August. The dreaded time for kids to go back to school. Most kids hate it. But, you love it for the peace and relaxation that lies ahead. But, for many, August is the child support system Awareness month. Yeah, that’s right. The states have instituted a Child Support System Awareness month to educate and focus their efforts to collect child support arrears from what many believe are ‘dead beat dads’.
The Child Support System’s Child Support Awareness month was started back in 1995 by states and municipalities across this great land. But, the implementation of this plan was one more focused on funding the STATE than funding needy parents in want of child support arrears.
The truth is in the numbers, so leave your emotions at the door!
The Child Support System – Every State Wants A Piece of This Action
You can’t avoid the emphasis on deadbeat child support collections dominating the news this month, second only to the Olympics. Here are a few of my favorite headlines, filled with biased, emotionally charged wording:
– “Texas Cracks Down on Deadbeat Parents”
– “New Jersey Rounds up 1221 Deadbeat Parents Owing $25.4M”
– “New Mexico Governor Announces Crackdown on Parents Failing to Meet Child Support Obligations”
Even the Feds have a Deadbeat Parent Punishment Act to catch parents who move from state to state to avoid paying up.
News outlets revel in hyping the national tragedy of unpaid child support exceeding $100 billion. Very often though, they leave out the details behind these numbers – important details!
First, this is the total running tally of unpaid support since data was kept, meaning decades of debt. The children owed the first $1 million of this figure are likely parents or even grandparents themselves now!
Parents Can’t Pay From Behind Bars
The first article in this series covered how much of TODAY’s unpaid child support is actually accumulated by people in PRISON, who with their almost zero dollars income, are not likely to make those payments.
Even armed with this bit of common sense knowledge, the government is continuing to add up their debt while also piling on interest. Read the detailed article here.
The Numbers Will Blow Your Mind
Following the money, Part 2 of this series reveals how the National Department of Health and Human Services was responsible for the Enforcement Division of the collection effort. But wait! They also reported (through a separate division) who owed the child support based on annual income and the likelihood of collections.
Turns out, those making a livable wage owed only a small fraction of the total debt! The rest of the debt resided with those barely getting by, and this same federal agency labeled that debt as largely un-collectable! The shocking details are all here.
The Beatings Continue Regardless of Results
It’s terrible how so many parents out there are struggling to make ends meet at a poverty-level wages.
Both parents are struggling to provide for their children. Yet, instead of focusing on ways to educate parents to improve their job skills and wage potential, the authorities attack the parent who can’t keep up.
New Mexico, for example, as part of it’s annual crackdown on deadbeat parents, publicly lists the names of parents with delinquent child support.
Are banks allowed to list all those who are late with their payments? A bank would probably be slapped with a huge lawsuit, but I guess the government doesn’t have to follow the same rules.
Where’s The Money – According to Uncle Sam
So where are these agencies focusing their efforts? You can’t nail it down for all states, but the Department of Health and Human Services provides a clue about where recoverable money resides for those in arrears.
HHS reports suggest that once a parent with delinquent child support made over $20,000 per year, their debt was mostly collectable. But, only 17% of the “deadbeats” fall into the collectable category.
The rest – the vast majority- had little or no income.
The data shows that about three-fourths of the debtors have no reported income, or make less than $10,000 per year! This income group is also categorized by this same agency as one whose arrears are virtually “un-collectable.”
But hey, this is where the debt resides, so the agencies choose to focus considerable efforts towards collecting child support debt from those that can’t afford to pay it!
It’s pretty clear how bloated the budgets are for federal and state collection and enforcement agencies. The government collection agencies could pay off the total child support arrears in the country in just a few short years with only their fat annual budgets.
The government collection agencies could pay off the total child support arrears in the country in just a few short years with only their fat annual budgets.
But these agencies are getting results, and their results are widely publicized in the news. As an example, let’s look at New Mexico again.
The Poster Child For Child Support Collection
New Mexico proudly received a national child support enforcement award for the “Most Improved System”.
This year, they are on track to exceed $140 million in back-due child support collection. That’s a pretty impressive number – that leaves out the crushing impact to those who pay into the $140 million.
The New Mexico Division of Child Support Enforcement has an annual budget of $34 million, roughly 25% of the collections. So, for every dollar the tax payers put in, they received four. Sounds good, but there’s more to the story.
The problem with just showing the raw collected amounts is traced to the Bradley Act in 1986 that allowed states to add interest to arrears. So how much of that $140 million is actually money that was due to the parent versus interest that goes to the state? The answer is not advertised, but we have great examples from real folks.
A Payment Scheme Like You Wouldn’t Believe
Recently, a reader shared his story. Let’s call him Joe. His kids are now grown and out of the care of their mother. He made scheduled child support payments until he hit hard times and missed some. Eventually, Joe got back on track and made payments until his kids were grown. Now he’s making his payments for the overdue amount. Joe pays $100 per month.
Sounds good. He’s paying his debt. Right?
The story gets ugly though, when Joe shares the breakdown of his debt payments. About $25 of his payment goes to his ex. The rest? $75 goes to interest on his debt and goes to the state. Yeah, they can charge interest, remember?
Math time! 75% of that collection goes to interest…only 25% to the parent. Apply that to New Mexico’s success story.
Just Suppose …
$140 million in collections…outstanding! 75% back to the state, or $105 million. So $35 million goes to the parent that’s due. Considering that their annual budget, invested by the taxpayers, was, $34 million, the result was only $35 million to the parents and kids that needed the money, the kids that needed school supplies.
That’s pretty close to a 1 for 1 ratio, meaning the taxpayers gave the state $1 and the state gave $1 to the parent in need. After that, the state made over $100 million profit from interest. This is interest collected from people struggling to meet their child support obligations, struggling to make ends meet.
We aren’t talking about making $100 million from creating an industry that provides products and jobs for the community resulting in taxes collected on industrial revenue. This is money “taxed” on the poor.
Essentially, the states are cracking down on struggling parents to fund their programs. The states are publicly vilifying struggling parents, while crushing them with insurmountable interest and debt.
Wouldn’t the agency funds be better spent by educating parents, improving their income, and then taxing their income? The kids would have a better quality of life and the state would be funded to serve the people, not turn them into indentured servants.
There’s Gotta Be A Better Way
We must create a better system. The money invested is clearly wasted. Currently we are treating the symptom of the problem, missed payments, as criminal behavior. The state is spending countless taxpayer dollars to collect back due child support from those that can’t pay, as well as interest to pad the state’s bottom line.
We need a system to treat the cause of the problems. Unpaid child support is caused by low incomes, poor job skills, and skyrocketing child care costs.
Children of divorce will be better served if the funds budgeted for child support enforcement and collections are spent fighting the poverty cycle!
Are you fed up with the broken child support system? What is your child support experience? Share your opinion in the comments below.
- Consider me frustrated, frustrated at ‘the system’ and its persistence in going after deadbeat dads and their alleged child support arrears. Don’t get me wrong. Real deadbeats are the scourge of the human race for not taking financial responsibility for their offspring. And, as the mid-term elections are grinding to…