Am I the only one frustrated by all the hype over so-called deadbeat dads and going after all the alleged child support arrears? As this year’s election kicks into full overdrive the topic will surely come up as a direct reason in the increase in children raised in single-parented households living below the poverty line.
Recently, I joined in a parenting discussion about child support arrears. I was drawn to the forum because of a member who shared an article about a website sponsored by the Canadian government that lists all its citizens with past-due child support. The site aims to shame the heavily indebted into paying. This concept reminds me of the millennial version of placing folks in stocks in the town square for all to gawk and throw their rotten fruit at.
Everyone was applauding the site and its goal when I arrived onto the forum. I chimed in and mentioned the first article in this series (which the forum managers removed shortly thereafter, but whatever) that plainly lays out the facts behind the myth that dead beat dads are the best un-tapped source of income for children living in poverty.
Note: Haven’t read it? No prob! Check it out here.
None in the forum knew how many so called “no-loads” were actually in prison with no chance at making an income. Even with that knowledge, many didn’t care. I received strongly-worded counterarguments about the many dads who hide income to avoid paying to support their children.
If you’ve read my work, you know how much I just love broad generalities and hyperbole! So, I moved the throttles to afterburner and asked about the moms who refuse to get jobs to artificially keep their incomes low to increase their child support award. My question also had no basis in fact, but since I was “discussing” grown-up topics with folks who weren’t, why not poke the bear!?
Cutting through the emotions, a real question emerged: What about parents with past-due child support arrears who aren’t in prison? Why aren’t they paying?
An excellent question, it turns out! And the FACT-BASED answer is the purpose of this article!
Breaking Down Child Support Arrears
The reality of over-due child support is shocking. In my previous article, I estimated the figure is at over one-hundred billion dollars!
Granted, that’s the total over decades, but armed with only that knowledge, it’s easy to fall into the trap of assuming we can go get that money and win the war on poverty.
The breakdown of the debt, though, crumbles the walls of that belief like a Christmas gingerbread house left out until May.
WARNING! REAL FACTS AND DATA AHEAD. IF YOU DON’T LIKE THESE, DON’T READ!
The US Department of Health and Human Services reports:
- 40% of that hundred-billion-dollar pie belongs to people with NO INCOME! No income, as in zero! It’s a difficult source from which to pull, at best.
- 30% is from individuals who make an annual salary anywhere from $1 (so that’s actually something) to $10K
- 21% is owed by those who rake in an annual sum of $10K to $30K
- And only 9% comes from people making over $30K
Remember that these individuals also need to sustain themselves!
Unfair Interest Rates on Child Support Arrears for Low Earners
I’ll save the debate on minimum wage for another series. But let’s at least consider the current system’s implications.
Some states have a higher minimum wage, but the federal minimum is $7.25 per hour. For a full-time, 40-hour-a-week job, that’s just over $15K per year or $1,257 per month.
Out of that comes food, lodging, health insurance, transportation, clothing, etcetera. There’s not much left after that. Most who live on that salary will tell you zero is what’s left over.
Our child support system is designed so that both parents are tasked with supporting their children. And both should!
For many reasons, our system built up an enforcement network over the past decades to seek out and collect child support arrears. The problem was only compounded by the Bradley Amendment of 1986 that allowed states to add interest to those arrears.
Think about that for a minute.
We have people out there struggling to get by on nothing (or almost nothing) themselves. When they fall behind in child support, we pile on interest to their debt? How do we expect them to dig out of that hole?
The Government has been very willing to attack predatory credit lenders that impose egregious interest rates on the poor. When the housing market crashed, the Government attacked banks to renegotiate the terms of the horrible loans that families struggled under.
This same Government, though, is charging interest to poor working parents who can’t meet their child support obligations. We all know what it’s like to struggle to meet our bills. For these parents, the pain never ends. It’s a constant shell game to keep creditors and bill collectors satisfied just to make it through to the next month, sometimes even the next meal.
Child Support Arrears Collection Forecast
Some parts of the Government recognize how unlikely these debts are to be collected. Ironically, the same organization, the Department of Health and Human Services, reports their estimate about how much of the outstanding child support debt will be collected after 10 years.
- 100% of the debt owed by those who earn >$30K annually will be collected
- 50% of the debt owed by minimum wage earners will be collected
- <25% of the debt owed by those making <$10K annually will be collected
I’m not presenting new math or even a new concept. The phrase “You can’t get blood from a turnip,” has been around for a long time. Yet we continue to bring up these parents as sources of income to solve the overall problem of children living below the poverty line in America. We spend a hefty chunk of change in tax dollars to go after these debtors.
How much does a federal enforcement bureaucracy cost per year?
Federal agencies don’t collect the debt themselves. Instead, they study the data and guide policy. The state enforcement agencies are actually charged with collections. So figure into your estimate another 50 collection and enforcement agencies in addition to the federal agency.
What did you come up with?
Remember how I told you the total child support arrears in America exceeds $100 billion dollars? Turns out, the federal Office of Child Support Enforcement works for the same federal agency I keep harping on, the Department of Health and Human Services.
That division’s annual budget is public record and has been pretty steady for the past several years, around $4 billion EVERY YEAR!
Take that number and add in an agency for each state!
Want an example? California’s child support agency’s annual budget: $1 billion. That’s a big state, so assume most are 75% of that number. You end up with an estimate for state fiscal commitments around $37.5 billion. Add in the federal agency and you get $41.5 billion!
Seems to me that if you eliminated these agencies, you could cover the decades’ worth of debt in just under 3 years!
What if you cut the enforcement side of all those agencies completely? Take a portion of those funds and apply them to education programs for parents to help them get better jobs.
The same federal department I’m annoyed with myself for repeating shows that if individuals can earn over $30K per year, they have an almost 100% chance of making their payments.
If the real goal is to end child poverty, let’s attack it from all sides! There are 2 parents and both need to support their child.
One is tagged with paying child support. For those who can’t make their payments, help them get just twice above the minimum wage so they can. At the same time, we can help the parent receiving the child support earn a better wage and get more affordable child care while working so they can work full-time.
The result would be greater income for BOTH parents, which only benefits the children.
Assuming we only had about 15% of that annual budget, or $6.2 billion, do you think we could stand up a good program with the goal of increasing employment and eliminating (or at least decreasing) child poverty? Or is it better to keep spending our tax dollars on federal and state agencies tasked with collecting debts that THE SAME AGENCY ruled un-collectable!?
Let me know in the comments!