The Commonwealth State of Virginia has been reported from multiple sources to be suing the Texas-based private child-support collection agency known as SupportKids, Inc. In a political atmosphere where budgets are tight, some states are struggling to maintain their monopolies where they can instead of sharing markets with private firms, saving taxpayers billions nationwide.
The state is suing Supportkids Inc., a private child support collection
company based in Texas, to prevent the company from interfering with
the enforcement of child support in the Commonwealth.
Governor Tim Kaine and State Attorney General Bob McDonnell
announced the lawsuit today (Friday). “Any actions that impede the
Commonwealth’s efforts to lawfully and fairly collect child support
must be addressed,” Governor Kaine said in a news release.1
The various state child support agencies are funded through a federal grant and incentive program under Title IV-D of the Social Security Act2. For every three dollars spent by a local state agency for actions like paternity establishment, child support enforcement, and creation of child support orders, the local agency only has to contribute $1.00 while the Federal government pays the State and Local agencies $2.00. This program has been referred to as a "Free For All Welfare Program" where the overwhelming majority of the program are middle and upper-class families fighting over money and the more actions that the local agency takes the more money they receive from the Federal Government.
When private firms refuse to work with the State and Local agencies, despite an individual parent contracting with a private collection firm, there actually exists the potential to cost the State and Local agencies federal funds. With a loss of federal funds, State and Local agencies look for additional ways to bolster membership by requiring nearly every case involving children and spousal support to go through their local Title IV-D offices despite not being means tested for need like other government welfare programs. Essentially the programs reward for a negative result instead of positive results of actually solving a root societal problem.
Families typically
turn to a private, for-profit child-support collection agency when the state
has not been successful in collecting payments.
According to the
Supportkids' Web site, the company has collected more than $360 million since
1991 on behalf of clients, making it the largest private child-support
collection company in the country.
In the news release
about the lawsuit, Kaine said Virginia's Child Support Enforcement agency
collected more than $608 million last year for 484,000 children who are owed
money. 3
SupportKids, Inc. has claimed to be successful at collections where many State and Local agencies have failed and if a parent contracts with such a collection service they should be allowed to do so instead of requiring a parent to use government and tax payer subsidized programs against their will. Right now the tax payers are paying for the entire expense of child support enforcement and other services at the federal, state, and local level and if participants would rather do business on their own dime instead of the taxpayers dime we should certainly encourage it.
Necessary changes to the national child support program should be implemented to remove the multitude of cases nationwide that do not qualify for current state aid programs and allow parents to conduct business with whatever firm in their judgment will get the desired result. Society cannot force business owners to chose between one or more collection agents, so government shouldn't be able to force parents to work with a government monopoly where there are clear alternatives that do not cost the taxpayer. Child Support orders are regular civil judgments and should be treated accordingly not as a business for our federal, state, and local governments to subsidize bloated bureaucracies.
1. WSLS News, February 8, 2008, http://www.wsls.com/sls/news/state_regional/article/virginia_sues_texas_company_over_child_support_enforcement/5283/
2. Social Security, Welfare, and Child Support Enforcement, February 2006, Lary Holland & Jason Bottomley, http://www.laryholland.com/ssacse
3. The Virginian-Pilot, February 9, 2008, http://hamptonroads.com/2008/02/va-sues-texas-collection-agency-over-child-support-payments