|Decision Makers:||State Government Federal Government|
|Population Reach:||1-9% of WI's population|
|Impact on Disparities:|
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Families eligible for Temporary Assistance for Needy Families (TANF) are required to assign their rights to child support to the state in order to receive TANF benefits. States may retain child support payments collected on behalf of TANF families to offset the cost of welfare payments or may pass some or all collected funds to the custodial parent. States may also disregard some or all of a pass-through amount when determining TANF participants’ benefits so that portion of the child support is not considered in benefit calculations. Full pass-through policies allow the custodial parent (usually the mother) to receive all child support paid; no portion is retained by the state.
There is strong evidence that full pass-through and disregard of child support payments increases custodial parents’ receipt of payment as well as the amount they receive. Paternity is also established more quickly when such policies are in place than when child support payments are retained to offset welfare payments (Urban-Wheaton 2008, Cancian 2008, UW IRP-Cancian 2007, Pirog 2006, Cassetty 2005).
Overall, more generous pass-through and disregard policies are associated with higher levels of child support receipt (Cancian 2008, UW IRP-Cancian 2007, Pirog 2006, UW IRP-Cancian 2006, Cassetty 2005) and paternity establishment (Cancian 2008, UW IRP-Cancian 2007, UW IRP-Cancian 2006, Cassetty 2005). Full pass-through and disregard, where the custodial parent receives all child support paid on their behalf and that amount is not considered in benefit calculations, increases the likelihood of payment and amount received, and leads to paternity establishment more quickly than partial pass-through and disregard (Cancian 2008, UW IRP-Cancian 2007). Full pass-through may also reduce the risk of child maltreatment (Cancian 2013) and reduce cohabitation rates between mothers and men who are not the fathers of their children (Cancian 2014).
Partial pass-through policies, including the $50 pass-through policy in many states before 1996 and the current $150 policy in Washington DC, have been shown to increase rates and amount of child support receipt (Urban-Lippold 2010, Urban-Sorensen 1999). When pass-through and disregard amounts are reduced, however, there may be an increase in informal support from the non-custodial parent (Gunter 2013).
Generous pass-through and disregard policies generally decrease government outlays on some safety net services (e.g., child care and food stamps) but can increase other government costs (Pirog 2006). Little additional cost to government was noted in an assessment of Wisconsin’s full pass-through and disregard (Cancian 2008, UW IRP-Cancian 2007). Modeling suggests that costs are likely to be higher for state governments than federal governments (Urban-Wheaton 2008).
A recent report projects that establishing full pass-through of all child support collected on behalf of TANF families, disregarding it in calculating TANF benefits, and disregarding up to $100 of it in calculating SNAP benefits would reduce the number of children in poverty by approximately 89,000 children. These changes would cost approximately $1.1 billion (CDF 2015).
Pass-through and disregard dollar amounts vary by state. As of July 2013, many states have no pass-through or disregard, and 22 states have some form of pass-through and disregard in place. States are required to pay the federal government a portion of child support collected on behalf of TANF recipients; amounts paid are equal to the Medicaid match rate. If all child support is passed through to the custodial parent, states must still pay the federal government from other funds (OPRE-Huber 2014).
In Wisconsin, 75% of child support is passed through and disregarded for purposes of eligibility and benefits (OPRE-Huber 2014).
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