By Amber Solar, Esq.
The passage of the coronavirus relief bill brought a bit of relief to many who are facing financial hardships as COVID-19 continues to wreak havoc on the economy. The direct cash payments that are intended to help people through the crisis are expected to be sent soon; however, those who have child support arrears are unlikely to find any stimulus checks in their mailbox.
Federal laws allow the government to reduce or withhold federal payments to individuals if they have certain debts including tax burdens, other payments owed to federal or state government such as student loans, and child support payments. In most circumstances, these funds are taken from an individual’s tax refund.
Under the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (P.L. 104-193), the Treasury Department is directed to collect reported overdue child support by cutting or withholding federal payments as an offset. Individual states report to the Federal Government people who are behind on their payments, and the amounts that are owed. These past due child support funds are often referred to as arrears.
Sen. Chuck Grassley (R-Iowa), the chairman of the Finance Committee and contributing author to the corona virus relief bill wrote in a post on medium.com that the legislation “turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts or who are behind on other payments to federal or state governments, including student loan payment.”
Grassley went on to say, “the only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the Treasury Department.”
In other words, if you have reported child support arrears, all or a portion of, your stimulus check will be redirected to reducing your child support arrears. The parent who is owed the back-child support will be receiving those funds through the individual state disbursement units.
To be clear, if you have recent child support arrears brought on by recent corona virus related events, including job loss, it is extremely unlikely that these funds would have yet been reported to the federal government and you will still likely receive your stimulus check.
As a side note, if you find yourself currently unable to pay a child support obligation due to job loss or insufficient income under the current circumstances, most Friend of the Court or Child Support Disbursements Units are still available by phone and it is highly recommended you contact them to discuss relief options prior to going into support arrears.
If you have any questions about this or any other legal uncertanties related to the impact COVID-19 contact Gravis Law, and one of our attorneys can assist you.