Do Child Support Awards Cover the Cost of Raising Children?

Family Economics and Nutrition Review, Wntr, 1998 by Mark Lino

A dramatic change in American family life during the past 30 years has been the growth in the number of single-parent families. In 1970, 13 percent of all families with children were headed by a single parent. By 1996, this proportion had climbed to 32 percent (14,17). It is estimated that half of the children in the United States will spend part of their childhood in families headed by a single parent (4)--typically, the mother. Since 1970, single parenthood has become synonymous with poverty. In 1994, the median income of single-parent families headed by a female was less than one-third that of married-couple families with children (17); 53 percent of these female-headed families had income below the poverty threshold (17). Child support--legally mandated payments from a noncustodial parent to a custodial parent[1]--can improve the economic well-being of single-parent families if these payments are paid on a regular basis and reflect the cost of raising children. Given that the recent Welfare Reform Act limits the time single parents are eligible for public assistance, child support is an important way to improve the economic well-being of single-parent families.

Much of the focus on child support has been on payment enforcement because noncustodial parents often do not make payments. In 1991, of custodial mothers who were due child support, 48 percent received partial payment or none at all (15). The adequacy of child support awards has received much less attention.

Beller and Graham compared 1985 child support awards with the cost of raising children (based on 1972-73 data inflated to 1985 dollars)and found these awards only covered a fraction of the cost of raising children (2). A U.S. Department of Health and Human Services study reviewed a variety of estimates of the cost of raising children and compared them with 1990 State child support guidelines (18). Most State guidelines were within the range of cost estimates; however, these guidelines were at or near the lower bound of these estimates. Pirog-Good compared 1991 State child support awards determined by the guidelines in each State with estimates of the cost of raising children and concluded most State guidelines fell short of this cost (9). The Women's Legal Defense Fund compared 1989-90 State child support guidelines with a standard-of-living measure for children (5). It was found that, in most States, support awards based on the guidelines left children with less than a decent standard of living.

Since 1960, the U.S. Department of Agriculture (USDA) has provided annual estimates of family expenditures on children (often referred to as the cost of raising a child) by family income level. This study examines the adequacy of child support awards by comparing average full child support payments with USDA's estimates of the cost of raising children. Average full child support payments should reflect total child support awards. This study differs from previous research--it focuses on USDA's estimates of the cost of raising children as a basis for comparison; whereas, other studies use a range of estimates, some of which are outdated. Also, it uses actual child support payments to make this comparison.

The article begins with a brief overview of child support guidelines in the United States, a description of the USDA child-rearing expense estimates, and a comparison of the USDA estimates with other estimates of expenditures on children. The article concludes with a discussion of the policy implications for child support guidelines.

Overview of the U.S. Child Support Guideline System

Before 1984, the use of child support guidelines was limited in many States (21). Child support awards, typically set on a case-by-case basis, varied tremendously among judges (5). This system often resulted in awards that had little rationale (2). The emphasis during this time was on the enforcement of child support payments since a large percentage of single mothers received no payments--a problem that still exists. In 1978, about half of custodial mothers due child support received partial payment or none at all (2). By 1991, this proportion remained almost unchanged at 48 percent (15). Title IV-D of the 1975 Social Security Act made the Federal Government an overseer of child support collection; although, the daily work of collecting child support remained a State responsibility.

The Child Support Enforcement Amendments of 1984 were primarily aimed to improve the collection of child support. These amendments required States to (1) use automatic wage withholding to collect overdue child support, (2) use expedited legal processes to establish and enforce support orders, (3) collect overdue support by intercepting State income tax refunds, and (4) initiate a process for imposing liens against real and personal property for nonpayment of child support. The amendments also required States to set numeric child support guidelines and to make these guidelines available to officials in charge of setting the level of child support. The amendments, however, did not require that these guidelines be binding.