Child Support, Foster Care, and the Poverty Profiteers

“Limited budgets. Stricter federal performance requirements. Expanding caseloads. New program regulations. And greater public demands. Sound familiar?” queries the Affiliated Computer Services web site.

“We’re on it. We offer increased efficiency and cost-effectiveness to your child support program. Count on us to provide subject matter expertise, best practices and the best technology to fit your program. With a focus on quality customer service, we provide accurate, timely services and information to custodial parents. Let us customize your state or local child support program to meet your needs.”

This message is addressed to human services managers, who know full well that it is they – and not children – who stand to profit from child support. As I cited as an example in my previous posting, the Missouri Department of Social Services uses its Child Support Enforcement Collections Fund to directly support its Director’s Office, its Mail Center Consolidation, its department of Finance and Administrative Services, its General Services department, as well as its Legal Services division.

That’s an awful lot of financial support extracted from anguished parents whose children have been “removed” from their homes. The well-heeled bureaucrats that inhabit the upper echelons of the child welfare industry know this to be so, just as they know that they are masquerading behind the seemingly benevolent facade of “helping” families. As Leroy Pelton succinctly explained: “The crucial point is that the coercive apparatus is coated with a helping facade.”

Lest the reader think I’m being overly harsh in my assessment, the California Department of Social Services, in its own Stakeholder’s report opened with a letter reading, in part: “Over a period of many years, the original vision for supporting and healing families deteriorated into a system that is too adversarial and coercive to be effective. The hasty reactions to tragic events, coupled with genuine good ideas and best practices, have resulted in a patchwork of limitations and inflexibility, approaches confined by fear of liability despite a deep desire to serve.”

There are quite a number of ways that child welfare agencies enrich themselves with child support, not the least of which is the forced assignment of the child support obligation as a condition of Temporary Assistance to Needy Families. As the Congressional Research Service explains: “As a condition of receiving TANF cash benefits, a family must assign its child support rights to the state. Assignment rules determine who has legal claim on the child support payments owed by the noncustodial parent. The child support assignment covers any child support that accrues while the family receives cash TANF benefits,as well as any child support that accrued before the family started receiving TANF benefits. Assigned child support collections are not paid to families; rather, this revenue is kept by states and the federal government as partial reimbursement for welfare benefits.”

David E. Cook of the Sacramento News & Review begins his report on child support with a question for his readers: “The system makes Darryl Gay pay child support. But it’s more than he can afford and his daughter doesn’t get the money. Is this how it’s supposed to work?”

“I was buying my daughter whatever she needed because I was there every day,” Gay says. “I knew what her needs were. I was buying what she needed.”

Cook explains how “the welfare bureaucracy put its boot up Gay’s backside” by nailing him with a court-ordered child support payment established after his daughter’s mother left town and applied for TANF.

Cook explains: “Because Gay’s whereabouts were unknown at the time, he was unaware of the order. But when he tracked down his daughter on his own accord, Alameda County slapped him with a $227-per-month child-support payment. As an in-home health aide, Gay makes $830 per month. That leaves him with just $603 to make ends meet after paying child support. None of the money he paid on his own in the past counts. But here’s the real rub: Most of the child support goes not to Tynea or her mother, but to Alameda County. Only $50 goes to Tynea.”

That’s right – only $50. The rest goes right back into the County’s coffers.

In a voluminous report issued by the DC Appleseed Center for Law and Justice, the Center notes that: “In a step very much supported by child and poverty advocates, the District recently enacted a $150 child support pass-through, making it the first jurisdiction in the Nation to increase its pass-through and income disregard above $50 a month since the enactment of the Deficit Reduction Act of 2005.”

Under the enactment, the first $150 per month collected by the District on behalf of a TANF recipient goes directly to the family instead of to the District to reimburse it and the federal government for TANF and Medicaid expenditures, the Center explains. Yes, reimbursement not only for TANF, but for Medicaid as well.

That’s more generous a stipend than is offered by other jurisdictions, but the lion’s share of the gain nevertheless still goes to the District and to the federal government. In effect, it’s welfare in reverse. The government is soaking poor families in an insidious twist on trickle-up economics.

“Poor fathers are routinely required to pay much higher proportions of their income than middle- and upper-income fathers,” says Sara McLanahan, director of the Center for Research on Child Wellbeing at Princeton. “Unrealistic arrearages arise because child-support agencies and courts base child-support payments not on fathers’ actual earnings, but on their presumptive earnings.”

It isn’t only impoverished fathers that child welfare agencies use the presumptive earnings gimmick on. In a Virginia case, a mother’s child support obligation was calculated based on her working a minimum wage job, when the reality was that she was a self-described “stay-at-home housewife.” The juvenile court approved of this chicanery in calculating the family’s child support obligation for their children in foster care. (Their children were neither abused or neglected – but the agency managed to convinced the judge that they were, notwithstanding credible testimony to the contrary from people who knew the family well).

The conventional image of the “deadbeat dad” is largely a myth – one that was reinforced in the minds of most Americans by a compliant and uncritical media. The fact is that a majority of the so-called deadbeats are actually “dead broke.”

Associate Professor at Seton Hall University School of Law Solangel Maldonado explains: “Policymakers, the media, and most Americans assume that fathers who fail to support their children simply refuse to do so. State agencies and the press post photographs and ‘wanted ads’ of fathers who are delinquent on their payments, labeling them ‘deadbeats.’ Many Americans support incarcerating fathers who owe back child support because they believe that most deadbeat fathers enjoy a comfortable lifestyle while their children live in poverty. Although some fathers who do not pay child support can afford to pay the amount awarded, the majority of fathers who do not pay simply cannot afford to do so. In fact, over two and one half million nonresident fathers of poor children are poor themselves, earning less than $6,000 a year.”

This point is not entirely lost on human services administrators. “Even with all our strong-arm tactics, there is a percentage of fathers that is dead broke,” said Dan Welch, a senior administrator at Colorado’s division of child-support enforcement. ”We have come to realize that all of the enforcement tools in the world can’t make somebody pay if they don’t have the money.”

Dead broke or not, trying to squeeze the last ounce of blood of out these parents is a very lucrative enterprise, and particularly so for everyone’s favorite revenue maximization specialist MAXIMUS. The company was awarded a $6.6 Million Child Support Contract in Tennessee, a $6.7 million Child Support Contract in Maryland, and an $8.4 million Child Support Contract in Georgia.

In August of 2006, MAXIMUS announced that it had picked up another $33 million worth of child support business in the states of Texas, Illinois, and Iowa.

In May of 2009, MAXIMUS announced that it had been awarded a $49 million Child Support Operations Contract in Tennessee, which it proudly boasted was the: “Largest Child Support Privatization Contract in the U.S.”

To be sure, MAXIMUS isn’t the only game in town. Returning once again to Affiliated Computer Services, in August of 2001, it was announced that ACS was planning to acquire Lockheed Martin IMS Corp., a subsidiary of the Lockheed Martin Corporation.

Mark Dunlea reported in Covert Action Quarterly that Lockheed Martin was around that time among the most aggressive of the big players to hop on board what he described as “one of the biggest corporate grabs in history.” Namely, welfare reform.

“Ironically, although Lockheed has little experience in the social services, it does know welfare from the inside. In the 1970s and ’80s, Congress approved a massive bailout for the failing weapons manufacturer,” Dunlea candidly observed.

At the time, big names like Electronic Data Systems, the $12.4 billion information-technology company founded by presidential candidate Ross Perot, Andersen Consulting, then a $4.2 billion sister company of Arthur Andersen, Unisys, and IBM were clamoring to hop on board the welfare reform gravy train.

On September 28, 2009, Xerox Corporation announced plans to acquire Affiliated Computer Services in a $6.4 billion transaction. That deal was closed on February 8, 2010. That’s right – it’s a Zerox subsidiary pitching its child support revenue maximization software to human services executives today.

Clearly the most insidious revenue maximization gimmick employed by child welfare agencies and their revenue maximization contractors is extracting child support from impoverished parents to “reimburse” the agency for the costs of foster care. This child support obstacle may well become the one that a family may not be able to overcome as they seek “reunification” with their children.

“The current child support system was not developed from a desire to help children. The federal government and the states created it to reduce the number of children needing public assistance and to recoup partially the costs of providing benefits to those who nonetheless needed benefits,” notes the National Center on Poverty Law.

In 1975 Congress amended the Social Security Act, providing federal funding to states to help operate child support programs. As the NCPL explains: “A cornerstone of the federal scheme is that families who need welfare assistance must assign their rights to child support to the state and cooperate with the child support program in establishing paternity and enforcing support orders. Because most of the support collected does not go to the children or custodial parent, it generally does not significantly improve the quality of life or economic stability of family members.”

Followed in 1986 the Bradley amendment, which prohibited retroactive modifications of child support. “Congress intended the amendment to prevent obligors from amassing huge child support debts and then obtaining judicial relief from the debt that the parent could, and should, pay. The amendment may achieve its goal for obligors who have the ability to pay but has unintended consequences for obligors who are poor,” the NCPL explains.

Daniel L. Hatcher of the University of Baltimore explains that when children are removed from poor families and placed in foster care, federal law “forces a collaboration between child welfare and child support agencies to pursue child support obligations against the children’s parents.” The children receive no benefit at all, as he explains: “Payments made in the name of child support are re-routed to the government coffers and converted into a funding stream to reimburse the government costs of providing foster care services.”

This cost recovery requirement “targets parents who are the least able to pay, whose children were often removed due to the circumstances of poverty and the neglect that results.” Hatcher continues on to explain that: “Saddled with the additional child support obligation, the parents’ struggles toward economic stability and family reunification are often derailed. Case plans required by federal law to aid reunification are illegally converted into debt-collection tools. If the parents fall behind, the government owed debt can become a consideration, sometimes the sole factor, for the permanent seizure of their children through the process of terminating parental rights. Foster children become collateral, mortgaged to secure the debt for their own care.”

Efforts are currently underway in Nebraska to further maximize revenue by targeting child support enforcement in a highly programmatic manner to enrich state coffers.

“The state treasurer is responsible for receipting and disbursing child support payments. The Health and Human Services System is responsible for providing the state treasurer with distribution instructions for the disbursement of child support,” according to the state’s summary of executive state job positions.

Under the federal Assistance for Unemployed Workers and Struggling Families program, Nebraska is to receive $10,300,000 in federal funds that provide “for the state to receive reimbursement of federal funds at 66% for state child support program expenses during the time frame from October 1, 2008 through September 30, 2010,” according to – a government web site apparently devoted to the state’s revenue maximization efforts.

Termination of parental rights typically ends the child support obligation. But of course, there are those elements who would have it otherwise.

A report issued in 2004 by the Texas Select Committee On Child Welfare and Foster Care notes that: “Currently, a judge can order child and medical support payments from the biological parents up until the parent’s rights have been terminated. The Committee recommends extending the court’s ability to order child and medical support payments even upon termination of parental rights, up until the time the child turns 18.”

The Committee continues on to explain: “Child support orders should be monitored from the day issued and the Office of Attorney General should expedite the filing of support enforcement actions any time that a child support payment falls 60 days late. Any time a child is removed from their home due to abuse and/or neglect, the financial costs of caring for that child should still remain the priority of the biological parents. The taxpayers of this state should not have to pay for the inability of parents to serve the best interests of their children.”

The cruel irony in this proposal is that many parents who may not have abused or neglected their children at all may nevertheless find themselves having their parental rights terminated on the basis of their inability to pay child support, and being forced to maintain the burden of reimbursing the state for the costs of housing children that are legally no longer theirs.

Welcome to the welfare state in reverse. It is one in which the human services administrators and their revenue maximization contractors go laughing all the way to the bank while their anguished clients endure life on the margins in a deepening recession, providing all the more grist for the mill that is the poverty industry.