Chapter 1

The Child Support Enforcement Amendments of 1984

by Robert M. Horowitz

In 1974 Congress enacted Title IV-D of the Social Security Act. 42 U.S.C. 0 5 650-662. This title put the federal, state and local governments in the business of child support establishment and enforcement. Through inter- governmental cooperation absent parents were to be located, paternity established, and support set and enforced. Congress’rationale for entering the domestic relations field was a fiscal one: it believed the government’s burden of supporting needy children through the Aid to Families with Dependent Children (AFDC) program could be partially shifted to parents by improvements in support estab- lishment and collection.

Ten years after the original IV-D enact- ment Congress revisited the program and found it wanting. Obligors were disobeying support orders in epidemic proportions. Defaults on child support obligations ex- ceeded $4 billion annually. Nearly half of all custodial parents did not even have a support order. As a result the IV-D program was overhauled by the Child Support Enforce- ment Amendments of 1984 (hereinafter CSEA), Public Law 98-378. Unlike the 1974 act geared exclusively toward government (hereinafter referred to as IV-D agencies) endeavors, the 1984 amendments contain provisions which should interest the private practitioner. These are highlighted in this article.

Enforcement

The centerpiece of CSEA is a series of child support enforcement procedures. States must have these procedures in place by Oct. 1, I985 (with some delays permitted because of state legislative schedules). These remedies must be available to IV-D agencies for both AFDC recipients who have assigned their support rights to the state, and non-AFDC applicants who have assigned theirs to the agency. While the original act required IV-D services for non-AFDC applicants, federal funding for- mulas favored AFDC collection to the disad- vantage of non-welfare applicants. See Carter v. Morrow, 562 F. Supp. 311 (W.D.N.C. 1983) (finding such treatment violated the Social Security Act). To encourage improved agency services to non-AFDC applicants, the federal funding formula has been adjusted. The private bar will profit from these man- dated procedures and funding changes in two ways. First, many states, when enacting these new remedies, will give them general applica- bility. Second, attorneys may refer their clients to the IV-D agency for support enforcement services with greater confidence that they will be helped.

The specific enforcement remedies of the CSEA are wage withholding, imposition of bonds, securities or other guarantees, liens on real and personal property and interception

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Robert M. Horowitz

of federal and state income tax refunds. Also, as an inducement for voluntary compliance, the law requires states to make available sup- port debt information to consumer reporting agencies.

Mandatory wage withholding is the key enforcement tool. A separate article in this issue is devoted exclusively to it. The use of liens, bonds, and other securities are common devices used by attorneys to enforce money judgments. In most states little legislative reform will be necessary to comply with these CSEA requirements.

A more intriguing and potentially profita- ble source of support collection are tax refund intercepts. Since the Omnibus Budget Reconciliation Act of 198 1, IV-D agencies, through the Internal Revenue Service (IRS), could intercept federal income tax refund payments for past due support owed to the state or federal government. Similarly, many states intercept state income tax refunds for their AFDC cases. CSEA expands both pro- grams. It permits federal tax refund offsets for non-AFDC clients of the IV-D agency and requires states with personal income taxes to do likewise. Unlike other enforce- ment tools, only the IV-D agency can insti- tute such intercepts. Thus, the attorney must refer the client to the agency if this remedy is desired. Before doing so, an affidavit signed by the client attesting to the amount of sup- port owed should be prepared. Once referred, however, there is no assurance that the agency will seek tax refund intercepts. Decisions on when to seek this remedy are discretionary to the agency. The federal tax refund interest program from non-AFDC applicants con- tains two other unique aspects. First, it is limited to federal taxes payable before Jan. 1, 1991. Second, it may not be used to collect spousal support.

A few additional enforcement matters should be noted related to fees, due process protections, interstate enforcement and spousal support. Before attorneys refer clients to a IV-D agency they should be familiar with the agency’s charges. Under the CSEA two fees may be collected. First, states must charge an application fee, not to exceed $25, for furnishing IV-D services to non-AFDC applicants. The state may elect to pay this fee

itself or recover it from the absent parent and reimburse the applicant. Second, the IV-D agency may charge an additional fee to the non-AFDC applicant, again not to exceed $25, for submitting a federal tax refund offset request to the IRS or a state tax intercept.

Lawyers representing absent parents should be aware of basic protections afforded their clients. As a general proposition, the CSEA note enforcement remedies must comply with states’ due process requirements. The wage withholding, federal tax intercept and credit information reporting sections of the act further enumerate specific procedural protec- tions. They each require pre-deprivation notices and opportunities to challenge the proposed action. Additionally, the tax inter- cept program protects new spouses of the absent parent who filed a joint tax return. The new spouse is given notice and has an oppor- tunity to file a 1040X, Amended U.S. Indi- vidual Income Tax Return, to seek her share of any refund owed.

Notwithstanding the Uniform Reciprocal Enforcement of Support Act and Uniform Enforcement of Foreign Judgments Act, Congress believed interstate child support enforcement remained a major problem. Many private practitioners can attest to the difficulties in enforcing orders in foreign states. Several features of the CSEA address this concern. The state wage withholding procedures must be available to enforce sister state orders. The federal tax intercept pro- gram has “national jurisdiction” (although obligors are given their choice of state to con- test this action, either where the support order was issued or where the offset request is being made). Special federal funds and grants are available to improve interstate enforcement.

Finally, counsel should be alerted to the spousal support requirement of the CSEA. Under the original IV-D amendments states could elect to enforce spousal support orders. The new law requires this where the spouse or former spouse has an outstanding support award and lives with the minor child on whose behalf the agency is providing services.

In addition to the enforcement remedies several other features of the CSEA bear examination.

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The Child Support Amendments of 1984

Paternity

In the early 1980s the U.S. Supreme Court twice struck down short statutes of limita- tions for paternity actions. (Mills v. Hablu- ezel, 456 U.S. 91 (1982) (one-year statute); Pickett v. Brown, 103 S.Ct. 2199(1983)(two- year statute). The Court failed, however, to identify a constitutionally permissible period. Congress, citing high rates of children born out-of-wedlock and advances in scientific paternity testing, has settled the matter. The CSEA requires states to permit the bringing of paternity actions up to at least the child’s 18th birthday. States with no or more gener- ous limitation periods are unaffected.

Central Registries and Clearinghouses

In order to operate a wage withholding system, states must provide for some agency to collect and disperse support payments sub- ject to withholding. The CSEA permits states, at their election, to allow this agency to collect and distribute support payments even when withholding has not been instituted. This may be done at the request of either parent. An annual handling fee must be charged to cover the actual costs, not to exceed $25, and imposed on the requesting party. Many com- munities already use clerks of the court to perform this function. The CSEA may accel- erate this trend by providing funds to help automate registry systems.

The benefits of payment through a central registry for both obligee and obligor are numerous. In the event of a payment dispute the registry data provides an official payment record. This record will help avoid protracted disputes over whether payments were made and the exact amount of any arrears.

Medical Support

The CSEA require IV-D agencies to peti- tion the court for inclusion of medical sup- port in any child support order whenever the obligor has health care coverage available at a reasonable cost, typically through his place of work. While Congress is looking to decrease costs to Medicaid, private attorneys should consider obtaining such orders. (Several states

already require this, See e,g., Minn. Stat. $5 18.55 I .) This is particularly critical where the custodial parent does not work or have access to a low-cost group plan. Attorneys should view this provision broadly to cover the full gamut of employment-related benef- its. The House report on the proposed CSEA legislation suggested that such orders might include “coverage provided in connection with a retirement, disability or unemploy- ment plan, by a union plan, or by some other group plan which offers comprehensive benefits. ”

Expedited Proceedings

Another mandate of the CSEA is that states have “procedures under which expe- dited processes are in effect under the state judicial system or under state administrative process (a) for obtaining and enforcing sup- port orders and (b) at the option of the state. fo r establishing paterni ty .” 42 U.S.C.

Private attorneys must heed closely the developments of expedited proceedings in their states. States may well set up quasi- judicial systems, e.g., use of masters or ref- erees, in which all support matters, whether brought by IV-D agencies or privately, are determined. See, e.g., Mich. Comp. Laws Ann. $552.501 et seq.

Among the issues attorneys should con- sider, whether an administrative or quasi- judicial system is proposed, are due process requirements and scope of jurisdiction. The federal law and regulations contain minimal procedural safeguards. States are free and well advised to add to these.

Jurisdictionally, the CSEA only require support questions to be handled expedi- tiously. With the universal application of support guidelines (see below), quick support determinations may be practical, especially in AFDC cases where the parties have limited assets. Divorces, however, often involve complex collateral issues-custody, visita- tion, property settlement-which affect sup- port awards. Neither the CSEA nor the legis- lative history suggest such cases go through the expedited process, although one must be used to secure an interim child support order.

§666(a)(2).

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Support Guidelines

A controversial feature of the CSEA among the domestic relations bar concerns child support guidelines. The CSEA require states to have such guidelines in place by Oct. 1, 1987. These may be established by legislation or by judicial or administrative action. They are not required to be binding.

Notwithstanding the discretionary escape clause, private practitioners have voiced many concerns over guidelines. They ques- tion if any chart, formula or table can take into account tax considerations, previous debts, joint custody arrangements, unusual medical, educational or other needs of the child, in-kind support payments, employment expenses, child’s own income, future income and so forth. Although these concerns are valid they are not irreconcilable. National and local studies addressing these and other issues are under way. Some states that trail- blazed guidelines just five years ago have already taken steps to address many of these issues. For example, the revised Uniform Child Support Guidelines for the state of

Washington (effective Jan. 1. 1985) take into account child care costs. ages of the child, adjustments caused by length) visitation periods, new children of obligor. split custody and joint physical custody. The CSEAs’ three-year grace period for guidelines will enable practitioners to study these issues and work toward satisfactory standards.

State Child Support Commissions

The CSEA promise to bring major changes to child support practice. Attorneys involved in these cases should provide input. State child support commissions, another require- ment of the act, have proposed ways in which their states can comply with the federal legis- lation and look at other child support-related issues, such as visitation and interstate enforcement.

Robert M . Horowitz is co-director of the Child Support Project of the National LRgal Resource Cen- ter for Child Advocacy and Protection, Washington, D. C.

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