Obama Administration Releases Fiscal 2016 Budget Proposal

The Obama Administration this week sent its proposed federal fiscal year (FFY) 2016 budget to Congress. The Administration resubmitted its FFY 2015 child support proposals which were not enacted into law and added two new proposals to eliminate the Medicaid assignment of cash medical support requirement and to create a Child Support Research Fund. The HHS budget in brief, which contains the child support budget, may be accessed here. For a more detailed summary, click here.

The proposal includes the policy proposed in previous budgets to encourage states to pass through current child support collections to families receiving Temporary Assistance for Needy Families (TANF) benefits, rather than retaining payments for cost recovery purposes. To encourage states to take up family distribution options, the proposal includes short-term incentive funding to offset a significant share of state costs to implement the policy. The proposal would cost about $1.3 billion over ten years.

Also proposed previously, the Obama Administration would mandate that by 2021 all states implement parenting time arrangements. States would have the option to implement parenting time arrangements before that date.  This provision would cost $448 million over ten years. And, the administration proposes again to require child support payments made on behalf of foster care children be used to promote the best interests of the child, rather than offset state costs. That proposal would cost $476 million over ten years.

New proposals in the FFY 2016 budget include the following:

Eliminate Medicaid Cash Assignment Requirement: The FFY 2016 request would provide states the option to eliminate Medicaid’s requirement to assign the right to cash medical child support to the state as a condition of eligibility in order to reduce barriers to health care access and increase resources for families. It is estimated to cost the Medicaid program $130 million over ten years in lost cash medical support collections which would go instead to families.

Child Support Research Fund: The FFY 2016 request would create a $1 billion over ten years Research Fund to encourage state child support agencies to implement family-centered support services. The Fund would build on child support’s efforts to test approaches to improve family engagement and child support collections.

Under the Fund, $50 million in annual competitive grants would be created for state child support agencies to test and evaluate family-centered approaches. And, a $50 million annual mandatory formula grant would be available to all 54 state child support agencies to encourage states to incorporate evidence-based approaches.

IRS Access to NDNH to Address Fraud: The FFY 2016 budget also proposes to provide the Internal Revenue Service (IRS) access to the NCNH with the objective of preventing identity theft and fraudulent tax returns.   

Other Initiatives: The FFY 2016 request also includes a number of proposals to increase and improve program collections and efficiency, including increasing state flexibility to determine when to report child support arrears to credit bureaus, as well as increasing state flexibility to retroactively modify child support orders.                  

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