Child Support Enforcement: States' Experinece with Private Agencies' Collection of Support Payments

摘要

States are turning to private firms to collect child support payments because they are finding it increasingly difficult to service their growing CSE caseloads with available staff and budgetary resources. Most commonly, states contract with the private sector for the collection of past-due support,3 especially that considered hard-to-collect. Privatizing collections has enabled states to collect support that they would have been unable to collect without hiring additional staff. Under the terms of most collection contracts, states pay contractors only if collections are made and payments to contractors are often a fixed percentage of collections. For example, in fiscal years 1994 and 1995, contractors in nine states collected nearly $60 million and were paid about $6 million. Whether or not these collections provide financial benefits for the states and for the federal government depends on whether the families receiving child support services had received welfare and on the specific financial arrangements that exist between the federal government and each state. For families receiving Aid to Families With Dependent Children (AFDC) benefits,4 most of the child support collected is retained by the government; in effect, the government is reimbursed for AFDC payments made to families. Families not on AFDC get most of the support collected. The split in collections between the federal and state governments depends first of all on the federal governments share of welfare payments within each state. The more the federal government pays in relation to the state, the more it gets back from child support collections.