More Child Support Dollars to Kids
From Center for Law and Social Policy:
The Deficit Reduction Act of 2005 (DRA) provides new state flexibility to pass through more child support dollars to children who currently receive or formerly received welfare.
States are searching for ways to support work, reduce poverty, and meet the new TANF work participation requirements in the Deficit Reduction Act of 2005 (DRA).
In addition, the need for supports for working families outside of welfare has increased as welfare caseloads have declined.
Federal and state governments continue to withhold $2 billion per year in child support to repay TANF cash assistance costs.
Families receiving TANF cash assistance are faced with time limits and are expected to move quickly into work.
The basic rule is that child support paid while families are receiving TANF cash assistance is withheld by the state and shared with the federal government.
Increasing the amount of child support payments to current and former TANF families can complement this strategy.
Additional supports, including child support, can make a difference in whether they will remain off of welfare or return.
Under the new law, states have the option to expand payments to both current and former TANF families, allowing for a smoother transition off of welfare.
One study estimated that a $100 pass-through and disregard could increase annual cash income for poor TANF families with a child support collection by 6 percent.xv And in states with earnings disregards, a combination of work, child support, and assistance could substantially increase the financial security of TANF working families.
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