JOB OPPORTUNITIES TASK FORCE

Advocating better skills, jobs, and incomes

Promoting Employment Among Low-Income Non-Custodial Parents who Owe Child Support Arrearages to the State

The Problem:  Many low-income non-custodial parents have accumulated un-payable child support arrearages, frequently as a result of being incarcerated.  The debt accumulation, which can amount to $20,000 or $30,000, functions as a disincentive for these parents to engage in mainstream work, because the principal method of collecting child support is through wage garnishment.  The accumulation of arrearages also negatively impacts the parent’s relationship with his or her children, driving the parent into an underground economy. Child support debt accrued by low-income parents is frequently owed to the state, because custodial parents who receive public assistance benefits are required to sign over child support rights to the state.

The Remedy: The state should establish a debt-leveraging program for eligible low-income non-custodial parents (“obligors”) who have accumulated large amounts of child support arrearages that are owed to the state, and who stay current on their child support obligations to custodial parents.

Additionally, the state should create a system that modifies a child support order to avoid the accumulation of child support arrearages for an incarcerated obligor if the obligor has insufficient resources to meet the financial obligation.

Background:

Maryland’s Debt-Leveraging Pilot Program

In November 2000 Maryland established a debt-leveraging pilot program aimed at assisting low-income obligors in Baltimore City.  After a non-custodial parent enrolled in a community-based parenting initiative, he or she would be referred to CSEA.  If the parent met eligibility requirements for debt-leveraging, he or she received a 25 percent credit toward their state-owed child support arrears following graduation from the parenting program.  After each six-month period of consecutive child support payments the parent was entitled to another 25 percent reduction of arrears, so that after two years the parent’s child support debts could be completely eliminated.

The pilot program ended in February 2003 after enrolling 134 parents.  The decision to terminate the program was made after the state Attorney General’s office advised CSEA that the program had no legal authority to reduce arrears based on completion of a parenting program.

Current Maryland Child Support Enforcement Policy for Incarcerated Obligors

When a non-custodial parent is sentenced to incarceration, he or she can file a request for modification because of a change in circumstances.  If granted by the court, the modification will halt the accumulation of arrearages.  When the prisoner is released, the child support can be reinstated at a level that is payable given the level of income.  However, most persons who are incarcerated are unaware of the steps they need to take to reduce their child support order.  Federal law prohibits retroactive modification of child support.

As of December 2002, a total of 17,214 incarcerated non-custodial parents had outstanding child support debt. The total amount owed by incarcerated non-custodial parents was over $137 million. Forty-two percent ($58 million) of these arrearages were owed to the State and 82% of the debt was owed by people earning between $0 and $20,000 per year.

The Maryland Division of Correction (DOC) has updated its computerized intake system to collect self-reported data from inmates regarding child support, including the number of children and whether or not the inmate knows of pending child support orders against him or her.  The Child Support Enforcement Agency (CSEA) can obtain a list of prisoners owing child support and compare the names of persons obtained by DOC at intake with the names in the Department of Human Resources (DHR) child support system. 

Policy Solutions:

1) The state should create a child support debt-leveraging program to assist low-income parents who are experiencing difficulties meeting their child support obligations and who owe child support debt to the state. Under this program, obligors’ state-owed arrearages would be reduced by a certain amount as long as they maintain employment and make current child support payments to custodial parents.

Similar programs have been established in several states, including Iowa, Minnesota, and Missouri.  A February 2004 study by the Minnesota Department of Human Services of the Minnesota debt-leveraging program found that obligors were more likely to succeed when the amounts of their monthly child support payments were reduced.

2) The state should also give CSEA administrative authority to modify a child support order for incarcerated obligors if the obligor has insufficient resources to meet the financial obligation.  The purpose is to suspend the accrual of arrearages when the obligor has no income or financial resources.  CSEA would also be required to notify those who are owed child support (custodial parents or the state), of their right to object to the proposed action, and to explain the procedures for filing an objection.