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Urban Institute releases report on San Francisco Child Support Debt Relief Pilot; found parents made more consistent payments, children received more financial support.

When Joe showed up at the debt relief workshop, he was frustrated. He had been living in his van, struggling to pay back thousands of dollars in child support debt owed to the government. His credit plummeted, and he struggled to get to his minimum wage job as a security guard. Like many parents, the majority of Joe’s child support debt was to pay back the government for the cost of public assistance.
Last year, parents in California paid $368 million in child support payments that went to repay the cost of public benefits. In California, when a parent signs up for public assistance, such as Medi-Cal and CalWORKS, they must sign over the rights to their child support payments to the government. Only the first $50 of their child support payment goes to their family. The rest goes to the government to pay back the cost of public assistance. When a parent falls behind on payments, they begin to accrue debt to reimburse the government, and penalties quickly set in. They are charged ten percent interest, their license can be suspended, and they can even be incarcerated. Requiring parents to pay back public assistance widens existing inequalities by disproportionately impacting low-income families of color.
The workshop Joe attended was part of a pilot program in San Francisco, a partnership between the San Francisco and State Department of Child Support Services, the Financial Justice Project, and two local funders, The Walter and Elise Haas Fund and Tipping Point Community. After attending a workshop, Joe and 31 other pilot participants had all of their public assistance payback debt erased, ensuring that all future payments would go to their kids. The pilot project was featured on National Public Radio’s KQED of Northern California.
 
After the debt relief, Joe’s credit score improved, he found housing, and he started working as a driver for Lyft. Joe also spends more time with his children. “We hang out even more and go out on weekends, just to movies and stuff like that. I couldn’t afford it ever. I couldn’t afford to take my kids to a movie. As of now, I could actually sit down and talk to her a little bit.” “But if I was in debt,” Joe said, “I wouldn’t have that type of time because I’d be so stressed out about where I’m going to get the next meal from… If I didn’t have the debt relief, well I’ll probably be still sleeping in the van right now.”
 
Today the Urban Institute released an evaluation of the pilot project. They found that parents who had their public assistance payback debt forgiven:
  • Made more consistent child support payments: parents who received relief from public assistance payback debt had payment rates 18 to 28 percent higher than their statistically matched peers;
  • Had reduced stress, reduced barriers to employment; improved credit scores, more stable housing, and feelings of control over finances;
  • Improved their relationships with children and coparents;
  • And improved relationships with the child support system.
To learn more about the pilot project, you can read the Urban Institute evaluation here. To learn more about state legislation that is moving forward to reform California’s child support system, click here. Many thanks to our partners,  the San Francisco and State Department of Child Support Services, Tipping Point Community, and the Walter and Elise Haas Fund.
 
Yours in Financial Justice,
 
Anne and Christa
Copyright © 2019 Financial Justice Project, All rights reserved.


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