Historians will look back on 2020 as a year of major changes: an economy that was shut down, unemployment rates that skyrocketed due to those unable to work, and a major uptick in remote working, all due to a pandemic that affected almost every aspect of our lives. The child support program, which affects over 46 million people in the U.S., was similarly impacted by the pandemic. In fact, approximately one in every seven people in the U.S. population is uniquely identified as a parent or child on a child support case. As one of the most objectively data-rich human services programs, the impacts of the pandemic on the child support program can be measured.
We compiled select data from each of the 50 state Title IV-D child support programs and Washington, D.C. to take an early look at the objective results federal fiscal fear (FFY) 2020 brought. This article will identify several of the major activities that impacted child support programs across the nation as they relate to three main data areas in the child support program: paternity establishment, collections, and staffing levels.
In March of 2020, states around the nation began implementing strict measures to control the spread of COVID-19. These measures included mask-wearing mandates, social distancing, and closing of many in-person businesses, forcing some workers to work remotely while others lost their jobs entirely. These measures drastically impacted life in the U.S., as dining out became practically non-existent and venues for social interactions like bars, sporting events, and concerts all closed. Federal and state governments stepped in with various methods of relief — including the provision of enhanced unemployment payments of $600 per week and authorization of one stimulus check in March 2020.
Although each of these measures influenced the child support community, the impact did not begin to occur until six months into the federal fiscal year. As a result, the annual data was only impacted for one-half of the year. This article is published six months into FFY 2021, and COVID restrictions are only now starting to be lifted in some states. Therefore, it is reasonable to assume that the full-year figures for FFY 2021 will continue trends from FFY 2020 and only begin to revert to normal in FFY 2022.
In the face of the pandemic, many states closed down all non-essential businesses, including many state offices, and required people to work remotely. Nowhere in the child support performance data reported on the OCSE-157 report is this more evident than in the number of paternities established or acknowledged in FFY 2020. Paternity establishment typically occurs through the in-hospital paternity establishment program or genetic testing, which involves obtaining genetic samples through a buccal swab — essentially a long cotton swab scraped along the inside of the cheek. This DNA collection method requires several things largely absent during the pandemic: hospitals open to routine visits; court time; service of process; in-person, in-office meetings; and mask-less interactions. As a result, the number of paternities established or acknowledged (as reported on OCSE-157 report line 16) decreased by 27 percent between 2019 and 2020. The 51 programs reporting data showed a nationwide reduction from 357,087 in FFY 2019 to 259,949 paternities established in FFY 2020. This 27-percent decrease is far greater than the year-to-year decreases seen in the prior 5 years, which averaged a 4.99-percent decrease.
Interestingly, this decrease did not drastically affect the reported performance measures in the child support program for paternity establishment. The Title IV-D paternity establishment figures are computed by dividing the total number of children born out of wedlock (BOW) in the caseload needing paternity establishment (9,099,367 in FFY 2020) into the total number of BOW children in the caseload (9,559,543 in FFY 2020). The volume of BOW children in the IV-D caseload is high because it includes all children on all IV-D cases, so a one-year reduction of nearly 100,000 children does not have a large impact.
For the near future, we anticipate offices will slowly re-open, mask-wearing will become more infrequent, hospitals will open to visitors, courts will hold hearings again at rates seen before the pandemic, and genetic-testing activities will return to normal levels. However, it seems likely that the paternity establishment levels will remain similar to those in FFY 2020. The actual percentage of IV-D BOW children with paternity established may be counterbalanced by an expected dip in the birth rate for BOW children. (With social distancing and limited social gatherings, experts predict a lower number of BOW children born to those who do not live together.)
Historically, more than half of all child support collections are received through income withholding payments — employers withhold a portion of their employee’s paycheck and send it to child support on the employee’s behalf. Although many employers were not paying staff due to businesses remaining closed for periods of time during the pandemic, child support collections continued for those that received unemployment or stimulus checks. All state child support computer systems interface with the state’s unemployment agency for a withholding similar to the income withholding. Like income withholding and unemployment benefits, the federal stimulus payments were intercepted for child support payments.
We do not gather data specific to collection type (which would be reported on the subset of line 2 on the OCSE-34 quarterly report). As a result, our data does not show how much of a change there was between income withholding payments, UIB payments, and federal stimulus payments. The data does show an overall increase in total child support collections of 8.62 percent, from $30.0 billion in FFY 2019 to $32.6 billion in FFY 2020.
Despite the lack of source-of-payment data, we can surmise that the increased unemployment payments contribute to the current-support-collected percentage remaining largely unchanged. The figure, computed by dividing current support due by current support paid in the month that it is due, only changed from 66.24 percent to 66.29 percent (a 0.05 percent increase). Typically, unemployment payments first apply to current support in the month due. However, after current support is paid in full, additional payments apply to payments in arrears. It is unclear how many cases this impacted, but the enhanced unemployment benefits of $600 per week, plus federal stimulus checks that applied directly to arrears, contributed to an increase in the percent of cases paying towards arrears. The total number of cases paying towards arrears increased by nearly 600,000 cases — a nearly 9 percent increase. This is a drastic change from the prior four years, with each year-over-year comparison showing an annual decrease of approximately 1.5 percent. The total-cases-paying-towards-arrears percentage increased by 8.33 percent — from 64.82 percent to 73.15 percent. By comparison, since 2015 our data show the nationwide cases-paying-towards-arrears incentive factor has remained slightly higher than 64 percent each year.
Since the $600 enhanced unemployment rate has decreased to $300, fewer cases will be able to pay current support amounts in full, and fewer cases will have payments made towards arrears. Further, neither the second nor third stimulus checks (authorized in FFY 2021 in December 2020 and March 2021) were able to be intercepted for child support. At this point, it is unclear whether the cases-paying-towards-arrears percentage will remain high for FFY 2021 and then taper off back to normal levels or instead will drop down to normal levels faster, but it seems unlikely that this percentage will decrease drastically in FFY 2021.
Typically, when state revenues are hit as hard as they were during the pandemic, government entities have across-the-board budget cuts, hiring freezes, and furloughs or layoffs. The child support program was not immune to these types of changes in FFY 2020.
Historically, the nationwide average shows the child support program has been reducing staff, with staffing level reductions in three of the last four years. From 2016 through 2019, the average child-support-program staffing level across the nation was 50,751 full-time-equivalent employees (FTEs). In FFY 2020, the reported staffing levels were 48,588 FTEs — a 3.96 percent reduction overall. Some states were hit especially hard: 6 states lost at least 10 percent of their staff compared to their respective 4-year average staffing levels, and another 16 states lost at least 5 percent. Staffing levels have been in a downward trend for several years now, so it is unclear how much the pandemic had to do with continuing that decrease and whether programs plan to return staffing levels to their pre-pandemic levels.
Projecting the Future
FFY 2020 included many changes, and some of those changes are evident in the child support data reported by states. The year included several benefits for the child support program, including enhanced unemployment benefit payments for six months and a stimulus check eligible for intercept. For FFY 2021 and beyond, we predict that collections from unemployment benefits will start to decrease as the economy re-opens, people return to work, and the enhanced benefits are reduced. As a result, the number of cases paying towards arrears will likely remain elevated over prior year actuals, but slightly lower than FFY 2020 levels. While income withholding payments should begin to increase over FFY 2020 levels, those collections may lag, as it typically takes programs longer to verify employment than it does to intercept unemployment benefits. Again, this puts downward pressure on total collections, which may remain elevated over prior year actuals but lower than FFY 2020. Finally, the total number of paternities established by the state may take some years to recover, as many factors will have to increase, such as out-of-wedlock births, service of process, court hearings, and in-person mask-free office meetings. However, we anticipate only minor changes to the paternity establishment percentages, as social distancing will likely lead to a decreased born-out-of-wedlock birthrate. We will continue to assess and evaluate the impact of COVID-19 on the nation’s child support program as FFY 2021 data becomes available.
If you have questions about this article or child support performance statistics, please contact us at email@example.com.