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What is the maximum penalty that could be assessed?

The maximum penalty is the disapproval of the State’s Child Support Enforcement (Title IV-D) State Plan. This would result in the withdrawal of all federal funding for the State’s Child Support Enforcement program of approximately $22.8 million and over 200,000 child support cases annually. The second level of penalty would be the disapproval of federal funding for the Temporary Assistance for Needy Families (TANF) program, potentially $99 million annually.

Despite record collections by State CSE programs, considerable sums of child support go unpaid every year. As of September 30, 2006, States reported that the total national unpaid child support debt that has accumulated since the program began in 1975 is $105 billion. This large accumulation of child support arrears is a serious concern for a number of reasons. First, if these arrears could be collected, the additional income would clearly benefit the children and families who are owed this child support. Second, some of these arrears are owed to the government. Finally, large arrears balances give the impression that State CSE programs are not doing their job, when, in fact, the situation is much more complicated (emphasis added).

[States that fail to install computerized child support collection and tracking systems] may lose federal funding under both Title IV-D (child support enforcement) and Title IV- (TANF). See 42 U.S.C. § 655(a)(1)(A); 42 U.S.C. § 602(a)(2). Alternatively, a State may opt for an alternative penalty in lieu of disapproval of their state plan and the withholding of federal funds if the State is making a good faith effort to comply with the program’s requirements and the State has submitted a corrective compliance plan. See 42 U.S.C. § 655(a)(4). South Carolina has elected to incur the alternative penalty.

Commissioner Turetsky referred your email to me for response.

The latest Title IV-D expenditure information available can be found in our FY 2006 Report to Congress at [this link]. Please see table 38. We are in the process of posting the ’07 Report – it should be on our website next week.

The latest Title IV-A information available can be found in the Office of Family Assistance’s FY 2008 TANF Financial Data page at [this link]. Please see table A.

The district court opinion contains a comprehensive history, the details of which need not be repeated here, of the federal government’s longstanding involvement in child support enforcement programs and related federal efforts to work with the States to solve the serious problem of nonpayment of child support. See Hodges v. Shalala, 121 F.Supp.2d 854 (D.S.C. 2000). Currently, as a condition of receipt of any federal funding under Title IV-D of the Social Security Act, 42 U.S.C. §§ 651-669, States must have an approved state plan for child and spousal support that meets all the requirements of 42 U.S.C. § 654. Among the prerequisites for approval of a Title IV-D Plan are the requirements that the State establish and operate an automated data processing and information retrieval system, see 42 U.S.C. § 654(24), and a state child support disbursement unit (SDU), see 42 U.S.C. § 654(27)(A). South Carolina concedes that it has neither a federally certifiable statewide automated system for child support nor an SDU. See Hodges, 121 F. Supp. 2d at 86 (emphasis added).

Without an approved state plan, a State may lose federal funding under both Title IV-D (child support enforcement) and Title IV-A (TANF). See 42 U.S.C. § 655(a)(1)(A); 42 U.S.C. § 602(a)(2). Alternatively, a State may opt for an alternative penalty in lieu of disapproval of their state plan and the withholding of federal funds if the State is making a good faith effort to comply with the program’s requirements and the State has submitted a corrective compliance plan. See 42 U.S.C. § 655(a)(4). South Carolina has elected to incur the alternative penalty.