The state can hold child support to recoup its costs of providing cash assistance to needy families, including more than 13,000 Granite State families last year

By: Kelly Burch, Granite State News Collaborative

Last year, New Hampshire retained more than $4.8 million in child support from about 13,000 Granite State families who are receiving cash assistance from the state, or have received it in the past. 

Although withholding the money aligns with federal law, policy experts say retaining child support to cover state costs has a negative impact on families and makes it less likely that a parent will pay court-ordered child support.

In part because of those issues, half of states around the country — including Maine, Vermont and Massachusetts — have changed their laws to allow child support to “pass through” to families who are receiving benefits. 

Similar efforts have briefly been considered in New Hampshire, but never gained real traction, experts say. 

“There certainly is a lot of support behind having pass-through so the family is receiving [cash benefits] but also the child support that is court-ordered to be paid to the family,” said Karen Hebert, director of the state Division for Economic Stability, which oversees cash assistance and child support.

The lack of action has left New Hampshire’s most vulnerable families without access to money that could help them escape poverty. 

“We want to ensure we’re lifting people up and not constraining them to remain at low-income levels,” said Rebecca Woitkowski, child and family policy director at New Futures, a Granite State nonprofit advocating for improved health through policy changes. “The more we can build up a family, the better it will be for our state’s future.” 

Withholding money that could help cover basic needs

Temporary Assistance for Needy Families (TANF) provides cash to the country’s lowest-income families. In New Hampshire, families may qualify for TANF if their income is at or below 60% of the federal poverty level, or $1,560 per month for a family of four. 

“TANF families are living at very low income levels. They likely have a number of burdens they’re trying to overcome…” Woitkowski said. “Families don’t want to live at TANF levels. It’s hard.”

To qualify for TANF, federal law requires families to cooperate with the government’s child support program, which helps facilitate court-ordered child support. The state assists a family in finding a non-custodial parent and obtaining child support, often from federal tax returns, said Diana Azevedo-McCaffrey, policy analyst with the Washington, D.C.-based Center on Budget and Policy Priorities and co-author of a recent report on the issue of retained child support. 

“For these families — most of which are very low income, overwhelmingly led by women, disproportionately women of color — these child support payments make a huge difference for children, families, and parents, not only financially but in other ways as well,” she said.

And yet, “most of the time [the family doesn’t] receive those child support payments,” Azevedo-McCaffrey said. 

Instead, “the state splits [the child support] with the federal government to reimburse itself for the cash benefits provided to the family.”

In fiscal year 2024 (which ended June 30), New Hampshire retained a total of $4,837,163 in child support from families who have utilized TANF, according to data provided by the state Division for Economic Stability, which oversees both TANF and child support. 

That includes $3,526,501 retained from families currently getting TANF, and $1,310,662 from families that were formerly on TANF, but aren’t currently getting cash benefits. 

A similar policy affects child support paid by parents whose children are currently in or were formerly in foster care. In fiscal year 2024, New Hampshire retained $27,642 from those families, according to state data.

In total, the state retained child support from 13,420 New Hampshire families last year. On average, the court-ordered child support paid to these families is $222.89 per month from families currently on TANF, and $200.80 per month from families that were formerly on TANF, according to state data. 

That may seem like a small amount of money to some people, but for TANF families it can mean the difference between housing and homelessness, eating or going hungry, according to Woitkowski. 

“Any amount of money, at that point, is going to be impactful for that family to meet their basic needs,” she said. 

Two policy changes could make a difference

Research shows many benefits to families receiving child support, including more financial stability, lower risk of involvement with child protective services, and better outcomes for kids. 

In addition, noncustodial parents are more likely to pay their court-ordered child support if they know it is benefiting their children directly, rather than being retained by the state, research shows. 

“There’s not much incentive [to pay] for parents who are having child support kept by the government,” Azevedo-McCaffrey said. 

There’s also an emotional and social factor to child support that’s different from other types of financial support.

Child support is “often representative of family relationships and dynamics,” Azevedo-McCaffrey said. “These cost-recovery policies can be very harmful, not only in the sense that they’re depriving families of an income source … but they’re disrupting families and family dynamics and relationships.”

Because of this, states around the country are reconsidering the retention of child support, and are moving to change two policies. 

The first change is to enact legislation that would allow a certain amount of child support to “pass through” to families without being retained by the state. Twenty-five states, plus Washington, D.C., and Puerto Rico, have adopted such policies. Massachusetts and Maine both allow $50 per month in child support to go directly to families even if they’re getting TANF; Vermont increased the pass-through amount to $100 this year. New Hampshire doesn’t allow any funds to pass through.

A second policy would alter the distribution model that states use to allocate child support funds, switching from the model outlined by a 1996 federal law to the model outlined by a 2005 law. The change “switches the payment order, essentially,” paying families their current and then past child support owed, before reimbursing the state for costs associated with TANF, Azevedo-McCaffrey said. 

Nationally, nine states, including Vermont, have made that change. New Hampshire still follows the 1996 law. 

‘A lot of support’ for change, but little action

Hebert, director of the state Division for Economic Stability, which oversees TANF and child support, says New Hampshire has considered changing its policies on retained child support twice within the 20 years that she’s been with the division, but the efforts haven’t led anywhere.

When the state provides assistance to individuals, it has a “vested interest” in covering its costs, Hebert said. At the same time, there’s a desire to get people the assistance they need. 

That’s why there’s no child-support requirement for individuals or families participating in the Supplemental Nutrition Assistance Program (SNAP): The state wants people who need food assistance to get it, Hebert said. 

Leveraging child support as a condition for SNAP is “just not something the state has ever really been interested in,” she added. And yet, the state continues to retain child support from families on TANF, which has a much lower income threshold than SNAP.

“There are lots of reasons we would want to support pass-through,” Hebert said, citing the national research about parents being more likely to pay child support when the money goes directly to their children.

Still, there’s been no change. One reason is that when the state collects child support for a family that has had TANF, it must give a portion of the proceeds to the federal government. 

Federal law allows states to pass through up to $200 a month in child support (depending on family size) without needing to reimburse the federal portion, Azevedo-McCaffrey said. Three states — Colorado, Michigan and Minnesota — combine several federal policy options in order to pass through all child support to families, despite the federal requirement, according to the Center on Budget and Policy Priorities report. 

Making similar changes in New Hampshire “is a state policy and finance decision for the legislature,” Hebert said. 

The other reason New Hampshire hasn’t changed is more mundane: computer and logistical challenges. 

“There’s a lot of maintenance to it in the system that we have,” Hebert said. 

That’s a prominent barrier around the nation, Azevedo-McCaffrey said. Updating the software that states use to calculate TANF and child support distributions is a huge undertaking.

"For some states, the biggest cost is computer reprogramming,” she said.

A bigger issue is also at play, she added: “Sadly, sometimes there is not a lot of political will to change policies that impact people living in poverty.”

Regardless of child support, TANF in NH is underutilized

Aside from issues around retaining child support, there’s widespread “under-enrollment” in TANF in New Hampshire, according to a report from the N.H. Fiscal Policy Institute. Because fewer families are participating in the program, the state has a balance of $74.4 million in unspent TANF funding from the federal government, the fiscal policy center found.

Each state has the power to set its own definition of a “needy family,” Hebert said, so New Hampshire has the power to raise the income that qualifies for TANF, potentially increasing the number of participating families. New Hampshire’s threshold for qualifying for TANF is already among the highest in the country, and greater than neighboring states, but “if the limit were increased, it is logical we could see an increase in utilization,” Hebert said.

The state also disregards certain income when calculating TANF eligibility, she noted. The state is currently running a pilot program to disregard 75 to 100 percent of new income, in order “to mitigate the cliff effect,” which occurs when people suddenly lose benefits after hitting a certain income threshold.  

Only 5,308 individuals participate in TANF at any given time in 2024, well below the 76,922 enrolled in SNAP or the 183,955 enrolled in Medicaid, according to the Fiscal Policy Institute. Both SNAP and Medicaid have significantly higher income allowances, so more people are eligible for those programs.

Participation in TANF declined about 34% between 2020 and 2024, said Jess Williams, policy analyst with the N.H. Fiscal Policy Institute. In part, that’s positive: Families overall are more financially stable due to the state’s low unemployment, and the impact of pandemic-related financial resources, including stimulus checks. 

However, there are plenty of families that could still use TANF, Williams said. Based on U.S. Census data looking at poverty rates, about 25,000 New Hampshire families with at least one child live at or below 60% of the poverty line – an income level that qualifies them for TANF. Only about 13 percent of those families are participating in the program, she said. (Income is not the only qualification for TANF, but offers a benchmark for understanding how many families may qualify, Williams noted).

There are two main drivers of the low participation, according to Williams. 

• The first is the relatively low benefit amount, compared to the high cost of living in the Granite State. A single parent with two children can receive a maximum of $1,291 per month on TANF, which covers about 15.8 percent of the monthly cost of living in New Hampshire, the report found. “For a family receiving TANF, cash assistance may still be minimal compared to the cost of living in the state,” Williams said.

• The other reason for low participation is that “the TANF program may not be reaching all families across the state who are eligible,” she said. Families may be unaware that they qualify, or they might have trouble navigating the state’s online application for assistance at NH Easy. “It becomes very confusing for families when they’re trying to apply for services,” Woitkowski said.

The state has worked to make the application accessible, Hebert said, including having a prescreening tool that families can use to see if they might qualify. The tool took less than five minutes when this reporter tried it, much shorter than the time needed to lodge a formal application. Applicants can also reach out to any of the state's 11 district offices for help with the application, Hebert said. 

“We want to make sure we are reaching folks who are eligible for the program,” she said. “We want to make it easy for people so they have an easy and good experience if they need those kinds of services.”

These articles are being shared by partners in the Granite State News Collaborative. For more information, visit collaborativenh.org.