Federal incentives (updated)

Conditioning welfare on the absence of a parent

The Aid to Dependent Children program established by the Social Security Act of 1935 made “needy” children eligible for cash assistance. (More precisely, it made the custodian of a needy child eligible to receive cash assistance on the child’s behalf.) A child was defined as “needy” if, among other possible reasons (e.g., the death or disability of a parent), he or she “has been deprived of parental support or care by reason of the … continued absence from the home … of a parent.”1

The requirement that one of the parents be “absent” arguably created an incentive for single mothers to remain unmarried, and helped subsidize a married woman’s decision to divorce her husband, provided she was confident she would retain custody of her children, either because she reasonably anticipated that a court would apply a maternal preference or for some other reason. The requirement that a parent be absent from the home also created a disincentive for a divorced or separated mother to reconcile with her husband.

The Personal Responsibility and Work Opportunity Act of 1996 repealed the statute that had conditioned eligibility for welfare benefits on the “continued absence” of a parent from the home. In its place, it substituted a new statutory provision (42 U.S.C. Section 608) that prohibited states from granting aid to a family “unless the family includes (i) a minor child who resides with the custodial parent or other adult caretaker relative of the child; or (ii) a pregnant individual.” The following year, Public Law 107-33 (1997) replaced the word “custodial parent” with “family,” and added a requirement that states deny assistance to a family if the child does not reside in the home of the family for forty-five consecutive days. States were given the option of specifying a different period of time, so long as the period selected was between thirty and 180 days. This condition effectively created a disincentive for welfare recipients to agree to alternating custody arrangements, or to joint custody arrangements that called for a school/summer split of time.

Impact of federal child support enforcement incentives

Federal budgetary concerns were the impetus for federal involvement in child support enforcement. With the advent of no-fault divorce in the 1970’s, and the destigmatization of birthing children out of wedlock, an increasingly large number of women became eligible for AFDC benefits. The increased strain on the federal budget prompted Congress to enter the child support enforcement field, the hope being that responsibility for supporting these women could be shifted from the federal government to the men who fathered the children.

Incentive payments, matching funds, and block grants to states are the basic mechanisms by which Congress specifies and controls the content of state divorce, paternity and other family laws. A state is free to refuse to enact the laws Congress has outlined for it, but if it does then it forfeits a significant share of the federal money that Congress has made available to states, and to individuals within the states, that do comply with the Congressional program.

To date, no state has refused to comply with the conditions Congress has specified. States find the federal funds quite attractive. For example, 74% of the state of Minnesota’s total child support enforcement funding comes from the federal government. Federal Financial Participation (FFP), which is provided at a flat rate of 66% of state and county spending, accounts for most of that. The rest comes from federal financial incentives paid to the state and distributed to counties for the establishment of paternity, and for support establishment and collections.2 This is in addition to federal financing of up to 90% of certain child support collection-related program costs.

Federal funds also benefit states indirectly, in the sense that bringing more federal money into a state can help stimulate the local economy; and ensuring people’s eligibility for federal welfare benefits relieves a state of some of its share of responsibility for supporting dependent mothers and children (and now, sometimes, fathers) residing within the state.

According to a 1998 House Ways and Means Committee report,3 states were earning a “profit” from federally-incentivized child support programs. This statement made some sense at the time it was made, since the federal government, at that time, was paying each complying state a bonus of at least 6% of all child support the state collected, in both welfare-reimbursement and non-welfare-reimbursement cases.4 Today, the incentive payment is no longer calculated as a percentage of the amount collected, and instead involves a limited aggregate fund to be divvied up among the states according to their relative performances, and incentive payments that are received must be reinvested in the child support enforcement program. Moreover, the child support that is collected is either used to reimburse the government for its TANF outlays, or distributed to the parent to whom the support is owed. Accordingly, it may not be quite as accurate today as it once was to characterize federal support enforcement incentives as “profit” to states. Nevertheless, it is still possible to argue, as political scientist Stephen Baskerville has, that the system gives states an incentive to “turn as many parents as possible into payers by providing financial incentives to mothers to divorce”5 – at least in the sense that any federal funds received help offset state outlays.

While there may be disagreement about whether states really make a “profit” on child support collections or not, the profitability of the child support guidelines for custodial parents has been clear. According to an analysis conducted by economist Robert Willis, less than one-third of child support payments are actually used for children; the remainder is profit for the custodial parent.6 To the extent this remains the case in a particular state, it creates a significant financial incentive for a single mother to refrain from marrying, and for a married mother to divorce, at least if she is confident a court will grant her sole custody of the children.7

No federal welfare or incentive program requires states, as a condition of eligibility for federal funds, to successfully encourage unwed couples to enter into marriage for the benefit of their children. States, in their discretion, may spend some of their TANF block grants on “non-cash service” programs aimed at preventing out-of-wedlock pregnancies (e.g., abstinence education), but federal law does not mention encouraging marriage as a means of preventing births out of wedlock. Nor does the federal government reward any state for successfully bringing about a divorcing couple’s reconciliation. States receive payments for establishing paternity and divorce support orders, not marriages.

Until 1997, federal law (specifically, 42 U.S.C. Section 651) authorized federal appropriations to states for the enforcement of the support obligations of “absent” parents. The Personal Responsibility and Work Opportunity Act of 1996 substituted the word “noncustodial” in place of “absent.” Since neither of two joint custodians is a “noncustodial” parent, this arguably created a financial incentive for states to apply a preference for sole custody awards in preference to joint custody, given that the amount of a state’s incentive payment was directly related to the amount of support established and collected from noncustodial parents. This particular incentive, however, was weakened considerably, if it even continues to exist at all, by the phase-in of the new performance-based incentive system.

It is likely, however, that state child support guidelines (the use of which is also a condition of receiving federal funds) continue to have a negative impact on a state’s policies concerning joint physical custody. Child support guideline formulae and amounts vary from state to state, but a common feature among them is that they generally call for higher amounts when sole physical custody is awarded than when joint physical custody is. The legal rationale for this is that a sole custodian is said to be responsible for a greater share of the child-related expenses than a noncustodial parent is. (This rationale makes sense if joint physical custody is conceived of as being quantitatively, rather than qualitatively different from visitation. A parent who has the child five days out of the week will need to spend more on the child than a parent who has the child for only two days every other week.) Judges seeking to ensure abundant financial resources for a mother therefore have an incentive to favor sole custody and to disfavor joint custody.

In short, although child support no longer factors into child custody determinations as directly as it once did, child support laws arguably have a considerable impact, albeit an indirect one, on custody outcomes.

  1. 42 U.S.C. § 606(a) (1964 ed., Supp. II)
  3. HOUSE WAYS & MEANS COMM., 105TH CONG., 2D SESS., 1998 GREENBOOK 596 (Comm. Print 1998)
  4. William Akins, Why Georgia’s Child Support Guidelines Are Unconstitutional, 6 GA. BAR J. 9-10 (2000) (arguing that calculating federal payments as a percentage of support collected creates an “incentive to establish support obligations as high as possible without regard to appropriateness or amount.”)
  6. Robert J. Willis, Child Support and the Problem of Economic Incentives, in THE LAW AND ECONOMICS OF CHILD SUPPORT PAYMENTS 31, 42 (William S. Comanor ed., 2004)
  7. See Robert A. McNeely & Cynthia A. McNeely, Hopelessly Defective: An Examination of the Assumptions Underlying Current Child Support Guidelines, in THE LAW AND ECONOMICS OF CHILD SUPPORT PAYMENTS 170 (William S. Comanor ed., 2004); see also LOWELL GALLAWAY & RICHARD VEDDER, POVERTY, INCOME DISTRIBUTION, THE FAMILY AND PUBLIC POLICY 84-89 (1986); Saul Hoffman & Greg Duncan, The Effects of Incomes, Wages, and AFDC Benefits on Marital Disruption, 30 J. HUM. RESOURCES 19-41 (1995)

“Fighting for sperm”: The Jason Patric case

A headline in my news feed this morning declared: “You can fight for your sperm!” Guessing it might be about yesterday’s appellate court decision in the Jason Patric case, I read on. I was correct; it was about that case. The article reported that despite California’s artificial insemination statute, which gives sperm donors protection from being declared a baby’s legal father, a sperm donor nevertheless may seek custody of children conceived with his sperm.

As usual, media reports do not exactly match reality. The decision, Jason P. v. Danielle S. (Cal. App. 2nd dist. no. 248629) does not allow just any sperm donor to seek custody of a child conceived with his donated sperm. It only allows a sperm donor who is also a presumed father to do so.

California, like many states, has enacted a statute that sets out a number of circumstances in which a man is presumed to be a child’s father even without proof of a biological relationship with the child, i.e., even if he does not first prove that his sperm contributed to the conception of a child. One of these circumstances, of course, is marriage. If a married couple has a baby during the marriage, and then divorces, the husband does not need to prove that he is the biological father in order to make a claim to custody in the divorce.1 Just as the wife is presumed to be the mother, so the husband is presumed to be the father without need for scientific evidence.

California is one of several states that has also established a presumption of fatherhood where a man, although not married to the mother, has established a relationship with the child, and holds the child out as his own. Patric fell into this category. Under California’s paternity presumptions statute, Patric was the legal father to the same extent he would have been had the couple gone through a marriage ceremony prior to conceiving their child. Accordingly, it made perfect sense for a court to allow him to seek custody of his child.

The issue never would have arisen had the California legislature given more careful consideration to how legislation divesting sperm donors of parental rights may impact the rights of presumed fathers. For example, broadly declaring that any child conceived by artificial insemination is not the  legal child of the sperm donor will, in theory, impact the rights of married men who, for health or other reasons, use the services of a fertility clinic to facilitate the wife’s impregnation with the husband’s sperm. As more states begin to address the legal aspects of assisted reproduction, it would behoove legislators to make a greater effort to coordinate new laws with existing ones.

Does the decision in Patric’s case mean that men now get to fight for their sperm? No. It means that men, no less than women, get to fight for their children.



  1. The presumption may be rebuttable, but that fact does not defeat the husband’s standing to assert a right to custody in the first instance.