The state’s basic cash assistance program, the Kentucky Transitional Assistance Program (KTAP), provides critical support for families with young children to meet basic needs like rent, utilities, toiletries and school supplies. Because KTAP payments are very modest, it would be especially beneficial for families to receive them in conjunction with owed child support payments. However, in Kentucky, most child support payments for kids receiving KTAP made by a non-custodial parent are intercepted by the state, a policy known as “cost recovery” that dates to the 1970s. Most of that intercepted money is then sent to Washington D.C. where it fails to benefit any Kentucky child.
In 2023 alone, more than 34,000 Kentucky kids did not receive all of their child support payments due to this policy. But Kentucky could change that by allowing some or all of these child support payments to flow into the homes of very low-income children, which can have long-lasting positive effects on their lives.
How “cost recovery” works
In Kentucky, when families with children who are owed child support payments complete their KTAP application paperwork, they are required to “assign” those payments to the state, not to exceed the amount of their basic cash assistance. The state receives these child support payments until the value of KTAP benefits are fully reimbursed, or when the total amount of the child support has been turned over to the state if it is less than the KTAP benefits. These payments can continue to be intercepted by the state even after the family is no longer receiving KTAP in some cases.
KTAP is funded by the federal government through the Temporary Assistance for Needy Families (TANF) grant and a smaller, state-funded contribution known as a “maintenance of effort.” The cost recovery policy requires the state to send 72% of non-custodial child support payment money to the federal government to reimburse it for the cost of the KTAP payments (72% is a larger share than most states because of the formula it is based on). In other words, for every $100 check a non-custodial parent writes for their child who is receiving KTAP, $72 of it is sent to the federal government and the Kentucky state government keeps the remaining $28.
In 2023 alone, a total of $24.3 million in child support payments were withheld from Kentucky kids through the cost recovery policy, which amounted to an average of $1,047 per household. The state’s share of this total was just $4.9 million, which was then added to the state’s Division of Child Support’s budget, with the remaining $19.4 million being sent to the federal government. That year, KTAP-participating children received only $1.6 million in child support payments.
Read the rest at KY Policy.
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