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Reconsidering tribal child support cost recovery practices

Daniel L. Hatcher, University of Baltimore School of Law, June 9, 2014

Understand how harm results from cost recovery using child support

Understand the intensity of the harm – and that more harm to tribes than states because of higher relative poverty numbers.

Understand that while tribes face more harm, tribes also have more discretion and can take the lead in doing what’s right for children and families

Understand that doing what’s right for children and families can also make the lives of tribal child support directors easier - because fewer unmanageable cases

Some goals….

How human service agencies and their parent states are using vulnerable populations as a revenue source

Conflict between agency and state fiscal self-interest and the best interests of those served

Focus of research…

Partnership between private industry and government, using vulnerable populations as a source of government revenue and private profit

Medicaid maximization Foster children’s Social Security benefits Nursing homes DSH Hospitals Child Support School based medicaid Prescription Drugs

MAXIMUS example Foster Child As Source of Revenue (new

slide)

The Poverty Industry

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In 2002, Alabama “spent” $272 million on child welfare. There were about 5,800 children in foster care in Alabama in 2002.

Divide that out = about $47,000 per child. Subtract out IV-B and its $45,000

45,000 = $3,750 PER MONTH per child

The amount Alabama paid its foster care providers to care for children in 2002? Between $350-380 per month.

Example foster care numbers to consider…

Starting at the end – recommendations Primary Recommendation: Use

discretion to benefit children and families

Turning to cost recovery through child support

WELFARE Expansive “good cause” to not require

child support cooperation and assignment. Value choice of the custodial parent. Best interests of child should always control.

Expansive use of ground to deviate downward from child support guidelines when support is owed to gov’t.

Pass through child support to families. Exercise discretion to reduce driver’s

license suspensions and credit reporting.

Focused recommendations

WELFARE Arrears Management.

Forgive state owed arrearages. Debt leveraging option. Automatically suspend child support for

incarcerated obligors. Declare best interests of child as paramount.

And mean it. Sounds obvious – but sometimes the most obvious

is the easiest to overlook. Make the connections and take off the blinders.

Welfare, Foster Care, Child Support, Housing, Criminal Justice, Juvenile Justice, Education Dept, Health care, Mental health, Courts.

Recommendations continued…

FOSTER CARE Most of the same recommendations as with

welfare cost recovery, plus…. Expansive use of “where appropriate”

language. Don’t refer cases to child support if contrary to best interests of child or conflicting with reunification efforts.

Don’t include child support as part of reunification plan.

Don’t take children’s Social Security benefits, but rather use the funds to help the children and families.

Understand that short term revenue can cause long term costs.

Recommendations continued

Out of the $107 billion in child support debt nationwide, the government claims half so it can seek to recoup the costs of public assistance provided to low-income families.

Cost Recovery requirements – child support cooperation and assignment

Public Assistance and Child Support

When child support provided to children and families, can be tremendous help

But the side of child support that forces the child support obligation and takes payments from children and families causes harm

Benefit or Harm

For children whose child support has been assigned to the government, the reality of child support is harmful

Poor mothers are forced to name absent fathers, and then sue them—and sue them again and again.

Because the fathers are often also poor, the vast amount of assigned child support goes unpaid and insurmountable arrearages quickly result.

Fathers who try almost always fail as the automated enforcement mechanisms take over: a trucker’s license is suspended, so he cannot work; a laborer’s wages are garnished at sixty-five percent, so he cannot afford to pay his own rent; a father obtains a new job and then loses it after being incarcerated for contempt because of his child support arrearages.

The relationships between the mothers and fathers, fragile at their beginnings, can be obliterated through the process. The hopes of children to have fathers who are supportive and involved in their lives can be dissolved.

Harm…

Little if any gain to counter the loss because welfare cost recovery is a fiscal failure. Financial benefit to the government from welfare cost recovery is minimal and may actually be negative.

Small percentage of assigned support that is successfully collected is diverted from the children and their families when they most need it, decreasing their economic stability and increasing their likelihood of needing welfare again in the future.

Also reduced in-kind support

Harm continued…

Child support cost recovery also results in legal conflict.

Reimbursing welfare costs directly conflicts with serving the best interests of the children, long recognized as the paramount purpose of child support. The two goals simply cannot coexist.

Every dollar taken from a child in the name of welfare cost recovery is a dollar that does not serve the best interests of the child. Yet, despite the conflict, child support agencies attempt to serve both purposes simultaneously.

Harm continued

State vs. state. State’s own interests are aligned against each other. Looking forward, states have an interest in supporting the future welfare and best interests of children and an interest in reducing the likelihood that single- parent households will need future public assistance. Looking back, once a family has received welfare assistance, states have a short- term interest in seeking reimbursement of the public costs of the welfare assistance already provided. The interests are in direct conflict.

Culture of conflict – state vs state vs mom vs dad vs child

State vs. parents and child Mom vs. Dad

Cost recovery pits family members against each other.

At the time of the birth of a new child, young unmarried parents in “fragile families” have the potential for a healthy relationship. Most of the mothers want the fathers to have significant involvement in their children’s lives and the fathers want to do right by their children. The fragile families have hope. But rather than building on that hope with supportive services aimed at encouraging healthy relationships, welfare cost recovery adds turmoil.

Culture of conflict…

Parents vs. children Fathers can be further alienated from their

children as they are unable to make payments and thus may reduce visitations out of embarrassment or simply the desire to hide from enforcement efforts.

Even the relationship of mother and child can become adversarial. Most children hope for a relationship with their absent parents. Unable to understand the forced system, the children are witness to their mothers suing their fathers in court and may blame one or both parents when their fathers retreat further from family contact.

Culture of conflict..

Government child support officials recognize the failings of welfare cost recovery, and they describe a shift in priorities. No longer is cost recoupment the primary aim of child support offices.

But although signs of the changing mission are evident, the shift is far from complete. States not on board yet…

Deficit Reduction Act of 2005 – pass through and disregard. Other discretion available. States not taking advantage of discretion.

In anti-tax fiscal climate, the pressure on states to pursue long- standing revenue streams is powerful.

Moving forward…

Pass through and disregard Good cause for noncooperation Realistic guidelines Downward deviations from guidelines

when in best interests of children

Available discretion…

Foster care cost recovery through child support enforcement initiated under the requirements of Title IV-E of the Social Security Act.

To receive the federal funds, IV-E requires inter- agency partnership in effort repay foster care costs. Child support obligations initiated against mothers and fathers of foster children, and rather than using the payments for the children’s benefit, the child support is assigned to the government.

Only applies to children removed from poor families.

Foster Care and Child Support

Children in foster care are not likely to come from rich families. Children in families with annual incomes below $15,000 twenty-two times more likely to experience some form of maltreatment than children whose families earned $30,000 or more per year. This poverty correlation doubles when considering only child neglect, and neglect is the most common type of maltreatment.

The parents of foster children present harsh portrayals of the causes and effects of poverty: former welfare recipients fighting a losing battle for economic stability; victims of domestic violence; young parents who grew up in foster care repeating the cycle; parents struggling with substance abuse; homeless mothers unable to find shelter, and families lacking access to health care.

Poverty Correlation

Connection between poverty and foster care exacerbated by state and federal policies and by the overall funding structure of the child welfare system.

Reasonable efforts required to prevent the necessity of child removal. But unfortunately, the “reasonable efforts” to provide needed services are usually inadequate.

Title IV-B federal funding, available to provide services to help struggling families stay intact, is capped. In contrast, Title IV-E funding provided to assist states with foster care costs after child removal is structured as an entitlement, and thus limited only by the number of eligible children. Poverty correlation

cont…

Title IV-E payments are targeted so that states have a financial preference to remove foster children from poor families.

Private consultants often hired to develop strategies to increase the “penetration rate”—the percentage of foster children from poor families. Children in low- income families, already at greatly increased risk of being assessed for child maltreatment due to the circumstances of poverty, are further targeted because they are viewed as coming with money attached.

Combined with ASFA strict time limits. And unpaid support used as grounds for TPR. Poverty correlation

cont…

The effort to recover foster care costs through child support enforcement diverts the child welfare agencies’ missions. The over- arching purpose of the child welfare system is to protect the welfare of children while simultaneously striving to strengthen and preserve families. The child support program is guided by the best interests of the child standard.

However, through the forced intersection of the two programs in order to recover costs, a shift occurs that subverts the agencies’ core missions to the cost recovery pursuit – and harm results.

Harm and diverted mission…

Places gov’t fiscal interests over best interests of children

Hurts reunification efforts Can extend stays in foster care Hurts families after reunification Alienates parents Individual caseworkers often oppose the

policy Little if any fiscal benefit to gov’t

Harm…

Diversion of statutorily required mission Misuse of required case plans – using

children as collateral Termination of parental rights for gov’t

debt (substantive due process) North Carolina Example

Illegality of practices

42 U.S.C. § 671(a)(17). “[W]here appropriate, all steps will be taken, including cooperative efforts with the State agencies administering the program funded under part A of this subchapter and plan approved under part D of this subchapter, to secure an assignment to the State of any rights to support on behalf of each child receiving foster care maintenance payments under this part.”

“Where appropriate” provides a lot of discretion to not refer cases, but states often ignore discretion.

Discretion ignored

WELFARE Expansive “good cause” to not require

child support cooperation and assignment. Value choice of the custodial parent. Best interests of child should always control.

Expansive use of ground to deviate downward from child support guidelines when support is owed to gov’t.

Pass through child support to families. Exercise discretion to reduce driver’s

license suspensions and credit reporting.

Focused recommendations

WELFARE Arrears Management.

Forgive state owed arrearages. Debt leveraging option. Automatically suspend child support for

incarcerated obligors. Declare best interests of child as paramount.

And mean it. Sounds obvious – but sometimes the most obvious

is the easiest to overlook. Make the connections and take off the blinders.

Welfare, Foster Care, Child Support, Housing, Criminal Justice, Juvenile Justice, Education Dept, Health care, Mental health, Courts.

Recommendations continued…

FOSTER CARE Most of the same recommendations as with

welfare cost recovery, plus…. Expansive use of “where appropriate”

language. Don’t refer cases to child support if contrary to best interests of child or conflicting with reunification efforts.

Don’t include child support as part of reunification plan.

Don’t take children’s Social Security benefits, but rather use the funds to help the children and families.

Understand that short term revenue can cause long term costs.

Recommendations continued

Use discretion available, and work to serve the bests interests of children and families.

Don’t lose sight of what this is all about.

Concluding thoughts