F & F Testifies at Hearing to Cut MA’s Outrageous 18% Interest Rate on Child Support

F&F Member, John Natale
F&F Member John Natale

Fathers & Families Chairman Dr. Ned Holstein and numerous Fathers & Families supporters testified today at a Massachusetts Department of Revenue hearing on lowering interest on child support. The proposed amendment to the current regulation would lower the combined interest and penalty rate from a whopping 18% annually down to 12%.

Fathers & Families has long fought to reform Massachusetts child support, and was successful in lowering noncustodial parents’ child support by $200 million a year from 2001 to 2007. Today’s F & F testimony focused on the benefits lowered interest rates would produce both for people struggling to pay their child support and for the state.

A 2007 study by the Urban Institute showed that eighteen states routinely charge interest and those states have seen their arrears increase from $5.4 billion to $58.7 billion over a 10-year period.  States that did not charge interest over that same period only saw arrears grow from $2.8 billion to $19.5 billion during the same time period.

Lowering the interest on child support would also help the state in collecting owed amounts.  If parents are unable to pay the support and interest and simply stop paying, the amount of uncollected arrears on the state”s books grows.  This in turn hurts the state”s chances of getting more federal incentive payments, since the more child support money they collect, the more money they get from the federal government in support of their collection programs.  A large amount of uncollected money does not make the state look good.

Several Fathers & Families members testified at the hearing.  John Natale (pictured) wondered how the interest rate came to be 18% in the first place when he is refinancing his mortgage for 4.65%.  The DOR also heard from Sarah Blackford – a mother who depends on child support, but still thinks these interest rates are far too high.  She told the story of her friend who is constantly struggling to pay his child support, but is stuck in a $40,000 black hole of interest and penalties that he may never be able to dig himself out of.

Chris Jenson stated simply and clearly why the current interest rate is outrageous.  He told the story of falling behind on child support by $375 and reported that he has now paid the $375, but he still owes $1,240 in interest and penalties – almost three times as much as the amount originally owed.  F&F members Bill Zamzow, Hector Montalvo, Philip Alvarado, and Franco Marzouki also testified to the importance of lowering the interest rate.

The representatives from the Child Support Enforcement Division were unable to answer any questions during the hearing, including who will ultimately make the decision on lowering the rates and when that decision will be made.  We will be monitoring the situation and will keep our supporters posted.

To read Fathers & Families’ full testimony, click here.

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