Debt collection

Pandemic aid triggers record child support collections

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If Billy McCasland had gotten his $ 1,200 stimulus check, he would have moved his family out of the Modesto house the pediatrician says is responsible for the lead poisoning of his 7-year-old.

Los Angeles-based single dad Gabriel Lopez said he had hoped to take his youngest to the Selena Museum in Texas, a bright spot after a tough year full of remote schools and family turmoil.

And in Sacramento, Stacy Estes reportedly bought a car so he could get to work on his own, without scheduling shifts around his fiancée’s workday. Any car would work, as long as it fits within its budget.

But those fathers, who all owe thousands – in some cases tens of thousands – of old child support debts did not get the first federal stimulus checks. Instead, California scooped money that was supposed to be a lifeline for food and shelter during the worst public health crisis in a century, from checks drawn to pay off decades-old debt.

The same thing happened when Estes filed for unemployment. His weekly checks have gone from around $ 80 to just over $ 60, not enough to cover food, rent, and utilities.

Statewide, many low-income California parents behind on government-collected child support payments saw their $ 1,200 checks issued in the spring of 2020, along with improved unemployment benefits, intercepted l ‘last year. California has responded with a good faith effort to end garnishments in the second and third rounds of stimulus checks. Department of Child Support Services director David Kilgore said the state was putting families first by shifting stimulus funds to custodial parents.

Still, records reviewed by CalMatters and The Salinas Californian showed the state retained a record $ 430 million last year, a 16% increase from the previous year, mostly by taking a government pot to reimburse another.

Billy McCasland pictured at his parents’ house in Modesto on April 29, 2021. Photo by Anne Wernikoff, CalMatters

Parents struggling with child support debts told CalMatters they had never seen their stimulus checks and federally funded $ 600 unemployment checks – and the money wasn’t going not always to their children either.

History of child support collections

Based on the idea that people who appeal for public assistance have a responsibility to repay the government, California intercepts child support payments from custodial parents who subscribe to government assistance such as CalWORKS. It imposes penalties such as interest and driver’s license suspensions when non-custodial parents fall behind.

As a result, California charges non-custodial parents millions of dollars in interest on overdue child support payments, making it nearly impossible for many to find jobs, support their children, and pay back. the debt.

California typically collects about $ 2.5 billion from parents each year through the Department of Child Support Services. Most of this money goes to custodial parents, but the state agency withholds some of it. In 2019, he kept around $ 370 million, half of which went to the general state fund.

Those numbers – from collections to retentions – have skyrocketed in 2020, which state data suggests is thanks to the state taking funds approved by Congress to catch staggering people on the verge of a eviction cliff during the pandemic. Last year, the agency kept about $ 430 million of the $ 2.8 billion it raised, sending $ 207 million into state coffers, an increase of about 25% compared to the previous year.

Stimulus checks and unemployment benefits accounted for such a large chunk of the money intercepted that it has decreased the percentage typically collected through income deduction, where the agency takes money directly from them. pay checks from non-custodial parents. The loss of jobs also contributed to the decline.

Normally, withholding income represents 75% of the billions collected, but in 2020 the percentage has dropped by more than 20 percentage points.

Stimulus check interceptions fell under the category of federal tax refunds, which tripled from 2019 to 2020.

The interception of unemployment benefits increased further after Congress authorized the basic payments of $ 600 authorized under the CARES Act. In 2019, the state agency intercepted $ 33 million in unemployment benefits. In 2020, that number jumped to $ 193 million. The state did not deal with interceptions for unemployment benefits.

This means that stimulus checks and unemployment benefits from Estes and others were primarily responsible for the increase in child support collections during the pandemic.

Pay parents first

Although the most recent checks for $ 1,400 and $ 600 could not be intercepted by the state on behalf of the parent, in many cases the first check was intercepted to pay off an old debt owed to the state. and the federal government, said Kilgore of the Department of Child Support Services.

Interception is typical of federal funds like tax returns. It’s an easy way to get extra money to pay off a parent’s debt to the agency.

Knowing that funds would be intercepted and that food and property insecurity had spurred the pandemic, Kilgore said, the agency worked with Gov. Gavin Newsom to create an executive order that would route the intercepted stimulus checks to the parent first. custodian, rather than the government.

Newsom produced an executive order in April 2020 to this effect, authorizing “federal stimulus checks to flow directly to custodial parents who were required to reimburse child support.”

However, if no debt was owed to the family, the rest went to the government to pay off the old debt.

Golden State Stimulus checks cannot be intercepted. However, they can still be collected through a bank debit for overdue child support payments, according to the Franchise Tax Board.

As a result, between 2019 and 2020, the amount of child support funds that California kept for itself increased from $ 166 million to $ 207 million.

Lost chances

Stacy Estes pushes DoorDash to face the state’s child support debt. Photo by Anne Wernikoff, CalMatters

Advocates have been outraged by the state’s decision to keep money for itself during the pandemic. The embezzlement of stimulus checks meant less money for families to pay rent or utilities, Western Law Center director of political advocacy Mike Herald said.

“There are millions of people in California who lost their jobs at the onset of the COVID crisis and that means those dollars were used instead to pay child support arrears,” he said.

Several fathers who owe tens of thousands of old child support debts shared letters they received from the state in lieu of their $ 1,200 stimulus checks. The letters indicated that the checks had been intercepted on behalf of the Department of Child Support Services.

For them, this lost money represented lost opportunities.

This article is part of California Division, a collaboration between writers examining income inequality and economic survival in California.


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