Child Support Enforcement: Is the System Failing Families?

By Tracy Schorn

March 15, 2017

In this month's Washington Lawyer, we explore the issue of child support enforcement and the challenges for parents, attorneys, the courts, and state agencies on the fair application of the law. Robert Doar, the Morgridge Fellow in Poverty Studies at the American Enterprise Institute (AEI), believes child support enforcement is an access to justice issue and that state agencies should get their focus back on collection as a core goal. Rob Feito, CEO of Supportkids Services, Inc., the largest private child support collection company in the United States, argues that private debt collection should be an option for parents, especially when state agencies are overwhelmed and underfunded. Below are their expanded interviews.

Robert Doar, the Morgridge Fellow in Poverty Studies at the American Enterprise InstituteImprove the System, Focus on Collection

At AEI, Doar studies and evaluates how improved federal policies and programs can reduce poverty and provide opportunities for vulnerable Americans. Before joining AEI, Doar was commissioner of New York City's Human Resources Administration, where he administered 12 public assistance programs, including child support enforcement. Previously, he was commissioner of social services for the state of New York.

Do you think child support enforcement divides on the issue between the "can't pay" and the "won't pay" non-custodial parents?

There are those [who] can't pay, those who won't pay, and the very many who do pay. The majority of non-custodial parents pay child support without pushing or cajoling. They want to pay.

Should child support be inescapable like death and taxes?

There used to be a lot of bipartisan support [on child support enforcement]. From the mid-1990s to mid-2000s there was lots of progress. But more recently, there's been a breakdown of that consensus. We've gone too far away from stressing collections as the core goal.

Some of [the $115 billion in arrearages] cannot be paid. We don't want to impose an unreasonable burden on non-custodial parents. But we also don't want people to be able to walk away from their obligations. For those who can pay but walk away, we need stronger enforcement.

You've called for child support to be coordinated with use of other social services. Can you elaborate?

For [custodial parents] who are on cash welfare, the state plays a strong role in enforcing the order. But we aren't tying other public assistance like Medicaid, food stamps, or public housing to child support enforcement. For those non-public assistance cases, progress [on enforcement] has gotten weaker for those who can pay.

For those non-custodial parents in the regular work system, whose kids are still minors, the enforcement program is fairly effective.

How do you enforce support orders when the other parent tries to skip out or work under the table?

You have to be really creative. [As child support director of New York State,] we were pretty aggressive and effective in collecting support.

Is child support enforcement an access to justice issue?

Absolutely. That's one major reason we created the child support enforcement system—there were lots of frustrated parents asking lawyers to enforce court orders who got nothing. The Office of Child Support Enforcement was supposed to make up for the completely cumbersome process of trying to navigate the court system. Child support enforcement is supposed to be fast, efficient, and reliable.

The system now is more effective than it was in 1990. We take in $30 billion a year in support, and collect on more than 60 percent [of orders].

How can we improve the system?

1. For the program at the federal level, there needs to be more focus on financial support of single-parent households. We need to get back to basics and focus on collections. Collections are declining, but the need to receive money has not gone away.

2. Cooperation between child support enforcement and other public assistance services like SNAP. Very few users of these services are being asked if they're seeking child support from the non-resident parent. They should be asked to seek that support.

3. Right now 95 percent of collections go to the family and 5 percent reimburses the state. We need to make it clear that the money is for families, not for the government.

4. For the poor non-custodial parents who are struggling, we need to create a connection to workforce programs.

Rob Feito, CEO of Supportkids Services, Inc.'We Want to Be an Option'

Supportkids operates in 38 states and the District of Columbia. Feito says their typical client is between 35 and 50 years old, with a household income of around $40,000 to $55,000 a year. According to Feito, 95 percent of those who seek out the help Supportkids are women.

In 2015 former Office of Child Support Enforcement Commissioner Vicki Turetsky said enforcing unpaid child support with non-custodial parents who have money has been "solved." Do you agree?

Absolutely not. According to the 2013 U.S. Census Bureau report on Child Support, we have over $115 billion in arrearages. If this problem was solved, the total amount of unpaid child support in the U.S. to custodial parents wouldn't increase every year and we'd be out of business.

Why should states allow custodial parents to use private collection agencies?

Access to justice is about options. If you have the financial ability, you can hire a lawyer [for enforcement]. Lawyers, like Supportkids, are a private for-profit alternative to the state.

Enforcement is an ongoing obligation. It's a collections issue. Lawyers are good for going to court to get a one-time solution, but a one-time payment doesn't solve the issue. We're dedicated to long-term enforcement.

Private enforcement agencies have a history of being criticized by states as "predatory." What is your fee structure?

The criticism is that we're taking money from children by charging a fee. It's not a fair criticism. We work on a contingency fee basis—we are paid 34 percent of the child support collected. If we don't collect, the client pays nothing. It is a success-driven model. We're very upfront about our fees. We also work via a flex-pay subscription model for $59 a month. We offer choices for the custodial parent to select an option that works for their household budget.

Almost 100 percent of our clients have tried to recover [unpaid child support] through the state. Over $10,000 is the average arrearage. Many have gone to attorneys to enforce child support orders and spent $3,000 to recover $3,000.

How do you respond to criticism that companies like Supportkids are targeting low-income parents who have no ability to pay?

We have a dedicated strategy for each case. Lack of employment does mean it's harder to collect. We set fair expectations about recovery, and regardless of income, if someone is seeking our assistance, it generally means they are not receiving payments at all. If we are not successful, the client does not pay any fees, so it comes down to potentially receiving 66 percent of a payment or continuing to receive $0. Low-income parents in immediate need of cash assistance would do better to work with state programs that can offer that type of help.

Can you explain your business model?

Consumer debt gets collected every day because the loans are consistently worked and the private sector has access to locate tools and databases for identifying assets and bank accounts.

We have access to the same systems that locate the non-custodial parent and identify hidden income/assets. Knowledge is powerful and it can be leveraged. We do not like the term "deadbeat dad" and we're not vindictive—we work with non-custodial parents to come up with a payment plan. We treat non-custodial parents professionally and with respect.

Is your industry regulated?

We are licensed as a private child support collection agency in Texas and as a third-party collection agency in other states. We welcome regulation to provide transparency to the state agencies and prefer to work in cooperation with the state. We want to be an option.

Why should a parent hire you?

We empower the custodial parent to enforce the court order. Our clients tell us 'I felt powerless.' They've dealt with paperwork, sat in long phone queues, and have seen their cases fall through the cracks. We give them back their time.

Sixty percent of our cases are interstate cases. [Multistate enforcement] is a major problem. State offices are overwhelmed and underfunded. So if states don't have the funding, why not let people look to the private sector?