How to Improve Child Support Systems

For the last few months or so, I have been researching child poverty and how to reduce it. Looking at countries with low child poverty, it's clear that something like an unconditional child allowance is the way to go. But it's not the only thing you can do. There are a lot of much less effective and more complicated things that the policy set is sure to love. Here, I cover child support systems.

Child support in the U.S. is apparently a disaster. According to the Census Bureau, in 2009 around 60 percent of custodial parents who were owed child support did not receive the full amount they were owed, if any at all. This is especially a problem for low-income families who fare the worst at receiving the child support they are owed, despite needing it the most.

When custodial parents do not receive the child support they are owed, they have to navigate themselves through various bureaucracies (depending on the state) to force the non-custodial parent to pay up, if they are even able. With 60 percent of custodial parents not receiving what they are owed, it's fair to say that the existing method of dealing with non-payment is not working.

One way to fix it would be to do as Iceland does. Custodial parents in Iceland can opt to have the big social insurance agency pay them their owed child support instead of the non-custodial parent. Under this arrangement, the agency pays the child support directly and then pursues the non-custodial parent for reimbursement. If the non-custodial parent doesn't pay the social insurance agency for a given period, the custodial parent still receives their owed child support without missing a beat.

This is a good idea for a number of reasons.

First, the custodial parent receives a guaranteed child support income stream that doesn't depend on what is going on with the non-custodial parent. Being able to get back child support way down the line is not helpful when you need the money now, and it is not good for ensuring a stable household for the child. The state, on the other hand, can deal with waiting a while to get back child support as it is not raising any children with the money.

Second, a state agency with a staff dedicated to coordinating this kind of thing will be far more effective at actually dealing with non-custodial parents who do not pay. They will know better than the custodial parent what courts to file claims in, how to put liens on property, how to garnish wages, and so on. They have more institutional competence at making a non-payor pay and will surely be better at ensuring compliance than the current system.

Third, knowing that a dedicated and competent state agency will come after you probably will deter non-payment better. It makes more sense to gamble on non-payment when the custodial parent has to jump through a lot of complicated hoops that they may not be able to successfully do than it does when a professional agency is the one that will come after you.

Fourth, it ensures more harmony between the custodial and non-custodial parent who are, in many cases, communicating and working with one another to raise the children. A custodial parent might not want to risk alienating the non-custodial parent by pursuing legal proceedings and whatnot for non-payment. This system transforms any non-payment away from a custodial parent v. non-custodial parent thing and into a non-custodial parent v. state thing.

Of course, to make this work smoothly will cost money. There will be situations where it will be impossible to get the child support that was paid out reimbursed by the non-custodial parent. The agency running this child support program would have to absorb these losses. But it's a small price to pay, if you care about children. In 2009, the Census put the unpaid child support figure at $13.65 billion, and that's with only 61 percent of the aggregate child support being paid. Ideally with the better enforcement that comes with a better system, that 61 percent figure will rise, meaning that the agency wouldn't absorb anywhere near that much.