What Happens When We Forgive Debt from Child Support Payments?
The share of child support payments in California that is owed to the government was changed from 70 percent to 40 percent to reflect the most recent data. (Corrected 8/28/2019).
In California, 40 percent of child support payments don't go to parents to support their children, but to reimburse the government for public assistance their children have received. If parents miss a payment or don’t pay the full amount due, they accrue “public assistance payback debt” with 10 percent interest. Most parents who owe this debt earn under $15,000 a year.
This public assistance payback policy involves additional stiff penalties: parents’ driver’s and professional licenses can be suspended, up to 65 percent of their paycheck can be garnished, and they can be jailed.
Parents can obtain debt relief through the state’s Compromise of Arrears Program (COAP), which allows eligible parents to make a partial payment toward their public assistance payback debt and have the rest of their government-owed debt eliminated. But many parents find it difficult to make the required partial payment and challenging to navigate the lengthy application process.
A debt-relief pilot shows promising results for parents and children
Community partners in San Francisco recently collaborated on a pilot program that paid down a portion of participants’ public assistance payback debt, which allowed participants to receive full debt relief through COAP. Partners included the state of California, the local child support agency in San Francisco, the city’s Financial Justice Project, and the Walter & Elise Haas Fund. Tipping Point Community, an organization focused on fighting poverty in the Bay Area, funded our evaluation of the pilot program.
Our analysis of the pilot program shows positive results for parents and children:
Parents make more consistent and timely payments
Parents who participated in the pilot consistently made their monthly child support payments on time. Their payment consistency was 18 to 28 percent higher, depending on the month, than for similar parents who had not received debt relief.
Parents’ housing status and credit scores often improve, and their employment barriers are reduced
Owing public assistance payback debt had been a source of enormous stress in parents’ lives, and the elimination of the debt and its associated stress contributed to reduced employment barriers and improved credit scores, housing status, and feelings of control over finances, according to both focus group participants and survey respondents.
If I didn’t have the debt relief, well I’ll probably be still sleeping in the van right now.
—Debt relief pilot participant
Relationships between parents and children improve
Many parents reported that the government-owed debt created conflict between coparents. Relief from financial and emotional burdens positively affected parents’ relationships and activities with their children as well as with their coparents. Parents expressed that they could more effectively coparent after the debt burden was removed, and that after the debt relief they could better afford to financially support their children.
We hang out even more and go out on weekends, just to movies and stuff like that. I couldn’t afford it ever. I couldn’t afford to take my kids to a movie.
—Debt relief pilot participant
The pervasive narrative of parents “shirking responsibility” may lead some to reject the idea of forgiving the government-owed debt. But the pilot program in San Francisco adds evidence that these stereotypes are false and that punitive policies contribute to the debt in the first place.
Child support systems nationwide could benefit from recognizing parents’ desire to support their children and empowering parents to provide that support by providing complete relief from government-owed child support debt.
Our evaluation of the pilot illustrates how complete debt relief transformed many parents’ experiences from a downward spiral of despair and missed opportunities to an upward trajectory of improved well-being for parents and children.