After advocacy from fathers' and family organizations, the Massachusetts Department of Revenue (DOR) is reducing the interest rate for past-due child support by 50 percent. The modification decision was made after a DOR Hearing on Reducing Interest on Overdue Child Support.
At the hearing, members of Fathers and Families, an organization that seeks family court reform to support equal rights and responsibilities for mothers and fathers, presented personal stories and empirical information on the negative effects of interest charges on past-due child support.
Challenging Child Support Interest Rates
One Fathers and Families member, John Natale, questioned why the interest rate was so high when he could refinance his mortgage at 4.65 percent. Another member, Chris Jenson, related that he once fell behind on child support by $375. After making the overdue $375 payment, he still owed $1,240 in interest and penalties, which is more than three times the amount he originally owed.
Hearing attendees also presented information on child support arrearages in states that do and do not charge interest on past-due child support. A 2007 study from the Urban Institute found that arrears in states that did not charge interest on late child support increased by six times from 1987 to 2006. In the same time period, arrears in states that did charge interest increased tenfold. This study demonstrates that charging interest on past-due child support does not reduce arrearages.
A Poverty Problem
The Urban Institute also found that arrearages often exist because the paying parent is in poverty. The organization's investigation revealed that 70 percent of all people in arrears on child support earn less than $10,000 a year. In the current economic downturn with high unemployment rates, it is challenging for some people to make child support payments; adding penalties and charging high interest rates makes it even more difficult.
The lowered interest rate on overdue child support in Massachusetts will help parents pay and catch up on child support. If you have questions about child support or how the interest rate change may affect you, contact a child support attorney in your area.
