New Approaches to Child Support Arrears

Across the country, unpaid child support debt is a serious problem. In fact, it appears about one-half of all open child support enforcement cases have accrued debt. Understandably, states are concerned about carrying the accrued debt and the costs of trying to collect it. There are other compelling reasons for states to be concerned about the problem of unpaid child support debt. One of the performance indicators for the child support program is the number of cases with arrears balances that show some collection activity. Another performance indicator is the percentage of cases paying current support. And although the data do not exist to support this contention, some father advocates maintain that large arrears balances discourage low-income noncustodial parents from paying current child support. So how are states dealing with unpaid child support debt? To find out, child support enforcement (CSE) representatives from 21 states were interviewed. [1] Representatives from states known to be innovative in their child support practices and representatives from states that had developed a program specifically dealing with arrears were targeted for the interview. Here's what was found. Default Orders and Imputing Income A default order is one in which the obligor is absent from the process of determining its amount. Federal law requires that states have the ability to establish default orders, but allows them discretion in the use of such orders. Almost all states impute income if the noncustodial parent (NCP) fails to provide income information and is unemployed or underemployed. In some states, the child support agency will set an default order when the potential obligor does not respond to a notice or does not appear for a hearing. In other states, default orders can only be established judicially. Two state agencies that are heavily administrative reported that their standard procedure is to initially set an order amount based upon staff research and to send it to the obligor. If there is no response, the proposed amount becomes the amount of the order by default. In all cases, the default order is both valid and enforceable, but also subject to rebuttal. When entering a default order, agencies employ a variety of resources to establish the person's occupation, income level, and earning capacity, including Department of Labor records and the National Directory of New Hires. A survey conducted by the Office of the Inspector General (OIG) in 2000 showed 35 states attribute the minimum wage at 40 hours per week to noncustodial parents who do not appear and provide income information, or if no information can be found by researching state labor or tax record systems. Of the states interviewed, Iowa and Washington go the furthest in trying to establish default orders that match NCPs' ability to pay. To ensure orders are accurate, the Washington Division of Child Support puts its administratively established default orders into effect only when NCPs fail to respond to notification. The agency also reviews default orders that are perceived to be set too high and permits NCPs to claim good cause for not responding to a notice or appearing at a hearing and to request another hearing. Iowa has moved from basing default orders on the annual median income for households in the state to using median income for the IV-D caseload as the basis, noting that obligors within the state TV-D caseload had a much lower median income than the state as a whole. The shift was in response to a 1998 finding that while only 2.5 percent of the orders established per year were default orders based on the median income for households, they resulted in average orders of $383--a significantly higher level than the $250 average for orders based on actual financial information (Iowa Department of Human Services, Bureau of Collections, 1998). This discrepancy was further reflected in the low payment rate for default orders (8 percent) compared to orders set using actual financial information (52 percent). …