Why Child Support Agencies Should Shift Mindset from Enforcement to Engagement

Child support arrears collection is typically approached from an enforcement mindset, with financial repercussions, administrative actions and social stigma mounting on parents who do not pay — as well as potential civil contempt or criminal charges. And of course, there is an imperative to provide for children who cannot provide for themselves. However, in some cases, a shifted mindset to non-custodial parent engagement may prove more effective.

Opportunities to improve child support payment recovery

Child support orders can be notoriously difficult to collect — especially once they fall into arrears. Prior TransUnion research found 95% of accounts that remain delinquent for 12 months would remain so for the next three years. However, new analyses of child support repayment options found exciting potential in small, sustained payments.

First, it’s important to understand that the majority of parents who fall behind on child support payments are in the lower-income spectrum. Parents who earn less than $55k pre-tax hold 70% of all child support debt. This group is especially vulnerable to economic or personal financial downturns and has been hard-hit by inflation.

Recently, TransUnion’s Public Sector team conducted research to understand the impact of fluctuating income on child support payments. They examined 40,000 parents who had child support debt — half of whom experienced a 25% income increase and half of whom experienced a 25% income decrease within three months. The analysis charted the effect those changes had on their child support debt repayment over the 12 months following their change in income.

Unsurprisingly, parents whose incomes decreased fell further behind in their payments. However, their collective child support debt balance began to grow in the three months prior to the change, suggesting that the parents began cutting back on payments in anticipation of an income reduction. This is important because child support agents who have access to trended financial data can spot when a parent is likely experiencing significant financial distress. This creates an opportunity to reach out in advance to provide resources and options that can help parents stay on track with child support payments.

For parents whose incomes increased by 25%, the median child support debt balance decreased by 15% over the next 12 months. This generally presented as a short-lived payment spike but was not sustained over time. This serves as a good reminder that a higher income doesn’t automatically lead to higher compliance with payments. Also, even a significant increase of income can still leave low-income parents struggling financially.