On this 5th day of June 2001, the National Council of Child Support Directors resolves that:
Congress should amend federal law to eliminate the cap on the child support federal incentive funding.
The National Council of Child Support Directors is committed to increasing child support collections and to improving the delivery of child support services to children and families. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) provided flexibility to State TANF programs to help move families from public assistance to self-sufficiency. PRWORA also mandated many new requirements and tools for state child support programs. State child support enforcement programs have answered the call in implementing these monumental changes. Child Support enforcement played a significantly key role in reducing TANF caseloads and moving children and families off of the welfare roles. Increasing collections to desired levels results in financial stability for more families, which is critical as many families reach the end of strict time limits for public assistance.
The current incentive system was passed as part of the Child Support Performance and Incentives Act of 1998, P.L. 105-200 (CSPIA). The incentive funding formula prescribed by the CSPIA was developed by a workgroup of state and federal representatives that recommended broadening performance measures to calculate each state's incentive payments, with one major exception. Congress included provisions for an incentive payment pool, or cap, on the total amount of incentives payable to all states each fiscal year. The CSPIA requires the incentive payments to be reinvested to supplement, and not supplant, the funding of the state child support enforcement program operations. The purpose of the federal incentive payment system is to provide a reward to states for improvement in performance in 5 key areas. Under prior law, the incentive system was an open-ended program. Under this new system, one state's incentive payment depends upon how all others perform. The cap requires a computation of each state's incentive in comparison to all states after the end of a fiscal year, creating an unstable and unpredictable prospective financial planning environment.
As states improve performance, there is no guarantee that their incentives will also rise. Even states that are already performing at the maximum or improving their performance will see their incentive payments drop as other states make strides to increase their performance. In addition, if a sixth measure for medical support is implemented, without a commensurate increase in the incentive pool, states will have less incentive, not more, to improve their performance, as this will mean that the incentive "pie" will be divided into smaller pieces with no overall net gain. NCCSD calls for repealing the cap on the incentive structure because it requires some states to lose in order for others to gain; therefore, it is not a true performance incentive.