In my first year as the director of financial justice for the city of San Francisco, I got asked one question over and over: “Can you please do something about child-support debt?”
My office assesses and reforms fines, fees and financial penalties that hit low-income people particularly hard in our very expensive city. The child-support question at first had me puzzled. Why would government want to wipe out such debts? Wouldn’t that take money away from kids?
I didn’t understand the way the system works. When low-income fathers make child-support payments, most of their payments go to paying back the government for the cost of public assistance received by the mother and child — for welfare, Medi-Cal or foster-care assistance. In California, for families that receive public assistance, only the first $50 of child support goes to the children. In 2017-’18, $368 million in payments made by low-income parents went to the government, not to their children, according to a forthcoming report, “The Payback Problem,” that my office co-authored with other California organizations.
California charges 10% interest on missed child-support payments, one of the highest interest rates in the country.
Momentum to reform this system is building at the local and state level. It deserves everyone’s support.
Let me be clear: The fixes under discussion wouldn’t affect middle- and upper-income dads who can pay child support but won’t. Their support checks, when they send them, go to their kids, not to paying back the government.
But 70% of outstanding child-support debt in California is owed to the government, not to kids. That’s because three-quarters of California child-support cases involve low-income families — disproportionately families of color — currently or previously on public assistance. Of the parents who owe payback debt, most earn less than $10,000 a year.
When child-support payments go into government coffers rather than to families, children suffer. Just ask Ronnell, a Los Angeles resident whose mother struggled to raise him and his siblings on her own. Ronnell’s father worked as a maintenance worker and had $600 garnished from his wages each pay period for child support, but $550 went to pay back public assistance. Ronnell remembers when their water was turned off and they had to go to a neighbor’s house to use the bathroom and shower.
“If my father’s payments had come to us, there is so much we wouldn’t have had to go through,” Ronnell told the “Payback Problem” researchers.
The reimbursement policies don’t just fail children, they also set up low-income fathers (and some mothers) to fail, and discourage them from paying child support at all. When parents don’t pay, penalties make matters worse.
California charges 10% interest on missed child-support payments, one of the highest interest rates in the country. In California, a parent with $36,000 in public assistance payback debt can pay $50 every two weeks for 30 years and still end up owing the government more than $400,000. Someone making the same payments in a state that does not charge interest would nearly have paid off their debt over this same time period.
Most California counties also may send people to jail who cannot pay back public assistance, and the state can suspend the driver’s licenses of those whose payments are more than 30 days late. None of this makes it easy for parents who owe child support to get or keep a job.
The San Francisco Financial Justice Project and state and local departments of child support launched a pilot program to try to get parents out of perpetual public-assistance debt. With help from local charities, we paid off the payback money owed by 32 parents who were no longer getting government help. Going forward, every dollar fathers or mothers paid in child support would go to their families, not the government.
So far, most of the support payments are coming in on time and in larger amounts than before, according to the San Francisco Department of Child Support Services. When parents know their payments will go to their children, they will pay.
California legislators have introduced bills in Sacramento that would build on such evidence-based results. State Sen. Nancy Skinner (D-Berkeley) introduced Senate Bill 337, which would require that 100% of parents’ payments go to their children and would end public-assistance payback requirements in California. When Colorado enacted this reform, child-support payments in the state jumped 63%. Families’ reliance on welfare and food stamps went down too.
Another bill put forward by Assembly member Reggie Jones-Sawyer (D-Los Angeles) would end the 10% interest rate on public-assistance debt. Jones-Sawyer is also introducing a bill that would extend a law that prevents public-assistance payback debt from growing while parents are incarcerated and cannot pay.
Right now, the child-support system functions as a revenue-generating agency for California’s safety net programs. The nearly $400 million in payments diverted from families to support federal, state and county programs won’t be easy to replace. But every dollar parents pay in child support should go to their children, not to fund our safety net.
Anne Stuhldreher directs the Financial Justice Project in the San Francisco treasurer’s office and is a senior fellow in the Aspen Institute’s Financial Security Program.
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