If everything goes according to plan under a new scheme that Congress, the Social Security Administration and the Internal Revenue Service have cooked up, thousands of parents who are behind in their child-support payments won't get federal income tax refunds next year.
That's because the government, pressing ever forward against waste, fraud and welfare costs, now has authority to grab refunds due those who have skipped out on child-support responsibilities. The money, once collected, is either deposited in the welfare account known as Aid to Families with Dependent Children (AFDC) or sent to the family if it is not receiving AFDC.
This program of intercepting tax refunds, which federal officials prefer to call the "offset" program, is one more weapon in the growing arsenal the federal government has been developing to help state welfare agencies establish paternity of AFDC recipients and force absent parents to pay child support.
If child support is due in an AFDC case, the recipient must agree that the support check will go directly to the state. States administer the AFDC program, although the federal government pays a varying percentage of the benefits. The federal share of AFDC is now $6.5 billion annually.
And while federal bureaucrats everywhere are busy checking budget-cutting rumors to see if their jobs are going to fall to budget director David A. Stockman's scythe, those in the Social Security Administration's Office of Child Support Enforcement have been told no cuts are coming and they may even get another 16 people. They are doing something, after all, that almost no other bureaucracy does: they are making money and thus reducing the tax burden for everybody else.
In fact, in the three-month period that ended June 30, the office has announced, a record $430 million in child-support payments was collected from absent parents, many of whom had disappeared or forgotten where they were supposed to send the check.
Of that, $180 million went to reduce AFDC costs, the rest went to families not on AFDC, although many might have been, had the child-support payments not been recovered.
Fred Schutzman, the new deputy director (and real chief) of the Office of Child Support Enforcement, says his program represents a "philosophical change" for the government. "We had started to think that the primary obligation for the child rested with the state; that AFDC was the rule and that parental support was the exception."
Since child-support enforcement became a major effort for the federal government in 1974, collections from parents have increased steadily, from $864 million in 1977 to $1.5 billion in 1980, the last year for which complete figures are available (see table).
Some states have been more vigorous than others in pursuing delinquent child-support payments through a variety of techniques, including a nationwide parent-locator service run by the feds.
In 1980, the District of Columbia collected only about 1.4 percent of its AFDC payments from child-support payments. At the same time, Maryland was collecting 6.7 percent and Virginia 5.5 percent. The national average was 5.2 percent.
Audrey Rowe, commissioner of social services for D.C., said the District's record is poor because "we have trouble getting enforcement." She said the city is planning to begin a local tax intercept program and to take advantage of the new federal program. Someday soon, she said, the District "will do as well as our neighboring jurisdictions."
Maryland and Virginia are among the 14 states that have already begun to intercept state tax refunds and both plan to use the new federal tax intercept program, federal officials said.
John Williams, director of child-support enforcement for Maryland, said that in 1980, the first year of the state tax intercept program, Maryland intercepted $1.5 million in state income tax refunds, or about 10 percent of the state's gross collections for child support.
Williams said more than 27,000 names of potential child-support payers have been submitted to the federal program; Schutzman reports that 550,000 have been submitted nationwide.
The average federal income tax refund is $650. No one is sure yet what percentage of the average child-support delinquency that might represent.
When a state agency forwards the name of a delinquent parent to the feds, the name is automatically checked against Social Security and Internal Revenue Service records. The IRS file is flagged, which means the refund will be intercepted.
Other records, including those of the Veterans Administration and the Railroad Retirement Board, might also be checked, depending on the circumstances.
The federal tax intercept program was approved by Congress in last summer's budget reconciliation bill. The IRS has been empowered since 1973 to collect delinquent child support as an overdue tax, but the certification is a burdensome, lengthy process. Since then only 771 delinquent cases involving $5.3 million have been processed by the IRS, which has collected only $144,000 under that program, a spokesman said.