Is Money Recieved By Child Because Of Mothers Disabilty Determined In Child Support From Father

The Supplemental Security Income (SSI) program serves as an income source of terminal resort for elderly or disabled individuals, including blind or disabled children. In determining the benefit amount for a child, the plan excludes 1-third of child back up payments from countable income. Legislation reauthorizing the 1996 welfare reform law contains provisions that would encourage states to allow children receiving Temporary Assistance for Needy Families (TANF) to keep more of the child support paid by an absent-minded parent. These potential changes provide impetus to revisit the style the SSI program treats child support.

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This brief was prepared by Susan Wilschke and Richard Balkus of the Social Security Administration'southward Office of Disability and Income Assist Policy.

Questions nearly the analysis should exist directed to them at 202-358-6275.

The findings and conclusions presented in this cursory are those of the authors and do non necessarily represent the views of the Social Security Administration.

This policy brief analyzes several options for increasing the SSI exclusion for child back up.

• Excluding all child support from countable income would benefit all children who receive child support only would heighten equity bug past allowing some individuals with higher income to receive a college SSI benefit.
• Excluding a larger percentage of child support would brand all children receiving kid back up ameliorate off, only children with larger support payments could exclude more than income than those with smaller payments.
• Excluding a flat amount of up to $300 would as well do good all kid recipients who receive child support.
• Excluding smaller amounts—upwards to $200 or $100, for example—would have a positive or neutral effect on virtually children just would harm a small number of children who currently receive back up payments exceeding three times the excluded amount ($600 for the $200 exclusion and $300 for the $100 exclusion).

Introduction

Under electric current law, the Social Security Administration (SSA) excludes 1-third of child support payments received in a calendar month on behalf of a child on Supplemental Security Income (SSI) from countable income in determining the SSI payment. Should the current treatment of child support payments in the SSI program change? How does it compare with policies in other means-tested programs? Are there ways to change the treatment of child support payments that would outcome in higher SSI payments for the children nigh in need, provide amend compliance with reporting requirements, and result in more absent-minded parents making child support payments?

Legislation reauthorizing the 1996 welfare reform law contains provisions that would let children receiving Temporary Aid for Needy Families (TANF) to keep considerably more of the child support paid by an absent parent than current constabulary allows. Allowing families to keep more kid support promotes family unit self-sufficiency and would "allow noncustodial parents who pay child support to know that their support payments are existence received by their children" (Senate Commission on Finance 2003).

To the extent that policymakers favor this blazon of incentive for families of children receiving SSI, this paper identifies several options for doing so. The options would eliminate or reduce the corporeality of kid back up counted against the monthly SSI benefit. This policy brief looks at the potential effects that implementing each option would have on the child also as on the SSI program.¹ It presents these options for purposes of discussion, but it does non make recommendations.

Depending on the option chosen, changing the rules for counting child support in the SSI program could potentially resolve several concerns raised by the current policy. First, the current policy raises issues of horizontal equity by allowing children with child support payments to receive higher benefits than children with equal income from other sources. However, public policy is better served if absent parents provide child support. In contrast to other types of income that the custodial parent or kid may receive, child support seems to warrant more of an incentive and reward for its receipt. Consequently, some differential treatment for counting child support would seem to be acceptable public policy. The question is how much. A related issue is that children with larger child support payments may exclude significantly more support from their countable income than children receiving smaller support amounts. The result is that SSI children with larger kid support payments have higher net income than those with smaller payments. The 2d event to consider is that the full general handling of child back up in means-tested programs may serve as a disincentive for custodial parents to pursue formal child support and to report on an accurate and timely footing the support payments they receive. For the SSI programme in item, electric current rules may discourage noncustodial parents from paying support, since two-thirds of the payment offsets the SSI do good. A more than generous child back up exclusion may encourage absent parents to pay back up and custodial parents to pursue information technology.

Federal Policy on Child Support Enforcement

Congress created the Kid Back up Enforcement (CSE) program in 1975 as an try to reduce public expenditures on welfare past obtaining support from noncustodial parents to proceed custodial parents and their children off welfare. Country CSE agencies assist custodial parents in obtaining financial and medical support for children by locating noncustodial parents, establishing paternity and support obligations, and enforcing those obligations. Child support payments are included in computing benefits under both the TANF and SSI programs. As discussed below, child back up rules for the TANF program may change with the passage of pending legislation. In examining the proposed changes, it is useful to understand how the TANF program currently treats child support.

Treatment of Kid Back up in the TANF Plan

Current law requires TANF recipients who receive child support payments to assign the payments to the state government every bit an implicit reimbursement for welfare expenditures. States are required to give the federal regime a share of its kid back up collections that is proportionate to the share of the land's TANF program that is federally funded.

Under the former program of Assistance to Families with Dependent Children (AFDC), states were required to laissez passer through to the family unit the first $50 of child back up received each month and exclude that amount in determining eligibility and benefits. The amount passed on to the family unit was overlooked when determining the federal share of a country's collection. The Personal Responsibility and Work Opportunity Reconciliation Human activity of 1996 eliminated the pass-through requirement in the new TANF program. States may pass some or all kid support payments to families receiving TANF, but any support paid to families must be paid out of the state's share of collections. As of 2003, 28 states had eliminated the pass-through and exclusion for child support collections.² The majority of states continuing to laissez passer through kid support have maintained the $l pass-through and the excluded corporeality, simply a few states allow families on TANF to proceed higher amounts of child back up (Roberts and Hashemite kingdom of jordan 2004).

Eliminating the child support laissez passer-through is seen every bit a disincentive for noncustodial parents of children on welfare to participate in the formal child support system. Since support paid through that system yields piffling or no additional income for their children, many of those parents adopt to make informal contributions (Sorensen and Lerman 1998). Enquiry suggests that many noncustodial fathers make noncash contributions, considering those contributions allow them to come across their children's needs more directly. Show too indicates that child support enforcement discourages some fathers from working in the formal sector and increases informal work activity (Waller and Plotnick 2001). Breezy agreements, however, put the custodial parent at risk of noncompliance with TANF requirements. Informal payments are likely to be smaller and are made at the discretion of the noncustodial parent, leaving the custodial parent little ways to pursue nonpayment (Turetsky 2000).

The treatment of child support payments for TANF recipients may change with the reauthorization of the 1996 legislation. H.R. 4, the Personal Responsibleness, Work, and Family Promotion Deed of 2003, was passed past the House on February xiii, 2003. The bill would encourage states to give the custodial parent a larger portion of the child support payment ($100 or $50 plus the pass-through allowed past the country as of December 31, 2001, whichever is greater) by waiving the federal regime'southward share of any child support collections that are passed on to the family. On October iii, 2003, the Senate Commission on Finance reported a version of the pecker that would waive the federal share of child support passed on to TANF families—up to $400 per month in the example of a family with one child, and up to $600 per calendar month in the case of a family with ii or more children.

Proponents of these proposals believe that information technology would provide an incentive for more than absent parents to make payments, considering less of their payment would be counted confronting the TANF do good. Proponents also believe that more custodial parents would seek CSE services if the custodial parent kept an increased portion of the child support payment. At that place is some testify to support this position. Sorenson and Halpern (1999) institute that the $fifty pass-through program increased the likelihood of receiving kid support. For example, of the never-married mothers on TANF, the likelihood of receiving child support increased by 4.5 percent nether a laissez passer-through program. In addition, Wisconsin received a federal waiver that allowed a total pass-through of child back up collections to TANF recipients on an experimental basis. Reports of the experiment show that the full pass-through encourages recipients to cooperate with establishing paternity and results in collecting higher amounts of kid support (Meyer and Cancian 2002).

Treatment of Child Support in the SSI Program Under Current Constabulary

Although filing for child support is a condition of eligibility for TANF, it is not so for the SSI program. TANF recipients must assign the right to whatever child support collected to the TANF agency, while SSI recipients are required to written report this income to SSA. Despite these differences in programme pattern, both programs operate in fundamentally similar ways, using kid support payments to kickoff benefits.

When determining a kid'southward monthly SSI benefit, program rules under the Social Security Human activity exclude from countable income one-third of the child support payment received from the absent parent. The remaining kid back up payment is bailiwick to the $20 general income exclusion. The rest reduces the child's monthly SSI benefit dollar for dollar. The example in Box 1 shows how child back up payments are counted for a child who has no other income.

Box 1.
Current computation for child back up payments (in dollars)

This instance assumes that the child has no other income.

Monthly federal do good rate for 2004	564.00
Average child support payment for June 2003	199.00
Minus 1/three of the child back up payment	− 66.33
Minus the $20 general income exclusion	− 20.00
Total countable income	= 112.67
SSI benefit (564.00 − 112.67)	451.33
Total income bachelor to child (199.00 + 451.33)	650.33
Note: This calculation is for the federal Supplemental Security Income payment but. Some states provide supplemental payments to children, enabling them to receive higher benefits.

Children who receive both SSI and child support payments have more bachelor income than children who do not receive kid support payments. Roughly 12 percent of children who receive SSI (25 percent of those living with ane parent) receive an average monthly child back up payment of $199 (as of June 2003).^three

Table 1 shows steady increases in the pct of children who receive both SSI and child support and in their boilerplate monthly child back up payment.

Tabular array 1. Children receiving both SSI and child support and their boilerplate child support payment

Date	Receiving both SSI and kid support		Average kid back up payment (dollars)
	Number	Percentage of all kid recipients
June 1996	81,810	8.2	156
December 1996	82,640	8.three	159
June 1997	85,440	eight.five	161
December 1997	75,750	8.vi	168
June 1998	80,690	8.9	172
December 1998	82,010	nine.3	171
June 1999	85,410	9.8	177
December 1999	84,100	ten.0	176
June 2000	88,010	10.4	181
December 2000	89,950	ten.vii	182
June 2001	95,260	11.i	184
December 2001	99,830	11.4	188
June 2002	104,470	11.6	192
Dec 2002	107,520	11.8	194
June 2003	114,170	12.1	199
SOURCE: Social Security Administration. 1996–2003. Children Receiving SSI. Semiannual report. Baltimore, Md.: SSA, Office of Policy.

Studies indicate that many custodial parents of children on SSI do not pursue child support from the absent parent or do non written report the child support payments they receive. For example, a 1999 report conducted by the Full general Bookkeeping Function (GAO) in 3 of the 4 states with the largest number of children receiving SSI (New York, Florida, and Texas) establish that less than half of the SSI children who alive in single-parent households received CSE services. A 1999 report done by the Social Security Assistants of nearly 1,500 single-parent households showed that 47 percent of the custodial parents had not pursued child support and that approximately 2-thirds of those households might receive back up if they pursued it.

In the iii states selected for review, GAO besides found that virtually two-thirds of parents who receive child support for children who become SSI do not study the child support payments to Social Security. Related to the underreporting is a high book of overpayments associated with child back up. Nonreporting or late reporting of all types of income is a problem for the SSI programme. For about other forms of income, such equally wages, there is a centralized organization for verifying receipt. By contrast, no such system exists for child back up, and SSA therefore relies heavily on cocky-reporting. In fiscal year 2000, at that place were about 660,000 overpayments, totaling $39 one thousand thousand, associated with child back up payments.

Options for Changing the Treatment of Kid Support in the SSI Programme

The amount of child support SSI children receive nether current law varies considerably (Nautical chart 1). Almost ii-thirds of SSI children reported equally receiving kid support receive monthly payments of $200 or less. Iii-quarters of the children who receive monthly payments of $200 or less practice not have whatsoever other countable income, including any income from the custodial parent deemed available to the child (deemed income). A change in the amount of child back up that is counted when determining children'south SSI benefits could have a pregnant impact on the total household income for these families.

Chart 1.
Number of SSI child recipients with payments from absent parents, by corporeality of payment, June 2002

Source: Social Security Administration, SSI Feature Excerpt Record, 10 percent data.

Excluding one-3rd of the child support payments raises issues of horizontal equity, because SSI children who receive child support are eligible for higher benefits than their peers who receive equal income from other sources. For example, excluding one-third of kid support payments allows a kid to receive up to $874.50 in child back up and even so be entitled to a monthly do good of $one and thus maintain Medicaid eligibility. Other SSI children with unearned income other than child back up tin can simply receive income upward to $583 and still be entitled to a monthly benefit of $ane. Furthermore, the more child support an SSI child receives, the larger the corporeality of the child support payment that will be excluded when determining the SSI benefit amount. For example, if a kid receives kid support payments of $750 a month and has no other income, Social Security does not count $270 of the support payment. A child whose only income is a child support payment of $150 tin can exclude but $seventy. Therefore, the child receiving the $750 child back up payment has $200 a month more in full income ($834) than the child with the $150 payment ($634).

Several options would allow children receiving SSI to keep more of the child support paid by an absent parent. Option i would exclude all child support from countable income, Option 2 would increase the percentage of child back up excluded, and Option 3 would supercede the current rule of excluding 1-third of child support with a fixed dollar exclusion.

Option 1. Exclude all child back up from countable income. This option would provide the greatest incentive for absent parents to provide child back up. It would increase the total income available for the child's care and thereby encourage more than custodial parents to seek out CSE services, knowing that the kid support would not impact the SSI benefit for their child.

Pick 1 would increase plan costs for current SSI kid beneficiaries receiving child support by most $136 million annually.^four (Plan costs from new recipients are difficult to estimate. Previous studies have shown that many SSI children receive child support that is not reported. Therefore, the number of new applicants who would exist eligible equally a result of this increased exclusion may not be every bit pregnant every bit one might expect.) This option would also simplify administration of the SSI program, because SSA would no longer demand to verify child support income or procedure overpayments related to child support.

As with current policy, this option would nowadays some issues of horizontal disinterestedness. For example, a child who now receives $874.50 a month in child support and $1 in SSI benefits would, under this pick, receive the full SSI monthly benefit of $564, for a full of $1,438.50. In add-on, the total income for some children would significantly exceed the total income for adults receiving SSI. For example, if both members of a married couple were eligible for SSI benefits and received at least $20 in unearned income, their total income guarantee for 2004 would be $866. Selection ane would too increase the differential handling of income from the custodial and noncustodial parent. In the instance above, assume that the monthly child support payment of $874.50 represents one-third or less of the absent-minded parent's earnings. A disabled child living with a parent with comparable earnings would not be eligible for SSI benefits, because a portion of the earnings of the custodial parent would be subject to deeming.^v

Option 2. Exclude a larger percentage of kid support payments. This option would increment the SSI benefits for children receiving child support by excluding a larger share of the child support payments. This option would as well present issues similar to those in Option one by excluding a much larger amount of child support for children who receive larger child support payments. Past excluding, for case, one-half of child back up payments from countable income, a kid could receive upward to $1,166 per month from an absent parent and yet receive $1 in SSI. Children receiving the average child support payment of $199 per month would come across their SSI benefit increment by $33.17 per month, and children receiving monthly kid support of $forty or less would have all of their child support excluded. This option would increase program costs for current SSI kid beneficiaries receiving kid support by about $38 million annually.

Some other variation would be to exclude two-thirds of child back up payments received. A kid could receive up to $1,749 in child support without losing eligibility for SSI. Children who receive less than $60 per month in kid support and have no other income would be able to exclude all of their child support. Program costs for current beneficiaries would increment past $76 1000000 per year.

Choice iii. Exclude a flat amount of child back up payments rather than a percentage. A third option for replacing the current 1-third exclusion would be to exclude a flat amount of child back up payments from countable income. This option is similar to the proposed TANF provision that allows a flat amount of child support to be passed on to the child. For example, SSA could exclude (upwards to the outset) $300, $200, or $100 of kid support. The flat corporeality could be tied to the cost-of-living adjustment.

Exclude up to $300. In effect, the maximum excludable amount for kid support payments is $291.fifty for 2004, so an exclusion of $300 would not adversely touch on any SSI children. All children with countable child support payments (any balance after applying the general income exclusion) would do good from this pick. The full monthly kid support payment would be excluded for about 85 per centum of children with reported child back up. A child receiving $883 in kid support would even so qualify for a monthly SSI benefit of $i under this option—comparable with the total income possible under the current dominion. Program costs for current beneficiaries would increase by nigh $117 1000000 annually. Similar the offset option, this option would as well provide a considerable incentive for the custodial parent to piece of work with CSE agencies.

Exclude up to $200. Excluding $200 would adversely affect less than 1 percentage of the SSI children receiving child support—those receiving more than $600 monthly in kid support. Children receiving more than than $783 in child support would no longer be eligible for SSI. Those children represent less than 0.2 percent of all children with reported child back up. The $200 exclusion would cost the program approximately $89 million annually for current beneficiaries and would target the neediest of the SSI children who receive child support. A kid receiving $200 monthly in child support and no other income would receive $113.33 more in SSI benefits nether this choice. Since 99 percent of current SSI children receiving kid support would benefit from this option, one would expect that more than custodial parents non receiving child support payments would avail themselves of CSE services to increase the total income for the household.

Exclude upwards to $100. If the exclusion were $100, kid back up payments for most 28 percent of SSI children would be totally excluded. A kid currently receiving $100 in kid support (and no other income) would receive a $46.67 increase in his or her monthly SSI benefit. Children whose child support payments were between $100 and $300 would also receive a higher monthly SSI benefit, with more of their kid support beingness excluded as countable income. This exclusion, therefore, would either benefit or not disadvantage the 85 percent of all SSI children who receive kid support payments of $300 or less. (Children receiving $300 in monthly child support payments and children with payments totally excluded nether the general income exclusion would have no modify in their monthly benefit.) Although not every bit generous as the other options, this choice would still provide more of an incentive for many parents to seek CSE services than currently exists. The estimated annual program toll of this pick for current beneficiaries is about $28 million.

Excluding $100 would be equivalent to the current 1-tertiary exclusion for children receiving child support payments of $300. Therefore it would adversely impact children at present receiving more than $300 per calendar month (nearly fifteen percent of all SSI children with reported kid support). For example, children receiving $400 in child support (and no other income) would encounter their full monthly income decrease past $33.33. (The majority of children with child support payments above $300 report payments in the $301 to $400 range.) The result would be more than significant for the 6 percent of SSI children who receive payments that are more than than $400, and some would lose their entire SSI benefit and possibly their Medicaid coverage. For example, children receiving $684 or more in child support payments would no longer be eligible for SSI. About 0.5 percent of all SSI children with reported child back up receive $684 or more.

Policy Implications

How would these options affect horizontal equity in the SSI programme, the payment of kid support, and incentives to report its receipt?

Improving Horizontal Equity in SSI

Excluding all child back up payments would increase differences in income between children who receive child support and other SSI recipients. Although most children who receive child back up practice not receive big payments, some children would be able to receive large amounts of child support while remaining eligible for SSI. An exclusion based on a apartment corporeality (Option three) would mitigate the differences in income levels more than would an exclusion based on a higher percentage (Option 2) or a total exclusion of child support payments (Pick ane).

Encouraging Noncustodial Parents to Pay Support

Research shows that fathers are more willing to establish paternity and pay support when their payments direct do good their children. Similarly, custodial parents may be more likely to pursue child support payments when the fiscal incentives for their children are greater. Any of the options discussed could increase the monthly SSI do good for children receiving kid support, thus providing an immediate benefit to children already receiving back up and perchance resulting in more children receiving support.

Addressing Nonreporting Issues

Totally excluding child support (Pick i) would provide the maximum incentive for absent parents to pay kid back up and would eliminate the demand for custodial parents to report child back up to SSA. In addition, the overpayment workload existing as a result of the current policy would be eliminated, which would help offset the additional costs associated with the option. Finally, this option goes farthest toward Social Security'due south continuing goal of simplifying the SSI plan. Option one as well is the most plush. The other options also accept the potential to increase the corporeality of child support that SSA excludes from countable income, providing greater incentive for custodial parents to study this income to SSA accurately and on a timely basis.

Notes

 i. For an in-depth assay of child support problems in the SSI programme and other options for increasing the receipt of child support payments for SSI children, see Wilschke 2001/2002. Options included in that article range from requiring cooperation with Child Support Enforcement (CSE) agencies and providing improve data to custodial parents virtually the availability of CSE services and SSI reporting requirements.

 two. Alabama retained the pass-through, only the corporeality is counted as income.

 three. Nigh 63 per centum of children receiving SSI live with one parent, usually their mother.

 4. Plan cost estimates are based on benefits paid in 2002.

 5. SSA includes, or deems, the income and resources of parents of modest children and ineligible spouses of married individuals when determining an private's eligibility for SSI and the amount of his or her payment.

References

General Accounting Function. 1999. Supplemental Security Income: Increased Receipt of Child Support Could Reduce Payments. Letter report, GAO/HEHS-99-11 (January 12).

Meyer, D., and M. Cancian. 2002. "W-2 Child Support Sit-in Evaluation Report on Nonexperimental Analyses."

Roberts, P., and Grand. Jordan. 2004. "Land Policy Regarding Pass-Through and Disregard Of Current Month's Child Support Collected for Families Receiving TANF-funded Greenbacks Aid." Center for Law and Social Policy, Washington, D.C. Accessed on February 25, 2004.

Social Security Administration. 1996–2003. Children Receiving SSI. Baltimore, Md.: SSA. Office of Policy.

———. 1999. "Draft Child Support Enforcement Study." Baltimore, Md., Office of Quality Assurance and Functioning Assessment.

Senate Committee on Finance. 2003. The Personal Responsibleness and Individual Development for Everyone Act. Report to accompany H.R. 4, Report108-162 (October 3).

Sorensen, E., and A. Halpern. 1999. Child Support Enforcement: How Well Is It Doing? Discussion Papers: Assessing the New Federalism, No.99-11. Washington, D.C.: Urban Plant.

Sorensen, E., and R. Lerman, 1998. "Welfare Reform and Low-Income Noncustodial Fathers." Challenge 41(4): 101–116.

Turetsky, V. 2000. Realistic Child Back up Policies for Low Income Fathers. Kellogg Devolution Initiative Paper: Realistic Child Back up Policies for Low-Income Fathers. Washington, D.C.: Centre for Law and Social Policy. Accessed on Dec 12, 2003.

Waller, M., and R. Plotnick. 2001. "Effective Child Support Policy for Depression Income Families: Evidence from Street Level Research." Journal of Policy Assay and Management xx(ane): 89–110.

Wilschke, S. 2001/2002. "Improving Child Support Enforcement for Children Receiving SSI." Social Security Bulletin 64(one): sixteen–26.

Source: https://www.ssa.gov/policy/docs/policybriefs/pb2004-02.html

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