A Quick Summary of Title IV-D Funding and Incentives

Doug Dante DougDante1@yahoo.com Updated: March 11, 2009

US CODE TITLE 42 > CHAPTER 7 > SUBCHAPTER IV > Part D > § 655. Payments to States
http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00000655----000-.html Provides for 66 percent payments to cover basically all expenses related to child support establishment, payment handling, etc. This is the big direct payment to the states from the federal government. The more work there is to do, the more the federal government repays the states. To maximize program income, the child support enforcement agency should maximize the number of cases, and the number of dollars and processing time per case. It is therefore necessary to discourage parents from making their own arrangements for payment, and to strongly encourage divorces or a breakup of cohabitation between parents. Joint custody laws have been shown to cut the divorce rate. It is unsurprising that most child support agencies often strongly oppose them, along with most family lawyers. From various newspaper articles, it seems that the Michigan Friend of the Court (Assists Michigan courts in enforcing child support and parenting time orders) sends to the federal government documentation for wages and benefits of full time equivalent employees. Each hour a that FOC enforcement officer works, 66% of his/her pay comes from the federal government (plus incentive payments based on performance). I do not believe that the FOC distinguishes between time spent collecting fines, which go to the FOC itself, and time spent collecting child support, which go to the parents who care for the children. Other states likely have equivalent billing mechanisms.

US CODE TITLE 42 > CHAPTER 7 > SUBCHAPTER IV > Part D > § 658a. Incentive payments to States

$483,000,000 for fiscal year 2008 to be shared amongst all states. (2)(A) Each state's portion is based on its "incentive base amount" which is supposed to be calculated from its paternity establishment performance level, support order performance level, current payment performance level, arrearage payment performance level, and cost effectiveness performance level.

All except the first are improved by getting higher child support orders per case, which means sole physical custody for the parent earning the least money. However, for states maximizing revenue, the state collections base, i.e. Support collected, is, I believe, the only value used to calculate performance (5)(A). There is what may be termed a “loophole” which is used by states to effectively get near 100% funding of child support enforcement. This was closed under the Deficit Reduction Act of 2005, but was recently reopened for two years retroactive to October 2008 under the 2009 American Recovery and Reinvestment Act (a.k.a. Stimulus Package). The “loophole” allows states to use federal incentive money to cover their 34% payment to get § 655 funds. In effect, the states only needed to to pass the appropriate laws complying with Title IV-D, maintain a certain performance level, and then the federal government will pay for most, if not all, of their child support enforcement efforts. In some cases, the states could even profit by collecting more in incentive payments than was required to cover their 34% base share. http://www.whitehouse.gov/the_press_office/arra_public_review/#TB_inlineheight=220&width=370&i nlineId=tb_external (See Section 2104)

US CODE TITLE 42 > CHAPTER 7 > SUBCHAPTER IV > Part D > § 669b. Grants to States for access and visitation programs
90% federal match or $100,000 per state minimum. It seems to me that most states are missing the boat on getting the most money here. This is may be because they're aware that strong enforcement of parenting time may be an inhibitor to a future divorces, which can reduce child support awards and therefore cut into program income. http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00000669---b000-.html In Michigan and other states, these funds are often directed into supervised visitation centers. http://courts.michigan.gov/scao/services/grants/AVFundingAppFY2008.pdf http://www.scribd.com/doc/477791/A-Review-of-the-CSPER-Report (See page 4) Unfortunately, in Michigan, as well as in other states, these funds are then directed away from front line Friend of the Court workers who are actually tasked with enforcing parenting time. http://www.scribd.com/doc/550881/When-the-Friend-of-the-Court-Doesnt-Respond-to-ParentingTime-Violations

US CODE TITLE 42 > CHAPTER 7 > SUBCHAPTER IV > Part D > § 654. State plan for child and spousal support
This provision of federal law provides for a $25 annual fee to be deducted from child support payments for each family after a minimum amount of $500 in support is received each year. Some of this fee is for the states, and some is for the federal government. $25 application fees for assistance in support are also described here. http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00000654----000-.html#6_B_ii

Fines, Reimbursements, Disbursements, and Other Fees
TITLE 42 > CHAPTER 7 > SUBCHAPTER IV > Part D > § 654b. Collection and disbursement of support payments http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00000654---b000-.html TITLE 42 > CHAPTER 7 > SUBCHAPTER IV > Part D > § 657. Distribution of collected support http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00000657----000-.html#a Prior to the Deficit Reduction Act of 2005 some parents complained that the local child support agencies were collecting child support and then using that money to enforce court orders to pay for court fees, required counseling fees, lawyers fees, interest-like fines on child support arrears, etc. The Federal Government then mandated that the disbursement of child support money collected go to the recipient parent child first, excluding cases where the state was owed money for assistance or when the child was under state care, and excluding minor fees such as the $25 annual fee. Under federal law, there are percentage limits of the paying parent's income that can be collected for child support (50-60%) and arrears (an additional 5%) that can be garnished from wages or acquired by any legal process. http://uscode.law.cornell.edu/uscode/html/uscode15/usc_sec_15_00001673----000-.html However, it appears that some local courts are evading these limits, and requiring that parents regularly pay additional amounts via check. http://www.scribd.com/doc/458394/Michigan-Friend-of-the-Court-Child-Support-ModificationRequest (Search for “Macomb”) It's not clear that these courts are respecting the disbursement laws in the 2005 Deficit Reduction Act, and may be using these additional payments, received by check, to pay themselves interest-like fines on arrears.

Also, in some case, courts in some states may be respecting the income limits, but evading the restrictions on disbursement by collecting that portion of child support which is intended to pay down arrears as fees. Local child support enforcement agencies then such as the Michigan Friend of the Court then have a financial incentive to find that parents have in the past failed to support their children for an extended period, or that they owe substantial fees such as lawyer fees as child support. As the paying parent will likely not be able to pay off these fees for a long time, the agency can then create an income stream as large as 5% of the parents net income (based on the amount collected for arrears), and disburse that to itself as interest-like fines on the arrears that parents owe, rather than to the child they are intended to serve. This creates a very strong incentive to add the legal bills of the other party or other fees onto the child support obligation of the paying parent, in order to establish large arrears up front which then help create large interest-like fines that then create a steady future pay stream for the agency. The establishment of these arrears also create a strong financial incentive to deny modifications of child support payments when parents lose their jobs, or to prevent parents who owe arrears but are actually the custodians of the children for whom they pay child support to modify their obligations to receive support instead, which is normally defined by law as being in the best interests of the children. For some local agencies who are adept at finding parents in arrears, these interest-like fines may represent a substantial income stream. For those income streams established before the 2005 Deficit Reduction Act, the agency's immediate loss of those income streams, caused by new federal laws requiring them to pass that money onto the children they serve, can be a bitter pill to swallow. It should come as no surprise that some parents have raised concerns that their local agency may be failing to follow the changes in the federal disbursement law. Local agencies may also fine parents for the cost of enforcing support obligations, including court costs, costs of police time, cost of agency time in enforcing obligations, the costs of prosecuting attorneys, and jail costs. These additional costs can sometimes create a conflict of interest for the agencies. However, finding the proper balance of enforcement in each case is a delicate matter, and we in the public should try to show reasonable deference to agencies and people who are honestly acting in what they believe is the best interests of children and parents, and who are doing their best to apply the law in a reasonable manner.

Undistributed Collected Funds
In some cases, child support collected is never disbursed to the parent who is caring for the child. Sometimes that parent “does not want the money”. Sometimes that parent fails to cooperate, and sometimes the money is just lost. Usually, the state keeps this money for itself, either through the general treasury or through the child support collection agency. These undistributed collected funds can add up to substantial income. States have a financial conflict of interest in providing this money to the children which are to benefit

from it. This may include making it difficult for people to find out what funds are not being collected or disbursed, even for the paying parent or the child in question, and even after that child turns 18. For example, in Michigan, only the recipient can find the funds using his/her name and social security number. http://www.michigan.gov/dhs/0,1607,7-124-5453_5528-107523--,00.html In Michigan, an audit found that undistributed funds were 3.15% of all collected support in 2000-2001, with the share of undistributed funds increasing year on year. Other states likely have similar large amounts of child support which are not going to the children who need it. http://audgen.michigan.gov/comprpt/docs/r4362502L.pdf

See Also
Other concerns include: More information on possible racketeering in the FOC: http://www.scribd.com/doc/454566/Racketeering-in-Michigans-Friend-of-the-Court More information on show cause hearings. http://www.scribd.com/doc/406110/Some-Thoughts-For-Parents-Facing-A-Contempt-of-Court-Hearing The court has a financial conflict of interest that may discourage joint physical custody or the higher earning parent to obtain custody of children: http://www.scribd.com/doc/630611/A-Quick-Summary-of-Title-IVD-Funding-and-Incentives Some local FOCs may delay or deny legitimate child support modification requests: http://www.scribd.com/doc/458394/Michigan-Friend-of-the-Court-Child-Support-ModificationRequest Or refuse to respond to legitimate parenting time violations: http://www.scribd.com/doc/550881/When-the-Friend-of-the-Court-Doesnt-Respond-To-ParentingTime-Violations Or engage in troubling retaliatory practices: http://www.scribd.com/doc/454566/Racketeering-in-Michigans-Friend-of-the-Court http://www.scribd.com/doc/959159/When-Might-a-Federal-Racketeering-Lawsuit-Be-Allowable Or may operate without knowledge of problems that fatherlessnes cause for children: http://www.scribd.com/doc/425877/The-Effects-of-Divorce-and-Sole-Custody-on-Children-

Any local FOC is under the direction of the SCAO (State Court Administrative Office) which created the troubling CSPR (or CSPER) report, and the federal dollars also extend the financial conflict of interest from the courts to the local Prosecuting Attorneys: http://www.scribd.com/doc/477791/A-Review-of-the-CSPER-Report http://courts.michigan.gov/scao/services/focb/CSPR12-06ReportAndRecommendations.pdf Some local FOCs may improperly use internal mediators. http://www.scribd.com/doc/405400/Michigan-Friend-of-the-Court-Mediator-Questions Some local FOCs may unnecessarily delay child custody rulings, damaging the parent-child bond of the parent on the wrong side of a temporary order, and risking making any temporary order a permanent order through simple longevity: http://www.scribd.com/doc/509712/What-if-The-Court-Fails-to-Rule-Promptly-on-Custody Some local FOCs may fail to allow contemptors to speak at contempt hearings: http://www.scribd.com/doc/406110/Some-Thoughts-For-Parents-Facing-A-Contempt-of-Court-Hearing Some local FOCs may fail to properly ensure that the civil rights of parents are respected: http://www.scribd.com/doc/404652/Fiction-John-Q-Public-and-the-Friend-of-the-Court-Before-ItBegins Some local FOCs may fail to enforce parent's rights to their children's school or medical records: http://www.scribd.com/doc/458635/Considerations-for-Getting-Your-Childs-School-Records-usingFERPA Some local FOCs may incorrectly substitute a software application for the correct child support formula manual, creating an improper support obligation that may actually cause severe poverty of the paying parent, which is not consistent with Michigan law nor in the children's best interests: http://www.scribd.com/doc/962203/Should-Software-for-Child-Support-Calculations-be-Treated-AsUnreliable Or they may fail to act in the children's interest when there is clear and convincing evidence that their custodial parent isn't using the paying parent's payments to provide for the children: http://www.scribd.com/doc/1018457/Considerations-for-when-a-Parent-Spends-Child-Support-onHimselfHerself-and-the-Court-Doesnt-Care Or they may back date forms, etc, making it difficult for parents to obtain justice: http://www.scribd.com/doc/948712/Detecting-Fraud-in-Court-Filings-Postal-Meters-ColorPrintersCopiers-and-Cartridges Or they may fail to follow court rules and allow for contemporaneous recordings, or alter recordings, or unnecessarily delay transcripts, to make it more difficult for parents to obtain justice: http://www.scribd.com/doc/2257035/Contemporaneous-Recordings-for-Referee-Hearings-in-Michigan Or they may use biased custody evaluators: http://www.scribd.com/doc/2561734/Some-Thoughts-on-Child-Custody-Hearings Or lawyers and judges may fail in their mandatory ethical duties to report ethics violations of their

peers: http://www.scribd.com/doc/2618443/YOU-are-a-mandated-reporter Or the mediators may not appear to act honestly, referees may seem less than fair, and judges may rubber stamp decisions: http://www.scribd.com/doc/3123830/Michigan-Child-Custody-Survey-Report Or the procedures on getting public information from the judiciary may be obscure and confusing: http://www.scribd.com/doc/3584335/How-to-Get-Public-Information-From-the-Michigan-Judiciary For local FOCs: Oakland: http://www.scribd.com/doc/362206/Oakland-County-Friend-of-the-Court-Ignores-the-Law-and-HurtsKids Macomb: http://www.scribd.com/doc/3987229/Macomb-County-Friend-of-the-Court-Ignores-the-Law-andHurts-Kids Ingham http://www.scribd.com/doc/362198/Ingham-County-Friend-of-the-Court-Is-Ignoring-The-Law-andHurting-Kids Kent http://www.scribd.com/doc/6507067/Kent-County-Friend-of-the-Court-Ignores-the-Law-and-HurtsKids Be aware of House Joint Resolution NN, which would add already protected federal rights of parents to Michigan's constitution: http://www.scribd.com/doc/1452062/Send-Michigan-Reps-a-Thank-You-For-House-Joint-ResolutionNN http://www.scribd.com/doc/4525506/-House-Joint-Resolution-NN-Specific-Problems-and-How-ItWill-Help-Michigans-Children http://www.scribd.com/doc/4339855/-Its-Time-To-Help-Parents-and-Children-By-Passing-HJR-NN Related short fiction: http://www.scribd.com/doc/2261150/Fiction-Congratulations-Now-Pay-Up Two free on line communities that you may find useful are: http://groups.yahoo.com/group/FRC/ http://groups.yahoo.com/group/michdads/ Be aware that FOC custody recommendations vary significantly between various FOC offices , and these variations also create differences in custody recommendations between various population groups. http://www.scribd.com/doc/6169001/Analysis-of-Friend-of-the-Court-Custody-Recommendations

I would be aware of my ability to make discovery motions, with my lawyer or on my own, and my rights to discovery as they relate to my fundamental liberty interests to the care and custody of my child: http://www.scribd.com/doc/9131878/Considerations-for-Appeal-of-Discovery-Rulings-in-MichiganFamily-Law I would be aware of potentially illegal lobbying by the Friend of the Court Association at taxpayer expense: http://www.scribd.com/doc/12744555/Is-the-Friend-of-the-Court-Stealing-Taxpayer-Dollars-FromChildren-for-Illegal-Lobbying I would have an understanding of the Friend of the Court and the ways in which it can be easily improved. http://www.scribd.com/doc/12745431/Suggestions-to-Help-the-Michigan-Friend-of-the-CourtStrengthen-Families If at all possible, I would seek the help of a good lawyer!