Child support reform can help parents better support their children during and after the COVID-19 recession

BlogCOVID-19Jun 24 2020

For parents who have court orders to pay child support, the financial outlook may be especially bleak due to COVID-19-related job loss compounded by enforcement of child support orders. If child support orders cannot be modified in a timely manner to reflect job loss, parents can quickly build child support debt and become subject to non-compliance penalties. Changes to current child support practices and policies can improve parents’ ability and willingness to pay support when they recover from the COVID-19 recession.

Even before this recession, many parents with child support orders—who are disproportionately low-income parents and parents of color—found it challenging to make payments. Low-income parents are more likely to fall behind on payments than their higher-income counterparts due to unstable employment. In addition, many of these parents have long been excluded from avenues of public support; most recently, those with past-due support were the only group with government debt that were not granted stimulus payments in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Besides their limited ability to pay, parents can be discouraged from paying child support when their payment does not directly benefit their children; specifically, in many states, if the parent living with the child covered by a child support order receives aid from Temporary Assistance for Needy Families (TANF), child support paid by the parent under the order is used to recoup TANF costs instead of going directly to the child.

To modify child support orders based on changes in circumstances, parents can file a request with the court, either directly or through the child support office. (However, in some states, the child support office can modify orders on its own.) Modifications requiring judicial decisions may involve lengthy procedures that can be further delayed due to court closures. In a recent survey of states, more than half indicated that they are unable to review support obligations—or are delaying the process—depending on the timing of the request. Meanwhile, interest on past-due support can easily grow parents’ debt, depending on how often states charge interest. Parents with past-due support are subject to child support enforcement practices such as tax intercepts, liens, asset seizure, credit reporting, and license suspension. Child support debt is negatively associated with the well-being not only of parents with orders but also of their children, including reduced labor force participation among parents and reduced contact with children. In contrast, forgiveness of child support debt is associated with higher child support payments.

State and federal officials should consider three areas of reform to prevent unintended consequences for families served by the child support system: allow timely modifications, limit punitive enforcement measures, and facilitate financial support to families.

First, timely modifications not only acknowledge the decreased income of parents with orders but also ensure that child support increases as parental income improves. These challenges can be reduced with increased support from child support offices through streamlined procedures and effective use of income data that already exist in administrative databases. For example, Alaska uses ELMO—a computer program that uses automated income data electronically linked to the state’s child support administrative database—to review orders, ensure eligibility requirements, and calculate changes in income to flag cases for manual review.

Second, states should limit compliance enforcement measures to allow parents to gain some level of self-sufficiency during this crisis. At the time of writing, around half of states have discontinued placing liens on bank accounts and/or suspension of drivers’ licenses, while others continue to apply these tools or take a case-by-case approach. Limiting the use of punitive measures is a more sustainable approach that can easily be automated in highly economically distressed areas.

Third, both public and private income support should be made more accessible to children. When parents with child support orders can pay, passing their payment to children regardless of TANF receipt bolsters children’s economic and emotional well-being. A full pass-through of child support paid, as compared to a partial pass-through, has been found to reduce the risk of child maltreatment. Federal lawmakers can make parents with child support debt fully eligible for stimulus payments to increase their ability to provide formal and informal child support and benefit their children.

Even under normal conditions, the child support system faces challenges. Although child support improves the economic conditions of millions of children, it can be difficult for parents to pay support when their earnings change and they cannot modify orders easily with the court. To alleviate the adverse impacts of the COVID-19 recession on families, states should revisit their child support and welfare policies.