California lawmakers have put forward a budget proposal to stop collecting child support debts from some parents who receive out-of-pocket aid, but the solutions proposed are a long way from what advocates for those debtors sought in January.
The Legislator’s budget proposal would reduce or cancel debt to the government – not debt to families – for parents whose only source of income is supplemental security income or state benefits, the Cash Assistance Program for Immigrants, a combination of SSI/SSP and Social Security Veterans Administration.
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The proposal could break a narrow subset of the larger population of Californians in child support debt with the government; the state has not released to CalMatters the exact number of people who receive these benefits and owe child support debts, and it is unclear whether the state has that number.
In context, the Senate Appropriations Committee found that removing all arrears from child support debt would cost the state hundreds of millions of dollars and save only $3.7 million in the general fund by hiring 98 full-time employees of the Department of Child Support Services. let go who work in the collection of child benefits.
The proposal has yet to be negotiated with the Newsom administration.
Push for more child benefit waiver
“It is not our intention for money owed to families to go away, but only money owed to the state,” Senator Susan Eggman, a Stockton Democrat, said during a statement. Senate Budget Subcommittee heard about the proposal last month.
Yet advocates for the poor had poor asked the state move on by canceling old, bad debts. And the current proposal leaves the state’s 10% interest on child support, one of the highest interest rates of its kind in the country.
“That’s something that is definitely within the legislature’s control to change,” said Jhumpa Bhattacharya, vice president of programs and strategies at the Oakland-based Insight Center, a nonprofit economic justice organization. “They just have to have the will to do it.”
The theory behind child support is that a parent who does not have custody of a child supports the child with monthly payments. But that’s not how it works in practice for parents who also receive cash assistance from the federal temporary assistance program for needy families known as CalWORKS in California.
As CalMatters and The Salinas Californian reported last monthCalifornia takes a portion of child support payments owed to custodial parents, usually mothers, who receive these benefits. In some cases, that piece is more than half of the total payment. Meanwhile, if the non-custodial parent falls behind in paying child support, that debt piles up via a 10% interest rate.
Held back by old debts
Rosalinda Garcia, a Fresno native, was one of those non-custodial parents for a short time in 2003. She still hasn’t been able to pay her debt, despite paying thousands more than her original balance. And the man to whom she owes alimony, her grandfather, Joe Garcia Montelongo, died in 2012.
When she asked a DCSS representative where all her money had gone, they told her: the state.
It frustrates her immensely.
“I understand I have to pay my debts, but right now, right now, it’s not the time,” Garcia said. “My little ones shouldn’t suffer from my old debts.”
Of the $13,000 Garcia was supposed to get from unemployment checks last year, less than $10,000 went into her bank account. The rest, she said, was intercepted by the Department of Child Support Services, refunding her grandfather for taking care of her two eldest for six months in 2003.
She originally owed about $4,000, but for years she couldn’t make the payments, so she skipped them. But interest continued to rise. Seventeen years later, after more than $4,000 in payments last year alone, she still owes over $2,000 in child support.
She said the state agency also intercepted her first federal incentive check, her $4,000 tax return, and the December incentive supplements she would receive to feed and clothe the five children still living at home.
Misconception about high interest rates
The state itself, in a report commissioned by the Child Welfare Agency, has had academics say: since at least 2003 that a large part of that debt is uncollectible. If states don’t get the money back from the parents, the state itself owes the federal government the debt. Some states have started passing on 100% of child support payments to families, and Colorado has passed a law dictating that the state pays the federal government back.
Most states are like California, which passes $100 for public assistance families with one child and $200 for families with two or more children. Last year, Governor Gavin Newsom New vetoed a measure of the assembly that would have eliminated California’s 10% interest burden because the state needs the money.
Bhattacharya said there is still a misconception that high interest rates will drive people to pay off their debts faster or not at all.
“But the reality is that this is a debt that people just can’t afford,” she said. “This is a debt charged to low-income people, mainly black and brown people, who are asked to basically repay the government for their safety net.
“These are poor people, and they can’t afford to pay at all, and now you’re charging 10% interest on top of that. And it just mixes.”
California collects large share of child support debt
Last week, the governor’s office told CalMatters that “given the revenue impact” of ending child support collections, Newsom “tried to address this issue through the budget process” when he vetoed the Assembly’s measure. .
It seems that day has come.
Federal data shows that California retains an unusually high proportion of child support payments — more than 3½ times the national average. That has a knock-on effect for the parents responsible for that debt: They have a harder time getting and keeping a job, their driver’s licenses can be revoked, and the children and non-custodial parents get less.
“I know this can create a (financial) hole for the state,” Eggman said, “but at the same time, we know there will be some money now. So why don’t we use it to provide for families and not worry about the interest accrued on things of the past?”
This story is part of The California Divide, a CalMatters project. Kate Cimini is a journalist for The Californian. Share your story at (831) 776-5137 or email firstname.lastname@example.org.Subscribe to support local journalism.
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