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Stimulus, unemployment checks help child support debt collection hit new high

CAL MATTERS-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 his 7-year-old’s lead poisoning.

LA-based single father 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 school and family turmoil. 

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

But these fathers, all of whom owe thousands –– in some cases, tens of thousands –– in old child support debt didn’t get the first federal stimulus checks. Instead, California clawed away money meant to be a lifeline for food and shelter during the worst public health crisis in a century, checks taken to repay decades-old debt. 

The same thing happened when Estes applied for unemployment. His weekly checks went from about $80 to just over $60, not nearly enough to cover food, rent and utilities.  

Across the state, many of California’s low-income parents behind on government-collected child support payments saw their $1,200 checks that went out in the spring of 2020, along with enhanced unemployment benefits, intercepted last year. California responded with a good-faith effort to halt garnishments on the second and third round of stimulus checks. Department of Child Support Services Director David Kilgore said the state prioritized families by passing stimulus funds to custodial parents. 

Still, records reviewed by CalMatters and The Salinas Californian showed the state kept a record $430 million last year, a 16% increase from the prior year, essentially taking from one government pot to pay back another.  

Parents saddled with child support debt told CalMatters they never saw their stimulus checks and federally funded $600 unemployment checks — and the money didn’t always go to their kids, either. 

History of child support debt collections 

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

As a result, California charges noncustodial parents millions of dollars in interest on past-due child support payments, making it nearly impossible for many to land employment, support their children and pay off the debt. 

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

Those numbers — from collections to retentions — skyrocketed in 2020, which state data suggests is thanks to the state taking funds Congress approved to catch people teetering on the edge of an eviction cliff during the pandemic. Last year, the agency kept about $430 million of the $2.8 billion it collected, sending $207 million to the state’s coffers, an increase of about 25% from the year before. 

Stimulus checks and unemployment benefits accounted for so much of the money intercepted that it dropped the percentage typically collected through income withholding, where the agency takes money directly from noncustodial parents’ paychecks. Job loss also contributed to the drop. 

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

 

(Kate Cimini is a reporter with the Salinas Californian and CalMatters' California Divide project. She covers economic inequality, agriculture, and housing. Previously, she covered national security, natural disasters, and sports. Her work has appeared in the Houston Chronicle, USA Today, VICE, The Athletic, Sports Illustrated online, and others.)  Photo: Anne Wernikoff, CalMatters

 

Tags:  Kate Cimini, CalMatters, Unemployment, EDD, CalWORKS, stimulus checks