Sep 2, 2008

New child support rules hit low income parents in the wallet

The Ohio Department of Job and Family Services’ Office of Child Support is proceeding to implement new provisions related to cash medical support. Cash medical support is an additional cash obligation imposed on the non-custodial parent that was intended by the federal government to help offset the cost of health insurance premiums paid by the custodial parent and/or help cover the cost of uninsured medical costs, things that Ohio was already dealing with in its child support orders. But instead of using the cash medical provisions to help custodial parents, Ohio has instead chosen to use the provisions primarily as a way to recover Medicaid costs. As a result, low income working custodial parents with a child on Medicaid will now receive less child support.

Were it not for other examples of how the Strickland administration is expanding social services to cover people at higher income levels by taking away support from people at lower income levels, this would be just another sad example of one hand of government not knowing what the other hand is doing. On the one hand, the Office of Child support is implementing new rules that will allow the state to recover part of the cost of providing Medicaid coverage by allowing the state to take part of a low income working custodial parent’s child support. Yet on the other hand, Governor Strickland established his Anti-Poverty Task Force which has a mandate to recommend ways to reduce the number of Ohioans (3.4 million) living below 200 percent of the federal poverty level. It is impossible to believe that any low income working custodial parents will be elevated out of poverty by having the state take part of their child support payments. It is also impossible to believe that any low income working non-custodial parent making between 150% and 200% of poverty will be elevated out of poverty by having more money withheld from their wages to pay cash medical support to the state.

The amount of child support lost to the custodial parent is a regressive tax on low income working custodial parents. By taxing these custodial parents the governor continues his practice of taking funds away from people with lower incomes to pay for expansion of services to people with higher incomes. Governor Strickland intends to pay for his promise to expand Medicaid coverage to children at higher income levels by taking child support funds that would have previously gone to low income working custodial parents. The cash medical provisions also operate as a regressive tax on the non-custodial parents. The cash medical amount for one child for a non-custodial parent making $16,640 per year is the same for a non-custodial parent making $44,000 annually, $775.00 per year. The cash medical amounts to 4.7% versus 1.8% of the total annual income for each non-custodial parent respectively.

Another example of where the governor has taken money from people with lower incomes and given it to people with higher incomes is the governor’s expansion of day care and his increases in day care reimbursement rates using federal Temporary Assistance for Needy Families (TANF) funds. Instead of using the TANF surplus to help address the immediate needs of the 130,000 poorest children in Ohio receiving Ohio Works First (OWF) benefits who live at about 50% of the poverty level, Governor Strickland choose instead to increase day care eligibility to families earning up to 200% of the poverty level and to increase the rates paid to day care providers regardless of their income.

This regressive taxing policy being implemented by the Strickland administration reverses a national philosophical trend to see the child support program as a family support program and not as a government cost recovery program. While considered a way of recovering money for the state when it was initially implemented, the child support program is now generally seen as an important and effective means of providing valuable financial support to a family, i.e., a “family friendly” program.

This trend was continued at the federal level with various provisions within the Deficit Reduction Act of 2005 (DRA). In the DRA, Congress provided several opportunities for Ohio to help enhance the financial support available to low income families that receive child support. But Ohio has failed to implement any of the options. Instead, Ohio has chosen to reverse course with its child support program and make Medicaid cost recovery a primary program goal. In moving toward that goal, the money that the custodial parent loses is taken by the state. That is certainly not family friendly.

Therefore, one obvious recommendation for Governor Strickland’s Anti-Poverty Task Force should be to stop the Office of Child Support’s implementation of new child support rules surrounding the collection of cash medical support. Adopting the “family friendly” provisions allowed by the DRA should also be one of the recommendations of the governor’s Anti-Poverty Task Force.

In these times of shrinking budgets and hard choices, those with the least should not be asked to pay for the benefits provided to those with more. Yet, the Strickland administration continues to tax and take away from the families with the lowest incomes in order to expand benefits to those higher incomes. Our priorities must be to use scarce resources to help those with the least first.

By implementing the provisions surrounding cash medical support, Ohio is implementing changes to its child support program that will make the calculation and payment of child support more complex, confusing, and costly for parents, more difficult and costly for employers and which provides no additional benefits to the children served by the program. A low income working custodial parent with a child on Medicaid will receive the same Medicaid coverage. The difference will be that the non-custodial parent will pay more and the custodial parent will receive less child support under these new rules.

~ Gregg Oakley, Athens County Child Support Enforcement Agency