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A public policy blog from AEI
Over the course of 2018, top scholars will debate on these pages some of the most pressing issues facing low-income Americans today. Policies aimed at reducing poverty and increasing opportunity for low-income Americans will be the focus. Both sides of an issue will be presented in a series of point/counterpoint essays in the hopes of opening minds and advancing discussion. We hope you enjoy it and we welcome respectful feedback in the comments section.
This is the first part of a debate series on Child Support Assurance. Read the rest of the conversation here.
A program of child support assurance, guaranteeing a minimum monthly child support payment for children living apart from a parent, would substantially reduce child poverty and economic insecurity. Children living with only one parent are considerably more likely to be poor, and to experience unstable income, than children living with two parents. Single parents (usually mothers) shoulder a disproportionate responsibility for providing care and support to their children, and yet frequently cannot rely on financial support from the nonresident parent. The nonresident parents (usually fathers) of low-income children frequently have child support obligations that are high relative to their incomes.
The current child support enforcement system works best for families in which the nonresident parent has stable formal employment — which gives the nonresident parent the means to pay, and generally results in automatic payroll withholding of the child support due. Lower-income individuals are more likely to encounter challenges in the child support system because of their income and employment status, because they are more likely to have children outside of marriage and with multiple partners, and because a higher proportion of their (low) income is needed to provide basic support. Less than 30% of resident parents below poverty received any child support and only 17% received all the child support due to them in 2015 (Grall, 2018).
Appropriately designed, a child support assurance program would both support vulnerable children living apart from a parent, and encourage parental responsibility. The essential elements of such a system are a minimum monthly support amount per child, a maximum child support obligation for nonresident parents, and a public guarantee to bridge the gap when the minimum support for children exceeds what the nonresident parent can reasonably pay. Elsewhere (Cancian and Meyer, 2018) we provide a specific proposal to illustrate and support estimates of costs and impact. In particular, we propose: (1) a guaranteed minimum child support payment of $150 per month per child; (2) a child support order standard of 12.5% of nonresident parent income per child, and (3) each nonresident parent’s total current contributions capped at 33% of income.
In addition to concerns regarding public costs, guaranteed minimum child support raises important concerns regarding the incentive for nonresident parents to pay child support and to work. If nonresident parents are working so that they can support their children, a guarantee reduces the incentive to work. However, previous analyses suggest this potential effect is likely to be small (Freeman and Waldfogel, 1998). Moreover, the minimum guarantee, available only to children with a child support order, would create a substantial positive incentive for resident parents (and many nonresident parents) to cooperate in establishing an order, which may reverse the decline experienced over the past decade in participation in the child support system (see Schroeder, 2016).
Many children in poverty have nonresident parents who have insufficient resources to support their children. In the absence of a child support guarantee, the choice is often between two bad options: orders that are too high for low-income nonresident parents to pay, or orders that are too low to provide meaningful support for poor children. A system of child support assurance creates a better alternative, in which resident parents can rely on regular support for each child, while nonresident parents are held responsible for a substantial, but manageable, contribution.
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