Where the child support money goes

Child support money is intended to cover the costs of raising a child, including expenses such as food, clothing, housing, healthcare, and education. The money paid by the non-custodial parent is typically used by the custodial parent to support the child’s basic needs and to provide for their overall well-being. In some cases, the money may be used to pay for child care or extracurricular activities. Ultimately, it is up to the custodial parent to decide how to allocate the child support funds, as long as they are being used to support the child’s needs.

Each state has established a payment processing center, often called a State Disbursement Unit (SDU) — a single unit to receive and send out payments for child support. These SDUs are intended to get payments out with a minimum of turnaround time. They have the additional advantage of providing a single place in the state to which employers can send child support payments collected from their employees.

• The SDUs are responsible for:
• receipt and disbursement of all payments;
• accurate identification of payments;
• prompt disbursement of the custodial parent’s share of any payment;
• furnishing to any parent, upon request, timely information on the current status of payments under a support order; and
• maintaining a statewide record of support orders.

It is important that families receive their child support payments as quickly as possible. Any delay can quickly and seriously threaten a family’s budget. For this reason, states are required to distribute most payments within two days of their receipt. When two states are involved, each one must send payments out within two days.

Families who receive public assistance under the Temporary Assistance for Needy Families (TANF) program, must “assign,” or sign over, their right to unpaid child support to the state. States have different laws and policies. Some states “pass through” child support collections to families who receive TANF without reducing the assistance payment. Other states keep the money when collected to repay TANF benefits received by the family.

After the family leaves the assistance program, the total current support collection goes to the family. Amounts collected beyond the amount ordered as current support are considered to be payments towards arrearages owed to the family or to the state. Under current laws, families receive their post-assistance arrears before the state collects money to repay the government for the assistance payments.