Governmental – Continued 2

Case Studies of Child Support Awards & Deviations

Rogers Economics is qualified and experienced with analyzing a state’s case data for federally required studies of a sampling of child support award and deviations.

Overview on Why Case Studies of Child Support Awards Must be Conducted by States

  • Under federal regulations, to obtain federal child support monies, at least every four years, states are required to conduct a study of their child support cases and compare presumptive awards with deviation awards.
  • Additionally, states are required to evaluated the impact of child support guidelines on various economic issues, notably for low-income parents.
  • The intent of case studies is to have states think about improving child support guidelines by comparing actual awards to formula awards and seeing if formulas should be changed to reflect actual court practices.
  • Additionally, new regulations require states to specifically evaluate the impact of child support guidelines on low income parents and whether child support guidelines adequately consider parents’ ability to pay. Specifically, do child support guidelines, after determining the award amount, leave a child support payor with enough income to meet basic needs? Surprisingly, many states are vague on this issue in their child support guidelines and likely need to revamp guidelines to comply with requirements for determining child support awards in low income situations.
  • To be done properly, case study analysis must be heavily data driven and take into account explicit and implicit economic issues arising from application of child support guidelines. The vast majority of states fall short of proper analysis of case study data and likely do not comply with federal regulations.
  • As of January 19, 2017, the federal requirements for facets included in the case studies of child support awards became notably more complex. New regulations took effect on that date and few states have focused on how to comply with the new requirements for analysis in the case studies. The case study requirements are found in the Code of Federal Regulations (CFR).

What Are the New Federal Regulations for Child Support Case Studies?

The applicable regulation is 45 CFR 302.56. The key portions of this regulation as related to case studies follows.

  • §302.56 Guidelines for setting child support orders.
    • (a) Within 1 year after completion of the State’s next quadrennial review of its child support guidelines, that commences more than 1 year after publication of the final rule, in accordance with §302.56(e), as a condition of approval of its State plan, the State must establish one set of child support guidelines by law or by judicial or administrative action for setting and modifying child support order amounts within the State that meet the requirements in this section.
    • (b) The State must have procedures for making the guidelines available to all persons in the State.
    • (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:
        • (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.
    • (h) As part of the review of a State’s child support guidelines required under paragraph (e) of this section, a State must:
      • (2) Analyze case data, gathered through sampling or other methods, on the application of and deviations from the child support guidelines, as well as the rates of default and imputed child support orders and orders determined using the low-income adjustment required under paragraph (c)(1)(ii) of this section. The analysis must also include a comparison of payments on child support orders by case characteristics, including whether the order was entered by default, based on imputed income, or determined using the low-income adjustment required under paragraph (c)(1)(ii). The analysis of the data must be used in the State’s review of the child support guidelines to ensure that deviations from the guidelines are limited and guideline amounts are appropriate based on criteria established by the State under paragraph (g).
  • 45 CFR 302.56 in Its Entirety
    • This regulation also addresses issues of required economic studies for child support guidelines, legal principles of states’ guidelines, and imputed income among others.
    • Click here for the report in pdf format.

What Are Likely Data and Analysis Needs Under New Regulations?

From an economist’s and/or statistician’s perspective, to properly comply with new federal regulations, states should:

  • (1) Have deviations listed individually and by dollar amount in each award (likely located in a state’s child support worksheet). Numerical analysis can only be conducted if there are dollar amounts associated with each deviation. This may not just require states to be more detailed in collecting data for the case study but a state may need to revise its worksheet to include such detail on individual deviations. This would contrast with states that simply require entry of an overall award inclusive of deviations and an entry of the presumptive award (no deviation component detail).
  • (2) Add data categories for each case to reflect new federal requirements. These new characteristics compiled would include:
    • Whether an award is in default (for modifications and/or follow up case information sometime after entry of the award);
    • Whether the award includes any imputed income in the calculation; and
    • Whether a low-income adjustment was used.

What’s the Point?

The new regulations essentially require each state to evaluate whether its child support guidelines are affordable for low-income obligors. Do presumptive awards leave a child support payor with enough income for basic living needs after paying child support? Are state policies for imputing income to unemployed obligors appropriate?

Surprisingly, most states do not address low income issues in a systematic, economically sound manner. The case study requirement helps to ensure that states statistically evaluate whether changes are needed in guidelines as related to this issue.

Because new regulations require addressing low income situations in more detail, many states will need to update guidelines with formulas to ensure that awards to not leave payors with less income than needed for basic needs.

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