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Budget and Policy Post
October 21, 2022

The 2022-23 California Spending Plan

Human Services

Department of Child Support Services

The spending plan includes $365 million General Fund for the Department of Child Support Services (DCSS) in 2022-23, an increase of $20 million (6 percent) relative to revised estimates for 2021-22. In this section, we discuss the budget actions resulting in the overall funding increase and other budget changes.

Adopts Legislation to Fully Pass Through Child Support Payments to Former California Work Opportunity and Responsibility to Kids (CalWORKs) Families as Early as July 1, 2023. Under federal law, when a parent applies for CalWORKs cash aid (and is not living with the other parent), they generally are required to open a child support case and sign over a portion of their child support payments to the state. This is because a portion, up to the monthly amount of CalWORKs cash aid provided to the family, is retained by the state as a way to pay back the total government costs for the cash aid the family received under the CalWORKs program. This process of retaining the child support as reimbursement for CalWORKs is referred to as CalWORKs recoupment. The CalWORKs recoupment payments are roughly split between the state (45 percent), counties (5 percent), and federal government (50 percent). To the extent the current child support order for a CalWORKs family is not fully paid in any given month, the state tracks the amount of unpaid child support as government-owed debt or past-due CalWORKs recoupment payments, up to the amount of cash aid paid. The state continues to seek payment of past-due CalWORKs recoupment payments even after a family exits the CalWORKs program. Past-due CalWORKs recoupment payments are fully retained by the state and split across the federal government, state, and counties. (Refer to The 2022-23 Budget: Analysis of Child Support Program Proposals for more information on child support and CalWORKs recoupment payment rules.)

The spending plan adopts legislation that will allow low-income families who formerly received CalWORKs cash aid to keep child support payments that, absent this legislation, would be used to pay back the government for past-due CalWORKs recoupment payments. The 2022-23 spending plan assumes the policy change will take effect on July 1, 2023 (or whenever the necessary automation changes are completed), resulting in an estimated $187 million going to former CalWORKs families annually. As shown by Figure 1, this amount reflects the estimated total support payments that otherwise would have gone to pay off the state, county, and federal governments’ shares of past-due CalWORKs recoupment payments. The federal government will not require the state to pay back, or backfill, the $82 million loss in annual federal revenue resulting from past-due CalWORKs recoupment payments being directed to families instead of the federal government. As a result, the state only will experience an estimated $95 million annual decrease in General Fund revenue. Additionally, the spending plan includes an additional $10 million General Fund cost to backfill the county loss in past-due CalWORKs recoupment payments, resulting in an estimated total General Fund impact of $105 million annually. Finally, the Department of Social Services (DSS), in consultation with DCSS, shall submit a report to the Legislature no later than May 1, 2023 on the impact this policy change may have on an individual or family’s eligibility for other need-based assistance programs and potential solutions to address any identified unintended impacts, including whether an opt out is necessary in order to avoid negative impact to families.

Figure 1

Estimated Annual Revenues From
CalWORKs Recoupment Payments
for Former CalWORKs Casesa

(In Millions)

Revenue Estimates









aReflects administration’s estimates, which is based on actual 2020‑21 past‑due CalWORKs recoupment collections in former CalWORKs cases.

Adopts Legislation to Fully Pass Through Child Support Payments to Current CalWORKs Families, Subject to Spring 2024 Trigger Determination. As previously mentioned, a family who currently receives CalWORKs cash aid is required to sign over their right to child support payments to the state. However, up to $100 of the current support payment is directed or “passed through” to families with one child every month (increasing to $200 for families with two or more children). The state could choose to pass through a greater amount of payments (up to the full amount of the child support payment); however, the federal government would require the state to backfill the amount of the pass-through payment that would have otherwise gone to reimburse the federal share of CalWORKs recoupment. (The federal government does not require repayment of its share of the $100/$200 pass through.)

The spending plan includes language that will prioritize passing through the full amount of child support payments to current CalWORKs families as a part of the 2024-25 budget subject to certain conditions. In particular, in spring 2024, a determination as to whether there are sufficient General Fund revenues over the multiyear forecast available to support this policy change must be made (as well as other changes subject to this language). The administration estimates the General Fund impact associated with this policy change totals roughly $150 million (reflecting the loss in state General Fund revenue and federal and county backfill costs), but the actual General Fund impact will depend on collections and caseload at the time of implementation. Moreover, the spending plan adopts language that requires DSS to convene a workgroup to discuss the potential unintended consequences of enacting a full pass-through of child support payments to current CalWORKs families. The workgroup shall consist of representatives from the Legislature, DCSS, County Welfare Directors Association of California, and advocates for low-income families with children and noncustodial parents. Additionally, DSS shall submit a report to the Legislature on or before April 1, 2024 that (1) summarizes the workgroup conversations, (2) identifies potential strategies to prevent unintended consequences and any estimates of implementing these recommended strategies, (3) estimates the impact of federal funding levels and any changes to eligibility and benefit determination in other need-based assistance programs, and (4) projects changes in child support payment compliance and associated changes to income levels of parents receiving payments.

Provides Additional Funding for Local Child Support Agencies (LCSAs). The spending plan provides an additional $20.1 million General Fund ($59.1 million total funds) for LCSA administration costs. The funding would be distributed to about 30 LCSAs that were identified to have staffing levels below the department’s staffing target (185.4 cases per full-time equivalent position statewide).

Defers Action on Portions of Administration’s Proposed Legislative Changes Related to Recent Federal Changes. In 2016, the federal government issued new child support program guidance, referred to as the Flexibility, Efficiency, and Modernization in Child Support Enforcement final rule (FEM final rule). While the state already is in compliance with some components of the FEM final rule, it will need to make additional changes to the statewide uniform guideline for child support and pleading options to come into full compliance. While the initial federal deadline for state compliance was in 2022, the federal government approved the state’s request to extend the full compliance deadline to September 2024.

As a part of the Governor’s January 2022 budget, the administration proposed program changes it identified as needed to come into full compliance with the FEM final rule. As shown in Figure 2, the proposed changes impacted various child support program components, including the treatment of a child support order when a parent is incarcerated or involuntarily institutionalized, quadrennial review reporting requirements, low-income adjustment (LIA), and presumed income assumptions. Overall, the spending plan adopted some of the administration’s proposed language changes and defers action on changes related to the LIA and presumed income. We understand that the LIA and presumed income changes required by the FEM final rule are expected to be addressed next year through the policy process.

Figure 2

Status of Administration’s Proposed FEM Final Rule Implementation

Program Component

Description of Proposed Policy Change

Budget Action

Status of child support order when parent is incarcerated

Suspend child support orders when parent required to make payment is incarcerated or involuntarily institutionalized for more than 90 consecutive days.

Adopted in 2022‑23 budget

Quadrennial review reporting requirements

Require Judicial Council to include other data elements in the quadrennial review of the statewide uniform guideline for child support, including but not limited to labor market data, economic data on the cost of raising children, and comparison of payment compliance by certain case characteristics.

Adopted in 2022‑23 budget

Court ability to establish earning capacity

Codify courts’ ability to impute income based on earning capacity. Also codifies requirement for courts to consider specific circumstances of the parent, including the parent’s assets, educational attainment, and health when determining earning capacity.

Adopted in 2022‑23 budget

Low‑income adjustment (LIA)

Amend LIA threshold to reflect monthly gross income assuming full‑time employment at the state minimum wage and modify K‑factor table and income bands.

Deferred action

Presumed income

Eliminate standard presumed income assumption (parent works 40 hours per week at state minimum wage) in cases where parent income is unknown and instead allow local child support agencies to make presumed income determination. Specifically, local child support agencies shall presume income to be state minimum wage at 35 hours per week, adjusted downwards to reflect the conditions of the labor market where the support obligor lives, with further adjustments based on other factors.

Deferred action

FEM final rule = Flexibility, Efficiency, and Modernization in Child Support Enforcement final rule.