# Privatizing Child Support Enforcement

- Link: https://thechildsupporthustle.com/privatizing-child-support-enforcement/
- Published: 2024-05-06T09:23:35+00:00
- Author: MsRockMon

[[Source: YoungWilliams X, formerly Twitter

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August 13, 2015 

Kenya N. Rahmaan

As the country continues to recover from the Great Recession, businesses and state
and local governments are more interested than ever in cutting costs while increasing
revenues.  An interesting way in which this is being accomplished is by privatizing
local and some state child support functions and agencies.  Since the 1990s (many
could argue much earlier), the federal government has discussed the privatization
of some child support departments, with collections being at the top of the list.
According to the United States General Accounting Office or GAO (1997), states most
commonly contract with the private sector for the collection of past-due support,
especially those considered hard to collect.

Private collection agencies generate huge profits acting as debt collectors for 
government-owed child support agencies.  In fiscal years 1994 and 1995, contractors
in nine states collected nearly $60 million and were paid about $6 million (GAO,
1997).   With little to no regard for the barriers parents may face, which make 
child support hard to collect, the government is hiring for-profit businesses.  
These for-profit companies are contracted to work alongside and, in some cases, 
in place of public collectors in charge of hounding parents for money.

The private agencies must meet certain criteria legislated by the federal government
to pursue collections.  Several requirements must be met before an agency is approved
to collect child support debt.  The agency must be licensed and bonded, and they
must adhere to fee limitations when charging the hiring parent.  More criteria must
be followed but the strict screening process does little to curb the aggressive 
collection tactics usually reserved for government agencies.

Private collection agencies, such as SupportKids, specify that communication is 
the key to collecting money from non-guardians.  The company explains that the most
effective method is often direct negotiations with the non-custodial parent (SupportKids).
Although this approach seems a bit more civil than the usual government collection
methods, SupportKids, along with many other private agencies, uses much harsher 
tactics when pursuing payments.  According to the SupportKids webpage, collection
tools and techniques available to their Enforcement Specialists include garnishing
wages or placing liens on property or assets.

Although not free to issue arrest warrants in child support delinquency cases, private
collection agencies may soon be afforded that option.  The metaphoric child support
privatization ping-pong ball has government officials fighting back and forth as
they decide which avenue best suits the budget when enforcing child support guidelines.
Several states are taking bigger steps into the privatization world expanding the
role of the outsourced functions from just that of collections.  In Davidson County,
Tennessee, the privatization of child support enforcement went into full effect 
in 2013 while receiving little attention from the tens of thousands of clients.

Although two private agencies had controlled many functions of the Davidson County
Child Support Agency, a new company was selected to finalize the act of complete
privatization.  According to John Lasker of the NashvilleScene (2013), Mississippi-
based YoungWilliams won a $4 million-a-year, five-year-performance-based contract.
There are no performance-based statistics available to confirm the success of the
privatization of all child support duties, but many public employees were not pleased
with the transfer of control.  A court magistrate was not feeling confident about
the new company stating concerns about underperformance and failing to keep the 
docket loaded with cases, (Lasker, 2013).

Another concern along with keeping the court full of complainants should be the 
transfer of authority to a non-governmental agency when dealing with court-ordered
child support.  Recently, county child support agents in some states have been granted
the authority to suspend licenses and order arrest warrants for delinquent parents.
These privileges, previously handled by legal experts, were handed down to civil
servants with no judicial authority to order such punishments.  The employers seemed
to be protected because they were government debt collectors pursuing the payment
of government debt.  By privatizing these particular job functions, for-profit agencies
may be given the same powers to order jail and prison sentences.  It is already 
an overreach that private companies are permitted to attach bank accounts and garnish
wages.

There may soon be no distinction between private and public debt collectors.  Punishments
will be the same with no protections provided for the everyday citizen.  Kansas 
has also privatized its child support agencies even though there were accusations
of contracts being awarded based on questionable selection methods.  Despite the
backlash, YoungWilliams was awarded yet another contract and was placed in control
of the child support agencies and operations.

According to Andy Marso of The Topeka Capital-Journal (2013), YoungWilliams’ CEO,
Robert Wells, and his wife both gave a maximum of $2,000 in donations to Governor
Sam Brownback’s campaign in the 2010 primary cycle.  Although the allegations were
denied, some Kansas public employees were ousted from their positions at the child
support enforcement agencies.  Kansas displaced some 187 Department of Child and
Family (DCF) employees who worked out of state offices (Marso, 2013). On the other
hand, YoungWilliams profited greatly after being awarded the contract.

Not only did the company gain control of over 20 districts, but the money gained
was quite significant at a total bid of $48.2 million over five years (Marso, 2013).
Again, there has been no empirical evidence that the children of Kansas benefited
substantially after the privatization of these agencies.   There is, however, plenty
of evidence that shows that YoungWilliams is not being forced to live in poverty.
With both contracts, the company stands to earn $68.2 million thanks to low-income
children and the state and federal governments.

The company Maximus, Inc. is, and has been, profiting from the privatization of 
child support function for many years.  This company, at one time, held the child
support contract for Davidson County but lost it to Policy Studies, Inc. or PCI.
In 2013, Maximus acquired PCI and immediately began projecting a great increase 
in profits. As explained by the company’s webpage the termination with PSI resulted
in a one-time, non-cash benefits revenue of $16.0 million and to gross an operating
profit of $10.9 million. There is no mention of how the acquisition will benefit
the children or families of these counties and states.

There are clear recordings of just how profitable the company has been in the past
operating as a private child support collection agency.  According to Lasker (2013),
Maximus is a publicly traded corporation specializing in running government services
and reported $1 billion in revenues in 2012.  Unfortunately, the company does not
provide information relating to how many children have been raised out of poverty
because of its services or how the company helped combat homelessness by collecting
child support money.  It is obvious, however, by the company’s admission that revenues
increased 23.6% to $464.4 million in the 2013 fiscal year  (Maximus, Inc., 2013).
The child support system may have been implemented with the best intentions, but
statistically, the mission has failed too many people.

That mission allegedly consists of collecting money from the non-guardian and ensuring
that the best interest of children is not only met but exceeded in the process. 
Privatization will not only hinder the supposed tasks of the agencies, but the children
are no better after outsourcing than they were before the transfer of duties.  Certain
goals of the El Paso Springs, Colorado Child Support Enforcement Agency, while operating
under YoungWillians, have not been met since the outsourcing began.  According to
J. Adrian Stanley of the Colorado Springs Independent (2014), only 61.1% of the 
child support owed is paid, and only 65.9% of parents who are behind on payments
pay some of the debt.  The target goals are 64.3 percent and 74.1 percent, respectively.

 Source: Shelby County, Tennessee

There should be a strong argument about the failure of these private companies to
meet and or exceed the goals established by the federal government before the reins
are handed to companies such as Maximus, Inc., and YoungWillians.  As the Country
moves forward in the recovery from the Great Recession, it is not conducive to the
lives of people that were most affected to depend on any privatized social programs.
The enforcement tools used for collecting child support are unconstitutional when
the government uses them as punishments against parents.  In the hands of private
collection agencies, along with the legality of the practices are moral and ethical
issues. Certain laws are in place to protect citizens from harassment by debt collectors,
but when government debt is handed over to private companies, those same protections
are automatically in jeopardy.

Parents who are unable to afford to pay child support debt because of the extraordinary
fees and interest should not be hounded by non-government agents.  Powers granted
to the government, such as seizing property and filing for arrest warrants, should
not be available to a company that generates revenues from harassing as many people
as possible.  There needs to be reform to the child support system, and the privatization
of any operations should be terminated. These companies do not care about the best
interests of children.  Their only interest, as with any other for-profit business
entity, is generating revenue, pleasing stockholders, and increasing profits.

References:

Lasker, J. (2013, June 27). A new firm is taking over Davidson County’s privatized
child support enforcement — and not a moment too soon | Cover Story | Nashville 
Scene. Retrieved from http://www.nashvillescene.com/nashville/a-new-firm-is-taking-
over-davidson-countys-privatized-child-support-enforcement-and-not-a-moment-too-
soon/Content?oid=3445605

Marso, A. (2013, June 19). Brownback donor’s company gets child support contract.
Retrieved from m.cjonline.com/news/2013-06-19/brownback-donors-company-gets-child-
support-contract#gsc.tab=0

Maximus, Inc. (2013, September 30). Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange act of 1934. Retrieved from http://investor.maximus.com/
sites/maximus.investorhq.businesswire.com/files/report/file/MAXIMUS_AnnualReport_FY2013.
pdf

Stanley, J. A. (n.d.). More support, less government | Local News | Colorado Springs
Independent. Retrieved from http://www.csindy.com/coloradosprings/the-county-is-
collecting-a-lot-of-child-support-using-a-private-company/Content?oid=2904171

SupportKids, Inc. (n.d.). Supportkids – How We Work. Retrieved from https://www.
supportkids.com/how-we-work/

United States General Accounting Office. (1996, October). Child Support Enforcement:
States’ Experience with Private Agencies’ Collection of Support Payments. Retrieved
from http://www.gpo.gov/fdsys/pkg/GAOREPORTS-HEHS-97-11/html/GAOREPORTS-HEHS-97-
11.htm