Panel tells committee pass‑through would return more child‑support dollars to Kentucky families

Sen. Craig Richardson opened discussion of Senate Bill 337, saying current cost‑recovery rules divert a large share of child support paid on behalf of families on KTAP to federal and state administrative accounts rather than to the children who are owed support. "That affected about 14,000 families this last year that missed out," he said, and described the bill as a bipartisan step to let a portion of those payments reach children.

Dustin Pugel of the Kentucky Center for Economic Policy and Christian Postel of the Lexington Leadership Foundation presented data and lived experience. Pugel summarized federal data showing that in federal fiscal year 2025 about $15,000,000 in payments were intercepted; "the state kept around 4,400,000 of that and sent 11,300,000 of that to the federal government instead of to these children who are owed it," he said. Pugel and others said passing through a modest amount (the draft would allow up to $100 per child, with caps per case) has been adopted in many states and is associated with higher compliance and more paternity establishment.

Christian Postel, who also described his personal background, said evidence shows pass‑through can increase payments and parent engagement: "Among the fathers who knew the rule going in, fathers paid nearly 20% more in child support," he said. Committee members asked operational questions — who receives the funds, whether the pass‑through reimburses the state if a parent later pays arrears, and how software in the Attorney General’s office would handle changes. Sponsors acknowledged implementation requires coordination with the AG and potential language changes so the effective date can align with system updates. No final committee vote was recorded at the hearing.