When non-custodial parents send child support payments to help their children, the payments should benefit the children. Unfortunately, Oregon currently does not allow child support payments to reach children whose families are receiving aid through the Temporary Assistance for Needy Families (TANF) program. HB 2469-A would change the existing policy, allowing some child support to reach children in TANF families.
Before they are eligible for benefits from the TANF program, poor families must assign their child support rights to the state. While federal law requires that Oregon must share with the federal government a portion of child support collected on behalf of TANF families, Oregon has considerable flexibility when it comes to the remainder of child support collections. The state may keep it all, pass through all of it to families, or just pass through some of it.
Oregon takes the most restrictive approach. Currently, Oregon does not pass through any child support income to TANF families. About 61 cents of every child support dollar collected essentially goes to the federal government, and the state keeps the remaining 39 cents.
HB 2469-A would allow each child in a TANF family to receive up to $50 per month in child support, up to a maximum of $200 per month per family, and would disregard the child support income in establishing TANF eligibility.
The policy change would help families and increase collections
- This policy change would help children in some of Oregon’s poorest families. To be eligible for TANF, families of three must have incomes under $616 a month, which is 43 percent of the poverty line. The $50 per child would significantly improve the income of TANF families.
- Passing a portion of child support to families would likely increase child support collections. Research and common sense suggest that non-custodial parents are more likely to pay child support when they know the money is reaching their children.
The federal government would bear most of the cost
- The Deficit Reduction Act of 2005 mandates that the federal government waive its share of child support collections if a state passes through and disregards the support, up to $100 per month for one child and $200 per month for two or more children. This provision will take effect October 1, 2008.
- The provisions in HB 2469-A allowing children in TANF families to receive some child support would take effect on October 1, 2008, consistent with the effective date of the new federal law.
- For each dollar in child support Oregon passes through to TANF families, up to the limit set in the Deficit Reduction Act of 2005, the cost to Oregon would be 39 cents. Rather than send the other 61 cents of each dollar to the federal government, Oregon would send the child support to families under HB 2469-A.
- The Division of Child Support in the Oregon Department of Justice estimates that the provisions in HB 2469-A allowing children in TANF families to receive some child support would cost only about $925,000 in the 2007-09 budget cycle.