Child Support Enforcement

Of nearly $35 billion in child support payments owed nationwide under the Child Support Enforcement Program, more than $27 billion remained uncollected at the end of fiscal year 1992. During that year, more than 5.7 of the 8.5 million noncustodial parents owing child support made no payment on the amount owed. Eleven of 16 states GAO reviewed routinely report child support payment information to credit bureaus; five states report information only at the request of credit bureaus. Most of the states that routinely report usually report only delinquent noncustodial parents. These states generally report to all three major credit bureaus information that is less than 30 days old, and few states have had problems categorizing child support payments in an automated and standardized format for the credit bureaus. The costs to start up and run credit bureau reporting systems appear to be nominal. The effects of credit bureau reporting on increasing collections have not been widely evaluated by the states GAO reviewed, but completed studies and comments by state and credit grantor officials suggest that credit reporting is helping with enforcement. One state suggested that its main benefits will appear over time as creditors deny credit to delinquent parents.

GAO found that: (1) 11 of the 16 states reviewed routinely report child support payment information to credit bureaus and 5 states report the information only at the request of the bureaus; (2) 10 of the states report only delinquent noncustodial parents, while California reports on all noncustodial parents; (3) credit bureaus and creditors prefer that all child support information be reported; (4) the 5 nonreporting states plan to start routine reporting on their delinquent accounts once their systems are automated; (5) the states generally report information that is less than 30 days old to all major credit bureaus; (6) some states have problems using the bureaus' automated and standardized reporting formats; (7) start up and operating costs for credit bureau reporting systems appear to be nominal, ranging from $12,900 to $300,000 and from $4,000 to $47,000, respectively; (8) the estimated costs to include all noncustodial parents in credit bureau reporting range from $8,600 to $80,800; and (9) the states have not evaluated the effects of credit bureau reporting on child support collections, but studies and anecdotal evidence suggest that routine credit reporting has a positive impact on enforcement.