California little one assist debt collections might cease for some

California lawmakers have tabled a budget proposal to end child maintenance collection from some parents who receive cash, but the proposed solutions are a far cry from what advocates were looking for in January for those debtors.

The legislature’s budget proposal would reduce or eliminate debt to the government – not families – for parents whose sole source of income is the supplementary security income or state supplement, the Cash Assistance Program for Immigrants, a combination of SSI / SSP benefits and disability insurance Veterans Administration Social Security or Disability Benefits.

The proposal could pause for a small subset of the larger California population who owe the government child support debts; The state has not disclosed to CalMatters the exact number of people receiving these benefits who owe child support, and it is unclear whether the state has that number.

In context, the Senate Grants Committee found that eliminating all those in arrears from child maintenance debts would cost the state hundreds of millions of dollars and save only $ 3.7 million in the general fund by having 98 full-time Department of Child Support employees Services that are involved in the collection of child support would be dismissed.

The proposal has yet to be negotiated with the Newsom administration.

Push for more child support debt relief

“We don’t intend to let the money owed families go away, only the money owed the state,” said Senator Susan Eggman, a Democrat from Stockton, during a Senate Budget Subcommittee hearing on the proposal last year Month.

Still, advocates for the poor had urged the state to go further by canceling old bad debts. And the current proposal leaves the 10% state interest rate on child support debt, one of the highest interest rates of its kind in the country.

“This is something that is definitely within the legislature’s control,” said Jhumpa Bhattacharya, vice president of programs and strategy at Oakland-based Insight Center, a nonprofit economic justice group. “You just have to have the will to do it.”

The theory behind child support is that a parent who has no custody of a child supports the child with monthly payments. But that is not how it works in practice for parents who are also receiving cash benefits from the state welfare program for families in need, known in California as CalWORKS.

As CalMatters and The Salinas Californian reported last month, California takes part of child maintenance payments owed to custodial parents, usually mothers, who receive these cash benefits. In some cases, this piece is more than half of the total payment. If the non-custodial parent defaults on maintenance payments, these debts accumulate at an interest rate of 10%.

Hold back by old debts

Rosalinda Garcia, a Fresno resident, was one of those unconscious parents for a brief period in 2003. She is still unable to pay off her debts despite paying thousands more than her original balance. And the man she owes alimony, her grandfather Joe Garcia Montelongo, died in 2012.

David Kilgore, Director of the California Department of Child Support Services

When she asked a DCSS agent where all her money went, she was told: the state.

It frustrates them to no end.

“I understand I have to pay my debts, but the time is not right now,” said Garcia. “My little ones shouldn’t have to suffer because of my old debts.”

Of the $ 13,000 Garcia was supposed to get for unemployment benefits last year, less than $ 10,000 came into her bank account. The rest, she said, was intercepted by the Department of Child Support Services, repayment to her grandfather for looking after her two elders for six months in 2003.

She originally owed about $ 4,000, but couldn’t afford payments for years, so she skipped them. But the interest increased. Seventeen years later, after more than $ 4,000 in payments in the last year alone, she still owes more than $ 2,000 in child support.

She said the state agency also intercepted her first federal economic check, $ 4,000 tax return, and December economic supplements that she should receive to feed and support the five children who are still at home dress.

Misconception about high interest rates

In a report commissioned by the Childcare Agency, the state itself has declared by academics since at least 2003 that much of this debt is bad. If states fail to reclaim the money from parents, the state itself owes the debt to the federal government. Some states have started distributing 100% of child child support payments to families, and Colorado has passed law requiring the state to repay the federal government.

Most states are like California, which enforces $ 100 for families with one child and $ 200 for families with two or more children. Last year, Governor Gavin Newsom vetoed a convention move that would have eliminated California’s 10% interest expense, saying the state needs the money.

Bhattacharya said there continued to be a misconception that high interest rates would push people to settle their debts faster or at all.

“But the reality is that this is a debt that people just can’t afford,” she said. “This is a debt that low-income people, mostly black and browns, are charged and asked to basically reimburse the government for their safety net.”

“They’re poor people and they can’t afford to pay at all, and now you’re charging an additional 10% interest. And it just connects. “

California has a high share of child maintenance debts

Last week, Governor CalMatters’ office announced that Newsom “was trying to address this issue through the budget process” when he vetoed the congregation’s move, “given the revenue impact” of ending child child support collections.

It seems that day has come.

Federal data shows that California retains an unusually high proportion of child support payments – more than three and a half times the national average. This has consequences for the debtor parents: it is more difficult for them to find and keep a job, the driver’s license is withdrawn and the children and parents who do not have custody receive less.

“I know that can create a (financial) hole for the state,” Eggman said, “but at the same time we know that there will be some money now. So why don’t we use it to take care of families and not worry about interest accrued on past affairs? “

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 [email protected].Sign up to support local journalism.

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