A bill to amend title IV of the Social Security Act to improve the performance of States in establishing the paternity of children, assuring the adequacy of child support award amounts, and enforcing child support awards.

Amends part D (Child Support and Establishment of Paternity) of title IV of the Social Security Act to authorize each State to: (1) establish a State organization to provide technical assistance to localities and, at the State's option, monitor the processing of paternity cases; and (2) designate an organization in one or more localities to perform paternity determinations in such localities. Sets the Federal share of the costs incurred by such State and local organizations at 90 and 75 percent, respectively.

Requires that the paternity performance standards established by the Secretary of Health and Human Services include: (1) standards for measuring a State's performance in establishing the paternity of children who were born out of wedlock and receive benefits under part A (Aid to Families with Dependent Children) (AFDC) of title IV of the Act by reason of a parent's continued absence from the home; and (2) goals for States which fail to meet such standards. Requires such standards to be set so as to encourage the establishment of a child's paternity at birth or soon thereafter. Excludes the costs of paternity determinations in computing State child support collection incentive payments.

Requires States to review their child support award guidelines at last once every three years to assess their adequacy in establishing appropriate child support awards. Requires judges and other officials to use such guidelines in determining the award amount, unless there is good cause for not applying the guidelines. Directs States to review child support awards at least once every three years for AFDC recipients and those who do not receive AFDC benefits provided, in the latter case, that either parent requests such review and the State determines that such request has merit.

Directs the Secretary to enter into an agreement with each of four States to conduct a two-year demonstration project to test model procedures for reviewing child support award amounts. Requires that at least one project be conducted through a State child support enforcement agency and at least one other conducted through a State judicial institution. Sets the Federal share of project costs at 90 percent. Directs the Secretary to report to the Congress regarding such projects within six months of their completion.

Requires the withholding of child support payments from the non-custodial parent's wages upon the issuance or modification of a child support order, unless both parents agree to, or one parent demonstrates good cause for establishing, an alternative arrangement.

Directs all States to have automated child support enforcement systems in place within five years of this Act's enactment. Directs the Secretary to establish State-specific performance standards for measuring a State's progress in establishing such a system.

Establishes a Commission on Interstate Child Support which shall hold at least one national conference on interstate child support reform by October 1988 and report to the Congress by October 1989 on its recommendations for improving such system and revising the Uniform Reciprocal Enforcement of Support Act. Terminates the Commission on October 2, 1989. Authorizes appropriations for such Commission in FY 1988.

Directs the Secretary to enter into an agreement with the Secretary of Labor to provide the Parent Locator Service with prompt access to the INTERNET system which tracks interstate unemployment insurance claims of the State employment security agencies and the Labor Department.

Amends the AFDC program to exclude the first $50 of child support arrearages received in a month from an individual's earned income in determining such individual's AFDC eligibility.