Child Support Interest Charges Dropped in 2021
Learn about the changes to child support laws in Illinois. Call Angela Larimer at 773-370-0600 if you need to talk to a child support lawyer in Chicago.
Illinois no longer automatically charges interest on past-due child support payments collected by the Department of Healthcare and Family Services (DHFS) unless there is an order from a court. Parents may also seek the court's assistance in eliminating outstanding interest charges previously calculated by the State. The policy applies to those enrolled in the Title IV-D program, a program in which the federal government administers child support payments jointly with the states. DHFS administers the program in Illinois. For more information on the changes, contact Chicago child support lawyer Angela Larimer at 773-370-0600.
The New Rule
Before 2021, Illinois charged interest automatically on past-due child support payments. According to DHFS, the charges fell unduly on people of color and low-income families. People of color accounted for 41% of IV-D Illinois cases and owed 45% of the total outstanding accrued interest. White individuals composed of 32% of Title IV-D cases in the state and owed just 31% of the accrued interest.
DHFS also said that research showed that for parents who were unable to pay their child support obligations, the resulting consequences, such as the revocation or suspension of driver’s licenses, would make catching up on the obligations more challenging. The agency added that enforcing interest policies is time-consuming, requires highly trained staff, and the costs involved do not qualify for federal matching payments.
This automatic penalty was repealed in a bill that was signed into law by Governor J.B. Pritzker in August of 2020. The State Legislature gave the DHFS authority to determine, by administrative rules, if and how it would enforce and charge interest penalties. Enforcement of penalties is at the option of the agency rather than being mandatory. The new rules became effective on January 1, 2021, which in turn zeroed out over $2.7 billion in child support interest payments.
Parents can still collect interest penalties on previous late payments. They can request the penalties within a year of their youngest child being emancipated and after full payment of the principal balance of child support obligations. Parents who decide to pursue child support on their own or are represented by a child support lawyer can seek that a court assesses child support arrangements and enforces interest charges.
Interest payments made are not treated the same as child support payments. The interest payments count toward the receiving parent’s taxable income.