Dollar for Dollar: Why the Child Support Pass-Through Makes Sense.
In our increasingly interconnected world, it is also becoming increasingly apparent that many of our social services programs have grown into disconnected and siloed organizations. It is often difficult to effectively share information, have workers deeply understand multiple programs, and, most important, drive toward the same mission. This was core to the leaders of Colorado's Department of Human Services (CDHS) when implementing a child support pass-through policy that impacts families who live in the intersection of two of its largest programs: Temporary Assistance for Needy Families (TANF) and Child Support Services (CSS).As a result of this policy shift, around 3,000 families received pass-through payments of $167, on average, each month. This reflects a 33 percent increase over TANF benefits for a single parent with two children. Additionally, $11.7 million in child support was passed through to families in the first two years after the policy change.
The CDHS was eager to better understand the drivers for why this increase in child support payments occurred and quantify the effects of this policy on families. From August 2018 to June 2020, CDHS completed an evaluation of the effect of the child support pass-through policy. This evaluation required cross-sector collaboration between the department's Child Support Services Division, Employment and Benefits Division, Performance and Strategic Outcomes Division, and an external evaluator. This article presents the high-level findings from that study as well as implications for policy and practice in Colorado.
What Is Colorado's Pass-Through Policy?
Pass-through policies are designed to impact those families who are receiving TANF support and are also engaged with CSS. In 1975, national Child Support Enforcement was created to recoup funds spent on public welfare by mandating payments from nonresident parents.(1) Since 1984, Child Support Enforcement implemented a mandatory $50 pass-through policy, which stipulated that the first $50 of every payment would be delivered to families rather than retained.(2) During welfare reforms in 1996, states were given the option to retain or remove the $50 pass-through. As of May 2020, 28 states have adopted a child support pass-through policy, with variations on the amount that is passed through and disregarded.(3)
In April 2017, Colorado implemented a child support pass-through policy for TANF participants. The policy change included a 100 percent pass-through of child support funds to families as well as a 100 percent disregard of this child support income from being considered when determining TANF eligibility. A100 percent pass-through and 100 percent disregard are also known as a full pass-through policy, and Colorado was the first state to adopt a full passthrough policy.(2)
In the months following the policy change in Colorado, there was a greater than expected spike in child support payments to families participating in CO Works (Colorado's TANF program). Figure 1 displays the amount of monthly support obligation (MSO) received from those child support cases that received CO Works. As shown, after the April 2017 policy implementation, there was a large increase in the receipt of payments on these cases. The orange line represents the date the pass-through policy was implemented, April 1, 2017.
Child Support PassThrough Policy Study
The child support pass-through policy study was conducted to help the department better understand the change in payment behavior that occurred after the child support passthrough policy went into effect in April 2017. The following research questions were investigated:
1. How did the payment behavior of pass-through cases change from before and after the policy went into effect?
2. How did the increased child support income that occurred after the policy change affect Supplemental Nutrition Assistance Program (SNAP) recipients?
Payment Behavior Outcomes
There were two behavioral outcomes that we graphed in a time-series format and used throughout the analysis: the percentage of cases receiving a child support payment of any size, and the percent of monthly support obligation (MSO) paid. Overall, we found increases in both of these payment behaviors for the pass-through group in comparison with the rest of the child support caseload. Figures 2 and 3 show the time-series graphs for each outcome. Although exact case numbers changed from month to month, the non-pass-through caseload represented roughly 80,000 cases and the pass-through caseload represented roughly 7,000 cases. Alongside the graphs, we have included yearly average caseload sizes for 2016 and 2018 for each group.
Figure 2 represents the percentage of cases that received any payment toward their MSO during the month. In a difference-in-difference comparison, the pass-through cases increased by 3.5 percent compared with the non-pass-through cases between calendar year (CY) 2016 and 2018 yearly averages.
Figure 3 shows the percentage of the MSO paid. Rather than the number of payments made, this is a count of the dollars collected over dollars owed in a given month. In a difference-in-difference comparison, the pass-through cases increased by 7.6 percent compared with the nonpass-through cases between 2016 and 2018 yearly averages.
Increased Child Support Income and SNAP recipients
While the pass-through policy included a full disregard of child support income when redetermining CO Works benefit amounts, this disregard did not apply to other support programs, such as SNAP, Medicaid, or housing assistance from local housing authorities. In order to understand how increased child support income may have affected SNAP recipients, this analysis looked at the change in monthly SNAP benefits for cases that also received pass-through payments.
This analysis identified all SNAP cases that received pass-through payments in 2016 and 2018 then compared the monthly benefit amount against ongoing SNAP cases that did not receive pass-through payments. We focused solely on ongoing cases, as this group demonstrated the greatest change in payment behavior outcomes from the prior analyses and would have, therefore, received the most pass-through payments. In addition, we only analyzed cases that actually received pass-through payments, and did not include pass-through-eligible cases that did not receive a payment.
On average, SNAP cases that received pass-through payments experienced a decrease in monthly SNAP benefits by $28.14. Figure 4 compares the average monthly benefit amount for ongoing cases that were open from CY 2016 through CY 2018. Those cases not receiving pass-through in either year stayed fairly steady, experiencing a drop of $2.63 in their average monthly benefits. Those receiving pass-through saw decreases in their average monthly benefit amounts, from $460.26 to $432.12. In a difference-in-difference comparison, average monthly SNAP benefit amounts for ongoing cases receiving pass-through payments decreased by $25.51.
The average monthly pass-through payment was $167. For SNAP cases that received pass-through payments, the average monthly pass-through payment size was only slightly less, $162 per month. Considering this same group also saw an average monthly reduction of SNAP benefits by approximately $28, their net change in benefits for CSS and SNAP was an increase of $134.
Implications for Policy and Practice in Colorado
Additionally, the research findings have influenced policy and practice in Colorado. The enabling pass-through legislation included a provision that the Colorado General Assembly may annually appropriate an amount of money to reimburse the counties for 50 percent of child support collections and the federal government for its share of child support collections that are passed through. In any year in which the General Assembly did not appropriate the necessary amount of funds equal to a full-year reimbursement, the pass-through program would need to be shut down. Since pass-through child support collections far exceeded the projected amount, the amount of dollars that the General Assembly has needed to appropriate has increased substantially. As a result, the Colorado Department of Human Services worked with a legislative sponsor and our county partners to pass new, more sustainable legislation, House Bill 20-1100. This legislation added new language that requires the pass-through program to remain in effect as long as the General Assembly appropriates an amount of money that is at least 90 percent of the county and federal share for the prior fiscal year.
Furthermore, the pass-through policy research study has generated new research questions. While this study demonstrated evidence that the pass-through policy likely resulted in changes to the payment behaviors of noncustodial parents, it is still useful to explore and better understand the underlying factors that drove these changes. Was outreach from caseworkers to families about the pass-through policy effective at changing the behavior of noncustodial parents? These and similar questions could be answered in future research projects.
In summary, the findings from the child support pass-through research project suggest that the pass-through policy change has improved the lives of a substantial portion of those families participating in CDHS Child Support and Colorado Works programs. While the cross-programmatic policy is nuanced and difficult to enact, as this research demonstrates, it can be extremely impactful for those families participating in multiple social services.
Reference Notes
(1.) See https://centerforpolicyresearch.org/wp-content/uploads/Co-Passthrough-Sept-2013-final-report.pdf
(2.) See https://search.proquest.com/docview/2820770097
(3.) See https://www.ncsl.org/research/human-services/state-policy-pass-through-disregard-child-support.aspx
Larry Desbien is the Director of the Division of Child Support Services at the Colorado Department of Human Services.
Michael Martinez-Schiferl is
the Operations Manager in the Employment and Benefits Division at the Colorado Department of Human Services.
Tom Zolot is an External Evaluator and Former Research Fellow at the Colorado Department of Human Services.
Megan Kauffmann is the Division Evaluator in the Employment and Benefits Division at the Colorado Department of Human Services.
By Thomas Zolot, Michael Martinez-Schiferl, Larry Desbien, and Megan Kauffmann
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| Title Annotation: | research corner |
|---|---|
| Author: | Zolot, Thomas; Martinez-Schiferl, Michael; Desbien, Larry; Kauffmann, Megan |
| Publication: | Policy & Practice |
| Geographic Code: | 1U8CO |
| Date: | Dec 1, 2020 |
| Words: | 1566 |
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