Michigan rules derail child support payments

December 15, 2009

Surcharges cause unemployed parents to fall further behind

Catherine Jun / The Detroit News

Scores of Michigan parents have fallen behind on their child support payments, and state regulations prevent some from ever catching up.

A large percentage of the debt is due to a surcharge the state began applying to delinquent payers in 1996, officials acknowledge. Though designed to encourage parents not to skip the payments, the surcharge has pushed some parents into such a deep hole they can’t climb out.

About $9.2 billion in back child support is owed in Michigan, affecting more than 600,000 children. That’s about two-thirds of child support cases in the state.

With state unemployment at 15 percent, courts and prosecutors that hunt down deadbeat dads are finding some fathers don’t have the money to pay.

“Yeah, I have been falling behind,” said Jeremy Deron, 38, of Westland, who was ordered to pay at least $5,000 in back payments by January.

Deron, who lost his job a year and a half ago as a union bricklayer, said he regularly paid child support for his two sons until his unemployment checks ran out a few months ago. Now he faces a felony charge if he misses the January deadline.

“I don’t have the five grand,” he said. “Now I’m fighting to stay out of jail.”

Michigan ranks third among states with the highest amount of uncollected child support funds. The state surcharge is a key culprit, compounding the debt of delinquent payers by essentially adding interest onto overdue back payments, said Marilyn Stephen, director of the state Office of Child Support.

“The reality is that it seems to have disincentivized payers,” Stephen said.

In some cases, it has scared payers away from making support payments altogether, cutting off needed dollars to children, she added. “It absolutely affects their kids.”

For some who do pay, the surcharge, applied twice a year, has bloated their arrearages beyond what they can manage.

Eric Bivens, 42, said he has regularly paid child support for his son for 13 years.

Though his son turned 18 last year, Bivens is still chipping away at $5,000 in surcharges, applied to arrearages that date to his early 20s.

Now, with his hours cut at the plastics shipping company where he works, he makes a reduced payment of $50 a month.

“I’m probably going to pay $50 for the rest of my life,” Bivens said.

After 1996, the state applied a compounded surcharge of 8 percent on back payments, then modified in 2004 to an uncompounded variable rate, which amounts to a lesser charge.

Interest charges common

About half the states in the country apply some kind of interest payment on unpaid support. Ohio, however, doesn’t add the interest automatically; they are only assessed when a court determines a parent is willfully failing to pay.

Officials in Michigan often point to Ohio when making the case that the surcharge is in large part to blame for the large number of arrearages.

In 1987, the two states, similar in demographics and caseload, each shouldered about $1 billion in back payments. Today, Ohio’s total is $4.1 billion, less than half that of Michigan.

“That to me is a very dramatic demonstration of the impact of the surcharge,” Stephen said.

David Pate, co-director of the Wisconsin-based Center for Family Policy and Practice, said that states with heavy arrearages could face challenges when seeking federal dollars.

“If you have a very high debt in the state coffers, it looks like you’re not making your collections,” Pate said.

Michigan legislators are considering bipartisan legislation that would eliminate the automatic surcharge. If passed, judges would then be required to decide when to apply the charge, like in Ohio. The law’s passage won’t affect surcharges that already have been applied.

“The goal is to be more flexible … and hopefully keep the parents involved,” said Sen. Mark Jansen, R-Gaines Township, a bill sponsor. He said by giving courts discretion, judges can consider the individual circumstances of payers.

“It’s meant to help both” families, Jansen said. He anticipates the bills could be adopted by January.

Wayne County leads state

State authorities have in recent years used the threat of criminal conviction to get delinquent parents to pay.

Since 2003, the state Attorney General has collected $80 million in child support to benefit more than 7,000 children.

Investigators have to spend more time trying to determine which parents are knowingly dodging payments and which simply cannot pay, said Nick DeLeeuw, a spokesman for the attorney general’s office.

Wayne County has nearly half of the state’s child support cases. Prosecutors there issue felony warrants against parents who owe more than $5,000 and have failed to pay, despite efforts by administrators at the county Friend of Court, the civil body that enforces child support orders.

Last year, the county collected $10.5 million in support for at least 4,000 children.

“I don’t know if we’re going to do as much this year,” said Nancy Neff, assistant prosecuting attorney. “We’re hearing more and more that people aren’t employed.”

Investigators, however, aren’t necessarily accepting unemployment as an excuse for nonpayment. Some parents are getting paid doing odd jobs, Neff said. “Are people in financial straits? Absolutely. Are they completely without resources? No,” she said.

Westland’s Deron said he is.

Since his unemployment checks ran out, he and his girlfriend have stretched her disability checks to pay for rent, food and clothes for her 12-year-old daughter and their 17-month-old baby.

He found out several months ago he had felony warrants for arrearages on child and spousal support. He owes $11,024 to his ex-wife, two sons and the state.

Court documents show support was garnished from his paychecks, unemployment checks and income tax returns since 2005. Deron is scheduled to return to court in January.

“With a felony, I’m never going to get a job now,” he said. “That doesn’t help out my children one bit.”

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