Come January, qualifying Michigan low-income families who receive both child support and cash assistance will begin seeing additional funds – up to either $100 or $200 – each month.
The new Gov. Gretchen Whitmer administration policy will be a significant change for the families enrolled in Michigan’s Family Independence Program (FIP), which provides temporary cash assistance benefits to qualifying low-income families with children and pregnant women.
Michigan will join the majority of states in implementing this policy aimed at helping more families escape poverty.
Since 2012, these families have been unable to actually collect their child support payments. Budgetary restraints during the GOP former Gov. Rick Snyder era had slashed the previous program, called the Client Participation Payment, which had allowed the Michigan Department of Health and Human Services (DHHS) to pass the first $50 of child support each month directly to the family.
Following late 2011, the DHHS began retaining all of that child support money from FIP participants in order to offset the cost of the cash assistance program.
But change came this fall, when Whitmer used the state administrative board to shift $625 million in funds within departments after signing the GOP-controlled Legislature’s Fiscal Year (FY) 2020 budget.
One of these largely unnoticed shifts included a provision of $946,000 for DHHS to allow child support payments to “pass through” to families participating in FIP.
Essentially, this will allow those low-income Michigan families to receive child support money for the first time in almost a decade.
“She [Whitmer] was very excited to do this,” DHHS Director Robert Gordon told the Advance in an interview on Thursday, adding that Whitmer “strongly believes” in the department’s goal of enabling more Michigan families to leave poverty.
“There’s a growing, really powerful body of evidence about the importance of basic income support and family to the long term success of kids,” Gordon said.
The additional monthly payments will begin on Jan. 1. The DHHS estimates that about 2,700 Michigan families will benefit from this change (provided that parents owing child support make those payments), and that the additional child support payments will add up to a total of about $2.5 million.
“What’s really exciting for us now is that starting on Jan. 1, not only will families get that $50, but actually get a little bit more,” said Erin Frisch, DHHS chief deputy director for opportunity.
For families with one child, the maximum amount of child support distributed to them will be $100 per month. The actual amount will depend on the earnings of the noncustodial parent. The DHHS estimates that single-child families will receive an average of $68 per month, or $816 per year.
Families with two or more children will be able to receive a maximum monthly amount of $200. It is estimated that on average, these families will receive around $127 per month, or $1,524 per year.
To many people, these numbers may not seem like much – but for families who rely on cash assistance programs like FIP to pay their living expenses and feed their children, that extra bit of money could make a sizable difference.
Gordon says that this extra bit of steady income will allow low-income families to have more money for living expenses and other necessities, like clothing and food.
“We hear frustration from parents often, around, you know, ‘Why am I paying child support when my child doesn’t actually receive the support?’” Frisch told the Advance. “So we expect parents who are in that situation to be pretty pleased with this policy change, because it will mean, at the end of the day, more money in the hands of the family raising the child.
“And just imagine, right, it’s pretty frustrating to feel like you’re paying support, but it never gets to your kid,” Frisch added.
With the new changes, Michigan will join 26 other states and the District of Columbia that also implement “pass-through” policies.
“For children, the most important thing is consistent income,” said Vicki Turetsky.
Turetsky, now a consultant, ran the federal Office of Child Support Enforcement in the U.S. Department of Health and Human Services under former President Barack Obama’s administration.
Turetsky said that Michigan’s current policy “treats child support money like a loan repayment,” but that Whitmer’s allocation of funds for pass-through support is a big step in the right direction.
“There’s research that shows that a child support dollar is more valuable, in terms of child outcomes, than any other form of income – including mother’s earnings,” Turetsky said.
She added that child support paid by parents is also associated with better educational outcomes and more cooperation between the parents.
Turetsky points to studies in states like Wisconsin and Colorado, in which researchers looked at what would happen if child support money was passed along to families rather than being held back as revenue for the state. The benefits, evidently, were plentiful.
“The Wisconsin study found that more fathers paid, fathers paid more, they were more willing to establish paternity. A similar Colorado study found that parents were more willing to establish the [child support] court orders,” Turetsky said. “I mean, right down the line, they’re more willing to participate in the child support program rather than enter the underground economy and avoid the system, because the child support they’re paying out of their limited wages are going to their kids.”
Gordon echoed this sentiment, saying that the change will promote the collection of child support, since parents are more likely to pay if they understand that the money will be going to their kids rather than to the government.
There are approximately 800,000 child support cases in the state right now, and around 15,000 cash assistance cases. This new policy will only affect families that are involved in both programs, and are specifically enrolled in Michigan’s FIP program.
These families will soon receive a letter from DHHS informing them that additional child support payments will begin on Jan. 1.
“[This action] does disproportionately support the most vulnerable families in our state, because it is specific to folks receiving cash assistance,” Frisch said.