“How can we help? What can we do?” Those were the first questions from many who work in the child support program as COVID-19 began to affect life in Michigan. We knew, at the beginning of all of this, that the impact to families would be great. Many immediately wanted to help families affected by COVID-19 and shutdowns, showing the passion and empathy they bring to their work (and the reason they do this work).
Since the onset of the pandemic, we continue to learn about how it is affecting child support program families. In Michigan, over 2 million people have filed new claims for unemployment benefits from the Unemployment Insurance Agency (UIA) since the first shutdown in early March. [1] More than 258,000 Michigan child support parties have filed claims. While the peak occurred in late March to early April, we are still seeing over 3,500 new claims from Michigan child support parties filed each week (as of the week ending July 25). For comparison, there were roughly 5,000 new claims per week from everyone in the state at this point last year.
While many in the program and public assumed that the pandemic and shutdowns most affected child support payers (“NCPs” in charts), the data shows a relatively equal impact to payers and recipients of support with a few differences in timing. The first chart (above) shows that the pandemic and closures first affected support recipients (“CPs”), leading to a slightly higher UIA application rate. This may be because they were the first to leave work to care for a child at home when daycare centers and schools closed. However, at the peak of the pandemic, the closures and job losses affected support payers at a slightly higher rate.
Of those approvals, 102,000 are from support recipients and almost 100,000 are from support payers.
Of the approved claims from child support parties, 103,000 have received the full state benefit award of $362 per week. The following chart shows that, of approved claims, 61 percent of support payers received the full state amount; whereas only 41 percent of support recipients received the full state amount. This may be because support payers tend to have higher incomes, thereby qualifying for a higher state unemployment benefit. However, there could certainly be other factors at play related to gender, race, location, or other demographic characteristics.
Proportionately, the types of child support parties receiving benefits were about equal between support recipients receiving less than the full UIA award amount and payers receiving the full amount.
Another key factor with unemployment is that the state and federal governments, recognizing the struggles many were facing, relaxed standards and increased benefit periods. This included the new federally approved Pandemic Unemployment Assistance, which helps provide relief to many who traditionally were not eligible for unemployment assistance (including self-employed and gig workers). The CARES Act also included a supplemental weekly federal contribution of $600 to everyone who qualified for state unemployment assistance. This brings Michigan’s benefit amount up to a maximum of $962 per week, for a possible monthly total of $4,184 (using an average of 4.35 weeks per month, in accordance with the Michigan Child Support Formula). However, the additional federal benefit of $600 per week ended as of July 26 in Michigan.
Once the reality of the pandemic sunk in, many child support workers asked, “How do we adjust child support in these cases?” Before starting child support reviews across the board, it is important to better understand what is happening to parents’ incomes. In almost 60,000 cases, we had access to information on the prior income used in support calculations for the approved UIA benefits recipient. Of those, 17 percent (10,313) were receiving a state benefit amount greater than their last calculation income. Nineteen percent of support recipients received benefits that were greater than the income used in the prior calculation compared to 15 percent of support payers. This percentage difference could indicate the greater impact the $600 per week federal supplement had on support recipients, who tend to have lower incomes.
When including the $600 weekly federal amount (recently ended as of July 26), 90 percent of child support parties who were approved for UIA benefits were receiving more than their previously used income to set the prior child support order, indicating that a support review would not have been beneficial to many parents who were out of work during the pandemic.
What can be done?
Many in the child support program wanted to find and provide equitable relief to those who pay and receive support. While many initially thought support payers were the majority impacted by the pandemic, in fact, we have seen a roughly equal impact. We have also seen how, particularly with the federal $600 weekly benefit, unemployment has actually raised income in the overwhelming majority of cases. This has led many to question whether we should be reviewing support obligations at all. The answer to that is not easy.
This pandemic is, hopefully, a temporary period – albeit one with drastic impacts. During this time, it is crucial to ensure support obligations are set appropriately. The often competing perspectives are: (1) looking at the parents’ ability to provide financial support and (2) providing for the likely increased needs of the child. Both are important perspectives and finding the proper balance can be difficult.
One key factor to remember when considering the support obligation and potential changes is parenting time. It is important to recognize, and accurately record, the actual exercised overnights each parent has with the child. This will ensure the most accurate and appropriate support order for the family and will help the support payer retain enough income in his or her household to “fund” time with the child.
Where appropriate, offices can use temporary child support orders or multiple support grids for different time periods or conditions to provide the most efficient and effective relief to the parties. See the Friend of the Court Bureau FAQ 2020-01 and checklist for more information and guidance.
Offices may also want to proactively use a newly created unemployment report (QN-116 in the Data Warehouse) to help identify cases that may need attention. Those applying for and receiving unemployment benefits may need support modified. However, those being denied unemployment benefits may need different assistance and connection to services.
A key goal of the child support program is finding the balance between equitable support amounts and providing for the needs of the child. Many families are experiencing extreme stress and challenges, including many families that rely on consistent child support. Working member match issues, ensuring income withholding orders are issued and set appropriately, and setting appropriate orders to reflect changing family situations are all vitally important steps the office can take to better serve families.
During this largely unprecedented time, we can and will find ways to provide relief and necessary support to families we serve.
Please contact me at gehmp@courts.mi.gov with any questions.
[1] The statistics and analysis in this article are based on Michigan child support program and UIA data queried from the State of Michigan Data Warehouse. The data analyzed include all Michigan child support program open IV-D cases and only traditional state unemployment benefits. Pandemic Unemployment Assistance (for self-employed, gig workers, and those between jobs) and the Workshare unemployment benefits are not part of this data analysis.
