Findings from a Review of State Approaches to

Low-Income Child Support Situations[1]

By R. Mark Rogers[2]

September 17, 2019

 

Introduction

Federal regulations require states to implement changes to child support guidelines to take a noncustodial parent’s own subsistence needs into account. These rule changes occurred in January 2017 as seen in 45 CFR 302.56. States were given a deadline to comply by one year after the end of a quadrennial review following implementation of these regulations (with the review starting after January 19, 2017).[3]

States have taken more than one measure to address low-income child support situations. These include:

The first two approaches are based on presumptive numbers or formulas and result in a presumptive sum certain award inclusive of self-support calculations. The latter is in terms of general principles and court discretion but does not result in a presumptive sum certain award that is inclusive of addressing a noncustodial parent’s self-support needs.

Key Findings

Georgia has the highest minimum presumptive award in the U.S. at $197 per month for one child (assuming zero income for the custodial parent). This reflects Georgia having an extraordinarily high cost table—especially at low income levels.

There is wide range in minimum presumptive awards. Minimum awards range from zero dollars to $197 per month. The median is $50 per month for one child. A significant number of states have a zero dollar minimum presumptive award.                                                       

Most states have some sort of self-support adjustments or calculations, but they may not be effective. More attention needs to be given to whether claimed self-support adjustments effectively leave noncustodial income at least at the poverty threshold. A claim of having a self-support adjustment is not the same as having an adjustment that results in actually protecting a noncustodial parent’s income for meeting subsistence needs.

Georgia is an outlier among states on the application of self-support considerations. Thirty-three states have some sort of formula-based self-support adjustment in child support determination. Georgia’s use of a deviation factor to address basic needs of the obligor (noncustodial parent) is vastly out of the mainstream.

There are several overview findings about the nature of the data and information. First, state language on these issues varies considerably. Second, states do not always give explanations of addressing (or not) self-support needs. Finally, some states either have dated (old) self-support numbers in cost tables or have what are described as self-support calculations (or cost table adjustments) that really do not result in protection of noncustodial income at true levels of self-support income. That is, cost tables are lowered from standard levels but not lowered enough to leave income at least at the poverty level. Also, some states having a worksheet self-support calculation sometimes put conditions on the self-support amount. The bottom line is that some states may claim to have a presumptive self-support calculation, but it is open to significant interpretation. Is it merely a lower award but not enough for leaving income at self-support levels? Is it a deviation factor that is frequently used or rarely used?

Methodology

The methodology of this paper is largely reading in detail each state’s child support guidelines, child cost tables, child support worksheets, and occasionally testing scenarios in state child support calculators. Key findings for each state were summarized in an Excel file. A close review of these factors resulting in finding numerous approaches and code language that can be useful across states.

As a caveat, whether certain self-support factors exist for a given states, there is a range of uncertainty for a number of states. For example, if a state has a large minimum award, does that preclude having an effective self-support adjustment (leaving income at sufficient self-support amounts after deducting the award)? Or if a state has a self-support adjustment in its cost table that is more than a decade old, is it still an effective self-support adjustment? In terms of having a self-support adjustment that effectively retains self-support income, claimed conformance with self-support sharply exceed statistics reflecting effective maintaining of self-support income.

Analysis of Data from a Review of States Treatment of Low-Income Situations

I.  There Is Wide Range in Minimum Presumptive Awards

Most states have a presumptive minimum award greater than zero dollars. A zero dollars award would typically occur when the noncustodial parent either has zero income or has no income above self-support income (when a state uses a self-support reserve to compare income to poverty level income to a calculated award) and there is no minimum (non-zero) award. Thirty-nine states have minimum presumptive awards of more than zero dollars.

Minimum awards range from zero dollars to $197 per month. Twelve states have zero dollars as the presumptive minimum award. The median is $50 per month for one child. More detail (state list) is found in Appendix B further below.

Why are minimum awards important? Philosophically, states with minimum awards typically argue that a minimum award sets the pattern for the noncustodial parent to expect to have a child support obligation. As a practical matter, a minimum award can run counter to the idea of maintaining self-support income. If income is less than basic needs income, then the minimum award is unaffordable, and arrearages develop. Generally, minimum awards indeed contribute little to meeting a child’s needs but are even less effective (getting money to the child) if they are unaffordable, lead to arrearages and related consequences (loss of driver’s license, possible incarceration, and other).

II.  Georgia Has the Highest Minimum Presumptive Award in the U.S. at $197 per Month for One Child (Assuming Zero Income for the Custodial Parent).

This fact reflects Georgia having an extraordinarily high child cost table—especially at low income levels. Also, Georgia does not have a self-support reserve built into its child cost table nor a self-support calculation in the worksheet to limit an award to no more than income above self-support income.

Exhibit 1.

Comparison of Minimum Child Support Awards, Southeastern States and U.S.

 

 

State

Minimum Presumptive Award

 

 

Income Basis

Alabama

$50

Gross

Florida

$190

Net

Georgia

$197

Gross

North Carolina

$0

Gross

South Carolina

$100

Gross

Tennessee

$100

Gross

 

U.S. State Median

 

$50

Mixed but Mostly Gross

The below chart shows Georgia’s BCSO numbers for one child cases at the low-income range. Surrounding states’ BCSOs also are shown (Florida is omitted since its BCSO uses net income).

Clearly, Georgia has the highest child cost table in the Southeast. Plus, there is no support reserve built into the table as is the case for North Carolina (NC’s self-support adjustment goes up to $1,150 in monthly gross income). A high cost table and no self-support adjustment in the BCSO table lead to Georgia having very high child support awards compared to most states (high is relative to other states and not to a child’s actual needs).

Exhibit 2.

III.  Most States Have Some Sort of Self-Support Adjustments or Calculations

States that incorporate a self-support calculation in the presumptive award typically make adjustments in two places. These are:

1) the BCSO table, and

2) as a worksheet calculation, after a determination of a pre-self-support award, comparing available income for child support (income minus self-support income) to the preliminary award.

For the first approach, a state’s economic consultant typically starts the BCSO table at self-support income (NCP income only) and then gradually adds to the child cost amount by a large fraction of the increase in income (typically 90-95 percent of additional income. Within the self-support adjustment range of income, BCSO costs are zero or minimal until self-support income is reached. After self-support income is reached, the BCSO amount tracks the rise in income—not actual child costs. Eventually, income reaches a level where adjusted BCSO amounts match standard BCSO amounts.

This pattern is seen in the above chart for North Carolina’s BCSO. Self-support is set at $1,150. Below this amount, the presumptive award is a minimum award–$50 per month. Then there is a range in which the BCSO tracks the rise in income–$1,200 through $1,500 (for one child—the range is longer for more children situations). From $1,550 and higher, a standard BCSO amount is used as income less the standard award still leaves income above self-support income.

A.  Twenty-four states have BCSOs with self-support adjustments. Again, note that there is some uncertainty regarding this count as discussed above that not all states clearly indicate whether there is a self-support adjustment built in and a number of states have very old cost tables in which the self-support income does not bear resemblance to today’s self-support income. Certainly, the vintage of a self-support adjustment is an issue that federal regulators should examine for compliance with child support guideline regulations.

The second approach takes into account final adjustments to income (for child support income out of gross income) and add on expenses such as health insurance premiums, day care expenses, and costs related to deviations.

Essentially, as a final calculation for a presumptive award, available income (though there are different terms used) is determined as income minus self-support income. Then available income is compared to the preliminary award. The award is the lesser of available income and the preliminary award.

Self-support income often is the federal poverty threshold for a one-adult household. Also, some states add a fraction higher to take into account paying payroll taxes or merely to acknowledge that the poverty level is too low for more realistic subsistence income. The additional fraction tends to be about 15 to 20 percent. So, self-support income generally ranges from 100 percent to 120 percent of the poverty threshold. Were Georgia to make such an adjustment to the poverty level, about 16 percent would need to be added to cover payroll taxes.

B.  Sixteen states use a worksheet calculation for self-support calculations. However, this approach is more comprehensive than just using an adjusted BCSO table since other costs (in addition to BCSO costs) are taken into account.

As a caveat, the inclusion or not of a state likely is to a small degree interpretative—but based mainly on code and worksheets.

C.  Thirty-three states use at least one of these two methods of taking into account a self-support reserve.

Exhibit 3.

States with Self-Support Income as Part of Final Presumptive Calculation

Arizona

New Jersey

California

New York

Colorado

Oregon

Delaware

Vermont

District of Columbia

Washington

Minnesota

West Virginia

Nebraska

Wisconsin

New Hampshire

Wyoming

D.  However, some states have self-support adjustments that do not achieve the stated purpose—they do not necessarily protect income needed for meeting basic subsistence for the noncustodial parent.

To see the divergence in effectiveness, one can contrast two states—North Carolina and Alabama. North Carolina’s BCSO table includes a self-support range and was updated in 2019. The state’s presumptive award for NCP gross income of $1,250 (just a little above the 2019 poverty threshold of $1,041) is $101 per month. Income after paying the award is $1,149—leaving $108 in income above the poverty level. In contrast, Alabama’s BCSO is was last revised in 2007 with the table reflecting the poverty level at that time. It is based on the 2007 poverty threshold of $851 per month. Using the same example as for North Carolina, at $1,250 monthly income, the Alabama BCSO award is $272. Income after child support is $978, leaving after child support income at $63 below the poverty level. The outcomes for both states would be worse if self-support income included an added fraction for paying payroll taxes.

One would think that the second approach would be more successful than putting the self-support adjustment directly in the BCSO table. Generally, this is true, but some states put conditions on the calculation that make it questionable that the goal of maintaining self-support income is achieved. For example, Wisconsin sets self-support income at 75 percent of the federal poverty threshold. West Virginia sets its self-support reserve at $500 per month. Colorado only applies its available income calculation to BCSO costs. So, the “devil is in the details.” Final self-support calculations only achieve the stated purpose if they are built on realistic components—such as for defined self-support income being at least the federal poverty level and regularly updated.

IV.  In Georgia, the Impact of a High Cost Table and Lack of Self-Support Reserve Calculations

Simple calculations show the impact of high presumptive awards on the ability of low-income NCPs to maintain enough income to meet basic needs.

One can take an NCP’s gross income (assume CP income is zero), subtract the presumptive award (BCSO only), and compare remaining income to self-support income. The below table makes such calculations for the low-income range of $800 through $2,000 per month. Self-support income is set at 1.15 times the federal poverty level for one adult. The poverty threshold is $1,041 per month and 115 percent is $1,197 per month.

What this table shows it that for incomes below $1,550 per month, the presumptive award pushes the obligor into below self-support income. There will almost always be a compliance problem with the presumptive award unless the court deviates. However, NCPs rarely know how to request a deviation and the latest case study by the Georgia Child Support Commission indicate that courts almost never deviate for low income.

Exhibit 4.

Georgia Low-Income Presumptive Child Support Award

versus Income and Self-Support Income

Gross Income

Presumptive BCSO

Income Minus BCSO Award

Amount Below Self-Support Income

Income Minus Award as % of Self-Support Level

$800

$197

$603

-$594

50%

$850

$208

$642

-$555

54%

$900

$218

$682

-$515

57%

$950

$229

$721

-$476

60%

$1,000

$239

$761

-$436

64%

$1,050

$250

$800

-$397

67%

$1,100

$260

$840

-$357

70%

$1,150

$270

$880

-$317

74%

$1,200

$280

$920

-$277

77%

$1,250

$291

$959

-$238

80%

$1,300

$301

$999

-$198

83%

$1,350

$311

$1,039

-$158

87%

$1,400

$321

$1,079

-$118

90%

$1,450

$331

$1,119

-$78

93%

$1,500

$340

$1,160

-$37

97%

$1,550

$350

$1,200

$3

100%

$1,600

$360

$1,240

$43

104%

$1,650

$369

$1,281

$84

107%

$1,700

$379

$1,321

$124

110%

$1,750

$389

$1,361

$164

114%

$1,800

$398

$1,402

$205

117%

$1,850

$408

$1,442

$245

120%

$1,900

$418

$1,482

$285

124%

$1,950

$427

$1,523

$326

127%

$2,000

$437

$1,563

$366

131%

Low-Income Deviations Are Not Working in Georgia to Ensure Self-Support Income

Every four years, Georgia is required by federal regulations to conduct a study of child support cases in the state. This is done by the Georgia Child Support Commission. The most recent study was conducted in 2018 for a 2018 quadrennial review of child support guidelines. The 2018 case study showed NO low-income deviations. If the deviation is not being used to maintain subsistence income, then this approach is not working.

Georgia courts clearly are not reviewing ability to pay when ordering child support awards in negligible and modest income situations. The case study from 2018 shows the impact of the awarded amount of child support on an obligor’s ability to meet basic needs after paying child support.

Exhibit 5.

Exhibit 6

The below chart shows key results from the case study for the 2018 guideline review. The percentages are the percent of noncustodial parents falling below the poverty threshold after the final award is subtracted from income. As done in varying states, one can choose alternative dollar amounts for minimal subsistence income. Common choices by various states are equal to the federal poverty threshold, 110 percent of the poverty threshold and 120 percent. Comparisons are shown below of after-child-support gross income to the three different subsistence levels.

About one-fourth of the noncustodial parents are pushed below merely 100 of the poverty level by the child support award. This percentage rises as the subsistence income rises to 110 percent and 120 percent of the poverty guideline. In the 2018 case study, just under 40 percent of obligors have less than 120 percent poverty level income after the presumptive award is deducted.

In sum, the case study indicates that a deviation approach to addressing self-support needs has not worked in Georgia.

Exhibit 7.

V.  Do Other States Deviate for Low-Income Situations?

This is an important question for states that do not have self-support calculations in the presumptive calculation. If there is not presumptive self-support calculation and courts do not deviate for low-income situations, then there is a compliance problem with related problems also occurring (loss of driver’s license, incarceration, etc.).

A selected review of case studies by states relying on deviations can provide insight.

Florida is a state without an effective presumptive self-support adjustment. The state officially claims to have an adjustment in its BCSO but admitted in its 2018 quadrennial review report that the adjustment is vastly out of date and not effective.[4] So, Florida essentially has no self-support adjustment. Does the state deviate for low income situations? The latest quadrennial report does not break out deviations by type. However, of a case sample of 10,652, there were only 50 cases with deviations—indicating a reluctance by courts to deviate for any reason, not just for low-income situations. Notably, the latest quadrennial report advocated updating low-income provisions, including putting the self-support calculation in the worksheet to cover all costs. But, for now deviations are not a working strategy in Florida for low-income situations.

Nevada reviewed its guidelines in 2016. Its case study had only 100 cases. The sample is not statistically high and provides little meaningful detail. Nonetheless, there was a 36.0 percent overall rate of deviation. “Obligor unable to pay minimum amount (award amount)” was the second most occurring deviation with 12 percent of the cases deviating for this reason. Nevada may be adequately using this deviation to ensure self-support income, but the sample is not sufficient or detailed enough to know with any certainty.

A limited review of the use of low-income deviations indicates that this approach is less reliable than self-support reserve calculations. In turn, not only should federal regulators look at whether self-support adjustments are effective, but they also should examine whether case studies show low-income deviations being used. Were low-income deviations be used, it begs the question of whether such deviations shouldn’t be made part of the presumptive formula as required by 45 CFR 302.56.

VI.  An Updated Child Cost Table Would Provide Some Relief to Moderate-Income Georgia NCPs?

Some in the legal community and other reformers have questioned why Georgia’s BCSO table is one of the highest in the U.S.—especially for moderate income obligors. In fact, child costs as a percentage of gross income are higher for low and moderate-income obligors than under pre-2007 guidelines which were seen as excessive.

A.  One suggestion has been to update the BCSO with proposed tables in 2017 before the Georgia Child Support Commission. For one-child situations, the costs are somewhat lower. For two children and higher, costs are lower on the modest income part of the table but are somewhat higher at somewhat high incomes. However, gaining costs closer to affordability would be a good trade-off with higher costs at higher incomes.

B.  Adding a standard self-support adjusted section to the cost table with 2017 data would be a major step toward affordability by low income obligors.

The below three charts compare child costs in the existing BCSO table to the 2017 proposal without a self-support adjustment and to the 2017 proposal with a self-support adjustment.

Exhibit 8.

Exhibit 9.

Exhibit 10.

VII. Review of States Finds Helpful Code in North Dakota on Modification Related Issue

There is much detail in a review of 50 states’ guidelines plus that for the District of Columbia. It is useful to review how states view the treatment of low-income situations in code which can cover issues other than just self-support needs. Modification is a related issue when income changes—especially when income falls to zero such as when an obligor becomes incarcerated.

States generally use modification procedure to address loss of income, including from incarceration. This is an important issue since arrearages that generally accrue during incarceration generally preclude a decent chance for “starting over” upon release from incarceration. This is the practical issue intended to be addressed by new federal regulations. North Dakota uses a more innovative approach for loss of income upon incarceration of an obligor—operation of law.

14-09-09.38. Child support obligation of incarcerated parents.

      1. A monthly support obligation established under any provision of this code and in effect

after December 31, 2017, expires by operation of law upon incarceration of the obligor

under a sentence of one hundred eighty days or longer, excluding credit for time

served before sentencing.

Federal regulations allow states to use operation of law as a method to comply with new requirements for updating child support orders for incarcerated parents.

Such an approach would be simpler than a full-blown modification—which involves extensive procedure. North Dakota’s code could be enacted in Georgia and even reasonably expanded to include not just a sentence of 180 days or longer but actual time served if the original sentence was less than 180 days. Or the threshold could be changed to perhaps 120 days. But use of sentence length allows the child support agency re-establish obligations after the parent is released, even if the actual period of incarceration is shorter than 180 days.

VIII. Summary

Clearly, states are still in the process of complying with new federal regulations regarding taking into consideration a noncustodial parent’s subsistence needs. Many states have yet to comply. Also, some states that claim to have measures that meet federal regulations have adjustments that are either vastly out of date or have conditions that render the measures ineffective for the intended purpose of the regulations.

A minimum award would at face value run counter to the intended purpose of maintaining self-support income. If there is less income than self-support income plus the presumptive minimum award, then the minimum award makes meeting basic needs more difficult or more likely results in arrearages.

Minimum awards at times are vastly out of touch with the intended purpose of new regulations. Georgia has the highest presumptive minimum award at $197 per month and “to add insult to injury,” does not deviate with the state’s low-income deviation (according to Georgia’s 2018 case study). But some states acknowledge the importance of a realistic minimum presumptive award. Twelve states have a zero dollar minimum presumptive award. This due to either total income or available income being zero for the noncustodial parent.

Most states (thirty-three) have either a self-support adjustment in the BCSO table or have a self-support calculation in the worksheet. Again, many states have outdated adjustments or conditions on the calculation that render the self-support income calculation ineffective. Federal regulators need to look more closely at the actual impact of self-support measures before granting compliance status to a state.

Turning to Georgia specifics, the minimum presumptive award is vastly out of touch. The minimum award should be lowered and would require either lowering the entire cost table at the low-income segment, making a self-support calculation in the BCSO, and/or adding a self-support calculation to the worksheet.

Based on the excessive minimum award and lack of deviations, low-income obligors have borne the weight of excessive awards since the implementation of new guidelines in 2007. Bear in mind that the original draft of Georgia’s Income Shares BCSO had a self-support adjustment.[5] In turn, arrearages have developed that never should have. Solutions are available as found in use by other states.

Appendix A

 Discussion of Federal Regulations Related to Self-Support Issues for Child Support

Federal Regulations Require that a State’s Guideline Take into Account Self-Support Needs

Federal regulations include new standards for child support guidelines for addressing subsistence needs of noncustodial parents.

Specifically, there must be a formula or table resulting in a computation of the presumptive award with the inclusion of the subsistence needs calculation.

From 45 CFR 302.56:

Section 302.56   Guidelines for setting child support orders.

(c) The child support guidelines established under paragraph (a) of this section must at a minimum:

(1) Provide that the child support order is based on the noncustodial parent’s earnings, income, and other evidence of ability to pay that:

(i) Takes into consideration all earnings and income of the noncustodial parent (and at the State’s discretion, the custodial parent);

(ii) Takes into consideration the basic subsistence needs of the noncustodial parent (and at the State’s discretion, the custodial parent and children) who has a limited ability to pay by incorporating a low-income adjustment, such as a self-support reserve or some other method determined by the State;

            . . .

       (4) Be based on specific descriptive and numeric criteria and result in a computation of the child support obligation.

 

From the Federal Register, Vol. 79, No. 221, November 17, 2014, p. 68555:

Additionally, we propose a new criterion as § 302.56(c)(4). We propose that State guidelines take into consideration the noncustodial parent’s subsistence needs (as defined by the State in its guidelines) and provide that amounts ordered for support be based upon available data related to the parent’s actual earnings, income, assets, or other evidence of ability to pay, such as testimony that income or assets are not consistent with a noncustodial parent’s current standard of living. ‘‘Subsistence’’ is defined in the Merriam-Webster dictionary as, ‘‘the minimum (as of food and shelter) necessary to support life.’’ A number of States incorporate a self-support reserve into their guidelines to recognize the noncustodial parents’ subsistence needs. See PIQ–00–03 (September 14, 2000).[6] For example, New Jersey defines a self-support reserve as the amount of income that the State determines is necessary to ensure that a noncustodial parent ‘‘has sufficient income to maintain a basic subsistence level and the incentive to work so that child support can be paid.’’[7] This reserve amount [emphasis added] is either disregarded or used to adjust the child support obligation so the noncustodial parent is able to meet his basic needs.

These calculations can only be made if subsistence needs are defined and defined numerically.

From the Federal Register, Vol. 79, No. 221, November 17, 2014, p. 68555:

The goal of this proposal is to establish an accurate child support order and obtain compliance with the order based upon the real circumstances of the parties and the best interests of the child. The IV–D agency must use the guidelines and take into consideration the obligated parent’s ability to pay, or justify the deviation from the application of the guidelines.

Appendix B

 

Summary of States’ Minimum Presumptive Awards

State

Presumptive Minimum Award, One Child, Monthly

 

State

Presumptive Minimum Award, One Child, Monthly

California

$0

 

New Hampshire

$50

Connecticut

$0

 

North Carolina

$50

Illinois

$0

 

Oklahoma

$50

Indiana

$0

 

Oregon

$50

Maine

$0

 

Rhode Island

$50

Michigan

$0

 

Vermont

$50

Mississippi

$0

 

Washington

$50

Montana

$0

 

West Virginia

$50

North Dakota

$0

 

Kentucky

$60

Texas

$0

 

Virginia

$68

Wisconsin

$0

 

District of Columbia

$75

Wyoming

$0

 

Hawaii

$77

Kansas

$6

 

Delaware

$78

Pennsylvania

$17

 

South Dakota

$79

Maryland

$20

 

Ohio

$80

New Jersey

$21.75

 

Louisiana

$100

New York

$25

 

Nevada

$100

Iowa

$30

 

New Mexico

$100

Utah

$30

 

South Carolina

$100

Alabama

$50

 

Tennessee

$100

Alaska

$50

 

Massachusetts

$109

Colorado

$50

 

Arkansas

$127

Idaho

$50

 

Arizona

$174

Minnesota

$50

 

Florida

$190

Missouri

$50

 

Georgia

$197

Nebraska

$50

 

 

 

 

     

 

 

 

 

U.S. Median

$50

 

RogersEconomics.com

 

R. Mark Rogers

Rogers Economics, Inc.

141 Iron Oak Drive

Peachtree City, GA 30269

678-364-9105

C: 678-480-2912

RMRogers@mindspring.com

 

[1] This paper was written for presentation to the low-income study committee of the Georgia Commission on Child Support. While some findings are Georgia specific, the analysis and accompanying Excel file (with state data on these issues) can provide helpful insight for those in other states.

[2] R. Mark Rogers is an economist with Rogers Economics and consults on child support issues in Georgia and nationally. He has testified as an expert witness in numerous states and presented before state child support commissions and legislative committees. He served on the 1998 Georgia Commission on Child Support.

[3] See Appendix A for more discussion on the related federal regulations.

[4] Review and Update of Florida’s Child Support Guidelines, Report to the Florida Legislature, November 1, 2017, pp. iv-vi.

[5] See HB221 as introduced, 2005, General Assembly of the State of Georgia.

[6] PIQ–00–03, State IV–D Program Flexibility with Respect to Low Income Obligors—Imputing Income; Setting Child Support Orders and Retroactive Support; Compromising Arrearages; Referral to Work-Related Programs and Other Non-traditional Approaches to Securing Support, available at:

http://www.acf.hhs.gov/programs/css/resource/state-iv-d-program-flexibility-low-income-obligors.

 

[7] Rules Governing the Courts of New Jersey, Appendix IX–A Considerations in the Use of Child

Support Guidelines, Section 7.h., Self-Support Reserve, available at: http://www.judiciary.state.nj.us/csguide/app9a.pdf

.

Website Design and Development by Pro Web Marketing