d-ⁱⁿ⁾^f^e^de^r^a^{l m}ⁱ^nim^u^m
^w^a^g^e^of^$7.25^pe^r^hour^{. Som}^e^of^the^pe^r^c^eⁿ^ta^g^e^s^ha^v^e^be^eⁿ^r^ounde^{d. T}^h^e^FY^{2007 P}^o^v^e^r^t^y^G^u^ide^line^s^f^o^r^a^3-
^pe^r^s^{on f}^a^m^ily^{in the}^{48 c}^ontig^uous^s^t^a^t^e^s^is^{$17,170 pe}^r^y^e^a^r^or^{$1,431 pe}^r^m^onth.

Impact of DRA Provisions on the States
and the Federal Government
Increasing the child support pass-through and disregard could increase the
income of some TANF welfare families, but at a cost to both federal and state
governments. Under pre-DRA law, the cost of passing-through and disregarding
child support collected for welfare families is borne by states. They finance child
support paid to welfare families from the state share of child support collections and
through TANF.²²
The DRA provides a financial incentive to states to pass-through and disregard
more child support collected on behalf of TANF cash welfare families, by reducing
its cost to the state and shifting some of these costs to the federal government.
However, the way costs are shifted is fairly complex. For many families, the cost to
the state would be lowered by shifting it to the federal government, which would see
a reduced federal share of child support collections flowing to the federal Treasury.
For other families, however, the costs of switching to the DRA policies would
actually be borne by the state through increasing TANF cash welfare expenditures.
This would occur in cases when disregarding additional child support makes families
newly eligible for TANF (and they actually receive the TANF cash for which they
become eligible).
Table 6 shows how the cost of increasing family income under DRA provisions
through the child support pass-through and disregard would be borne by the federal
government and the states for a family whose noncustodial parent pays $300 per
month in child support. For many hypothetical families shown on the table, a greater
share of the cost would be borne by the federal government through a reduced federal
share of child support collections.
However, there are examples in the table that show how the states — via the
TANF program — sometimes bear the cost.²³ In Oklahoma, a family with zero

²² TANF is financed by a combination of federal grants to states and state funds under a
maintenance of effort (MOE) requirement. Child support money collected on behalf of
TANF families that is passed through to the families and disregarded by the state in
determining TANF eligibility may be counted by the state toward meeting its MOE
requirement. For this analysis, any costs of a child support pass-through or disregard
financed via TANF is considered to be borne by the state. Federal TANF grants to the state
are generally fixed, and do not change based on how much a state pays in cash welfare or
its child support pass-through and disregard policies. The MOE amount for a state is also
fixed. In order to finance a child support pass-through and disregard through TANF, the
state must forgo using TANF or MOE funds for other purposes.
²³ In other words, the cost of the DRA pass-through and disregard policies could come from
increased TANF expenditures. Examples shown in the previous section of this report show
that some families ineligible for TANF without the pass-through and disregard would
become eligible for TANF cash welfare because of the pass-through and disregard. If they
actually receive TANF cash welfare (many eligible families do not, in fact, take-up receipt
of TANF cash welfare) the cost of the change to DRA policies could be borne by TANF.
(continued...)

earnings is ineligible for TANF if the noncustodial parent pays $300 per month in
child support. Under DRA policies, the family would be eligible for TANF since
$200 of that child support would be passed-through and disregarded. The family
would receive a $292 TANF benefit — a cost to the state from TANF. Under pre-
DRA policies, the state would retain no child support since the family is ineligible
for TANF. Under DRA policies, the state retains $100 of child support — sending
$68 to the federal government, and keeping $32.
Table 6. Source of Payment for Increase in Monthly Family
Income Resulting From DRA Policy, for a Mother with Two
Children, With $300 in Child Support
^Iⁿ^creas^eⁱⁿ^How^{the I}ⁿ^creas^e^I^s^{Paid For}
^Fa^m^ily^Inco^m^e^{Federal Share}
^{(DRA v}^s^Pre-^T^ANF^o^f^Child^St^a^t^{e Sha}^{re o}^f
^{DRA Po}^licy⁾^Suppo^rt^{Child Suppo}^rt
^Z^{ero E}^a^rnings^{for Cus}^t^{odial Parent}
^C^a^lⁱ^f^ornⁱ^a^$150^$0^$100^$50
^I^llin^oⁱ^s¹⁵⁰⁰¹⁰⁰⁵⁰
^Maiⁿ^e¹¹⁵⁰^-²³¹³⁸
^Mary^l^aⁿ^d²⁰⁰⁰¹⁰⁰¹⁰⁰
^O^k^l^a^h^o^m^a¹⁹²²⁹²^-⁶⁸^-³²
^Wes^t^Vⁱ^rgⁱⁿⁱ^a¹⁷⁵^-²⁵¹⁴⁶⁵⁴
^Half-T^im^{e E}^a^rnings^{at the M}ⁱⁿⁱ^m^u^m^W^{age for C}^u^s^t^odⁱ^a^l^Paren^t
^C^a^lⁱ^f^ornⁱ^a^$150^$0^$100^$50
^I^llin^oⁱ^s⁸⁰¹⁸⁰^-⁵⁰^-⁵⁰
^Maiⁿ^e¹⁵⁰⁰¹²⁷²³
^Mary^l^aⁿ^d¹⁰¹²⁰¹^-⁵⁰^-⁵⁰
^O^k^h^o^m⁰⁰⁰⁰
^W^e^s^t^Vⁱ^r^gⁿ^a
^Fu^l^l^-^Tⁱ^m^e^E^a^rnⁱⁿ^gs^{at th}^{e M}ⁱⁿⁱ^m^u^m^W^{age for C}^u^s^t^odⁱ^a^l^Paren^t
^C^a^lⁱ^f^ornⁱ^a^$86^$186^-^$50^-^$50
^I^llin^oⁱ^s⁰⁰⁰⁰
^M^aⁿ^e
^r^y^l^d⁰⁰⁰⁰
^O^k^a^h^o^m
^W^e^s^t^Vⁱ^r^gⁿ^a
^Source:^T^a^{ble prepared}^by^th^e^C^oⁿ^g^r^es^sⁱ^on^al^R^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation
^m^odel^.

²³ (...continued)
In 2003, an estimated 45.7% of TANF cash welfare-eligible families actually received
benefits. The examples in this section assume that if a family becomes eligible for TANF
through the pass-through and disregard policy, they in fact receive TANF.

The cost-sharing arrangements for the states vary, depending on their FMAP.
Poorer states must send back to the federal government a greater share of child
support collections than higher income states. For example, West Virginia sends
back 72.82% of its child support collections; Maryland sends back 50.00% of its
collections. Under pre-DRA policies, a poorer state has a relatively small share of
child support collections to pass through to cash welfare families. For example, if
a noncustodial parent pays $300 in child support collections, West Virginia only
retains $82. A $200 pass-through cannot be paid for through West Virginia’s share
of child support collections.
Under DRA policies, the federal government generally would bear a greater
share of the higher pass-through and disregard in poorer states compared to better off
states. For West Virginia, the federal government would pick up (i.e., forego)
72.82% of the $200 pass-through under DRA policies ($146) for a family with no
earnings. On the other hand, for Maryland, the federal government would pick up

50.00% or $100 of the $200 pass-through for a family with zero earnings.

However, the relationship between state income and cost-sharing of the DRA
pass-through and disregard is different when TANF picks up the cost. The higher the
TANF benefit, the higher the cost to the state of adopting the DRA pass-through and
disregard. Also, the lower the state’s per-capita income, the higher the FMAP — and
the lower the state share is to offset higher welfare costs that might result from the
DRA pass-through and disregard policy.
Table 6 illustrates the complexity of how the states and federal government
would share the cost of the DRA pass-through and disregard. With regard to the
custodial parent with no earnings, for the first four states shown, the increased pass-
through and disregard would be paid for by a reduction in the federal share of child
support collections, a reduction in the state share of child support collections, or a
reduction in both the federal and state shares of child support collections.
However, in Oklahoma, the implementation of a DRA pass-through and
disregard policy would result in the hypothetical family with no earnings and child
support income of $300 per month gaining $192 in extra income each month through
the TANF program. Before DRA, the family kept the entire $300 of child support
and was ineligible for TANF. Pursuant to DRA, the family would keep $200 per
month in child support income and become eligible for $292 in TANF payments, for
a total monthly income of $492. This additional income to the family would be paid
for by the state with TANF dollars. In this report TANF benefit expenditures are
considered a state cost. The other $100 in child support from the noncustodial parent
would be divided between the federal government and the state (in accordance with
the state’s FMAP). Thus, the federal government’s share of the child support
collection would be $68 and the state’s share would be $32. One way of interpreting
this information would be to say that DRA would result in the state paying $292 in
added TANF expenditures, which could be partially offset with the state’s share of
child support collections for a total state cost $260. Given that TANF is considered
a state cost in this analysis, the federal government would not incur any cost; instead
it would keep its $68 share of the child support collection.

Another anomaly occurs in West Virginia. In West Virginia, the table shows
the state saving $25 in TANF expenditures because the analysis assumes that West
Virginia would eliminate its $25 incentive payment (which currently is added to the
TANF benefit payment if the noncustodial parent pays any amount of child support)
once the DRA pass-through and disregard policy takes effect.
At half-time minimum wage earnings,²⁴ a mother with two children in California
and Maine would both receive $150 per month in additional income after
implementation of a DRA pass-through and disregard provisions. The federal share
of child support collections would be higher in Maine than in California partly
because Maine has a higher FMAP (63.27% versus 50.00%) and partly because
Maine has a $135 “gap” payment. In Illinois and Maryland the $200 pass-through
and disregard policy together with the states’ earnings disregard rules would enable
a mother with two children to remain on the TANF rolls (at half-time earnings),
which means that the state via the TANF program would pay the cost of providing
the families with the additional monthly income. (See Table 6.) It is also
noteworthy that Maine is the only state in which a family working at the half-time
minimum wage level benefits more than the family with no earnings. This is more
consistent with public policy that seeks to encourage both work among welfare
recipients and their cooperation in attaining child support. Although this situation
reflects effective use of CSE resources, it is also a result of Maine’s fill-the-gap
policy. As mentioned earlier, Maine is one of only five states that have a fill-the-gap
policy.
At full-time state minimum wage earnings ($7.50 per hour), a mother with two
children in California would receive $86 per month in additional income after
implementation of a DRA pass-through and disregard policy. In California the $200
pass-through and disregard policy together with the state’s earnings disregard rules
would enable a mother with two children to remain on the TANF rolls (at full-time
earnings), which means that the state via the TANF program would pay the cost of
providing the family with the additional monthly income. Again, one interpretation
of this information is that DRA would result in the state paying $186 in added TANF
expenditures which could be partially offset with the state’s share of child support
collections for a total state cost of $136. Given that TANF is considered a state cost
in this analysis, the federal government would not incur any cost, and it would keep
its $50 share of the child support collection.(See Table 6.)
With respect to the CSE program, it is noteworthy that the interests and
perspective of an individual family and the interests and perspective of the state CSE
program are not always in sync. The interests of a family are usually entirely
financial. It is in the best interest of a family to get the highest amount of income
available to it; thus, the higher the child support pass-through and disregard amount,
the more a family will potentially benefit. However, from a CSE program
perspective, the more dollars that the program has to invest in CSE activities (e.g.,
parent location, paternity establishment, support order establishment, collection of
child support payments), the better the program can serve its entire clientele. Thus,

²⁴ The half-time minimum wage earnings rate is $7.50 per hour in California (state minimum
wage rate) and $7.25 per hour in Maine (new fully phased-in federal minimum wage rate).

for many states the ability to retain child support collections outweighs the value of
a pass-through and disregard policy, particularly since the pass-through and disregard
would not benefit persons who never received cash TANF benefits (such persons
represented 39% of the CSE caseload in FY2006).
Potential Behavioral Implications of DRA Child
Support Pass-Through and Disregard Rules
The simulations described in the previous section of this report show the direct
impacts that DRA policies would have on family income and government budgets,
if they were adopted by states. They do not capture what would happen if the DRA
policies evoke changes in behavior, however, particularly in the willingness of
noncustodial parents to pay the child support they owe. The “costs” of implementing
DRA policies, in the form of reduced child support collections retained by the federal
and state governments and higher TANF benefits, could potentially be offset by
greater child support collections and quicker exits from TANF.
Since its inception, the rationale for the child support pass-through and disregard
policy has been that it would encourage custodial parents to cooperate with the CSE
program and further, that it would encourage noncustodial parents to comply with
their child support orders if they know that some of the payment would increase the
amount of financial support for their children. Several ethnographic/focus group
studies indicate that once they start paying child support, noncustodial parents want
to see that their money actually helps their children; explanations that welfare
benefits are in effect child support paid by taxpayers have not satisfied them.²⁵
Moreover, child support analysts contend that the noncustodial parent’s compliance
with his or her child support order may also lead to the noncustodial parent becoming
more involved in his or her child’s life (e.g., providing emotional support, parental
guidance, etc.).
On the other hand, during the late 1980s and early 1990s, the general perception
regarding the pass-through and disregard policy was that it was administratively
burdensome and that it failed to improve custodial parent cooperation or noncustodial
parent compliance. These negative perceptions were thought to outweigh the
financial benefits to the family and in part led to the elimination of the mandatory
$50 pass-through and disregard policy in 1996. It was also recognized that
eliminating the pass-through and disregard allowed states to “recover” a larger
portion of cash welfare payments.²⁶

²⁵ Manpower Demonstration Research Corporation. Parents’ Fair Share Demonstration.
Caring and Paying: What Fathers and Mothers Say About Child Support, by Frank F.
Furstenberg, Jr., Kay E. Sherwood, and Mercer L. Sullivan. July 1992. p. 57-76.
²⁶ Policy Studies, Inc. Exploring Options: Child Support Arrears Forgiveness and
Passthrough of Payments to Custodial Families, by James A. Hennessey and Jane Venohr.
February 9, 2000. p. 37.

There is some evidence that governments’ retention of child support payments
affects noncustodial parents’ attitudes toward child support. In a study of a program
to provide services to low-income noncustodial parents who were behind on their
child support (Parents’ Fair Share), noncustodial parents were asked whether certain
situations constituted “good reasons for not paying child support.” Almost one-third
of the parents said that “the child support money goes to welfare or the state, not the
children” was a good reason not to pay child support. However, this situation ranked
below others that respondents more frequently said provided good reasons not to pay
support; for example, that the noncustodial parent is unemployed, the child support
order is too high, and there are disagreements over how the money is spent.²⁷
The effectiveness of various child support pass-through and disregard policies
was examined as part of welfare reform experiments conducted in the 1990s. These
studies, however, focused on custodial parents’ receipt of child support income rather
than the noncustodial parents’ payment of child support. A number of these
evaluations (for example, the evaluation of Connecticut’s Job First program)
reported increased receipt of child support income.²⁸ This could result from the
direct effects of the pass-through and disregard policies as illustrated in this report.
Higher reported child support income could also result from other welfare reform
features that could have shortened welfare spells and reduced the amount of child
support assigned to and retained by governments.
The Wisconsin Child Support Demonstration Evaluation, based on an
experimental design, provides the most direct evidence of whether larger child
support pass-through and disregards change parental behavior. Under the Wisconsin
program, all child support was passed-through and disregarded as long as the
custodial parent remained eligible for cash assistance (had income below 115% of
poverty). The full pass-through and disregard was compared with a $50 child
support pass-through and disregard. The evaluation found that the full pass-through
and disregard was associated with increases in paternity establishment. It also found
that for some groups in some years, the full pass-through and disregard increased
noncustodial parents’ payment of child support.²⁹ However, that last effect was not
observed over the longer-term (i.e., six years of observations) for groups studied in
the evaluation.

²⁷ See Bloom, Dan and Kay Sherwood. Matching Opportunities to Obligations: Lessons for
Child Support Reform from the Parents’ Fair Share Pilot Phase. MDRC, April 1994.
²⁸ See Child Support and TANF Interaction: Literature Review, at [http://aspe.hhs.gov/
h s p / C S -T A N F -In t 03/report.htm] .
²⁹ Meyer, Daniel R. and Maria Cancian. W-2 Child Support Demonstration Evaluation
Phase 2: Final Report. Institute for Research on Poverty, University of Wisconsin-
Madison. July 2003. See also W-2 Child Support Demonstration Evaluation Report on
Nonexperimental Analyses, Volume III: Quantitative Nonexperimental Analyses,
Background Reports, by Judith Cassetty, Daniel Meyer, and Maria Cancian. 2002; and
Child Support and TANF Interaction: Literature Review, at [http://aspe.hhs.gov/hsp/CS-
T ANF-Int03/report.htm] .

A 2002 national non-experimental study found that the child support disregard
had a small but positive and statistically significant effect on paternity establishment
and the proportion of cases with collections.³⁰ However, a 2005 study found little or
no significant impact of the child support pass-through and disregard on the
percentage of TANF cases with child support collections.³¹
Conclusion
In 2003, the average amount of child support owed by noncustodial parents to
custodial parents with incomes below the poverty level (who had a legal child³²
support order) was $3,713 per year or about $300 per month. But, not all of the
parents who had custody of their children while the other parent lived elsewhere had
child support orders. If paternity for a child has not been established or a child
support obligation has not been legally established, the custodial parent is not entitled
to child support payments. Some research suggests that a child support pass-through
and disregard policy can help increase the number of paternities and child support
orders established by increasing the willingness of custodial parents to cooperate with
the Child Support Enforcement (CSE) agencies and by increasing the willingness of
noncustodial parents to comply with their child support obligations.
There are both advantages and disadvantages associated with a child support
pass-through and disregard policy. Some of the advantages include the following:
^!An increase in income available to families who receive Temporary
Assistance for Needy Families (TANF) cash benefit payments. As
illustrated in this report, child support can be a significant
contribution to family income for the families that receive TANF
payments. When combined with earnings, child support may lift
some families out of poverty.
^!Preparation for life without the regularity of a monthly public
assistance grant. Because the child support pass-through and
disregard are applied only when the noncustodial parent pays current
monthly child support payments, the family may experience some of
the ups-and-downs of irregular or partial child support payments

³⁰ Institute for Research on Poverty. University of Wisconsin-Madison. W-2 Child Support
Demonstration Evaluation on Nonexperimental Analyses, March 2002. See Chapter 1 of
Volume III, entitled — Child Support Disregard Policies and Program Outcomes: An
Analysis of Data from the OCSE, by Judith Cassetty, Maria Cancian, and Daniel Meyer. p.

17. [http://www.irp.wisc.edu/research/childsup/csde/publications/nonexp.htm]

³¹ Institute for Research on Poverty. University of Wisconsin-Madison. The Effects of
Child Support Pass-Through and Disregard Policies, by Maria Cancian, Daniel R. Meyer,
and Jen Roff. December 2005/Revised April 2006. p. 15.
³² U.S. Census Bureau. Custodial Mothers and Fathers and Their Child Support: 2003.
Current Population Reports, P60-230, by Timothy S. Grall. July 2006. See Table 5 in
[ h t t p : / / www.census.go v/ hhes/ www/ chi l d suppor t / c hl dsu03.pdf ] .

before they leave welfare and thereby be better able to adjust to these
“real life” situations when they leave the cash welfare program.
^!Recognition by the custodial parent that the noncustodial parent is
contributing to the financial support of his or her children. This may
help many families reduce conflict over child support obligations.
A pass-through of child support makes the connection between the
noncustodial parents’ resources and the needs of the child more
direct. This may also increase child support payment and paternity
establishment.
^!Improvement in parent-child relationships. Some research has
shown that parents who pay child support tend to be more involved
in the lives of their children and to participate in decisions that affect
them. Greater interaction with both parents has been found to foster
more positive outcomes for the child.
^!States can claim Maintenance of Effort (MOE) credit for child
support that is passed through to families receiving TANF cash
assistance and disregarded in determining their eligibility and the
amount of their benefit. This helps states meet their MOE
requirements in their TANF programs.
^!Administrative simplification. A pass-through and disregard policy
could increase the transparency of the CSE system by making it
easier for customers, child support personnel, and public officials to
understand the CSE program.³³
Some of the disadvantages of a child support pass-through and disregard policy
include the following:
^!The revenue a state would forego (i.e., state share of child support
collections made on behalf of TANF families) that otherwise could
be used to fund CSE activities.
^!The costs of making changes to the state’s automated system to
reflect pass-through and disregard policy. There is some
disagreement over the potential size of these costs.
^!The revenue the federal government would forego by having to share
with the states the costs of pass-through and disregard policies. The
federal government would thereby receive a reduced federal share of
child support collections in the federal Treasury.

³³ Policy Studies, Inc. Exploring Options: Child Support Arrears Forgiveness and
Passthrough of Payments to Custodial Families, by James A. Hennessey and Jane Venohr.
February 9, 2000. p. 44.

Additionally, some would say that child support disregard policies raise equity
concerns. They contend that pass-through and disregard policies can result in
different treatment of families with the same basic financial position in determining
TANF eligibility and benefits. For example, consider a family with $200 in unearned
income: one with $200 in child support of which all is disregarded, and another
receiving social security survivor benefits of $200, none of which is disregarded.
The family with disregarded child support would receive a higher total income, as it
could keep the $200 of child support without a reduction in TANF benefits, while the
full $200 in social security survivor benefits would (in most states) reduce TANF
benefits dollar for dollar. Others contend that such concerns are not justified because
child support is income that generally is earned by the noncustodial parent and that
such income should be treated differently than income from public benefits.
It also is argued that the premise of the pass-through and disregard policy —
promoting cooperation by custodial parents — may not be as important today as it
was in the past. Although cash welfare families have always been required to
cooperate in establishing paternity or obtaining support payments in order to receive
AFDC/TANF, the 1996 welfare reform law instituted a hefty penalty for
noncooperation. If it is determined that a custodial parent is not cooperating and the
individual does not qualify for any good cause or other exception, then the state must
reduce the family’s TANF benefit by at least 25% and may remove the family from
the TANF program. Also some analysts say that the increasing co-location of CSE
offices with welfare offices, together with outreach efforts directed at educating
families on the benefits of paternity and child support order establishment, enhance
cooperation policies. Thus, these analysts argue that the state no longer has to forego
its share of child support collections to garner cooperation of custodial parents in
CSE program functions. Other analysts point out that a pass-through and disregard
policy may be more important as a tool for encouraging cooperation from the
noncustodial parent, which could lead to lower enforcement costs.
The analysis in this report of six selected states found that implementation of a
Deficit Reduction Act (DRA) pass-through and disregard policy would financially
benefit all 3-person families in which the mother had no earnings. For those with
earnings, mothers in relatively high TANF benefit states would be more likely to
experience an increase in monthly income than mothers in low TANF benefit states.
Moreover, the analysis indicates that a mother with two children and no earnings
would benefit more in a state that currently does not have a child support pass-
through and disregard policy but that adopts such a policy under the new DRA rules.
Many of the states currently without a pass-through and disregard policy are high
FMAP states, which means that the money that they give back to the federal
government as the federal share of child support payments is higher than in other
states. Pursuant to DRA, the federal government would waive its share of child
support collections. Thus, many analysts and family advocates argue that it may be
to the states’ advantage to pass these dollars to the TANF families instead of to the
federal government.
It has been suggested that states that currently have a child support pass-through
and disregard policy could increase the amount of the pass-through and disregard to
$200 per month and use what would have been paid out of state funds as the federal

share of child support collections³⁴ to help fund the higher disregard amount or to
provide funding for more CSE activities.³⁵
Under federal law, the federal government is required to give states a CSE
incentive payment to reward the performance of effective state CSE programs.³⁶
Federal law stipulates that the CSE incentive payment to states (in the aggregate)
cannot exceed $471 million in FY2007. The incentive payment to an individual state
is based on five performance measures related to the establishment of paternity and
child support orders, collection of current and past-due child support payments, and
the cost-effectiveness of the state’s program; and its relative ranking compared to the
other states. It has been suggested that for all states adoption of the new DRA pass-
through and disregard policy would be a way to increase CSE funding via higher
incentive payments. According to some advocacy groups:
Adopting a generous pass-through and disregard policy also could increase the
amount of federal child support performance incentive payments a state receives.
These incentive payments are based on performance measures such as a state’s
paternity establishment and child support collection rates. If, as research has
found, these rates improve as a result of expanded pass-through and disregard³⁷
policies, the state could see its incentive funding increase.
It also has been suggested that when all DRA rules are fully implemented, CSE
federal funding will be significantly reduced. Some point out that the matching of³⁸
incentive payments will end on September 30, 2007 and if a state gives its share of
child support collections to the TANF family that source of funding (i.e., state share

³⁴ If pre-DRA a state with a 50% FMAP passed through and disregarded $100 per month in
child support collections to TANF families, it meant that the state did not retain its share of
the $100 (i.e., $50) and sent the federal government the federal share of the child support
collection (i.e., $50). If the state adopts the DRA child support pass-through and disregard
of $200 per month, the state could give the family the entire $200 without expending
additional state dollars. The state would forego its $100 and the federal government would
forego its $100.
³⁵ Center for Law and Social Policy and Policy Studies, Inc. More Child Support Dollars
to Kids: Using New State Flexibility in Child Support Pass-Through and Distribution Rules
to Benefit Government and Families, by Paul Legler and Vicki Turetsky. July 2006.
³⁶ P.L. 105-200, the Child Support Performance and Incentive Act of 1998 (enacted July 16,
1998). The CSE incentive is based on a percentage of a state’s child support collections and
the state’s performance on five program measures. Pursuant to P.L. 105-200, states are
required to reinvest any incentive payments received back into the CSE program (or an
activity that contributes to improving the effectiveness or efficiency of the CSE program).
³⁷ Center for Law and Social Policy and the Center on Budget and Policy Priorities.
Implementing the TANF Changes in the Deficit Reduction Act: “Win-Win” Solutions for
Familes and States, Second Edition. February 9, 2007.
³⁸ The elimination of federal reimbursement of CSE incentive payments will result in a
significant reduction in CSE financing. Under previous law, the federal match resulted in
a near tripling of state CSE funding/expenditures. For example, in FY2005, actual incentive
payments to states amounted to $446 million; the federal match (at the 66% rate) on the
incentive payments amounted to almost twice that figure, $865 million, which translated into
state spending of $1.311 billion on CSE activities.

of child support collections) for the CSE program will also end. They remark that
while TANF families may be adversely affected by a state not having a child support
pass-through and disregard policy, a better funded CSE program is more likely to
benefit the majority (85%) of the CSE caseload which consists of former TANF
families and families who have never been on TANF.³⁹
If some of the literature and research is true, a child support pass-through and
disregard policy could potentially result in more child support payments. Such child
support payments could reduce government spending by providing families with
incomes sufficient to make them ineligible for programs such as TANF, food stamps,
and Medicaid. This concept is called welfare “cost avoidance” — when noncustodial
parents meet their financial obligations to their children, the U.S. taxpayer is relieved
of that responsibility. Many child support advocates contend that the financial
impact of welfare cost avoidance should not be ignored in discussions of the costs
and benefits of CSE endeavors.
The CSE FY2005-FY2009 Strategic Plan proclaims that “child support is no
longer primarily a welfare reimbursement, revenue-producing device for the federal
and state governments; it is a family-first program, intended to ensure families’ self-
sufficiency by making child support a more reliable source of income.”⁴⁰ It appears
that a state’s implementation of a child support pass-through and disregard policy
may aid in that endeavor. According to a 2005 report:
Recent policy proposals that provide for a more generous pass-through and
disregard policy, and extend “family first” distribution rules to child support
collections made through the FTRO [federal income tax refund offset program],
would increase family income and self-sufficiency and reduce poverty, although⁴¹
government costs would increase.
Most state CSE programs are currently in the position (or most likely will be in
the near future) of having to compete with all other state interests in obtaining funds
from the general state treasury or county treasuries. Thus, regardless of the
advantages of adopting a child support pass-through and disregard policy, many
states may be facing a situation in which CSE resources are very limited and thereby
will be unable to pay the costs associated with adopting a pass-through and disregard
policy.

³⁹ In FY2006, TANF families represented 14.7% of the CSE caseload, former TANF
represented 45.9% of the CSE caseload, and families who had never been on TANF
represented 39.4% of the CSE caseload.
⁴⁰ Office of Child Support Enforcement. The National Child Support Enforcement Strategic
Plan for FY 2005-2009. p. 1.
⁴¹ Urban Institute. Benefits and Costs of Increased Child Support Distribution to Current
and Former Welfare Recipients: Final Report, by Laura Wheaton and Elaine Sorensen with
Victoria Russell and Jeff Versteeg. October 16, 2005. p. viii.

Appendix A. Impact of Child Support Pass-Through
and Disregard Policy on Families with No Earnings
or Specified Earnings, Analysis of Selected States
There are significant differences among states in terms of their TANF cash
benefit payments, and how they treat earnings, work expenses, and child support
income. All of these factors must be taken into account in order to calculate a
family’s cash welfare benefit and total income.
This appendix provides more detail on the impact of Deficit Reduction Act
(DRA, P.L. 109-171) provisions on families, depending on their income status and
the amount of child support paid on their behalf, in each of six states: California,
Illinois, Maine, Maryland, Oklahoma, and West Virginia. The analysis is limited to
the following income sources: TANF cash benefit payments, earnings, and child
support payments from noncustodial parents. In each of the six states the situation
of a mother with two children⁴² and no earnings, part-time minimum wage earnings,
and full-time minimum wage earnings is examined. With regard to the minimum
wage, this analysis uses the higher of $7.25 per hour (the new fully phased-in federal
minimum wage) or the state minimum wage.⁴³ Monthly earnings are calculated by
multiplying the hourly wage rate by 8 hours per day multiplied by five days per week
and multiplied by a factor of 4.33. For purposes of TANF eligibility and benefit
computations, the 4.33 factor is not used in Maryland, which is required by its TANF
manual to use a factor of 4.00 to determine the monthly amount or in West Virginia,
which is required by its TANF manual to use a factor of 4.30 to determine the
monthly amount.
The analysis in this appendix compares the total monthly income of the mother
with two children under the state’s current policy regarding treatment of earnings and
child support pass-through and disregard, with DRA policy. The analysis assumes
that the state would opt to pass-through and disregard up to $200 per month of child
support payments with the federal government sharing in the cost. Also, the analysis
only examines child support payments between $0 and $500 per month (the tables
show this range in $100 dollar increments).

⁴² The analysis assumes that there are two children in the family/household. Pursuant to
P.L. 109-171, a person with two or more children would get the maximum federally-
matched pass-through and disregard amount of $200 per month.
⁴³ As of February 22, 2007, 31 states (including the District of Columbia and the Virgin
Islands) had a minimum wage that was higher than the federal rate of $5.15 per hour
However, P.L. 110-28 (enacted May 25, 2007) includes a provision that increases the federal
minimum wage in three steps to $7.25 per hour (from $5.15 to $5.85 on July 24, 2007; to
$6.55 beginning July 24, 2008; to $7.25 beginning July 24, 2009). This report assumes a
federal minimum wage of $7.25 per hour, which is higher than all of the states examined in
this report except for California and Illinois. Both California and Illinois have a minimum
wage of $7.50 per hour.

California
California currently provides a $50 child support pass-through and disregard to
TANF recipients who receive at least $50 per month in child support payments from
noncustodial parents. The maximum monthly cash TANF benefit for a 3-person
family in California is $723. In determining TANF benefits, $225 plus 50% of
remaining gross monthly earnings is not counted (i.e., this amount is disregarded).
Although this analysis assumes that California will adopt the new pass-through
and disregard policy authorized under DRA, whether or not California will do so in
reality is not known at this time. There have been initiatives in California to
eliminate the existing $50 child support pass-through and disregard policy.
Opponents of the current policy contend that it diverts county resources from basic
CSE activities.⁴⁴
Zero Earnings. In California, a mother with two children and no earnings is
eligible for the maximum TANF benefit of $723 per month until the child support
paid by the noncustodial parent exceeds the monthly TANF maximum. If the
noncustodial parent pays at least $50 per month in child support, the family receives
a $50 child support pass-through and disregard payment. Thereby, total income to
the family amounts to $773 per month. (See Table A-1.) If the noncustodial parent
pays child support in the amount of $773 or more per month, the family stops
receiving TANF benefits and instead receives only the child support paid by the
noncustodial parent. (This analysis only examines the impact of child support
payments of up to $500 per month.)
Assuming that California adopts the new federally matched pass-through and
disregard policy (pursuant to the Deficit Reduction Act ), a mother with two and no
earnings would receive total monthly income of $923 ($723 from TANF and $200
from the child support pass-through and disregard) if the noncustodial parent paid at
least $200 per month in child support.⁴⁵
Half-Time Earnings at State Minimum Wage. Effective January 1, 2007,
the minimum wage in California is $7.50 per hour. A person working for 20 hours
per week earns $649.50 per month (i.e., $650 — dollar figures are rounded in all of
the tables in this report). As noted above, in California, $225 plus 50% of remaining

⁴⁴ California Performance Review Report. HHS10 Align State Law Regarding the $50 Child
Support Disregard Payments. [http://cpr.ca.gov/report/cprrpt/issrec/hhs/hhs10.htm] The
California Performance Review Report, mandated pursuant to the Governor’s executive
order of February 10, 2004, was created “to conduct a focused examination and assessment
of California state government. Based on that examination and assessment, CPR’s mandate
was to formulate and recommend practical changes to government agencies, programs and
operations to reduce total costs of operations, increase productivity, improve services and
make government more responsible and accountable to the public.”
⁴⁵ The family can only receive the amount of child support paid on its behalf by the
noncustodial parent. This means that if the noncustodial parent only paid $100 per month
in child support, the family’s total monthly income would amount to $823 ($723 from
TANF and $100 from child support).

earnings is not counted (i.e., disregarded from gross earnings) in determining a
family’s TANF benefit. Thus, a mother with two children who works half-time at
the California state minimum wage level is still eligible for a TANF cash benefit
payment of $511 per month.⁴⁶ If the noncustodial parent pays at least $50 per month
in child support, the family also receives a $50 child support pass-through and
disregard payment. Thereby, total monthly income to the family amounts to $1,211
($511 from TANF, $50 from the child support pass-through and disregard payment,
and $650 from earnings).
Assuming that California adopts the new federally matched pass-through and
disregard policy, a mother with two children and half-time earnings would receive
total monthly income of $1,361 ($511 from TANF, $200 from the child support pass-
through and disregard if the noncustodial parent paid at least $200 per month in child
support, and $650 from earnings).⁴⁷
Full-Time Earnings at State Minimum Wage. A person working for 40
hours per week at the California minimum wage of $7.50 per hour earns $1,299 per
month. A mother with two children who works full-time at the California state
minimum wage is eligible for a TANF cash benefit payment of $186 per month if the
noncustodial parent pays less than $236 per month in child support. The total
monthly income for this family is $1,535 ($186 from TANF, $50 from child support
pass-through and disregard if the noncustodial parent pays at least $50 per month in
child support, and $1,299 from earnings). If, however, the noncustodial parent pays
$300 per month in child support, the family’s total monthly income only consists of
earnings and the child support income (i.e., $1,599 — $300 from child support and
$1,299 from earnings).
Assuming that California adopts the new federally matched pass-through and
disregard policy, a mother with two children and full-time earnings would be eligible
for a TANF cash benefit payment of $186 per month if the noncustodial parent paid
less than $386 per month in child support. This mother with two children would
receive a total monthly income of $1,685 ($186 from TANF, $200 from the child
support pass-through and disregard if the noncustodial parent paid at least $200 per
month in child support and less than $386, and $1,299 from earnings). If, however,
the noncustodial parent paid $400 per month in child support, the family’s total
monthly income would only consist of earnings and the child support income (i.e.,
$1,699: $400 from child support and $1,299 from earnings).

⁴⁶ $723 [TANF maximum benefit] - ($650 [earnings] - $225-($650-$225/2)) = $511 [TANF
grant].
⁴⁷ If the noncustodial parent only paid $100 per month in child support, the family’s total
monthly income would amount to $1,261 ($511 from TANF, $100 from child support, and
$650 from earnings).

Table A-1. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in California
(numbers in dollars)
^Child^{Pre-DRA Po}^licy^{DRA Po}^licy
^Suppo^rt
^Paid^b^y^Gr^o^s^s^T^ANF^Child^To^t^a^l^Gr^o^s^s^T^ANF^Child^To^t^a^l^Difference
^No^ncust^o^dia^l^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^{in To}^t^a^l
^Parent^Inc^o^m^e^Inc^o^m^e^Inc^o^m^e
^No^E^a^rning^s
⁰⁰⁷²³⁰⁷²³⁰⁷²³⁰⁷²³⁰
¹⁰⁰⁰⁷²³⁵⁰⁷⁷³⁰⁷²³¹⁰⁰⁸²³⁵⁰
²⁰⁰⁰⁷²³⁵⁰⁷⁷³⁰⁷²³²⁰⁰⁹²³¹⁵⁰
³⁰⁰⁰⁷²³⁵⁰⁷⁷³⁰⁷²³²⁰⁰⁹²³¹⁵⁰
⁴⁰⁰⁰⁷²³⁵⁰⁷⁷³⁰⁷²³²⁰⁰⁹²³¹⁵⁰
⁵⁰⁰⁰⁷²³⁵⁰⁷⁷³⁰⁷²³⁵⁰⁰⁹²³¹⁵⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^S^t^{ate M}ⁱⁿⁱ^m^u^m^W^{age ($7.50 Per Hou}^r⁾
⁰⁶⁵⁰⁵¹¹⁰¹^,161⁶⁵⁰⁵¹¹⁰¹^,161⁰
¹⁰⁰⁶⁵⁰⁵¹¹⁵⁰^{1,211 650}⁵¹¹¹⁰⁰^1,261⁵⁰
²⁰⁰⁶⁵⁰⁵¹¹⁵⁰^{1,211 650}⁵¹¹²⁰⁰^1,361¹⁵⁰
³⁰⁰⁶⁵⁰⁵¹¹⁵⁰^{1,211 650}⁵¹¹²⁰⁰^1,361¹⁵⁰
⁴⁰⁰⁶⁵⁰⁵¹¹⁵⁰^{1,211 650}⁵¹¹²⁰⁰^1,361¹⁵⁰
⁵⁰⁰⁶⁵⁰⁵¹¹⁵⁰^{1,211 650}⁵¹¹²⁰⁰^1,361¹⁵⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^S^t^{ate M}ⁱⁿⁱ^m^u^m^W^{age ($7.50 Per Hou}^r⁾
⁰¹^,299¹⁸⁶⁰¹^,485^1,299¹⁸⁶⁰¹^,485⁰
¹⁰⁰^1,299¹⁸⁶⁵⁰^{1,535 1,299}¹⁸⁶¹⁰⁰^1,585⁵⁰
²⁰⁰^1,299¹⁸⁶⁵⁰^{1,535 1,299}¹⁸⁶²⁰⁰^1,685¹⁵⁰
³⁰⁰^1,299⁰³⁰⁰^{1,599 1,299}¹⁸⁶²⁰⁰^1,685⁸⁶
⁴⁰⁰^1,299⁰⁴⁰⁰^{1,699 1,299}⁰⁴⁰⁰^1,699⁰
⁵⁰⁰^1,299⁰⁵⁰⁰^{1,799 1,299}⁰⁵⁰⁰^1,799⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^e^Sy^s^T^T^I^M^cas^e^sⁱ^m^u^lation
^m^odel^.

Illinois
Illinois currently provides a $50 child support pass-through and disregard to
TANF recipients who receive at least $50 per month in child support payments from
noncustodial parents. The maximum monthly cash TANF benefit for a 3-person
family in Illinois is $396 per month. In determining TANF benefits, 66.67% of gross
monthly earnings is not counted (i.e., is disregarded).
Zero Earnings. In Illinois, a mother with two children and no earnings is
eligible for the maximum TANF benefit of $396 per month until the countable child
support paid by the noncustodial parent exceeds the TANF maximum. If the
noncustodial parent pays at least $50 per month in child support, the family receives
a $50 child support pass-through and disregard payment. Thereby, total income to
the family amounts to $446 per month. (See Table A-2.) If the noncustodial parent
pays child support in the amount of $446 or more per month, the family stops
receiving TANF benefits and instead receives only the child support paid by the
noncustodial parent. This analysis only examines the impact of child support
payments of up to $500 per month. At the $500 level, the family is not eligible for
TANF payments in Illinois and its total monthly income consists of the $500 in child
support payments.
Assuming that Illinois adopts the new federally matched pass-through and
disregard policy, a mother with two children and no earnings would receive total
monthly income of $596 ($396 from TANF and $200 from the child support pass-
through and disregard) if the noncustodial parent paid at least $200 per month in⁴⁸
child support. If the noncustodial parent paid child support in the amount of $596
or more per month, the family would not be eligible for TANF benefits and would
instead receive only the child support payment. As shown in the table, if the
noncustodial parent paid $500 in child support, the family would receive total
monthly income of $596 ($396 from TANF and $200 from the child support pass-
through and disregard).
Half-Time Earnings at State Minimum Wage. A person working for 20
hours per week at the Illinois state minimum wage ($7.50 per hour, effective July 1,
2007) earns $650 per month. In Illinois, two-thirds of gross earnings is not counted
(i.e., disregarded from gross earnings) in determining a family’s TANF benefit.
Thus, a mother who works half-time at the state minimum wage and has two
children is eligible for a TANF cash benefit payment of $180 per month⁴⁹ until the
noncustodial parent pays $230 per month or more in child support; at that point the
family no longer receives a TANF cash benefit payment. If the noncustodial parent
pays at least $50 but less than $230 per month in child support, the family also
receives a $50 child support pass-through and disregard payment. Total monthly
income to such a family amounts to $880 ($180 from TANF, $50 from the child
support pass-through and disregard if the noncustodial parent pays at least $50 in
child support, and $650 from earnings). If the family receives $300 in child support

⁴⁸ If the noncustodial parent paid only $100 per month in child support, the family’s total
monthly income would amount to $496 ($396 from TANF and $100 from child support).
⁴⁹ $396[TANF maximum benefit]- ($650[earnings]-(.6667*$650))=$180[TANF grant].

payments, the family has total monthly income amounting to $950 ($300 from child
support and $650 from earnings).
Assuming that Illinois adopts the new federally matched pass-through and
disregard policy, a mother with two children and half-time earnings would receive
total monthly income of $1,030 ($180 from TANF, $200 from the child support pass-
through and disregard if the noncustodial parent paid at least $200 per month in child
support but not more than $380 per month, and $650 from earnings). If the
noncustodial parent paid more than $380 per month in child support, the family
would not be eligible for TANF benefits and would instead receive only the mother’s
earnings and the child support paid. As shown in the table, if the family received
$400 in child support payments they would have a total monthly income of $1,050
($400 from child support and $650 from earnings).
Full-Time Earnings at State Minimum Wage. A person working for 40
hours per week at the Illinois state minimum wage of $7.50 per hour (effective July
1, 2007) earns $1,299 per month. A mother with two children who works full-time
at the new state minimum wage is not be eligible for a TANF cash benefit payment
in Illinois. Thus, the family’s total monthly income consists of the child support
payment from the noncustodial parent and the mother’s wages. As shown in the
table, if the family receives $400 per month in child support its total monthly income
amounts to $1,699 ($400 from child support and $1,299 from earnings).
Assuming that Illinois adopts the new federally matched pass-through and
disregard policy, a mother with full-time earnings and two children would not be
eligible for TANF benefits. The family’s total monthly income would still consist
of child support payments received from the noncustodial parent and the mother’s
earnings. For example, as seen in the table, a family who receives $400 in child
support would have total monthly income of $1,699 ($400 from child support and
$1,299 from earnings). Similarly, a family who receives $500 in child support would
have total monthly income of $1,799 ($500 from child support and $1,299 from
earnings). Thus, for a mother who works full-time and has two children, total
income under all scenarios is exactly the same pre- and post- DRA in Illinois.

Table A-2. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in Illinois
(numbers in dollars)
^Child^{Pre-DRA Po}^licy^{DRA Po}^licy
^Suppo^rt
^Paid^b^y^Gr^o^s^s^T^ANF^Child^To^t^a^l^Gr^o^s^s^T^ANF^Child^To^t^a^l^Difference
^No^ncust^o^dia^l^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^{in To}^t^a^l
^Parent^Inc^o^m^e^Inc^o^m^e^Inc^o^m^e
^No^E^a^rning^s
⁰⁰³⁹⁶⁰³⁹⁶⁰³⁹⁶⁰³⁹⁶⁰
¹⁰⁰⁰³⁹⁶⁵⁰⁴⁴⁶⁰³⁹⁶¹⁰⁰⁴⁹⁶⁵⁰
²⁰⁰⁰³⁹⁶⁵⁰⁴⁴⁶⁰³⁹⁶²⁰⁰⁵⁹⁶¹⁵⁰
³⁰⁰⁰³⁹⁶⁵⁰⁴⁴⁶⁰³⁹⁶²⁰⁰⁵⁹⁶¹⁵⁰
⁴⁰⁰⁰³⁹⁶⁵⁰⁴⁴⁶⁰³⁹⁶²⁰⁰⁵⁹⁶¹⁵⁰
⁵⁰⁰⁰⁰⁵⁰⁰⁵⁰⁰⁰³⁹⁶²⁰⁰⁵⁹⁶⁹⁶
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^S^t^{ate M}ⁱⁿⁱ^m^u^m^W^{age ($7.50 Per Hou}^r⁾
⁰⁶⁵⁰¹⁸⁰⁰⁸³⁰⁶⁵⁰¹⁸⁰⁰⁸³⁰⁰
¹⁰⁰⁶⁵⁰¹⁸⁰⁵⁰^{880 650}¹⁸⁰¹⁰⁰⁹³⁰⁵⁰
²⁰⁰⁶⁵⁰¹⁸⁰⁵⁰^{880 650}¹⁸⁰²⁰⁰^1,030¹⁵⁰
³⁰⁰⁶⁵⁰⁰³⁰⁰^{950 650}¹⁸⁰²⁰⁰^1,030⁸⁰
⁴⁰⁰⁶⁵⁰⁰⁴⁰⁰^{1,050 650}⁰⁴⁰⁰^1,050⁰
⁵⁰⁰⁶⁵⁰⁰⁵⁰⁰^{1,150 650}⁰⁵⁰⁰^1,150⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^S^t^{ate M}ⁱⁿⁱ^m^u^m^W^{age ($7.50 Per Hou}^r⁾
⁰¹^,299⁰⁰^1,299^1,299⁰⁰^1,299⁰
¹⁰⁰^1,299⁰¹⁰⁰^{1,399 1,299}⁰¹⁰⁰^1,399⁰
²⁰⁰^1,299⁰²⁰⁰^{1,499 1,299}⁰²⁰⁰^1,499⁰
³⁰⁰^1,299⁰³⁰⁰^{1,599 1,299}⁰³⁰⁰^1,599⁰
⁴⁰⁰^1,299⁰⁴⁰⁰^{1,699 1,299}⁰⁴⁰⁰^1,699⁰
⁵⁰⁰^1,299⁰⁵⁰⁰^{1,799 1,299}⁰⁵⁰⁰^1,799⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^al^R^e^s^earch^Serv^ice^u^sⁱⁿ^g^th^e^Sy^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation
^m^odel^.

Maine
Maine currently provides a $50 child support pass-through and disregard and a
“gap” payment to TANF recipients who receive at least $50 in monthly child support
payments from noncustodial parents. The maximum monthly cash TANF benefit
payment for a 3-person family in Maine is $535 per month. In determining TANF
benefits, $108 plus 50% of remaining gross monthly earnings is not counted (i.e., is
disregarded). In Maine, a family can use earnings or child support income to fill the
gap between what the state says a family of a certain size needs to subsist in the state
(the state’s TANF “standard of need”) and the maximum TANF payment for a family
of the given size. Maine’s standard of need for a 3-person family is $670 per month
and the payment maximum for a 3-person family is $535. Thus, the “gap” is $135
($670-$535). This means that up to $135 per month in earnings or child support
income is disregarded in determining the family’s TANF benefit (in addition to the
$50 pass-through and disregard).
Zero Earnings. In Maine, a mother with two children and no earnings is
eligible for the maximum TANF benefit of $535 per month until the countable child
support paid by the noncustodial parent exceeds the monthly TANF maximum. If
the noncustodial parent pays at least $50 per month in child support, the family
receives a $50 child support pass-through and disregard payment. If the noncustodial
parent pays $200 in child support, the family is able to take full advantage of the
disregard and gap payment provision in that $185 would go to the family without
affecting the family’s TANF benefit (i.e., $50 from the pass-through and disregard
and $135 from the fill-the-gap policy). Thereby, total income to the family amounts
to $720 per month ($535 from TANF, $50 from the pass-through and disregard, and
$135 from “gap” payment). (See Table A-3.) If the custodial parent’s countable
income is greater than the state’s TANF need standard, the family is no longer
eligible for TANF benefits. For a Maine mother with two children, this point occurs
if the noncustodial parent pays child support in the amount of $855 or more per
month. At that point, the family’s total monthly income consists entirely of the child
support paid by the noncustodial parent. (This analysis only examines the impact of
child support payments of up to $500 per month.)
Assuming that Maine adopts the new federally matched pass-through and
disregard policy, a mother with two children and no earnings would receive total
monthly income of $735 ($535 from TANF and $200 from the child support pass-
through and disregard if the noncustodial parent paid at least $200 per month in child
support). The family would be able to take full advantage of the pass-through and
disregard and gap payment if the noncustodial parent paid at least $335 per month
in child support. A family on whose behalf $400 in child support is paid would have
a total monthly income of $870 ($535 from TANF, $200 from child support, and
$135 from the gap payment).
Half-Time Earnings at Federal Minimum Wage. The Maine state
minimum wage is lower than the new fully-phased in federal minimum wage;
therefore, this analysis uses the new fully phased-in federal minimum wage ($7.25
per hour). A person working for 20 hours per week at the new federal minimum wage
earns $628 per month. As noted above, in Maine, $108 plus 50% of remaining
earnings is not counted (i.e., is disregarded from gross earnings) in determining a

family’s TANF benefit. Thus, a mother with two children who works half-time at
the federal minimum wage is eligible for a TANF cash benefit payment of $410 per
month until the noncustodial parent pays $460 per month or more in child support;
at that point the family no longer receives a TANF cash benefit payment. In Maine,
if the custodial parent has earnings, the “fill-the-gap” policy is achieved by
subtracting countable income from the state’s need standard rather the state’s
maximum payment amount.⁵⁰ If the noncustodial parent pays at least $50 but less
than $460 per month in child support, total monthly income to such a family amounts
to $1,088 ($410 from TANF — which includes the embedded $135 gap payment,
$50 from the child support pass-through and disregard, and $628 from earnings). If
the family receives $500 in child support payments, the family’s total monthly
income amounts to $1,128 ($500 from child support and $628 from earnings).
Assuming that Maine adopts the new federally matched pass-through and
disregard policy, a mother with two children and half-time earnings at the federal
minimum wage would be eligible for a TANF cash benefit payment of $410 per
month until the noncustodial parent paid $610 per month or more in child support;
at that point the family would no longer receive a TANF cash benefit payment. If the
noncustodial parent paid at least $200 but less than $610 per month in child support,
total monthly income to such a family would amount to $1,238 ($410 from TANF
— including the embedded $135 gap payment, $200 from the child support pass-
through and disregard, and $628 from earnings).
Full-Time Earnings at Federal Minimum Wage. A person working for
40 hours per week at the new fully-phased in federal minimum wage earns $1,256
per month. A mother with two children who works full-time at the new federal
minimum wage is not eligible for a TANF cash benefit payment in Maine, under
either current state rules or if the state adopts the DRA pass-through and disregard
policy. Thus, the family’s total monthly income consists of the child support
payment from the noncustodial parent and the mother’s wages. As shown in the
table, if the family receives $400 per month in child support its total monthly income
amounts to $1,656 ($400 from child support and $1,256 from earnings). The results
pre- and post- DRA are the same in all scenarios for a mother with two children who
works full-time in Maine.

⁵⁰ In Maine, the “gap” payment policy is calculated by subtracting countable income from
the state’s need standard — (($628[part-time earnings]-$108)*.5)=$260[countable income];
$670[need standard]-$260[countable income]=$410[TANF grant]. The difference between
the state’s need standard and maximum payment amount for a 3-person family is $135
($670-$535).

Table A-3. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in Maine
(numbers in dollars)
^Child^{Pre-DRA Po}^licy^{DRA Po}^licy
^Suppo^rt
^Paid^b^y^Gr^o^s^s^T^ANF^Child^To^t^a^l^Gr^o^s^s^T^ANF^Child^To^t^a^l^Difference
^No^ncust^o^dia^l^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^{in To}^t^a^l
^Parent^Inc^o^m^e^Inc^o^m^e^Inc^o^m^e
^No^E^a^rning^s
⁰⁰⁵³⁵⁰⁵³⁵⁰⁵³⁵⁰⁵³⁵⁰
¹⁰⁰⁰⁵³⁵¹⁰⁰^{635 0}⁵³⁵¹⁰⁰⁶³⁵⁰
²⁰⁰⁰⁵³⁵¹⁸⁵^{720 0}⁵³⁵²⁰⁰⁷³⁵¹⁵
³⁰⁰⁰⁵³⁵¹⁸⁵^{720 0}⁵³⁵³⁰⁰⁸³⁵¹¹⁵
⁴⁰⁰⁰⁵³⁵¹⁸⁵^{720 0}⁵³⁵³³⁵⁸⁷⁰¹⁵⁰
⁵⁰⁰⁰⁵³⁵¹⁸⁵^{720 0}⁵³⁵³³⁵⁸⁷⁰¹⁵⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^Fed^eral^Mⁱⁿⁱ^m^u^m^W^{age ($7.25 Per Hou}^r⁾
⁰⁶²⁸⁴¹⁰⁰¹^,038⁶²⁸⁴¹⁰⁰¹^,038⁰
¹⁰⁰⁶²⁸⁴¹⁰⁵⁰^{1,088 628}⁴¹⁰¹⁰⁰^1,138⁵⁰
²⁰⁰⁶²⁸⁴¹⁰⁵⁰^{1,088 628}⁴¹⁰²⁰⁰^1,238¹⁵⁰
³⁰⁰⁶²⁸⁴¹⁰⁵⁰^{1,088 628}⁴¹⁰²⁰⁰^1,238¹⁵⁰
⁴⁰⁰⁶²⁸⁴¹⁰⁵⁰^{1,088 628}⁴¹⁰²⁰⁰^1,238¹⁵⁰
⁵⁰⁰⁶²⁸⁰⁵⁰⁰^{1,128 628}⁴¹⁰²⁰⁰^1,238^-³⁰⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^Fed^eral^Mⁱⁿⁱ^m^u^m^W^{age ($7.25 Per Hou}^r⁾
⁰¹^,256⁰⁰^1,256^1,256⁰⁰^1,256⁰
¹⁰⁰^1,256⁰¹⁰⁰^{1,356 1,256}⁰¹⁰⁰^1,356⁰
²⁰⁰^1,256⁰²⁰⁰^{1,456 1,256}⁰²⁰⁰^1,456⁰
³⁰⁰^1,256⁰³⁰⁰^{1,556 1,256}⁰³⁰⁰^1,556⁰
⁴⁰⁰^1,256⁰⁴⁰⁰^{1,656 1,256}⁰⁴⁰⁰^1,656⁰
⁵⁰⁰^1,256⁰⁵⁰⁰^{1,756 1,256}⁰⁵⁰⁰^1,756⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^al^R^e^s^earch^Serv^ice^u^sⁱⁿ^g^th^e^Sy^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation
^m^odel^.

Maryland
Maryland currently does not provide a child support pass-through and disregard.
The maximum monthly TANF benefit for a 3-person family in Maryland is $549.
In determining TANF benefits, 40% of gross earnings is not counted (i.e., is
disregarded).
Zero Earnings. In Maryland, a mother with two children and no earnings is
eligible for the maximum TANF benefit until the child support paid by the
noncustodial parent exceeds the monthly TANF maximum. That point occurs at
$549 per month. If the noncustodial parent pays child support in the amount of $549
a month or more, the family stops receiving TANF benefits and instead receives only
the child support paid by the noncustodial parent. (The tables in this analysis only
examine child support payments of up to $500 per month.)
Assuming that Maryland adopts a pass-through and disregard policy when the
provisions of the Deficit Reduction Act take effect, a mother with two children and
no earnings would receive both child support paid by the noncustodial parent and
maximum TANF benefits up to a monthly total of $749 ($549 from TANF and $200
from the child support pass-through and disregard) if the noncustodial parent paid at
least $200 per month in child support.⁵¹ (See Table A-4.)
Half-Time Earnings at Federal Minimum Wage. The Maryland state
minimum wage is lower than the new fully phased-in federal minimum wage;
therefore, this analysis uses the new federal minimum wage ($7.25 per hour). A
person working for 20 hours per week at the federal minimum wage earns $628 per
month. In Maryland, 40% of gross earnings is not counted (i.e., is disregarded from
gross earnings) in determining a family’s TANF benefit. Thus, a mother with two
children who works half-time at the federal minimum wage is eligible for a TANF⁵²
cash benefit payment of $201 per month until the noncustodial parent pays $191 per
month or more in child support; at that point the family no longer receives a TANF
cash benefit payment.⁵³ Table A-4 shows that total monthly income to a mother with
two children and half-time earnings amounts to $829 if child support payments from
the noncustodial parent are less than $191 per month ($201 from TANF and $628
from earnings). If child support income exceeds $191 per month, the family’s total
monthly income consists of the child support payment plus earnings. For instance,
if the noncustodial parent pays $300 per month in child support, the family’s total
monthly income amounts to $928 ($300 from child support and $628 from earnings).
Assuming that Maryland adopts the new federally matched pass-through and
disregard policy, a mother with two children and half-time earnings at the federal

⁵¹ If the noncustodial parent only paid $100 per month in child support, the family’s total
monthly income would amount to $649 ($549 from TANF and $100 from child support).
⁵² $549[TANF maximum benefit]- ($580[earnings]-(.4*$580))=$201[TANF grant]. As
mentioned earlier, Maryland uses 4.00 rather than 4.33 as the factor to determine monthly
earnings (i.e., $7.25*20*4=$580).
⁵³ Maryland has a $10 minimum TANF payment rule which means that if the TANF benefit
payment is under $10, the family still receives a $10 per month TANF payment.

minimum wage would be eligible for a TANF cash benefit payment of $201 per
month until the noncustodial parent paid $391 per month or more in child support;
at that point the family would no longer receive a TANF cash benefit payment.⁵⁴ If
the noncustodial parent paid at least $200 but less than $391 per month in child
support, the family also would receive a $200 child support pass-through and
disregard payment. The family’s total monthly income would amount to $1,029
($201 from TANF, $200 from child support, and $628 from earnings). Table A-4
shows that if the noncustodial parent pays $400 per month or more in child support,
the family’s monthly income would consist of the entire amount of the child support
payment plus earnings.⁵⁵
Full-Time Earnings at Federal Minimum Wage. A Maryland mother
with two children who works full-time at the new fully-phased in federal minimum
wage ($7.25 per hour) is not eligible for a TANF cash benefit payment, under either
current state policy or if the state adopted the new DRA pass-through and disregard
policy. Instead, the family receives monthly earnings plus the child support payment.

⁵⁴ Maryland has a $10 minimum TANF payment rule which means that if the TANF benefit
payment is under $10, the family still receives a $10 per month TANF payment.
⁵⁵ If the noncustodial parent paid only $100 per month in child support, the family’s total
monthly income would amount to $929 ($201 from TANF, $100 from child support, and
$628 from earnings).

Table A-4. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in Maryland
(numbers in dollars)
^Child^{Pre-DRA Po}^licy^{DRA Po}^licy
^Suppo^rt
^Paid^b^y^Gr^o^s^s^T^ANF^Child^To^t^a^l^Gr^o^s^s^T^ANF^Child^To^t^a^l^Difference
^No^ncust^o^dia^l^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^{in To}^t^a^l
^Parent^Inc^o^m^e^Inc^o^m^e^Inc^o^m^e
^No^E^a^rning^s
⁰⁰⁵⁴⁹⁰⁵⁴⁹⁰⁵⁴⁹⁰⁵⁴⁹⁰
¹⁰⁰⁰⁵⁴⁹⁰^{549 0}⁵⁴⁹¹⁰⁰⁶⁴⁹¹⁰⁰
²⁰⁰⁰⁵⁴⁹⁰^{549 0}⁵⁴⁹²⁰⁰⁷⁴⁹²⁰⁰
³⁰⁰⁰⁵⁴⁹⁰^{549 0}⁵⁴⁹²⁰⁰⁷⁴⁹²⁰⁰
⁴⁰⁰⁰⁵⁴⁹⁰^{549 0}⁵⁴⁹²⁰⁰⁷⁴⁹²⁰⁰
⁵⁰⁰⁰⁵⁴⁹⁰^{549 0}⁵⁴⁹²⁰⁰⁷⁴⁹²⁰⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^Fed^eral^Mⁱⁿⁱ^m^u^m^W^{age ($7.25 Per Hou}^r⁾
⁰⁶²⁸²⁰¹⁰⁸²⁹⁶²⁸²⁰¹⁰⁸²⁹⁰
¹⁰⁰⁶²⁸²⁰¹⁰^{829 628}²⁰¹¹⁰⁰⁹²⁹¹⁰⁰
²⁰⁰⁶²⁸⁰²⁰⁰^{828 628}²⁰¹²⁰⁰^1,029²⁰¹
³⁰⁰⁶²⁸⁰³⁰⁰^{928 628}²⁰¹²⁰⁰^1,029¹⁰¹
⁴⁰⁰⁶²⁸⁰⁴⁰⁰^{1,028 628}⁰⁴⁰⁰^1,028⁰
⁵⁰⁰⁶²⁸⁰⁵⁰⁰^{1,128 628}⁰⁵⁰⁰^1,128⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^Fed^eral^Mⁱⁿⁱ^m^u^m^W^{age ($7.25 Per Hou}^r⁾
⁰¹^,256⁰⁰^1,256^1,256⁰⁰^1,256⁰
¹⁰⁰^1,256⁰¹⁰⁰^{1,356 1,256}⁰¹⁰⁰^1,356⁰
²⁰⁰^1,256⁰²⁰⁰^{1,456 1,256}⁰²⁰⁰^1,456⁰
³⁰⁰^1,256⁰³⁰⁰^{1,556 1,256}⁰³⁰⁰^1,556⁰
⁴⁰⁰^1,256⁰⁴⁰⁰^{1,656 1,256}⁰⁴⁰⁰^1,656⁰
⁵⁰⁰^1,256⁰⁵⁰⁰^{1,756 1,256}⁰⁵⁰⁰^1,756⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^ice^u^sⁱⁿ^g^th^e^Sy^s^T^T^I^M^cas^{e s}ⁱ^m^u^lation
^m^odel^.
^No^te:^T^h^e^Mar^y^lan^d^{state T}^A^{NF m}^aⁿ^u^a^{l stip}^u^l^{ates th}^{at g}^r^o^{ss ear}ⁿⁱⁿ^g^s^b^e^m^u^ltip^lied^b^yⁿ^u^m^b^e^r^o^f
^h^o^u^r^{s w}^o^r^k^ed^an^d^th^en^m^u^ltip^lied^b^y^{a f}^a^c^t^o^r^o^f⁴^.⁰⁰⁽ⁱⁿ^s^tead^o^f⁴^.³³⁾^to^d^e^ter^mⁱⁿ^{e m}^oⁿ^t^h^l^y^g^r^o^s^s
^earnⁱⁿ^g^s^.^F^o^r^pu^rpos^es^of^con^sⁱ^s^t^eⁿ^c^yⁱⁿ^t^h^{e t}^a^bl^es^{, w}^e^u^s^{ed a f}^act^{or of}^{4.33 t}^o^deri^v^e^g^r^os^s^m^oⁿ^t^h^l^y
^earⁿⁱⁿ^g^s^f^o^r^Mar^y^lan^d^{, b}^u^{t f}^o^r^th^e^b^eⁿ^e^f^it^calcu^latioⁿ^s^th^e^f^acto^r^o^f⁴^w^a^{s u}^s^ed⁽^p^u^r^su^an^{t to}^Mar^y^lan^d
^p^o^licy⁾^.

Oklahoma
Oklahoma currently does not provide a child support pass-through and
disregard. The maximum monthly TANF benefit for a 3-person family in Oklahoma
is $292. In determining TANF benefits, $240 plus 50% of gross earnings is not
counted (i.e., is disregarded)⁵⁶
Zero Earnings. In Oklahoma, a mother with two children and no earnings
is eligible for the maximum cash TANF benefit of $292 per month until the child
support paid by the noncustodial parent exceeds this maximum benefit level. If the
noncustodial parent pays child support in the amount of $292 per month or more, the
family stops receiving TANF cash benefits and instead receives the amount of child
support paid by the noncustodial parent. Table A-5 shows that when the
noncustodial parent pays $300 or more in child support, the family receives only the
child support paid by the noncustodial parent. For a mother with two children and
no earnings, this amount represents the total monthly income of the family.
Assuming that Oklahoma adopts a pass-through and disregard policy when the
provisions of the Deficit Reduction Act take effect, a mother with two children and
no earnings would receive both child support paid by the noncustodial parent and
maximum TANF benefits up to a monthly total of $492 ($292 from TANF and $200
from the child support pass-through and disregard if the noncustodial parent paid
$200 in child support). Once the family reached the maximum child support
disregard level of $200 per month, the family would stay at a monthly income of
$492 until it was no longer eligible for TANF. In this example, the family would no
longer be eligible for TANF benefits when the noncustodial parent paid $492 or more
in monthly child support. At that point, the family’s total income would consist⁵⁷
entirely of child support payments.
Half-Time Earnings at Federal Minimum Wage. The Oklahoma state
minimum wage is lower than the new fully phased-in federal minimum wage;
therefore, this analysis uses the new federal minimum wage ($7.25 per hour). A
person working for 20 hours per week at the federal minimum wage earns $628 per
month. In Oklahoma, $240 plus 50% of remaining earnings is not counted (i.e., is
disregarded from gross earnings) in determining a family’s TANF benefit. Thus, a
mother with two children who works half-time at the federal minimum wage is⁵⁸
eligible for a TANF cash benefit payment of $98 per month until the noncustodial
parent pays $98 per month or more in child support; at that point the family no longer
receives a TANF cash benefit payment. Table A-5 shows that total monthly income

⁵⁶ In Oklahoma, a deduction of $240 is allowed if a recipient works at least 30 hours a week,
or 20 hours per week, if the family has a child under age 6. Otherwise, the allowed
deduction is $120 plus 50% of remaining earnings.
⁵⁷ The family can only receive the amount of child support paid on its behalf by the
noncustodial parent. This means that if the noncustodial parent paid only $100 per month
in child support, the family’s total monthly income would amount to $392 ($292 from
TANF and $100 from child support).
⁵⁸ $292[TANF maximum benefit]- ($628[earnings]-$240-($628-$240/2))=$98[TANF grant].

to a mother with two children and half-time earnings amounts to $726 if child
support payments from the noncustodial parent are less than $98 per month ($98
from TANF and $628 from earnings). If the noncustodial parent pays $300 in child
support, the family’s total monthly income amounts to $928 ($300 from child support
and $628 from earnings). If child support income exceeds $98 per month, the
family’s total monthly income consists of the child support payment plus earnings.
Assuming that Oklahoma adopts the new federally matched pass-through and
disregard policy, a mother with two children and half-time earnings at the federal
minimum wage would be eligible for a TANF cash benefit payment of $98 per month
until the noncustodial parent paid $298 per month or more in child support; at that
point the family would no longer receive a TANF cash benefit payment. If the
noncustodial parent paid at least $200 but less than $298 per month in child support,
the family also would receive a $200 child support pass-through and disregard
payment. The family’s total monthly income would amount to $926 ($98 from
TANF, $200 from child support, and $628 from earnings). Table A-5 shows that if
the noncustodial parent pays $300 per month or more in child support, the family’s
monthly income would consist of the entire amount of the child support payment plus⁵⁹
earnings.
Full-Time Earnings at Federal Minimum Wage. An Oklahoma mother
with two children who works full-time at the new federal minimum wage is not
eligible for a TANF cash benefit payment, under either current state rules or the new
child support pass-through and disregard policy allowed by DRA. Instead, the family
receives monthly earnings plus the child support payment.

⁵⁹ If the noncustodial parent paid only $100 per month in child support, the family’s total
monthly income would amount to $826 ($98 from TANF, $100 from child support, and
$628 from earnings).

Table A-5. Impact of DRA Policy on Total Monthly Income for a
Single Mother With Two Children in Oklahoma
(numbers in dollars)
^Child^{Pre-DRA Po}^licy^{DRA Po}^licy
^Suppo^rt
^Paid^b^y^Gr^o^s^s^T^ANF^Child^To^t^a^l^Gr^o^s^s^T^ANF^Child^To^t^a^l^Difference
^No^ncust^o^dia^l^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^{in To}^t^a^l
^Parent^Inc^o^m^e^Inc^o^m^e^Inc^o^m^e
^No^E^a^rning^s
⁰⁰²⁹²⁰²⁹²⁰²⁹²⁰²⁹²⁰
¹⁰⁰⁰²⁹²⁰^{292 0}²⁹²¹⁰⁰³⁹²¹⁰⁰
²⁰⁰⁰²⁹²⁰^{292 0}²⁹²²⁰⁰⁴⁹²²⁰⁰
³⁰⁰⁰⁰³⁰⁰^{300 0}²⁹²²⁰⁰⁴⁹²¹⁹²
⁴⁰⁰⁰⁰⁴⁰⁰^{400 0}²⁹²²⁰⁰⁴⁹²⁹²
⁵⁰⁰⁰⁰⁵⁰⁰^{500 0}⁰⁵⁰⁰⁵⁰⁰⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^Fed^eral^Mⁱⁿⁱ^m^u^m^W^{age ($7.25 Per Hou}^r⁾
⁰⁶²⁸⁹⁸⁰⁷²⁶⁶²⁸⁹⁸⁰⁷²⁶⁰
¹⁰⁰⁶²⁸⁰¹⁰⁰^{728 628}⁹⁸¹⁰⁰⁸²⁶⁹⁸
²⁰⁰⁶²⁸⁰²⁰⁰^{828 628}⁹⁸²⁰⁰⁹²⁶⁹⁸
³⁰⁰⁶²⁸⁰³⁰⁰^{928 628}⁰³⁰⁰⁹²⁸⁰
⁴⁰⁰⁶²⁸⁰⁴⁰⁰^{1,028 628}⁰⁴⁰⁰^1,028⁰
⁵⁰⁰⁶²⁸⁰⁵⁰⁰^{1,128 628}⁰⁵⁰⁰^1,128⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^Fed^eral^Mⁱⁿⁱ^m^u^m^W^{age ($7.25 Per Hou}^r⁾
⁰¹^,256⁰⁰^1,256^1,256⁰⁰^1,256⁰
¹⁰⁰^1,256⁰¹⁰⁰^{1,356 1,256}⁰¹⁰⁰^1,356⁰
²⁰⁰^1,256⁰²⁰⁰^{1,456 1,256}⁰²⁰⁰^1,456⁰
³⁰⁰^1,256⁰³⁰⁰^{1,556 1,256}⁰³⁰⁰^1,556⁰
⁴⁰⁰^1,256⁰⁴⁰⁰^{1,656 1,256}⁰⁴⁰⁰^1,656⁰
⁵⁰⁰^1,256⁰⁵⁰⁰^{1,756 1,256}⁰⁵⁰⁰^1,756⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^al^R^e^s^earch^Serv^ice^u^sⁱⁿ^g^th^e^Sy^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation
^m^odel^.

West Virginia
West Virginia currently does not provide a child support pass-through and
disregard. Instead, it provides a $25 incentive payment that is added to the TANF
payment. The maximum monthly cash TANF benefit for a 3-person family in West
Virginia is $340. In determining TANF benefits, 40% of gross earnings is not
counted (i.e., is disregarded).
Zero Earnings. In West Virginia, a mother with two children and no
earnings is eligible for the maximum TANF benefit equal to $340 per month plus a
child support incentive payment of $25 per month, if the noncustodial parent pays
some (any amount) child support. If the noncustodial parent pays $390 or more in
child support, the family is not eligible for a TANF payment. Instead, monthly
income for the family consists entirely of child support income paid by the
noncustodial parent.
Assuming that West Virginia adopts a pass-through and disregard policy when
the provisions of the Deficit Reduction Act take effect, a mother with two children
and no earnings would receive both child support income and maximum TANF
benefits up to a monthly total of $540 ($340 from TANF and $200 from child
support pass-through and disregard income if the noncustodial parent paid at least
$200 in child support payments).⁶⁰ Once the family received the maximum child
support disregard income of $200 per month, they would stay at a monthly income
level of $540 until they were no longer eligible for a cash TANF payment. At that
point, the family’s total monthly income would consist entirely of child support
payments. (See Table A-6.)⁶¹
Half-Time Earnings at Federal Minimum Wage. The West Virginia state
minimum wage is lower than the new fully phased-in federal minimum wage;
therefore, this analysis uses the new federal minimum wage ($7.25 per hour). A
West Virginia mother with two children who works half-time at the federal minimum⁶²
wage is not eligible for a TANF cash benefit payment, under either current state
rules or the pass-through and disregard policy allowed by DRA. Instead, the family
receives monthly earnings plus the child support payment.
Full-Time Earnings at Federal Minimum Wage. A West Virginia mother
with two children who works full-time at the new fully-phased in federal minimum
wage also is not eligible for a TANF cash benefit payment under either current or
DRA policy. Instead, the family receives monthly earnings plus the child support
payment.

⁶⁰ This analysis assumes that if the state adopts the DRA pass-through and disregard, it
would eliminate the $25 incentive payment.
⁶¹ If the noncustodial parent paid only $100 per month in child support, the family’s total
monthly income would amount to $440 ($340 from TANF and $100 from child support).
⁶² $340[TANF maximum benefit]- ($628[earnings]-(.4*$628))=-$37; thereby the TANF
grant=0.

Table A-6. Impact of DRA Policy on Total Monthly Income for a Single
Mother With Two Children in West Virginia
(numbers in dollars)
^Child^{Pre-DRA Po}^licy^{DRA Po}^licy
^Suppo^rt
^Paid^b^y^Gr^o^s^s^T^ANF^Child^To^t^a^l^Gr^o^s^s^T^ANF^Child^To^t^a^l^Difference
^No^ncust^o^dia^l^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^Ea^rⁿ^ing^s^Gr^aⁿ^t^Suppo^rt^Inc^o^m^e^{in To}^t^a^l
^Parent^Inc^o^m^e^Inc^o^m^e^Inc^o^m^e
^No^E^a^rning^s
⁰⁰³⁴⁰⁰³⁴⁰⁰³⁴⁰⁰³⁴⁰⁰
¹⁰⁰⁰³⁶⁵⁰^{365 0}³⁴⁰¹⁰⁰⁴⁴⁰⁷⁵
²⁰⁰⁰³⁶⁵⁰^{365 0}³⁴⁰²⁰⁰⁵⁴⁰¹⁷⁵
³⁰⁰⁰³⁶⁵⁰^{365 0}³⁴⁰²⁰⁰⁵⁴⁰¹⁷⁵
⁴⁰⁰⁰⁰⁴⁰⁰^{400 0}³⁴⁰²⁰⁰⁵⁴⁰¹⁴⁰
⁵⁰⁰⁰⁰⁵⁰⁰^{500 0}³⁴⁰²⁰⁰⁵⁴⁰⁴⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^Fed^eral^Mⁱⁿⁱ^m^u^m^W^{age ($7.25 Per Hou}^r⁾
⁰⁶²⁸⁰⁰⁶²⁸⁶²⁸⁰⁰⁶²⁸⁰
¹⁰⁰⁶²⁸⁰¹⁰⁰^{728 628}⁰¹⁰⁰⁷²⁸⁰
²⁰⁰⁶²⁸⁰²⁰⁰^{828 628}⁰²⁰⁰⁸²⁸⁰
³⁰⁰⁶²⁸⁰³⁰⁰^{928 628}⁰³⁰⁰⁹²⁸⁰
⁴⁰⁰⁶²⁸⁰⁴⁰⁰^{1,028 628}⁰⁴⁰⁰^1,028⁰
⁵⁰⁰⁶²⁸⁰⁵⁰⁰^{1,128 628}⁰⁵⁰⁰^1,128⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^Fed^eral^Mⁱⁿⁱ^m^u^m^W^{age ($7.25 Per Hou}^r⁾
⁰¹^,256⁰⁰^1,256^1,256⁰⁰^1,256⁰
¹⁰⁰^1,256⁰¹⁰⁰^{1,356 1,256}⁰¹⁰⁰^1,356⁰
²⁰⁰^1,256⁰²⁰⁰^{1,456 1,256}⁰²⁰⁰^1,456⁰
³⁰⁰^1,256⁰³⁰⁰^{1,556 1,256}⁰³⁰⁰^1,556⁰
⁴⁰⁰^1,256⁰⁴⁰⁰^{1,656 1,256}⁰⁴⁰⁰^1,656⁰
⁵⁰⁰^1,256⁰⁵⁰⁰^{1,756 1,256}⁰⁵⁰⁰^1,756⁰
^Source:^T^a^ble^prepared^by^th^e^C^oⁿ^g^r^es^sⁱ^on^al^R^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation
^m^odel^.
^No^te:^T^h^{e W}^e^{st Vir}^gⁱⁿ^{ia state}^T^A^NF^m^aⁿ^u^a^{l stip}^u^l^{ates th}^{at g}^r^o^{ss ear}ⁿⁱⁿ^g^s^b^e^m^u^ltip^lied^b^yⁿ^u^m^b^e^r
^o^f^h^o^u^r^{s w}^o^r^k^ed^an^d^th^en^m^u^ltip^lied^b^y^{a f}^acto^r^o^f⁴^.³⁽ⁱⁿ^s^tead^o^f⁴^.³³⁾^to^d^e^ter^mⁱⁿ^{e m}^oⁿ^t^h^l^y^g^r^o^s^s
^earnⁱⁿ^g^s^.^F^o^r^pu^rpos^es^of^con^sⁱ^s^t^eⁿ^c^yⁱⁿ^t^h^{e t}^a^bl^es^{, w}^e^u^s^{ed a f}^act^{or of}^{4.33 t}^o^deri^v^e^g^r^os^s^m^oⁿ^t^h^l^y
^e^a^rⁿⁱⁿ^g^s^f^o^r^W^e^{st Vir}^gⁱⁿ^{ia, b}^u^{t f}^o^r^th^{e b}^eⁿ^e^f^{it calcu}^latioⁿ^s^th^{e f}^acto^r^o^f⁴^.³^w^a^{s u}^s^ed⁽^p^u^r^su^an^t^t^o
^W^e^{st Vir}^gⁱⁿ^{ia p}^o^licy⁾^.

Appendix B. Impact of DRA Policy on Federal and
State Share of Child Support Collections, Analysis
of Selected States
To determine the distribution of child support collections among families, the
state, and the federal government, states must adhere to state and federal child
support assignment and distribution rules and calculate the federal and state share of
child support collections based on the state’s federal medical assistance percentage
(FMAP).
This appendix discusses the impact of Deficit Reduction Act (DRA) policy on
the distribution of child support collections among families, the state, and the federal
government, based on family income status, in six states: California, Illinois, Maine,
Maryland, Oklahoma, and West Virginia. The impact of DRA policy is based on the
assumption that each of the states would opt to pass-through and disregard up to $200
per month of child support payments made by noncustodial parents with the federal
government sharing in the cost. In each of the six states the situation of a mother
with two children and no earnings, with part-time minimum wage earnings, and with
full-time minimum wage earnings is examined. Also, the analysis only examines
child support payments between $0 and $500 per month (the tables show this range
in $100 dollar increments).
Assignment and Distribution Rules for TANF Families
Child support collections are either distributed to families or retained by the
state and federal governments as reimbursement for welfare costs. Current child
support payments⁶³ collected on behalf of nonwelfare families go to the family (via
the state Disbursement Unit). Current child support payments collected on behalf
of Temporary Assistance for Needy Families (TANF) families are split between the
federal and state governments, and at state option some, all, or none of the state’s
share of the child support collections can be paid to TANF families.
Under P.L. 104-193, the 1996 welfare reform law, the rules governing how child
support collections are distributed changed substantially. Pursuant to P.L. 109-171,
effective October 1, 2008, at state option, the child support distribution rules will
change again.
Since the Child Support Enforcement (CSE) program’s inception, the rules
determining who actually gets the child support arrearage payments have been
complex. It is helpful to think of the rules in two categories. First, there are rules in
both federal and state law that stipulate who has a legal claim on the payments owed
by the noncustodial parent. These are called assignment rules. Second, there are rules
that determine the order in which child support collections are paid in accordance
with the assignment rules. These are called distribution rules. The order of payment

⁶³ “Current” child support refers to the amount of child support that is required to be paid
to the custodial parent for the month in which it is collected.

of the child support collection is very important because in many cases child support
obligations are never fully paid.
Current TANF Recipients. As a condition of TANF eligibility, when a
family applies for TANF, the custodial parent must assign to the state the right to
collect both current child support payments and past-due child support obligations
that accrue while the family is on the TANF rolls (these are called permanently-
assigned arrearages). The assignment requirement for TANF applicants also includes
arrearage payments that accumulated before the family enrolled in TANF (these are
called pre-assistance arrearages).
While the family receives TANF benefits, the state is permitted to retain any
current support and any assigned arrearages it collects up to the cumulative amount
of TANF benefits that have been paid to the family.⁶⁴ P.L. 104-193 repealed the $50
required pass-through and gave states the choice to decide how much, if any, of the
state share (some, all, none) of child support payments collected on behalf of TANF
families to send the family. States also decide whether to treat child support
payments as income to the family. P.L. 104-193 required states to pay the federal
government the federal government’s share of child support payments collected on
behalf of TANF families.
P.L. 109-171 stipulates that the assignment covers child support that accrues
only during the period that the family receives TANF. Thus, child support owed
before a family enrolls in TANF and after the family leaves TANF belongs to the
family, and child support owed during the time the family is on TANF belongs to the
state and federal governments. This provision takes effect on October 1, 2009, or
October 1, 2008 at state option.
For families who receive TANF cash benefit payments, P.L. 109-171 requires
the federal government to waive its share of the child support collections passed
through to TANF families by the state and disregarded by the state — up to an
amount equal to $100 per month in the case of a family with one child, and up to
$200 per month in the case of a family with two or more children. This provision
takes effect on October 1, 2008.
Federal Medical Assistance Percentage (FMAP)
A key component in determining the federal and state share of child support
collected on behalf of TANF families is the federal medical assistance percentage or
FMAP. Under old AFDC law, the rate at which states reimbursed the federal
government for child support payments collected on behalf of cash welfare recipients
was the federal matching rate (i.e., the federal medical assistance percentage or
FMAP or “Medicaid matching rate”) for the AFDC program. The FMAP offered
federal matching dollars for all AFDC benefits payments, no matter how high they
were in the aggregate or per recipient. The federal share was determined by applying

⁶⁴ In other words, states only have the rights to pre-assistance arrearages while the family
is on TANF. Once the family no longer receives TANF benefits, the rights to pre-assistance
arrearages revert back to the family.

the FMAP to the total amount spent by a state for AFDC benefits. Under the FMAP,
the federal funding share of AFDC payments was higher for states with low per
capita incomes, and lower for states with high per capita incomes. In other words,
the FMAP varied inversely with state per capita income (i.e., poor states have a high
federal matching rate; wealthy states have a lower federal matching rate).
In a state that had a 50% matching rate, the federal government was reimbursed
$50 for each $100 collected in child support on behalf of an AFDC family, while in
a state that had a 70% federal matching rate, the federal government was reimbursed
$70 for each $100 collected. In the first example, the state kept $50, and in the
second example, the state kept $30. Thus, states with a larger federal medical
assistance matching rate kept a smaller portion of the child support collections. The
match ranged from a minimum of 50% to a statutory maximum of 83%. (Although
AFDC was replaced by the TANF block grant under the welfare reform law of 1996,
the same matching rate procedure is still used.)
The FMAP currently is used to determine the amount^{Federal M}^e^dical
of federal matching for the Medicaid program, TANF^As^sⁱ^s^t^{ance Percentage}
Contingency Funds, the federal share of CSE collections,^(FM^A^{P), FY}²⁰⁰⁷
Child Care Mandatory funding and Matching Funds of the^Ca^lⁱ^f^o^rⁿⁱ^a⁵^0.00^%
Child Care and Development Fund, Title IV-E Foster^I^llin^oⁱ^s⁵⁰^.⁰⁰^%
Care Maintenance payments, and Adoption Assistance^M^aⁱⁿ^e^63.2⁷^%
paym ents.^M^a^r^y^l^a^nd⁵⁰^.^00%^O^k^l^a^ho^m^a^68.¹⁴^%
Sections 1905(b) and 1101(a)(8)(B) of the Social^W^e^{st Vir}^gⁱⁿ^ia⁷²^.⁸²^%

Security Act require the HHS Secretary to publish the
Federal Medical Assistance Percentages each year. The
Secretary is to calculate the percentages, using formulas in Sections 1905(b) and
1101(a)(8)(B) of the Social Security Act, from the Department of Commerce’s
statistics of average income per person in each state and for the nation as a whole.
Note: This report focuses on current child support payments, thus the tables
only show the federal and state share of child support collections for families who are
still receiving TANF cash benefit payments. They do not show the federal and state
share of child support arearages (past-due child support that is owed) collected on
behalf of former TANF families.

California
California has a FMAP of 50%, which means that for every $1 collected in child
support by the state on behalf of TANF families, the state reimburses the federal
government $0.50. Table B-1 displays the amount of child support paid to the
family, or retained by the state, or sent to the federal government based on the
amount of child support paid by the noncustodial parent. The table shows this data
for custodial parents with zero earnings, half-time earnings at the state minimum
wage, and full-time earnings at the state minimum wage ($7.50 per hour).
Zero Earnings. In California, a mother with two children and no earnings is
eligible for the maximum TANF cash benefit until the countable child support paid
by the noncustodial parent exceeds the maximum cash benefit, which currently is
$723 per month. As shown in Table B-1, if the noncustodial parent pays $100 per
month in child support, the California family receives a $50 child support pass-
through and disregard payment. Moreover, the state is required to pay the federal
government $50 (50% of $100), and there is nothing left for the state to keep. If the
noncustodial parent pays $500 per month in child support, the California family
receives a $50 child support pass-through and disregard payment. The state is
required to pay the federal government $250 (50% of $500) and the state keeps $200
($500-$50-$250).
Assuming that California adopts the new federally matched pass-through and
disregard policy, a mother with two children and no earnings would receive a $200
child support pass-through and disregard payment if the noncustodial parent paid at
least $200 per month in child support. If the noncustodial parent paid $200 per
month in child support, the California family would receive a $200 child support
pass-through and disregard payment, the federal government would receive $0, and
the state would receive $0. If the noncustodial parent paid $300 per month in child
support, the California family would receive a $200 child support pass-through and
disregard payment. The state would be required to pay the federal government $50
(50% of [$300-$200]) and the state would keep $50 ($300-$200-$50). If the
noncustodial parent paid $500 per month in child support, the California family
would receive a $200 child support pass-through and disregard payment. The state
would be required to pay the federal government $150 (50% of [$500-$200]) and the
state would keep $150 ($500-$200-$150).
Half-Time Earnings at State Minimum Wage. A mother with two
children who works half-time at the California state minimum wage level ($7.50 per
hour) is still eligible for a TANF cash benefit payment of $510.75 per month. As
long as the family remains eligible for TANF, the distribution of child support among
the family, the federal government, and the state does not change because of
earnings. Therefore, the distribution under current rules is the same as that for a
family with zero earnings. Thereby, if the noncustodial parent pays $300 per month
in child support, the California family receives a $50 child support pass-through and
disregard payment. The state is required to pay the federal government $150 (50%
of $300) and the state keeps $100 ($300-$50-$150). If the noncustodial parent pays
$500 per month in child support, the California family receives a $50 child support
pass-through and disregard payment. The state is required to pay the federal
government $250 (50% of $500) and the state keeps $200 ($500-$50-$250).

Assuming that California adopts the new federally matched pass-through and
disregard policy, the distribution of child support among the family, the federal
government, and the state would not change based on the earnings of the custodial
parent as long as the family received TANF cash benefits. This means that if the
noncustodial parent paid $300 per month in child support, the California family
would receive a $200 child support pass-through and disregard payment. The state
would be required to pay the federal government $50 (50% of [$300-$200]) and the
state would keep $50 ($300-$200-$50). If the noncustodial parent paid $500 per
month in child support, the California family would receive a $200 child support
pass-through and disregard payment. The state would be required to pay the federal
government $150 (50% of [$500-$200]) and the state would keep $150 ($500-$200-
$150).
Full-Time Earnings at State Minimum Wage. A California mother with
two children who works full-time at the California state minimum wage is eligible
for a TANF cash benefit payment of $186 per month if the noncustodial parent pays
less than $236 per month in child support. As long as the family remains eligible for
TANF, the distribution of child support among the family, the federal government,
and the state does not change because of earnings. Therefore, the distribution under
current rules is the same as that of a family with zero earnings or half-time earnings.
Thereby, if the noncustodial parent pays $200 per month in child support, the
California family receives a $50 child support pass-through and disregard payment.
The state is required to pay the federal government $100 (50% of $200) and the state
keeps $50 ($200-$50-$100). If the noncustodial parent pays $300 per month in child
support, the California family no longer receives a TANF cash benefit payment.
Instead, the family receives monthly earnings plus the entire $300 child support
payment with no reimbursement to the state or federal government.
Assuming that California adopts the new federally matched pass-through and
disregard policy, a mother with two children and full-time earnings would receive
TANF cash benefits only if child support from the noncustodial parent was less than
or equal to $386 per month. The distribution of child support among the family, the
federal government, and the state would not change based on the earnings of the
custodial parent as long as the family received TANF cash benefits. This means that
if the noncustodial parent paid $300 per month in child support, the California family
would receive a $200 child support pass-through and disregard payment. The state
would be required to pay the federal government $50 (50% of [$300-$200]) and the
state would keep $50 ($300-$200-$50). If the noncustodial parent paid $400 per
month in child support, the California family would no longer receive a TANF cash
benefit payment. Instead, the family would receive monthly earnings plus the entire
$400 child support payment with no reimbursement to the state or federal
government.

Table B-1. Impact of DRA Policy on Distribution of Child Support
Payments for a Mother with Two Children: California
(numbers in dollars)
^Child^{Pre-DRA Policy}^{DRA Policy}^D^ifference
^Suppo^rt^Child^Child^Child^Child^Child^Child^Child^Child^Child
^Paid^b^y^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt
^No^ncust^o^dia^l^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined
^Parent^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e
^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.
^No^E^a^rning^s
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁵⁰⁵⁰^{0 100}⁰⁰⁵⁰^-⁵⁰⁰
²⁰⁰⁵⁰¹⁰⁰^{50 200}⁰⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
³⁰⁰⁵⁰¹⁵⁰^{100 200}⁵⁰⁵⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
⁴⁰⁰⁵⁰²⁰⁰^{150 200}¹⁰⁰¹⁰⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
⁵⁰⁰⁵⁰²⁵⁰^{200 200}¹⁵⁰¹⁵⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^{$7.50 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁵⁰⁵⁰^{0 100}⁰⁰⁵⁰^-⁵⁰⁰
²⁰⁰⁵⁰¹⁰⁰^{50 200}⁰⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
³⁰⁰⁵⁰¹⁵⁰^{100 200}⁵⁰⁵⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
⁴⁰⁰⁵⁰²⁰⁰^{150 200}¹⁰⁰¹⁰⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
⁵⁰⁰⁵⁰²⁵⁰^{200 200}¹⁵⁰¹⁵⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^{$7.50 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁵⁰⁵⁰^{0 100}⁰⁰⁵⁰^-⁵⁰⁰
²⁰⁰⁵⁰¹⁰⁰^{50 200}⁰⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
³⁰⁰³⁰⁰⁰⁰²⁰⁰⁵⁰⁵⁰^-¹⁰⁰⁵⁰⁵⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation^m^odel.

Illinois
Illinois has a FMAP of 50%, which means that for every $1 collected in child
support by the state on behalf of TANF families, the state reimburses the federal
government $0.50. Table B-2 displays the amount of child support paid to the
family, or retained by the state, or sent to the federal government based on the
amount of child support paid by the noncustodial parent. The table shows these data
for custodial parents with zero earnings, half-time earnings at the minimum wage,
and full-time earnings at the minimum wage. Effective July 1, 2007, the Illinois state
minimum wage is higher than the new fully phased-in federal minimum wage;
therefore, this analysis uses the state minimum wage of $7.50 per hour.
Zero Earnings. In Illinois, a mother with two children and no earnings is
eligible for the maximum TANF benefit until the countable child support paid by the
noncustodial parent exceeds the maximum cash benefit, which currently is $396 per
month. As shown in the table, if the noncustodial parent pays $100 per month in
child support, the Illinois family receives a $50 child support pass-through and
disregard payment. The state is required to pay the federal government $50 (50% of
$100), and there is nothing left for the state to keep. If the noncustodial parent pays
$400 per month in child support, the Illinois family receives a $50 child support pass-
through and disregard payment. The state is required to pay the federal government
$200 (50% of $400) and the state keeps $150 ($400-$50-$200).
Assuming that Illinois adopts the new federally matched pass-through and
disregard policy, a mother with two children and no earnings would receive a $200
child support pass-through and disregard payment if the noncustodial parent paid at
least $200 per month in child support. If the noncustodial parent paid $200 per
month in child support, the Illinois family would receive a $200 child support pass-
through and disregard payment, the federal government would receive $0, and the
state would receive $0. If the noncustodial parent paid $300 per month in child
support, the Illinois family would receive a $200 child support pass-through and
disregard payment. The state would be required to pay the federal government $50
(50% of [$300-$200]) and the state would keep $50 ($300-$200-$50). If the
noncustodial parent paid $500 per month in child support, the Illinois family would
receive a $200 child support pass-through and disregard payment. The state would
be required to pay the federal government $150 (50% of [$500-$200]) and the state
would keep $150 ($500-$200-$150).
Half-Time Earnings at State Minimum Wage. A mother with two
children who works half-time at the Illinois state minimum wage still is eligible for
a TANF cash benefit payment of $180 per month if countable child support payments
do not exceed $230 per month. As long as the family remains eligible for TANF, the
distribution of child support among the family, the federal government, and the state
does not change because of earnings. Therefore, the distribution under current rules
is the same as that of a family with zero earnings. Thus, if the noncustodial parent
pays $200 per month in child support, the Illinois family receives a $50 child support
pass-through and disregard payment. The state is required to pay the federal
government $100 (50% of $200) and the state keeps $50 ($200-$50-$100). If the
noncustodial parent pays $300 per month in child support, the Illinois family no
longer receives a TANF cash benefit payment. Instead, the family receives monthly

earnings plus the entire $300 child support payment with no reimbursement to the
state or federal government.
Assuming that Illinois adopts the new federally matched pass-through and
disregard policy, the distribution of child support among the family, the federal
government, and the state would not change based on the earnings of the custodial
parent as long as the family received TANF cash benefits. An Illinois mother with
two children and half-time earnings would still be eligible for a TANF cash benefit
payment of $180 per month if countable child support payments did not exceed $380.
This means that if the noncustodial parent paid $300 per month in child support, the
Illinois family would receive a $200 child support pass-through and disregard
payment. The state would be required to pay the federal government $50 (50% of
[$300-$200]) and the state would keep $50 ($300-$200-$50). If the noncustodial
parent paid $400 per month in child support, the Illinois family would no longer
receive a TANF cash benefit payment. Instead, the family would receive monthly
earnings plus the entire $400 child support payment with no reimbursement to the
state or federal government.
Full-Time Earnings at State Minimum Wage. An Illinois mother with
two children who works full-time at the state minimum wage is not eligible for a
TANF cash benefit payment. Instead, the family receives monthly earnings plus the
entire amount of the child support payment with no reimbursement to the state or
federal government.
Assuming that Illinois adopts the new federally matched pass-through and
disregard policy, a mother with two children and full-time earnings would still not
be eligible to receive a TANF cash benefit payment. Instead, the family would
receive monthly earnings plus the entire amount of the child support payment with
no reimbursement to the state or federal government.

Table B-2. Impact of DRA Policy on Distribution of Child
Support Payments for a Mother with Two Children: Illinois
(numbers in dollars)
^Child^{Pre-DRA Policy}^{DRA Policy}^D^ifference
^Suppo^rt^Child^Child^Child^Child^Child^Child^Child^Child^Child
^Paid^b^y^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt
^No^ncust^o^dia^l^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined
^Parent^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e
^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.
^No^E^a^rning^s
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁵⁰⁵⁰^{0 100}⁰⁰⁵⁰^-⁵⁰⁰
²⁰⁰⁵⁰¹⁰⁰^{50 200}⁰⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
³⁰⁰⁵⁰¹⁵⁰^{100 200}⁵⁰⁵⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
⁴⁰⁰⁵⁰²⁰⁰^{150 200}¹⁰⁰¹⁰⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
⁵⁰⁰⁵⁰⁰⁰⁰²⁰⁰¹⁵⁰¹⁵⁰^-³⁰⁰¹⁵⁰¹⁵⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^{$7.50 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁵⁰⁵⁰^{0 100}⁰⁰⁵⁰^-⁵⁰⁰
²⁰⁰⁵⁰¹⁰⁰^{50 200}⁰⁰¹⁵⁰^-¹⁰⁰^-⁵⁰
³⁰⁰³⁰⁰⁰⁰²⁰⁰⁵⁰⁵⁰^-¹⁰⁰⁵⁰⁵⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^{$7.50 p}^{er Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰¹⁰⁰⁰⁰¹⁰⁰⁰⁰⁰⁰⁰
²⁰⁰²⁰⁰⁰⁰²⁰⁰⁰⁰⁰⁰⁰
³⁰⁰³⁰⁰⁰⁰³⁰⁰⁰⁰⁰⁰⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation^m^odel.

Maine
Maine has a FMAP of 63.27%, which means that for every $100 collected in
child support by the state on behalf of TANF families, the state reimburses the
federal government $63.27. Maine currently provides a $50 child support pass-
through and disregard payment and a “gap” payment to TANF recipients who receive
at least $50 in child support payments from noncustodial parents. In Maine, a family
can use earnings or child support income to fill the gap between what the state says
a family of a certain size needs to subsist in the state (the “standard of need”) and the
maximum TANF payment for a family of the given size. In Maine, the standard of
need for a 3-person family is $670 per month and the payment maximum for a 3-
person family is $535. Thus, the “gap” is $135 ($670-$535), which means that up
to $135 per month in earnings or child support income is disregarded in determining
the family’s TANF benefit and paid to the family (in addition to the $50 pass-through
and disregard). Table B-3 displays the amount of child support paid to the family,
or retained by the state, or sent to the federal government based on the amount of
child support paid by the noncustodial parent. The table shows this data for custodial
parents with zero earnings, half-time earnings at the minimum wage, and full-time
earnings at the minimum wage. The Maine state minimum wage is lower than the
new fully phased-in federal minimum wage; therefore, this analysis uses the new
fully phased-in federal minimum wage ($7.25 per hour).
Zero Earnings. In Maine, a mother with two children and no earnings is
eligible for the maximum TANF benefit until the countable child support paid by the
noncustodial parent exceeds the maximum cash benefit, which currently is $535 per
month. As shown in Table B-3, if the noncustodial parent pays $200 per month in
child support, the Maine family receives a $50 child support pass-through and
disregard payment plus a $135 “gap” payment. The state is required to pay the⁶⁵
federal government $41 (63.27% of [$200-$135]), and the state loses $26 ($200-
$185-$41). If the noncustodial parent pays $400 per month in child support, the
Maine family receives a $50 child support pass-through and disregard payment plus
a $135 “gap” payment. The state is required to pay the federal government $168
(63.27% of [$400-$135]), and the state keeps $47 ($400-$185-$168). If the
noncustodial parent pays $500 per month in child support, the Maine family receives
a $50 child support pass-through and disregard payment plus a $135 “gap” payment.
The state is required to pay the federal government $231 (63.27% of [$500-$135]),
and the state keeps $84 ($500-$185-$231).
Assuming that Maine adopts the new federally matched pass-through and
disregard policy, a mother with two children and no earnings would receive a $200
child support pass-through and disregard payment if the noncustodial parent paid at
least $200 per month in child support. If the noncustodial parent paid $200 per
month in child support, the Maine family would receive a $200 child support pass-
through and disregard payment, the federal government would receive $0, and the
state would receive $0. If the noncustodial parent paid $300 per month in child
support, the Maine family would receive a $200 child support pass-through and

⁶⁵ Section 457(d) of the Social Security Act stipulates that at state option “gap payments”
are not subject to the CSE distribution rules.

disregard payment plus $100 of the $135 “gap” payment. The state would be
required to pay the federal government $127 (63.27% of [$300-$100]) and the state
would lose $127 ($300-$300-$127). If the noncustodial parent paid $500 per month
in child support, the Maine family would receive a $200 child support pass-through
and disregard payment plus the $135 “gap” payment. The state would be required
to pay the federal government $231 (63.27% of [$500-135]) and the state would lose
$66 ($500-$335-$231).
Half-Time Earnings at the Federal Minimum Wage. A Maine mother
with two children who works half-time at the new fully-phased in federal minimum⁶⁶
wage level is still eligible for a TANF cash benefit payment of $410 per month if
the noncustodial parent pays no more than $460 per month in child support
payments. As shown in Table B-3, if the noncustodial parent pays $100 per month
in child support, the Maine family receives a $50 child support pass-through and
disregard payment. The state is required to pay the federal government $63 (63.27%
of $100) and the state loses $13 [($100-$50)-$63)]. If the noncustodial parent pays
$400 per month in child support, the Maine family receives a $50 child support pass-
through and disregard payment. The state is required to pay the federal government
$253 (63.27% of $400) and the state keeps $97 ($400-$50-$253). If the noncustodial
parent pays $460 per month in child support or more, the Maine family no longer
receives a TANF cash benefit payment. Instead, the family receives monthly
earnings plus the entire amount of the child support payment with no reimbursement
to the state or federal government.
Assuming that Maine adopts the new federally matched pass-through and
disregard policy, a mother with two children and half-time earnings would continue
to receive a TANF cash benefit payment until the noncustodial parent paid $610 or
more in child support payments. Table B-3 shows that if a noncustodial parent paid
$200 per month in child support payments, the Maine family would receive a $200
child support pass-through and disregard payment, the federal government would
receive $0, and the state would receive $0. If a noncustodial parent paid $300 per
month in child support payments, the family would receive a $200 per month child
support pass-through and disregard payment. The state would be required to pay the
federal government $63 (63.27% of ($300-$200]), and the state would keep $37
($300-$200-$63). If a noncustodial parent paid $500 per month in child support
payments, the family would receive a $200 per month child support pass-through and
disregard payment. The state would be required to pay the federal government $190
[63.27% of ($500-$200)] and the state would keep $110 [($500-$200)-$190].
Full-Time Earnings at the Federal Minimum Wage. A Maine mother
with two children who works full-time at the new fully-phased in federal minimum
wage is not eligible for a TANF cash benefit payment. Instead, the family receives
monthly earnings plus the entire amount of the child support payment with no
reimbursement to the state or federal government.

⁶⁶ As mentioned earlier, the $135 gap payment is embedded in the $410 monthly TANF
benefit payment calculation.

Assuming that Maine adopts the new federally matched pass-through and
disregard policy, a mother with two children and full-time earnings would still not
be eligible to receive a TANF cash benefit payment. Instead, the family would
receive monthly earnings plus the entire amount of the child support payment with
no reimbursement to the state or federal government.
Table B-3. Impact of DRA Policy on Distribution of Child
Support Payments for a Mother with Two Children: Maine
(numbers in dollars)
^Child^{Pre-DRA Policy}^{DRA Policy}^D^ifference
^Suppo^rt^Child^Child^Child^Child^Child^Child^Child^Child^Child
^Paid^b^y^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt
^No^ncust^o^dia^l^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined
^Parent^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e
^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.
^No^E^a^rning^s
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰¹⁰⁰³²^-^{32 100}⁰⁰⁰^-³²³²
²⁰⁰¹⁸⁵⁴¹^-^{26 200}⁰⁰¹⁵^-⁴¹²⁶
³⁰⁰¹⁸⁵¹⁰⁴^{11 300}¹²⁷^-¹²⁷¹¹⁵²³^-¹³⁸
⁴⁰⁰¹⁸⁵¹⁶⁸^{47 335}¹⁶⁸^-¹⁰³¹⁵⁰⁰^-¹⁵⁰
⁵⁰⁰¹⁸⁵²³¹^{84 335}²³¹^-⁶⁶¹⁵⁰⁰^-¹⁵⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^{$7.25 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁵⁰⁶³^-^{13 100}⁰⁰⁵⁰^-⁶³^-¹³
²⁰⁰⁵⁰¹²⁷^{23 200}⁰⁰¹⁵⁰^-¹²⁷^-²³
³⁰⁰⁵⁰¹⁹⁰^{60 200}⁶³³⁷¹⁵⁰^-¹²⁷^-²³
⁴⁰⁰⁵⁰²⁵³^{97 200}¹²⁷⁷³¹⁵⁰^-¹²⁶^-²⁴
⁵⁰⁰⁵⁰⁰⁰⁰²⁰⁰¹⁹⁰¹¹⁰^-³⁰⁰¹⁹⁰¹¹⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^{$7.25 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰¹⁰⁰⁰⁰¹⁰⁰⁰⁰⁰⁰⁰
²⁰⁰²⁰⁰⁰⁰²⁰⁰⁰⁰⁰⁰⁰
³⁰⁰³⁰⁰⁰⁰³⁰⁰⁰⁰⁰⁰⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation^m^odel.

Maryland
Maryland has a FMAP of 50%, which means that for every $1 collected in child
support by the state on behalf of TANF families, the state reimburses the federal
government $.50. Maryland currently does not have a child support pass-through and
disregard payment. Table B-4 displays the amount of child support paid to the
family, or retained by the state, or sent to the federal government based on the
amount of child support paid by the noncustodial parent. The table shows this data
for custodial parents with zero earnings, half-time earnings at the minimum wage,
and full-time earnings at the minimum wage. The Maryland state minimum wage is
lower than the new fully phased-in federal minimum wage; therefore, this analysis
uses the new fully phased-in federal minimum wage ($7.25 per hour).
Zero Earnings. In Maryland, a mother with two children and no earnings is
eligible for the maximum TANF benefit until the child support paid by the
noncustodial parent exceeds the maximum cash benefit, which currently is $549 per
month. As shown in Table B-4, if the noncustodial parent pays $100 per month in
child support, the Maryland family does not receive any child support income. The
state, however, is required to pay the federal government $50 (50% of $100), and the
state keeps $50. If the noncustodial parent pays $500 per month in child support, the
Maryland family receives no child support income, but the state is required to pay the
federal government $250 (50% of $500) and the state keeps $250 ($500-$250).
Assuming that Maryland adopts the new federally matched pass-through and
disregard policy, a mother with two children and no earnings would receive a $200
child support pass-through and disregard payment if the noncustodial parent paid at
least $200 per month in child support. If the noncustodial parent paid $200 per
month in child support, the Maryland family would receive a $200 child support
pass-through and disregard payment, the federal government would receive $0, and
the state would receive $0. If the noncustodial parent paid $300 per month in child
support, the Maryland family would receive a $200 child support pass-through and
disregard payment. The state would be required to pay the federal government $50
(50% of [$300-$200]) and the state would keep $50 ($300-$200-$50). If the
noncustodial parent paid $500 per month in child support, the Maryland family
would receive a $200 child support pass-through and disregard payment. The state
would be required to pay the federal government $150 (50% of [$500-$200]) and the
state would keep $150 ($500-$200-$150).
Half-Time Earnings at Federal Minimum Wage. A Maryland mother
with two children who works half-time at the new fully phased-in federal minimum
wage ($7.25 per hour) is still eligible for a TANF cash benefit payment of $201 per
month if the noncustodial parent does not pay more than $191 per month in child
support.⁶⁷ As long as the family remains eligible for TANF, the distribution of child
support among the family, the federal government, and the state does not change
because of earnings. Therefore, the distribution under current rules is the same as
that of a family with zero earnings. Thereby, if the noncustodial parent pays $100 per

⁶⁷ Maryland has a $10 minimum TANF payment rule which means that if the TANF benefit
payment is under $10, the family still receives a $10 per month TANF payment.

month in child support, the Maryland family receives no child support income. But,
the state is required to pay the federal government $50 (50% of $100) and the state
keeps $50 ($100-$50). If the noncustodial parent pays $400 per month in child
support, the Maryland family no longer receives a TANF cash benefit payment.
Instead, the family receives monthly earnings plus the entire $400 child support
payment with no reimbursement to the state or federal government.
Assuming that Maryland adopts the new federally matched pass-through and
disregard policy, the distribution of child support among the family, the federal
government, and the state would not change based on the earnings of the custodial
parent as long as the family received TANF cash benefits.⁶⁸ This means that if the
noncustodial parent paid $300 per month in child support, the Maryland family
would receive a $200 child support pass-through and disregard payment. The state
would be required to pay the federal government $50 (50% of [$300-$200]) and the
state would keep $50 ($300-$200-$50). If the noncustodial parent paid $500 per
month in child support, the Maryland family would no longer receive a TANF cash
benefit payment. Instead, the family would receive monthly earnings plus the entire
$500 child support payment with no reimbursement to the state or federal
government.
Full-Time Earnings at Federal Minimum Wage. A Maryland mother
with two children who works full-time at the new fully-phased in federal minimum
wage is not eligible for a TANF cash benefit payment. Instead, the family receives
monthly earnings plus the entire amount of the child support payment with no
reimbursement to the state or federal government.
Assuming that Maryland adopts the new federally matched pass-through and
disregard policy, a mother with two children and full-time earnings would still not
be eligible to receive a TANF cash benefit payment. Instead, the family would
receive monthly earnings plus the entire amount of the child support payment with
no reimbursement to the state or federal government.

⁶⁸ In Maryland, the hypothetical family of a mother with two children and half-time earnings
would remain eligible for TANF benefit until the noncustodial parent pays $391 or more in
monthly child support payments. ($549[TANF maximum benefit]- ($580[earnings]-
(.4*$580))=$201[TANF grant]. As mentioned earlier, Maryland uses 4.00 rather than 4.33
as the factor to determine monthly earnings (i.e., $7.25*20*4=$580). $201-$10[minimum
benefit]=$191; $191+ $200[maximum amount of child support that is not counted in the
TANF benefit calculation]=$391.)

Table B-4. Impact of DRA Policy on Distribution of Child
Support Payments for a Mother with Two Children: Maryland
(numbers in dollars)
^{Pre-DRA Policy}^{DRA Policy}^D^ifference
^Child^Child^Child^Child^Child^Child^Child^Child^Child^Child
^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt
^Paid^b^y^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined
^No^ncust^o^dia^l^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e
^Parent^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.
^No^E^a^rning^s
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁰⁵⁰^{50 100}⁰⁰¹⁰⁰^-⁵⁰^-⁵⁰
²⁰⁰⁰¹⁰⁰^{100 200}⁰⁰²⁰⁰^-¹⁰⁰^-¹⁰⁰
³⁰⁰⁰¹⁵⁰^{150 200}⁵⁰⁵⁰²⁰⁰^-¹⁰⁰^-¹⁰⁰
⁴⁰⁰⁰²⁰⁰^{200 200}¹⁰⁰¹⁰⁰²⁰⁰^-¹⁰⁰^-¹⁰⁰
⁵⁰⁰⁰²⁵⁰^{250 200}¹⁵⁰¹⁵⁰²⁰⁰^-¹⁰⁰^-¹⁰⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^{$7.25 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁰⁵⁰^{50 100}⁰⁰¹⁰⁰^-⁵⁰^-⁵⁰
²⁰⁰²⁰⁰⁰⁰²⁰⁰⁰⁰⁰⁰⁰
³⁰⁰³⁰⁰⁰⁰²⁰⁰⁵⁰⁵⁰^-¹⁰⁰⁵⁰⁵⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^{$7.25 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰¹⁰⁰⁰⁰¹⁰⁰⁰⁰⁰⁰⁰
²⁰⁰²⁰⁰⁰⁰²⁰⁰⁰⁰⁰⁰⁰
³⁰⁰³⁰⁰⁰⁰³⁰⁰⁰⁰⁰⁰⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation^m^odel.

Oklahoma
Oklahoma has a FMAP of 68.14%, which means that for every $100 collected
in child support by the state on behalf of TANF families, the state reimburses the
federal government $68.14. Oklahoma currently does not have a child support pass-
through and disregard payment. Table B-5 displays the amount of child support paid
to the family, or retained by the state, or sent to the federal government based on the
amount of child support paid by the noncustodial parent. The table shows this data
for custodial parents with zero earnings, half-time earnings at the minimum wage,
and full-time earnings at the minimum wage. The Oklahoma state minimum wage
is lower than the new fully phased-in federal minimum wage; therefore, this analysis
uses the new fully phased-in federal minimum wage ($7.25 per hour).
Zero Earnings. In Oklahoma, a mother with two children and no earnings is
eligible for the maximum TANF benefit until the child support paid by the
noncustodial parent exceeds the monthly TANF maximum cash benefit, which
currently is $292 per month. As shown in Table B-5, if the noncustodial parent pays
$100 per month in child support, the Oklahoma family does not receive any child
support income. The state, however, is required to pay the federal government
$68.14 (68.14% of $100), and the state keeps $31.86. If the noncustodial parent pays
$200 per month in child support, the Oklahoma family receives no child support
income. The state is required to pay the federal government $136.28 (68.14% of
$200) and the state keeps $63.72 ($200-$136.28). If a noncustodial parent pays $300
or more in child support on behalf of an Oklahoma mother with two children and no
earnings, the family receives the entire amount of the child support payment with no
reimbursement to the state or federal government.
Assuming that Oklahoma adopts the new federally matched pass-through and
disregard policy, a mother with two children and no earnings would receive a $200
child support pass-through and disregard payment if the noncustodial parent paid at
least $200 per month in child support. If the noncustodial parent paid $200 per
month in child support, the Oklahoma family would receive a $200 child support
pass-through and disregard payment, the federal government would receive $0, and
the state would receive $0. If the noncustodial parent paid $400 per month in child
support, the Oklahoma family would receive a $200 child support pass-through and
disregard payment. The state would be required to pay the federal government
$136.28 (68.14% of [$400-$200]) and the state would keep $63.72 ($200-$136.28).
If the noncustodial parent paid $492 per month in child support or more, the
Oklahoma family would not receive a TANF benefit payment. Instead, the family
would receive the entire amount of the child support payment with no reimbursement
to the state or federal government.
Half-Time Earnings at Federal Minimum Wage. An Oklahoma mother
with two children who works half-time at the new fully-phased in federal minimum
wage is not eligible for a TANF cash benefit payment if child support payments
exceed $98 per month.⁶⁹ Instead, the family receives monthly earnings plus the entire

⁶⁹ As shown in Table A-5, $292[TANF maximum benefit]- ($628[earnings]-$240-($628-
(continued...)

amount of the child support payment with no reimbursement to the state or federal
government.
Assuming that Oklahoma adopts the new federally matched pass-through and
disregard policy, a mother with two children and half-time earnings would not be
eligible to receive a TANF cash benefit payment if child support payments exceeded
$298 per month.⁷⁰ Instead, the family would receive monthly earnings plus the entire
amount of the child support payment with no reimbursement to the state or federal
government.
Full-Time Earnings at Federal Minimum Wage. An Oklahoma mother
with two children who works full-time at the new fully-phased in federal minimum
wage is not eligible for a TANF cash benefit payment. Instead, the family receives
monthly earnings plus the entire amount of the child support payment with no
reimbursement to the state or federal government.
Assuming that Oklahoma adopts the new federally matched pass-through and
disregard policy, a mother with two children and full-time earnings would still not
be eligible to receive a TANF cash benefit payment. Instead, the family would
receive monthly earnings plus the entire amount of the child support payment with
no reimbursement to the state or federal government.

⁶⁹ (...continued)
$240/2))=$98[TANF grant]. Table A-5 also shows that the family receives $0 in child
support when the TANF benefit is $98. Thus the family has no child support income. If the
noncustodial parent pays $100 or more in child support, the family receives the entire
amount of child support without the state or the federal government receiving any part of
it.
⁷⁰ $98+ $200[maximum amount of child support that is not counted in the TANF benefit
calculation]=$298. The hypothetical family would be eligible for a TANF benefit until
child support payments exceeded $298 per month. However, as seen in Table B-5, if the
noncustodial parent paid $100 or $200 per month in child support, that money would be
passed through to the family without the state or federal government receiving any part of
it. If the noncustodial parent paid $300 or more per month, the family would not receive a
TANF benefit. Instead, the family would receive the entire child support payment plus the
mother’s earnings. As noted in the text, the state and federal government would receive no
child support reimbursements.

Table B-5. Impact of DRA Policy on Distribution of Child
Support Payments for a Mother with Two Children: Oklahoma
(numbers in dollars)
^Child^{Pre-DRA Policy}^{DRA Policy}^D^ifference
^Suppo^rt^Child^Child^Child^Child^Child^Child^Child^Child^Child
^Paid^b^y^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Reta^ined^Suppo^rt^Suppo^rt^Suppo^rt
^No^ncust^o^dia^l^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^by^St^a^t^e^Inc^o^m^e^Paid^to^Reta^ined
^Parent^to^Federal^by^St^a^t^e^to^Federal^to^Federal^by^St^a^t^e
^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.
^No^E^a^rning^s
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁰^68.14^{31.86 100}⁰⁰¹⁰⁰^-^68.14^-^31.86
²⁰⁰⁰^136.28^{63.72 200}⁰⁰²⁰⁰^-^136.28^-^63.72
³⁰⁰³⁰⁰⁰⁰²⁰⁰^68.14^31.86^-¹⁰⁰^68.14^31.86
⁴⁰⁰⁴⁰⁰⁰⁰²⁰⁰^136.28^63.72^-²⁰⁰^136.28^63.72
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^{$7.25 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰¹⁰⁰⁰⁰¹⁰⁰⁰⁰⁰⁰⁰
²⁰⁰²⁰⁰⁰⁰²⁰⁰⁰⁰⁰⁰⁰
³⁰⁰³⁰⁰⁰⁰³⁰⁰⁰⁰⁰⁰⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^{$7.25 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰¹⁰⁰⁰⁰¹⁰⁰⁰⁰⁰⁰⁰
²⁰⁰²⁰⁰⁰⁰²⁰⁰⁰⁰⁰⁰⁰
³⁰⁰³⁰⁰⁰⁰³⁰⁰⁰⁰⁰⁰⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Source:^T^a^{ble prepared by}^th^{e C}^oⁿ^g^r^es^sⁱ^on^{al R}^e^s^earch^Serv^{ice u}^sⁱⁿ^g^th^{e Sy}^s^T^T^I^{M cas}^{e s}ⁱ^m^u^lation^m^odel.

West Virginia
West Virginia has a FMAP of 72.82%, which means that for every $100
collected in child support by the state on behalf of TANF families, the state
reimburses the federal government $72.82. West Virginia currently does not have
a child support pass-through and disregard payment. Table B-6 displays the amount
of child support paid to the family, or retained by the state, or sent to the federal
government based on the amount of child support paid by the noncustodial parent.
The table shows this data for custodial parents with zero earnings, half-time earnings
at the minimum wage, and full-time earnings at the minimum wage. The West
Virginia state minimum wage is lower than the new fully phased-in federal minimum
wage; therefore, this analysis uses the new fully phased-in federal minimum wage
($7.25 per hour).
Zero Earnings. In West Virginia, a mother with two children and no earnings
is eligible for the maximum TANF benefit until the countable child support paid by
the noncustodial parent exceeds the maximum cash benefit, which currently is $340
per month. As shown in Table B-6, if the noncustodial parent pays $100 per month
in child support, the West Virginia family does not receive any child support. The
state, however, is required to pay the federal government $72.82 (72.82% of $100),
and the state keeps $27.18. If the noncustodial parent pays $300 per month in child
support, the West Virginia family receives no child support. But, the state is required
to pay the federal government $218.46 (72.82% of $300) and the state keeps $81.54
($300-$218.46). If a noncustodial parent pays $400 on behalf of a West Virginia
mother with two children and no earnings, the family receives the entire amount of
the child support payment with no reimbursement to the state or federal government.
Assuming that West Virginia adopts the new federally matched pass-through
and disregard policy, a mother with two children and no earnings would receive a
$200 child support pass-through and disregard payment if the noncustodial parent
paid at least $200 per month in child support. If the noncustodial parent paid $200
per month in child support, the West Virginia family would receive a $200 child
support pass-through and disregard payment, the federal government would receive
$0, and the state would receive $0. If the noncustodial parent paid $500 per month
in child support, the West Virginia family would receive a $200 child support pass-
through and disregard payment. The state would be required to pay the federal
government $218.46 (72.82% of [$500-$200]) and the state would keep $81.54
($300-$218.46). If the noncustodial parent paid $540 per month in child support or
more, the West Virginia family would not receive a TANF benefit payment. Instead,
the family would receive the entire amount of the child support payment with no
reimbursement to the state or federal government.
Half-Time Earnings at Federal Minimum Wage. A West Virginia mother
with two children who works half-time at the new fully-phased in federal minimum
wage is not eligible for a TANF cash benefit payment.⁷¹ Instead, the family receives
monthly earnings plus the entire amount of the child support payment with no
reimbursement to the state or federal government.

⁷¹ See Table A-6.

Assuming that West Virginia adopts the DRA federally matched pass-through
and disregard policy, a mother with two children and half-time earnings would still
not be eligible to receive a TANF cash benefit payment. Instead, the family would
receive monthly earnings plus the entire amount of the child support payment with
no reimbursement to the state or federal government.
Full-Time Earnings at Federal Minimum Wage. A West Virginia mother
with two children who works full-time at the new fully-phased in federal minimum
wage is not eligible for a TANF cash benefit payment. Instead, the family receives
monthly earnings plus the entire amount of the child support payment with no
reimbursement to the state or federal government.
Assuming that West Virginia adopts the DRA federally matched pass-through
and disregard policy, a mother with full-time earnings and two children would still
not be eligible to receive a TANF cash benefit payment. Instead, the family would
receive monthly earnings plus the entire amount of the child support payment with
no reimbursement to the state or federal government.
Table B-6. Impact of DRA Policy on Distribution of Child
Support Payments for a Mother with Two Children:
West Virginia
(numbers in dollars)
^Child^{Pre-DRA Policy}^{DRA Policy}^D^ifference
^Suppo^rt^Child^Child^Child^Child^Child^Child^Child^Child^Child
^Paid^b^y^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt^Suppo^rt
^No^ncust^o^dia^l^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined^Inc^o^m^e^Paid^to^Reta^ined
^Parent^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e^to^Federal^by^St^a^t^e
^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.^Fa^m^ily^G^ov’t.
^No^E^a^rning^s
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰⁰^72.82^{27.18 100}⁰⁰¹⁰⁰^-^72.82^-^27.18
²⁰⁰⁰^145.64^{54.36 200}⁰⁰²⁰⁰^-^145.64^-^54.36
³⁰⁰⁰^218.46^{81.54 200}^72.82^27.18²⁰⁰^-^145.64^-^54.36
⁴⁰⁰⁴⁰⁰⁰⁰²⁰⁰^145.64^54.36^-²⁰⁰^145.64^54.36
⁵⁰⁰⁵⁰⁰⁰⁰²⁰⁰^218.46^81.54^-³⁰⁰^218.46^81.54
^Part-Tⁱ^m^{e (20 Hou}^r^s⁾^@^{$7.25 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰¹⁰⁰⁰⁰¹⁰⁰⁰⁰⁰⁰⁰
²⁰⁰²⁰⁰⁰⁰²⁰⁰⁰⁰⁰⁰⁰
³⁰⁰³⁰⁰⁰⁰³⁰⁰⁰⁰⁰⁰⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
^Fu^l^l^-^Tⁱ^m^e^{(40 Hou}^r^s⁾^@^{$7.25 Per Hou}^r
⁰⁰⁰⁰⁰⁰⁰⁰⁰⁰
¹⁰⁰¹⁰⁰⁰⁰¹⁰⁰⁰⁰⁰⁰⁰
²⁰⁰²⁰⁰⁰⁰²⁰⁰⁰⁰⁰⁰⁰
³⁰⁰³⁰⁰⁰⁰³⁰⁰⁰⁰⁰⁰⁰
⁴⁰⁰⁴⁰⁰⁰⁰⁴⁰⁰⁰⁰⁰⁰⁰
⁵⁰⁰⁵⁰⁰⁰⁰⁵⁰⁰⁰⁰⁰⁰⁰
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Appendix C. DRA Provisions that Affect
Former TANF Families
Although this report focuses on current TANF families and current child
support payments, one of the goals of the 1996 welfare reform law with regard to
CSE distribution provisions was to create a distribution priority that favored families
once they leave the TANF rolls.
Once a family leaves the TANF rolls,⁷² arrearages (i.e., past-due child support
that is owed to the family) become important. Under pre-DRA rules, the custodial
parent that applies for TANF must assign to the state the right to collect both current
child support payments and past-due child support obligations which accrue while
the family is on the TANF rolls (these are called permanently-assigned arrearages).
The child support assignment for TANF families also includes arrearage payments
that accumulated before the family enrolled in TANF (these are called pre-assistance
arrearages). These pre-assistance arrearages are temporarily assigned to the state
while the family receives TANF assistance. After the family is no longer on the
TANF program, it regains its claim on pre-assistance arrearages.
The DRA stipulates that the child support assignment only covers child support
that accrues while the family receives TANF benefits. This means that any child
support arrearages that accrued before the family started receiving TANF benefits
would no longer have to be assigned to the state (even temporarily).
The DRA also gives states the option of distributing to former TANF families
the full amount of child support collected on their behalf (i.e., both current support
and all child support arrearages (including assigned arrearages that accrued while the
family was on TANF)). P.L. 109-171 allows states to simplify the CSE distribution
process by eliminating the special treatment of child support arrearages collected⁷³
through the Federal Income Tax Refund Offset program. This option allows states
to pay child support collected through the Federal Income Tax Refund Offset
procedure to former TANF families before repaying the state its share of child
support collections. If a state adopts the option to eliminate the special federal tax
offset collection rules, the federal government will waive its share of child support
arrearages collected via that method. Unlike the limits (i.e., up to $100 per month

⁷² Under federal law, the state CSE agencies continue to collect child support on behalf of
families that leave the TANF rolls. These former TANF families do not have to reapply for
CSE services nor do they have to pay an application fee for CSE services (Section

454(a)(25) of the Social Security Act).

⁷³ Pre-DRA rules required that if a child support arrearage payment was collected by the
Federal Income Tax Refund Offset program it had to be paid to the state rather than to the
family. Child support arrearages collected through any other method were to be paid to the
family first. Under the Federal Income Tax Refund Offset program, the Internal Revenue
Service, operating on a request from the state CSE agency through the Secretary of HHS,
intercepts income tax refunds of noncustodial parents who owe past-due child support
payments (amounting to at least $150 in the case of a TANF family; amounting to at least
$500 in the case of a nonwelfare family) and deducts the amount of certified child support
arrearages from the income tax refund amount. The money is then sent to the state.

for one child and up to $200 per month for two or more children) imposed on support
passed through to current TANF families, the full federal share of federal tax offset
collections will be waived if the money is paid to former TANF families. According
to one report, nearly all of the arrearage payments collected on behalf of former
TANF families was via the Federal Income Tax Refund Offset program.⁷⁴
In 2005, 56% ($1.148 billion) of the child support retained by the state (for state
and federal reimbursement — $2.040 billion) was collected on behalf of former
TANF families. In 2005, $1.5 billion in child support payment was collected via the
Federal Income Tax Refund Offset program.
The result of the 1996 welfare reform law (P.L. 104-193) distribution provisions
is that states are required to pay a higher fraction of child support collections on
arrearages to families that have left welfare by making these payments to families
first (before the state and the federal government). If adopted by the states, the result
of the Deficit Reduction Act (P.L. 109-171) will be to fully implement a “family
first” policy for former TANF families under which most (if not all) child support
received on their behalf will go to the families first (before the state and the federal
government). This additional income is expected to reduce dependence on welfare
by both promoting exit from TANF and preventing entry and re-entry to TANF.
Custodial parents welcome this provision that requires the federal government
to share with the states the costs of paying child support arrearages to former TANF
families, if the state chooses to implement that option. Custodial parents have been
frustrated because they have always viewed child support arrearages as belonging to
them. They argue that they had to rely on family and friends for financial assistance
during periods when the noncustodial parent failed to pay child support that occurred
before they went on welfare. They contend that they (and not the state) are entitled
to any pre-welfare arrearages that are collected on their behalf.⁷⁵
Much of the complexity of the distribution rules stemmed from their gradual
implementation and federal/state receipt of child support arrearage payments
collected through the Federal Income Tax Refund Offset program. Thus, some of the
complexity of the rules ended when the rules were completely implemented on
October 1, 2000. Many observers contend that if states choose to implement the
“family first” approach authorized by P.L. 109-171, the distribution of child support
will be much easier to explain, understand, and carry out.

⁷⁴ Center for Law and Social Policy and the Center on Budget and Policy Priorities.
Implementing the TANF Changes in the Deficit Reduction Act: “Win-Win” Solutions for
Families and States, Second Edition. February 9, 2007.
⁷⁵ Mathematica Policy Research, Inc. Living on Little: Case Studies of Iowa Families With
Very Low Incomes, by Heather Hill and Jacqueline Kauff. August 2001. Also see National
Women’s Law Center and Center on Fathers, Families, and Public Policy. Family Ties:
Improving Paternity Establishment Practices and Procedures for Low-Income Mothers,
Fathers and Children. November 2000.

Former TANF Families
Before 1996, once a family went off AFDC, child support arrearage payments
generally were divided between the state and federal governments to reimburse them
for AFDC; if any money remained, it was given to the family. In contrast, under P.L.

104-193, payments to families that leave TANF are more generous. Under P.L. 104-

193, child support arrearages are to be paid to the family first, unless they are
collected from the federal income tax refund (in which case, reimbursing the federal
and state governments is to be given first priority).
For Collections Made On or Since October 1, 2000. If a custodial
parent assigns her or his child support rights to the state on or after October 1, 2000,
the parent has to assign all support rights that accrue while the family is receiving
TANF benefits. In addition, the TANF applicant must temporarily assign to the state
all rights to support that accrued to the family before it began receiving TANF
benefits. This temporary assignment lasts until the family stops receiving TANF
benefits.
This means that since October 1, 2000, states have been required to distribute
to former TANF families the following child support collections first before the state
and the federal government are reimbursed: (1) all current child support, (2) any child
support arrearages that accrue after the family leaves TANF (these arrearages are
called never-assigned arrearages), plus (3) any arrearages that accrued before the
family began receiving TANF benefits (these are called temporarily assigned
arrearages). As mentioned above, these rules do not apply to child support
collections obtained by intercepting federal income tax refunds. If child support
arrearages are collected via the federal income tax refund offset program, the 1996
law stipulates that the state and federal government are to retain such collections.
Moreover, if, after satisfying the distribution rules specified above there are still child
support funds left over (i.e., available), then states may retain them to satisfy
arrearages they are owed. States are allowed to distribute any child support monies
still available at this point in the process to the custodial parent. However, regardless
of how states choose to distribute the money, they must pay the federal government
its share. Finally, any remaining funds are distributed to the family.
For Collections Made On or After October 1, 2009, or October 1,
2008, at State Option. P.L. 109-171 simplifies child support distribution rules by
giving states the option of providing families that have left TANF the full amount of
the child support collected on their behalf (i.e., current child support payments, non-
assigned child support arrearages, and child support arrearages collected via the
Federal Income Tax Refund Offset program).
With regard to former TANF families, P.L. 109-171 stipulates that the state
must pay all current child support payments to the family. If the child support
collection exceeds the amount of current support, the state must first pay to the
family any non-assigned child support arrearages. It there is still some money left,
the state has the option to retain the state’s share of the money or pay it to the family.
If the state decides to pay it to the family, the state does not have to pay the federal
government the federal share of the “left-over” collection. If any of the child support
collection still remains available, the state is required to pay it to the family.

Under P.L. 109-171, the state and federal government would be entitled to child
support arrearages that accrued while the family was on the TANF program, these
arrearages are assigned to the state as a condition of TANF eligibility. As noted
above, the state has the option to retain such collected arrearages or to pay them to
the former TANF family. The federal government is required to share with the states
the costs of paying child support arrearages to the family first. This provision takes
effect on October 1, 2009, or October 1, 2008, at state option.⁷⁶

⁷⁶ CBO estimated that this provision would cost the federal government $283 million over
the five-year period FY2006-FY2010. This provision takes effect on October 1, 2009, or
at state option not before October 1, 2008. Thus, the costs would only apply (at most) to
two of these fiscal years (FY2009 and FY2010).