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Unemployment, Phantom Earnings and Inflated Child Support Liabilities

The following was submitted by Terry Kee, member of our Fathers and Families Ohio affiliate.

Ever wonder how a low wage earner ends up owing a very large amount of child support? 

This story from WOSU radio in Columbus gives us a glimpse into the plight of one such individual (WOSU, 12/2/10).  Julius McIntyre is an under-employed man who owes roughly $20,000 in back child support. 

The report explains, “McIntyre has been working in a Wal-Mart distribution center for about two weeks now. It”s the first full-time job he”s had in more than a year.’ 

Despite the efforts of the attorney for the child support enforcement agency, who adamantly pushed for him to serve jail time, Franklin County, Ohio judge, Dana Preisse, elected not to sentence him.  Judge Preisse recognized that the economy is making it difficult for some support obligors to find work.  She noted that, “now that the unemployment rate is much higher I think it”s more reasonable that they truly can”t find a job.’ 

Her decision spared McIntyre 15 days in jail, saved his job and provided more support dollars for the benefit of the child.  It also stopped, for the moment, the increased accumulation of McIntyre”s child support arrearage.

McIntyre”s situation is not an isolated one. Take a look at the Ohio Child Support Enforcement Agency”s most wanted posters; almost invariably, these individuals are on the very low end of the wage scale, unemployed, or are relegated to seasonal employment. One example is Mr. McIntyre who is now working for a retail distribution center during the holidays.

The Ohio Child Support Enforcement Agency does a great job of listing indigent support obligors on wanted posters at rest stops and on pizza boxes, but does a poor job of providing timely downward modifications in the event an obligor becomes unemployed or underemployed.  As a result, the hidden truth is that much back child support is based on phantom earnings. Phantom earnings in turn are based on an ideal world of full employment – and where men’s unemployment was once low, it is now double digits.

If a noncustodial parent loses his or her job and is receiving unemployment, the full amount of the support is still owed.  It accumulates as a liability (“in arrears’) and when the support obligor does return to work, the liability is amortized as an additional obligation.

This is why many down-on-their-luck obligors accumulate such large liabilities that they can never hope to pay off.  They may have been entitled to a modification (after six months of unemployment), but never applied for one, or were never granted one, as such modifications are notoriously difficult to obtain.

In an intact family, if one or both parents become unemployed, the whole family is impacted.  They may eat out less, they may buy fewer toys for the children, and they may even have to move to a smaller house. 

But if the same two parents are divorced – only the unemployed noncustodial parent is the one who suffers.  The custodial parent receives the same support monies and maintains the prior lifestyle as if nothing ever happened – artificially supported based on the phantom earnings of an unemployed ex spouse.  The courts, in essence, are attempting to sustain an unsustainable lifestyle.

So to Judge Preisse, I say thank you, but don”t stop there.  When Julius McIntyre appears before your court in early 2011 because his seasonal employment was terminated, ask to see his wage history and adjust his outstanding support obligation accordingly – to a real number.  A number that is not based on phantom earnings, but actual earnings – a number that Julius McIntyre is more likely to pay.

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