Senate Bill 95 aims to amend Hawaii's child support laws to improve the financial situation of custodial parents receiving Temporary Assistance for Needy Families (TANF). The bill recognizes a significant issue within the current system where custodial parents do not have access to child support payments owed to them because those payments are redirected to the state to repay TANF assistance. SB95 seeks to allow certain child support payments to pass through directly to these families instead of being withheld by the state.
Furthermore, the legislation proposes to disregard these passed-through child support payments when calculating the income of applicants or recipients of public assistance, which would significantly improve the financial eligibility for those families. This change is in line with recommendations from the federal Deficit Reduction Act of 2005, which has prompted many states to enhance their child support policies by enabling families to benefit more fully from the support provided.
In the bill, there is also a stipulation to increase the maximum fine imposed on employers who fail to comply with income withholding orders related to child support. Specifically, the fine for an employer who either discharges or refuses to hire a noncustodial parent due to a child support order will increase from $250 to $1,000. This change aims to reinforce the importance of employer compliance with child support orders, ensuring noncustodial parents continue to contribute financially to their children's upbringing.
The fiscal implications of this bill include the projected increase of approximately $1,500,000 in funds reaching Hawaii's most needy families yearly as a result of the federal reimbursement waiver associated with this pass-through policy. While disregarding the additional child support income could lead to a loss of about $675,000 in state revenue, the benefits for vulnerable families are expected to far outweigh the drawbacks. This balance reflects an important shift towards prioritizing family support over strict compliance with state fiscal policies.