CHILD SUPPORT ARREARAGES - Virginia

1 CHILD SUPPORT ARREARAGES : A Legal, Policy, Procedural, Demographicand Caseload Analysis Final Report Funded in part by a Section 1115 Grant from the Department ofHealth and Human Services, Office of CHILD SUPPORT EnforcementDivision of CHILD SUPPORT Enforcement Virginia Department of Social Services August 2004 CHILD SUPPORT ARREARAGES : A Legal, Policy, Procedural, Demographicand Caseload Analysis Final Report Prepared by: Donald W. Myers, , Principal Investigator Virginia Commonwealth University, Richmond, VA Project Manager: Todd W. Areson, Virginia Division of CHILD SUPPORT Enforcement August 2004 Virginia ARREARAGES Study Page ii Acknowledgments This research represents a multi-year Office of CHILD SUPPORT Enforcement initiative for Virginia and the CHILD SUPPORT Enforcement community.

2 The final product could not have been as thorough in its coverage without the efforts and resourcefulness of two primary partners: the Center for SUPPORT of Families, Chevy Chase, MD, technical consultant; and the Virginia Commonwealth University (VCU) Center for Urban Development, which collected, analyzed, and re-analyzed the data, to ensure a credible, well-documented product. The Center for the SUPPORT of Families (Center) Vernon Drew, particularly, provided his usual insight and knowledgeable perspective of how other CHILD SUPPORT programs handle collections and ARREARAGES .

3 He also identified the most productive ways to adopt/adapt that larger body of practices to benefit this research. Simultaneously, Susan Paikin of the Center performed a stellar legal analysis of federal and state regulations and statutes impeding collections and ARREARAGES , and addressed where and how they might be used or changed in Virginia to make collecting CHILD SUPPORT more productive by reducing the build-up of arrears, interest, and fees. The VCU Center for Urban Development (CUD) was represented by Drs. Michael Pratt and Steven Peterson, and econometrician Howard Sanderson.

4 Steve Peterson was the major designer of the methodology and analysis of the probabilities of a reduction in arrears, resulting from the application of four enforcement tools selected for analysis. He also provided ad hoc consulting advice to the principal investigator as he reviewed and developed additional questions, to extract the most complete explanations from the Division of CHILD SUPPORT Enforcement (DCSE) administrative data set used in the study. The more laborious task fell to Howard Sanderson, whose expertise in manipulating and analyzing the data included suggesting additional opportunities to glean even further meaning from the data.

5 Mike Pratt was extraordinary in coordinating the VCU CUD team throughout the duration of the project. Dr. Todd Areson, DCSE Project Manager, performed key roles in the planning, administration, conduct, and analysis of this research. To a large extent, the final product reflects his collaborative work. Appreciation is also expressed to other key DCSE personnel Bill Trainor, Cindy Holdren, Joan Faulkner, and Shawkat Rana. To all, thanks for a job well done! We hope this work analyzing ARREARAGES will benefit not only Virginia but also other CHILD SUPPORT programs in the and abroad.

6 Donald W. Myers Principal Investigator Virginia ARREARAGES Study Page iii This page is left blank intentionally. Virginia ARREARAGES Study Page iv Table of EXECUTIVE of Arrears: Primary and Arrears Findings, Conclusions, and OF Laws and Agency Enforcement Employers ..4 PRIMARYCAUSES(NONCUSTODIALPARENT) ..4 Inability to of Motivation to Other FOR TO of SUPPORT of the of Rights and Enforcement Income on CHARACTERISTICS OF NCPS IN and Payment Composition of NCPs with Gender and SUPPORT Gender and Payment ARREARAGES Study Page v Table of Contents (cont.)

7 Employment Employment Status and Arrears: of All NCPs and NCPs with Status and SUPPORT Order Status and Arrears: Employment Status and Frequency of Status and Amount of Employment Status and Payment Frequency by Arrears Status and Payment Amount by Arrears ..30 Race and Employment of All NCPs and NCPs Owing NCP Race and SUPPORT Order Race and Number of NCP Race and Percent of Arrears Race and Payment Race and Amount of OF of Arrears of Case: TANF Compared to Type of SUPPORT of Cases Associated with NCP Owing of Cases.

8 Comparing Arrears Sample with Total DCSE of Cases and Amount of Number of Cases and Percent of Total Arrears of Cases and Payment Number of Cases and Payment Amounts and Arrears Cases and Arrears Balances and Payment Statistical Correlation of Arrears Balances and Making a Made: Arrears Only Cases Compared to Current SUPPORT Plus Arrears Percent of NCPs Owing Arrears Who Made Made: In-State Cases Compared to Interstate Made by Case Arrears Cases: Dollar Amount Debt and Interest, 1999 and Mean Dollar Amount of NCP Debt, 1999 and Arrears Only Cases: Dollar Amount Debt and Interest, 1999 and Current SUPPORT Plus Arrears Cases: Amount of Debt and Interest, 1999 and : Amount of Arrears and Interest as a Percent of Payments Made and SUPPORT Order Amount.

9 All Arrears, Current SUPPORT Plus Arrears, and Arrears Only ARREARAGES Study Page vi Table of Contents (cont.) ANALYSIS OF Income with Income Institution Data of a Reduction in Arrears Following Implementation of an Enforcement of Selected Enforcement Methods and Type of Arrears of Arrears and Selected Enforcement Arrears Reduction Following Selected Enforcement Methods: Non-TANF/TANF Case Status74 Use of Enforcement Methods: TANF and Non-TANF Arrears Arrears Reduction Following Use of Selected Enforcement Methods.

10 NCP s Employment Status76 Use of Enforcement Methods: Unemployed and Employed Arrears Reduction Following Use of Selected Enforcement Methods: District Office Use of Enforcement Effects of Selected Enforcement Methods on Payment Frequency and TO HYPOTHESES ..80 HYPOTHESIS 1: CHARGING FEES ON ARREARSCASES( , FOR INTERCEPTING TAX REFUNDS)INCREASES THE DIFFICULTY OF COLLECTINGPAYMENTS..80 HYPOTHESIS 2: CHARGING INTEREST ON ARREARSBALANCES IS AN EFFECTIVE STRATEGY FOR THE COMMONWEALTH AND CPS TO MOTIVATE NCPS TO PAY.