1. Child Support How Much is Appropriate?
US Guidelines and the Shifting Paradigm to Right Sizing Orders
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

2. Presentation Overview
Guidelines in the United States
History
Model Elements
Models of Choice
State Authority / governance
Research Findings
Current Issues and Concerns
NPRM – possible impacts/influences
New trends / next steps
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

3. Goals of Order Establishment
Set realistic orders based on real income
Increase obligor participation in order establishment
Reduce or eliminate setting retroactive support
Modify orders promptly when appropriate
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

4. UNITED STATES GUIDELINES
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

5. History First appeared in 1975 in Illinois and Maine
1984 Federal requirement for all states to adopt advisory child support guidelines by 1987
1988 federal mandated “rebuttable presumption” be added into every State’s child support guidelines
Must be reviewed every four (4) years – Quadrennial Reviews
Rebuttal
Presumption
True useless
Confronted & proved otherwise
Allows for defaults to stand
“Innocent until proven guilty”
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

6. History Basic Mandatory Components
Must have one set of guidelines to be used by all decision makers (IV-D & non- IV-D cases)
Take into consideration all earnings and income of the noncustodial parent
Must be based on specific descriptive and numeric criteria
Provide for the child’s health care needs
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

7. Three Models Percent of Income Income shares Melson
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

8. Models Percent of Income Model
Calculates the child support payment as a percentage of the obligor parent’s income alone.
Percent of obligor income model exhibits considerable variation
Arise from the definition of income and the percentages applied to that income
Significant variation in 10 States currently using
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

9. Models Income Shares Model
What portion of shared/pooled expenses belongs to the children, and what portion belongs to the adults.
Comparing what childless households spend versus what households with children spend at every income level
“Estimators” to determine the cost of children.
37 States use this model
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

10. Models Principles of Income Share Guidelines:
Parents should share the financial responsibility of their children
Child should share in lifestyle afforded by each parent
Not discourage share physical custody
Be gender neutral
Be mindful that all children of a parent have a right to a percentage of that parent’s income
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

11. Models Principles of Income Share Guidelines (cont’d):
Children of divorced and never-married parents should not be treated differently
Not indirectly create economic disincentives to re-marry or work
About 21 States initially adopted prototype Income Shares guidelines, today about 37 States use Income Shares
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

12. - Provided as an example of the variations
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

13. Example of Melson Formula
Melson Model
More complicated version of Income Shares
Provides a primary support allowance a self support and an adjustment (SOLA)
3 States use this model
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

14. Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

15. State Usage of Guidelines Models
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

16. Studies of the Cost of Raising Children
Basic need studies
Key to the guidelines were:
Understanding
1) the cost of raising children
2) How families spend – at various points – at various levels of income
3) How different are single parent families?
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

17. Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

18. Income and Expenditures Components
Self disclosed
Wage / reported / employed
Low income / Disability
Expenditures / Estimators
Assessment Methodology – economists don’t agree
Engel
Betson
CEX is the most detailed and best available source of national data on household expenditures upon which economists generally rely to determine what families are spending on children.
Number of children
Multiple fathers
Regional variations
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

19. Estimators Engel Estimator Used budget surveys
Conclude that as a family’s size increased (assuming constant family income), the percentage of the family’s expenditures devoted to food increased
As a family’s income increased (holding family size constants), the percentage of the family’s expenditures devoted to food decreased
Percentage of a family’s total expenditures that was devoted to food was a good criterion for evaluating well being
Rothbarth Estimator
Assess children’s impact on their parents’ consumption
Level of “excess income” available to them once necessary expenditures on all family members had been made
Excess income to include luxuries such as alcohol, tobacco, and entertainment, and savings
CNPP Estimator
Develops economic estimates for the major categories of child-rearing expenditures (i.e., housing, food, transportation, clothing, health care, child care and education, and miscellaneous child-rearing expenditures)
Allocates the expenses
Does not use a marginal cost method that measure child-rearing expenditures as the difference in expense between equivalent couples with and without children
Examines direct parental expenses on children through age 17
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

20. Research and Limitations
Many researchers have done work on child support collectability and arrears growth
Limitations due to :
- Data
- Use of large government databases – Employment Department or census data against child support databases – not linked person-to-circumstances.
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

21. Reasons that State Guidelines Amounts Differ
Economic basis, interpretation of the economic study & guidelines model
Year in which basic formula/schedule was last updated
State adjusts for its relatively high/low income (e.g. NJ’s adjusts for its high income, AL adjusts for its low income)
Consideration of federal and state income taxes
- tax year considered
Inclusion/exclusion of the child’s healthcare costs and child care expenses in the basic formula/schedule
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

22. Reasons that State Guidelines Amounts Differ
Consideration of parenting-time expenses in basic schedule/formula
Low-income adjustment formula
Extrapolations to higher incomes
Assumptions about how much disposable income is spent and saved
Parenting time
Texas - 50% possession
Sliding scales
Overnights
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

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25. Related Research
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

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28. Research that Makes the Case for Right Sizing Orders
Dr. Elaine Sorenson, Urban Institute, (2007)
- Looked at 9 States
Non-Compliance of a current support order is another major factor in arrears growth
Majority of arrears owed by a small percentage of obligors
11% of obligors owed 54% of the arrears
Of those obligors, ¾ had had no reported income, or income less than $10,000 per year
Interest on arrears, where interest was applied, is responsible for a large portion of arrears growth
- Over the last 5-7 years
- Improvements in collections and support slowed
- Availability of data provides better opportunity to analyze why
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

29. Research for Right Sizing
Eldrend and TaKayesu (2010, 2012) California
Despite Differences in:
CP & NCP Income
Number of Children Per Family
Type of Welfare Case (Current, Former, Never)
Court Action (Default, Stipulation, Court)
Guideline Deviation
Size of County
Visitation Percentage
Child Age
They found
- 18%-20%
- Factual information more effective
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

30. Initial Findings
Factual Income Leads To Consistent Child Support Payments
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

31. This chart shows the impact of educational differences in the ability to pay
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

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37. Concerns and Issues Child’s Financial and Non-Financial Well-Being
Support received, consistent and regular payments
Parent-child contact / parenting time
Automatic Adjustment/COLA
Complex Families
Multiple orders & Families
Kinship care & foster care
Changes in family construct
Split case – one party is both CP and NCP
Fairness & Equity
Timesharing adjustments
Other adjustments (childcare expenses, healthcare, etc.)
Parents with disparate incomes
Compromise programs
Self support reserve
Actual vs Imputed Income
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

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42. Proposed Federal Rules Changes
Fed. Register , v. 79 No. 221 p
Impetus
Research findsthat setting support obligations beyond the ability of obligors to meet them results in unpaid arrears
Research findsthat high arrearages reduce formal earnings of noncustodial parents and the payment of child support to economically disadvantaged families
Accumulation of arrears is associated with incarceration
St atisticsfrom state-enforced child support cases(FY2013)
Arrears among all cases nationally: $116 billion, 30 states with arrears over a billion in arrears
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

43. Summary of Proposed RPRM Changes Relevant to Guidelines
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

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50. In Summary
Guidelines are valuable but very complex and often do not reflect the flexibility needed
Experience has been a valuable teacher
Automation of enforcement tools is beneficial
One size and methodology of application has limitations
While support is a parents responsibility it should not dis-encentivized by policy and practices that are not reasonable
Engaging with families in meeting their responsibilities pays off for children
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015

51. Thank you
Questions ?
Alisha Griffin, Director, California Department of Child Support Services November 10, 2015