NOTE: Hyperlinks provided in this policy fax briefing were correct as of the time of publication.

March 2000 - Vol. 2, No 2

• New Jersey Superior Court Addresses Issue of Suspending Child Support during Incarceration
• Barriers to Health Coverage For Families Are Addressed In Several Recent Publications
• State Developments
• State-By-State Comparisons Of Child Support And Welfare Policies Available On-Line

New Jersey Superior Court Addresses Issue of Suspending Child Support during Incarceration

In a December 1999 ruling, the Superior Court of New Jersey, Appellate Division addressed the effect of incarceration on a pre-incarceration support order. The ruling takes a creative approach to the problem of contending with large arrears that build up when noncustodial parents are incarcerated. The case, Halliwell v. Halliwell, involved a divorced father who was sentenced to a term of four to fifteen years in Ohio, and sought a modification of his child support order from $75 per week to zero during the period of his incarceration. In an initial lower court ruling, his motion was denied based on a finding that the defendant's incarceration was a voluntary act that precluded his entitlement to a support reduction. The Appellate decision reversed this part of the ruling, stating that comparing incarcerated obligors to those who reduce their earnings by choice fails to acknowledge that the incarcerated obligor does not have the choice to rectify the situation by increasing earnings.

The court acknowledged the tension between avoiding unfair relief from child support for incarcerated individuals and attempting to prevent the accumulation an insurmountable arrearage. To address these conflicting goals, the court devised a new method of resolving modification motions. The defendant was granted a suspension of child support payments, but not relief from the child support obligation, resulting in the accrual of arrearages with no enforcement measures warranted during incarceration. The court's opinion contends with the potential barrier created by the arrears, by directing that the defendant's request for a child support modification be put on an inactive calendar, thereby postponing a decision on his modification request until his release from prison, at which time his ability to pay would be determined.

Barriers to Health Coverage For Families Are Addressed In Several Recent Publications

Two reports from the Commonwealth Fund, both based on The Commonwealth Fund 1999 National Survey of Workers' Health Insurance, address the current status of health insurance coverage for working families. For the survey, 5,002 adults were interviewed by telephone to learn about their experiences with health care and employer-based insurance.

1. Listening to Workers (January 2000) revealed that:
   • One in three full-time workers with incomes below $35,000 is uninsured
   • One in three low-wage workers with employer-based health care coverage report difficulty affording their share of insurance premiums.
2. Working Without Benefits: The Health Insurance Crisis Confronting Hispanic Americans (February 2000), used data from the survey to examine health coverage among Hispanic Americans. Key findings include:
   • Nearly 40% of Hispanics under the age of 65 do not have health insurance, and Hispanics are nearly twice as likely to be uninsured as the general population despite the fact that 9 out of 11 million uninsured Hispanics are in working families.
   • The number of uninsured Hispanics, 11.2 million, almost doubled from 1987 to 1998. Hispanics now constitute one-fourth of the 44 million uninsured Americans.
   • Two-thirds of uninsured Hispanic adults could not pay their medical bills and were pursued by collection agencies.

The reports are available on-line at www.cmwf.org.

• Possession of assets may pose one of the barriers faced by low-income families in obtaining Medicaid benefits. Five states (Idaho, Kentucky, Michigan, West Virginia and Wisconsin) have a Medicaid eligibility limit on the value of a vehicle of $1500. The Denver Post reports that in Denver, 3,700 of 15,330 applications for Medicaid were denied for surpassing the vehicle value limit, although the State Policy Documentation Project confirms that Colorado does not in fact have a limit on the value of a family's first vehicle. There is now a question as to whether or not these people were wrongfully denied Medicaid, according to People United for Families (PUFF) in Colorado.
• In response to significant declines in Medicaid enrollment since 1996, Families USA has produced What Did Welfare Reform Do to Medicaid in Your State and What Can You Do About It? An Action Kit for Advocates. The kit provides a guide for advocates to determine if a state is having a problem with declining Medicaid rolls, and to develop strategies and campaigns to address problems that are leading to Medicaid declines or illegal Medicaid practices in the state. The kit can be obtained on-line at www.familiesusa.org, or by contacting the organization at 202/628-3030.

State Developments

Wisconsin Set to Implement New Custody Legislation.

As reported in the October 1999 Policy Fax Briefing, Wisconsin has passed legislation reforming state paternity and custody laws. Since then, Governor Thompson has signed the legislation into law, having vetoed some of the provisions. The laws will go into effect May 1, 2000. Among some of the changes to be implemented are:

1. In both paternity and divorce cases there is a presumption of joint legal custody. A court may still award sole legal custody if the court determines that it is in the best interest of the child and either:
   1. Both parties agree to sole legal custody with the same parent, or
   2. The parties do not agree to sole legal custody, but one parent requests sole legal custody and the court finds any of the following:
      1. one party is not capable of performing parental duties or does not wish to have an active role in raising the child
      2. one or more conditions exist that would make joint legal custody unworkable
      3. the parties will be unable to cooperate in future decision making. (Evidence of domestic violence or child abuse creates a rebuttable presumption that the parties will not cooperate in future decision making.)
2. Courts must maximize visitation for the noncustodial parent when the parents are not living together.
3. The interest on arrearages for child support has been lowered from 18% per year to 12% per year.
4. In paternity lawsuits, the court may no longer retroactively hold a noncustodial father liable for child support for the period before the date of the filing of the lawsuit, with limited exceptions (including actions taken by the noncustodial parent to evade paternity proceedings). Under previous law, the father was liable for child support from the birth of the child or from the first date of welfare receipt, whether or not paternity had been established for that period.
5. In a paternity judgment, a father is responsible for birth costs based on his ability to pay or contribute to those expenses. Previous state statutes did not address a father's ability to pay in determining his responsibility for birth costs.
6. In paternity cases, if there is a dispute over visitation the court must apply the same factors in resolving the dispute as are applied when there is a dispute over visitation in a divorce.

Illinois House of Representatives Keeps Hope of a Child Support Pass-Through Alive; Centralized State Disbursement Unit Flounders. Last year, Governor Ryan of Illinois vetoed legislation that would have provided a pass-through of 66% of child support to working TANF families. An override of the veto failed in the Senate by one vote. Last month, a new bill (H.B. 3126), which would provide a pass-through of 50% of child support, passed the House of Representatives by a vote of 114 - 0. The lower pass-through percentage is being proposed this year to increase the likelihood of the bill's passage, since opposition to the bill last year was based on the shortfall that the state would experience if it granted a 66% pass-through while still required to return to the federal government its 50% of collected child support. The bill is now in the Senate Rules Committee. Illinois currently passes through $50 of collected child support to families on welfare.

Also in Illinois, the State Disbursement Unit (SDU) has been plagued with problems since it went into operation last October. Difficulties in keeping track of payments have resulted in checks being sent to the wrong addresses or never sent out at all. Thousands of families have gone without the child support owed to them, prompting the state to issue close to $10 million in emergency child support payments. Audits have been conducted by two entities and are expected to be released soon. The state's problems in converting to the SDU may presage the experience of other states that have yet to convert from multiple to a single disbursement unit for child support payments.

State-By-State Comparisons Of Child Support And Welfare Policies Available On-Line

State comparison charts for selected welfare, Medicaid and child support policies are currently offered by the National Conference of State Legislatures (NCSL), and by the State Policy Documentation Project, a joint project of the Center on Law and Social Policy (CLASP) and the Center on Budget Policies and Priorities (CBPP). The charts are useful for individuals and organizations seeking information on the number of states implementing specific provisions and options under current welfare laws. NCSL has compiled charts from its surveys of state legislation on such child support issues as: income withholding; data matching with financial institutions, and grandparent liability. Examples of the type of policies that are tracked and compared, and currently available from the State Policy Documentation Project include: applicant cash diversion programs; financial eligibility rules; family cap policies; school/training requirements for minors, and Medicaid eligibility and sanction policies. The NCSL child support state comparisons are available at www.ncsl.org/programs/cyf/tools.htm. The State Policy Documentation Project website is www.spdp.org.