considered exceptional," he said. "And heres another measure: Last year we collected 69 percent of child support through automated income withholding. We expect it will hit 80 percent soon. No human hand touches that operation."


Rocky Road to Centralized Payments

Part of the welfare reform mandate required states to centralize their child support payment processing systems. Although states could use decentralized systems to disburse payments as long as they didnt cost more or take longer to build, they still had to provide employers a single location in the state to send income withholdings.

Studies show that centralized payment-processing systems are far more efficient, most notably because the consolidation results in data-processing volumes that support the use of more sophisticated technology. States that centralize can afford to use automatic envelope openers, remittance processors and interactive voice response systems to handle large numbers of daily transactions at lower costs. Businesses that employ large numbers of workers also prefer centralized processing, because it means sending income withholding information to one site rather than dozens of sites around the state.

But states have had a mixed record implementing centralized payment systems, and the problems have received a great deal of publicity from the press. Parents in Kansas, Tennessee, Illinois and North Carolina have experienced late or missing checks and toll-free hotlines that are always busy. In some states, checks went out months late or not at all. Other checks had decimal places in the wrong place or were sent to the wrong people.

Some states, such as Illinois, attempted to build a single system by contracting with one county to process payments. Other states outsourced the entire operation to private firms, such as Lockheed Martin IMS, Maximus or Tier Technologies. Whether the systems were launched in-house or contracted out, phased-in or started all at once, delays, mistakes and other problems created difficulties that quickly got out of control. When parents started calling the service centers wanting to know what had happened to their checks, the deluge of calls often swamped the systems.

Thats what happened in Kansas, where the state used to process payments locally in 105 counties, then switched to a centralized system run by Tier. Each month, the state processes 150,000 child support payments totaling $30 million. The new system went live Sept. 29, 2000, and was expected to cut costs by $3 million a year. But problems quickly arose when some businesses continued sending withholding information to counties instead of the state. Software glitches also caused trouble; payments for some recipients were delayed by the errors.

"People panicked and overwhelmed the toll-free number," said Stacey Herman, a spokesperson for the Kansas Department of Social and Rehabilitation Services. While many of the problems were straightened out, some single parents were forced to wait weeks for their checks.

Besides late checks, the biggest complaint in Kansas and other states has been the inadequate support from the centralized call centers. "The wait time [for answering calls] was too long, because the operators were overwhelmed with calls," said Herman.

Ironically, the call centers in Kansas and elsewhere have been installed largely to provide better service in a program that is fraught with human emotion, according to Policy Studies Williams. "States need these centers to respond quickly to the actions they are taking with regard to employment income withholding and seizures of bank accounts."

States are also turning to the Web as a tool for handling some customer-service issues. Williams cited work done in Texas where parents can go online to check on the status of their payments or to find out when a hearing has been scheduled. Unfortunately, too many of the child support systems around the country have