Contra Costa County is in the process of clearing some of its old cases, and parents with an overdue child support balance may be in for a shock. The county has reportedly changed its computer systems four times in the past decade, and in the course of doing so failed to charge interest to some parents in arrears. Now it is adding interest to overdue balances on its books, including ones where previous audits indicated that no interest was due.
According to the Contra Costa Times, a glitch in the county's original software, installed in 1983, lacked the ability to calculate interest. An upgrade in 1998 included an interest-compounding function, but staffers at the Child Support Services Department were legally required to individually audit each case before applying interest charges. With a backlog at the time of over 70,000 cases, the county could not keep up with such audits. A statewide computer system to track child support payments took over individual county systems in 2008, but cases from before the 1998 upgrade in Contra Costa County still may not have interest applied to unpaid amounts. The Department estimates that about 1,000 cases remain from that period, and that it will need six months to audit them all.
A serious problem with many of these cases is that it will unexpectedly hit parents with an enormous bill that they almost certainly cannot pay. Although California law clearly permits the county to charge interest on overdue payments, the fact remains that substantial time had gone by with no notice to the obligor parents. The Times quotes one parent, now on Social Security disability, whose total overdue balance went overnight from $1,842 to $55,806 once interest was applied. The man states that the missed payments occurred between 1991, when he could no longer work due to health issues, and 1999, when the state began taking payments from his disability checks. The state never notified him of accrued interest on his missed payments during that time, although some bills noted that the balance "may not include accrued interest." His two children, the nominal beneficiaries of his payments, are now in their 30's, and his ex-wife continues to collect the payments.
The other side of the argument, of course, is that the obligee parent presumably had custody of the children and paid for their care the whole time the other parent's debt accrued. From the standpoint of that parent and the children, generally speaking, they simply were not receiving money to which they had both a need and a legal right. Just about any other debt includes interest penalties when it goes unpaid, so a lack of notice from the state may not be such a great excuse.