BILL ANALYSIS �
AB 2393
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Date of Hearing: May 2, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2393 (Davis) - As Amended: March 29, 2012
Policy Committee: JudiciaryVote:10
- 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill increases the net disposable income level from $1,000
to $1,500 for low-income child support obligors. Specifically,
this bill:
1)Increases the maximum low-income obligor adjustment to the
child support guideline from less than $1,000 net disposable
income per month to less than $1,500 net disposable income per
month, adjusted annually for cost of living increases.
2)Requires the Judicial Council, on March 1, 2013 and annually
thereafter, to update the low-income adjustment based on the
California Consumer Price Index (CPI), as specified.
FISCAL EFFECT
1)The Administrative Office of the Courts is already required to
do annual guideline calculator reviews and make CPI
calculation updates every other year. This bill would require
that calculation to be done every year. The additional
workload would be minor and absorbable within existing
resources.
2)To the extent this legislation results in more reasonable
child support orders for noncustodial parents, it should
increase the amount of child support collected. For example,
if this legislation results in a one percent increase in
collections on current support for cases for families who are
receiving CalWORKs it would be equal to $22.9 million ($9.4
million GF).
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COMMENTS
1)Rationale . As required by federal law, California has a
statutory guideline - a mathematical formula - to calculate a
noncustodial parent's child support obligation. To ensure
that low-income obligors are able to pay their child support
obligation, the guideline contains a low-income adjustment
which reduces the support obligation for obligors with monthly
income (after taxes and a few other mandatory payments) below
$1,000. The low-income adjustment has not been increased
since it was first introduced in 1993, even though the cost of
living increased by 50 % during that same period. This bill
increases the low-income adjustment to $1,500 and makes it
subject to further adjustments based on inflation.
2)Background . The primary purpose of the child support
enforcement program is to collect from absent parents, support
payments for custodial parents and their children. Local child
support offices provide services such as locating absent
parents; establishing paternity; obtaining, enforcing, and
modifying child support orders; and collecting and
distributing payments. All children are legally entitled to
support from both parents.
Federal law requires the states to provide child support
enforcement services to families receiving Temporary
Assistance for Needy Families (TANF). Non-TANF families may
request the same services, or seek to obtain child support
through a private attorney. Child support payments collected
on behalf of TANF recipients are used to offset the public
costs of TANF grants, except the first $25 of monthly
payments, which are distributed to the custodial parent.
Collections on behalf of non-TANF recipients are distributed
directly to the custodial parents.
Effective January 2000, the Department of Child Support
Services (DCSS) was created by the enactment of Chapter 478,
Statutes of 1999, (AB 196, Kuehl), and Chapter 480, Statutes
of 1999, (SB 542, Burton and Schiff), in order to improve the
administration of California's child support program. This
legislation removed the state administration of child support
from the Department of Social Services and shifted the local
responsibility for collecting child support from the district
attorneys' offices to local child support agencies (LCSAs).
Most counties formed their own LCSA
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3)Low-Income Adjustment . When applicable, the low-income
adjustment reduces, on a sliding scale, the support
obligation. Suppose a support obligation, calculated under
the guideline is $100. The order calculated with the low
income adjustment will be $100 if the obligor has a net
monthly income of $1,000, $75 if the obligor's income is $750,
and $50 if the obligor's income is $500.
If the low-income adjustment increases to $1,500 a month, the
support obligation for a $100 order will be $100 if the
obligor's net monthly income is $1,500, $67 if the obligor
income is $1,000, $50 if the obligor's income is $750, and $33
if the obligor's income is $500.
4)Child Support Arrearages . November 2011 child support data
shows that noncustodial parents in California owe almost $20
billion in past-due child support. Of that amount, almost $16
billion is for current and former assistance cases. The
remaining $4 billion is for families that were never on
assistance. Unpaid child support arrearages accrue interest at
the rate of 10% per year.
In 2003, when California's cumulative arrearages balance was
$14.4 billion, the state contracted with the Urban Institute
to conduct a study on the arrearages owed in California. The
Urban Institute's study found that 75% of the debt was over
2.5 years old; 70% of arrearages were held by individuals with
incomes below $10,000 per year; 70% of the arrearages were
owed to the government under public assistance assignment; 27%
of the debt was interest; and California could realistically
expect to collect 26% of the debt over a 10-year period.
Policy experts have long noted that one reason for the large
amount owed in arrearages is due to the fact that noncustodial
parents receive unrealistic child support orders for sums of
money they cannot afford to pay. That unpaid child support
quickly accumulates and is assessed interest. This bill may
help reduce future arrearages by increasing the low-income
adjustment.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081
AB 2393
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