Licence Suspension and Denial: Overview of a New Mechanism for Child Support Enforcement

3.5 Temporary Licences

Several jurisdictions allow the issuance of a temporary driver's or occupational licence, so that a payment plan may be worked out with the child support agency or the payor can demonstrate good faith in his or her attempts to pay the arrears. These provisions provide a hiatus during which negotiations between the payor and the CSA can be completed.

In California, the probationary occupational licence is for 150 days. In Kansas, the licensing body must issue a six-month temporary licence after being notified of the contempt of court order against the licensee. The temporary licence cannot be extended "except that the licensing body may extend the licence up to 30 days to prevent extreme hardship." After this period, the licensee must obtain a release from the court in order to be reissued with a licence and resume practice in the state (Kansas Statutes, 74-47). In Virginia, although there is no temporary licence, the licence holder is given 90 days to surrender the licence. Temporary licence provisions are found in a minority of states.

3.6 Matching Payors to Licence Holders

The United States federal government, as part of the PRWORA initiative, provided funding to state CSAs to improve their information systems. This influx of dollars is to continue until 2001. The system information in this section may be already or will soon be outdated, assuming that states have used financial assistance to improve their ability to communicate electronically with state motor vehicle agencies (MVAs) and other licensing bodies.

Social security numbers are used to match payors with the databases maintained by state MVAs. Although the PRWORA mandates the collection of SSNs on all applications for drivers' and occupational licences, this requirement will take time to be implemented, since existing licences may remain in effect for several years. That is, until all holders of licences and permits are required to renew their licences, complete matching by electronic means is not possible. Notwithstanding this problem, which will be resolved in time, the electronic matching of delinquent payors is more likely to occur for drivers' licences than for occupational and professional licences. Most, if not all, states have automated licensing systems for driving permits. Typically, the child support agency sends a list of delinquent payors who meet the criteria for suspension or denial to the motor vehicle agency, which then suspends the licence. The following are two examples of automated processing for drivers' licences.

  • In Massachusetts, the CSA conducts a monthly tape match with the MVA to identify payors due to renew their licences and who owe at least $1,000 and have not made a payment in the previous eight weeks. The MVA sends notices to payors every month asking them to appear at a pre-scheduled administrative hearing to determine whether the MVA should prohibit renewal of their licences (U.S. DHHS, OCSE, 1996).

  • Automated licence suspension records allow Maine to target large numbers of licence holders with overdue support payments. The CSA automated system has a licence suspension field for each case file and a separate computer screen to record milestones, such as the date that the case was targeted and the date of the last payment. Reports from the licence suspension field include: the number of eligible cases; the amount overdue; the number of targeted cases (i.e. payors threatened with licence suspension); the amount overdue for targeted cases; the number of paying cases; and the amount collected from paying cases (U.S. DHHS, OIG, 1997, p. 8).

Suspending occupational licences electronically is often more problematic because of the frequent incompatibility of licensing board and CSA computer systems. As well, manual systems may still be used in some licensing agencies.

Most states have mixed automated and manual systems for identifying payors with occupational licences. The Connecticut CSA has on-line and hard copy access to records of professional, occupational and trade licenses for use in identifying delinquent payors. In California, some automatic matching with the State Licence Match System affords access to the files of licensing boards. "The 12 licensing boards that participate in licence suspension periodically target eligible cases based on information compiled monthly from the state's 58 counties" (U.S. DHHS, OIG 1997, p. 10).

States differ in terms of the mechanics of the matching process. In some situations, the child support agency gives licensing agencies the list of delinquent payors, and asks for information on licences held (South Dakota). In other cases, the licensing agency provides the CSA with a list of all licensed persons, and the CSA is then responsible for matching names and SSNs (if available) to its list of delinquents (Rhode Island, South Carolina).

3.7 Reinstatement of the Licence

In states that have a judicial process, licences may be reinstated only after the court is informed that the payor has entered into a plan to repay the child support arrears or has paid the outstanding amount in full. In most states, the licensing agency is obligated to reinstate the licence immediately. Similarly, the child support agency in administrative process states must inform the licensing body that the payor has paid or has agreed to pay by means of a payment plan, and the licence is to be reinstated. In Maryland, for example, before the suspension is withdrawn, the payor must pay the arrears in full, pay the ordered amount for six consecutive months, or the court must issue an order to withdraw the suspension. While this might seem severe, Maryland allows restricted drivers' licences to be issued (i.e. the payor may be able to drive legally during the six months of "good faith" payments).

The licensing authority often charges a fee for the reinstatement of the licence.

3.8 Monitoring and Evaluation: Child Support Payments Received

Publications of the United States Office of Child Support Enforcement emphasize that states have found that the risk of losing a licence is an effective means of bringing a payor into compliance (e.g. U.S. DHHS, OCSE, 1998). The objective of licence suspension programs is to increase voluntary compliance with the payment of child support, not to suspend licences and permits. For example, the procedures manual for occupational suspensions in Oregon (Oregon Department of Justice, 1997) states that:

The goal of initiating licence suspension is to enter into a payment agreement... and NOT to actually have to suspend the licence. In other words, a payor will be given every opportunity to enter into a written payment agreement, and every effort must be made to avoid actually having to suspend the licence.

A Texas official made a similar point: "If the agency eventually suspends the licence, the remedy has failed in that case" (Adamson, 1999). A Colorado report stated that "ideally, the suspension of the driver's licence should serve as a productive threat" (Pearson et al., 1998). The number of suspensions is not, therefore, the best indicator of program success. Rather, success is determined by the amount of payments received after the delinquent payor has received notification of possible suspension.

Some information sources indicate that the suspension of occupational licences is not always a high priority in state child support agencies. The South Dakota procedures manual, for example, makes very little mention of professional licences, although there are detailed instructions to staff for dealing with driving permits. In Rhode Island, as of January 1999, no targeting of occupational licences has been done even though the licence suspension program has operated for drivers' licences since March 1997 (Rhode Island Division of Taxation, 1999). The state is currently testing the suspension of professional licences. It is apparent that the more cumbersome, expensive and uncertain[22] judicial process found in roughly one third of the states might explain the relative lack of use of the authority to suspend occupational licences.

The amount of child support recouped by licence suspension warnings is believed to be large. In Florida, in the first 18 months of the program in 1994 and 1995, 5,547 driving and occupational licences were suspended. While the number of targeted cases was not specified, the amount of back child support that was collected in the 18 months was $1.37 million. The publicity for the program noted that "most of the cases were resolved by a payment agreement rather than a suspension of the licence" (Florida Department of Revenue, 1995). In 1999, the Florida Department of Revenue reported that more than 28,500 drivers' licences had been suspended in 1998; no figures on amounts received as a result of the program were provided (Florida Department of Revenue, 1999).

Maine is the "success story" often cited in public relations material. For example, an Idaho press release used the state as an exemplar of the program: "Maine has collected nearly $30 million in back child support payments since 1993, while suspending only 111 drivers' licences and 13 professional licences" (Idaho Department of Health and Welfare, 1996). According to another source, Maine administratively collected about $10 million in overdue child support from 53 percent of the 17,000 targeted cases from July 1993 to March 1994; from July 1993 to March 1996, the state received almost $44 million, yet suspended only 113 licences. The state could not identify the amounts received as a result of threatening to (or actually) suspending occupational licences. An examination of suspended licences found that it took 97 days to suspend 101 drivers' licences, and 116 days to suspend 12 occupational and professional licences, indicating that the administrative process is, indeed, speedy (U.S. DHHS, OIG, 1997, pp. 7-8).

A more recent report from Maine states that between August 1993 and November 1998 more than 18,000 of the 23,000 people targeted paid $97 million. Licence issuing authorities had been notified to revoke 1,700 drivers' licences, and 287 business and professional licences during this period. The report stated that 55 percent of individuals subject to licence revocation "have come into compliance with their child support responsibility" (Maine Department of Human Services, 1998).

California, after targeting 35,000 eligible cases in 1992 to 1995, reported that about one half either paid the overdue child support or agreed to a payment plan. These cases had licences from the 12 boards that participate in the State Licence Match System. However, the state's management information system did not contain information on the amount of payments received as a result of the threat of occupational licence suspension.

In Oregon, 777 delinquent payors with occupational and professional licences were administratively targeted, and the child support agency collected $309,000 from 328 of them between 1994 and 1996. The state took an average of 120 days to suspend 128 occupational and professional licences (U.S. DHHS, OIG, 1997, p. 11).

Myers (1999) cites the following increases in collections because of "aggressive licence restriction programs."

  • South Dakota officials negotiated about 4,000 agreements but suspended only seven licences during the first two years of its program.
  • In Maryland, 58,000 letters were sent to payors and collected more than $40 million in response.
  • Texas collected more than $12.6 million in the first six months of its program.
  • A cost-benefit analysis conducted in North Dakota in 1996 attributed a seven percent increase in collections directly to the licence restriction law.

The report by the Office of the Inspector General makes the point that at the time of its audit, only two of the eight states reviewed had information systems that could identify the child support payments made as a result of licence suspension actions.[23] The same report made the following observations about the practices that increased the effectiveness of the suspension programs reviewed:

  • targeting eligible cases on a periodic basis instead of when prompted by the custodial parent, when a licence is up for renewal, or based solely on caseworker discretion;
  • using specific fields or screens for tracking suspension cases and activity;
  • using automated procedures to periodically follow up on targeted cases; and
  • using licence suspension when deemed necessary, as opposed to using it as a last resort.

The only rigorous evaluation of licence suspension that could be located concerned drivers' licences in Colorado. This evaluation used random assignment of three groups of non-complying payors:

  • group 1, which received neither credit bureau reporting nor drivers' licence suspension notifications (1,700 cases);
  • group 2, which received credit bureau treatment only (440); and
  • group 3, which received both credit bureau and suspension treatments (570).

Most payors in group 3 (about 80 percent) were in the MVA system, that is, they had once been issued a licence. Only about 38 percent had a valid licence immediately before the research; 39 percent had been suspended or revoked; 23 percent had an expired licence. These proportions tend to confirm what commentators have suspected: a substantial percentage of delinquent payors lack a valid driver's licence.

When the effect of the notification of licence suspension on payment of child support was examined, the research found that when group 3 was compared to groups 1 and 2 (no notification or notification of credit bureau reporting only), the payment of arrears was highest among group 3, i.e., cases receiving notification of suspension of their drivers' licences and credit bureau reporting. The researchers estimated that increased collections statewide could amount to $2.4 million annually if all delinquent payors were targeted with the threat of losing their drivers' licences (see Pearson et al., 1998).

In summary, a number of states and the United States Office of Child Support Enforcement have emphasized the large amounts of payments received through their licence suspension programs. Despite the general enthusiasm for this enforcement method, we lack quantitative data on the number and percentage of licencees who are in the "can pay" but "won't pay" group, and the extent to which they would be impelled to make payment arrangements if threatened with the loss of their drivers' or occupational licences. Furthermore, we do not know the extent to which the threat of licence suspension/denial influences overall compliance levels for individuals who are not in default and are financially able to make their regular payments.

3.9 Communications and Public Legal Education

Little evidence was found of public relations or consultative activity with interest groups before the passage of state legislation. This is not to say that negotiations behind the scenes did not occur during the development of state legislation, such as between state legislators and lobbyists for the occupational and other groups being targeted, for example.

Documentation was found on fathers' rights objections to licence restriction laws. For example, in Missouri, a fathers' rights group testified against the bill designed to satisfy the federal mandates in the PRWORA. The group argued that revoking drivers' licences would adversely affect children because parents with arrears would not be able to visit their children or get to work; the amount that triggered suspension was too low ($2,000 in Missouri) and should be raised; and, the bill was unfairly punitive because it did not provide for excusing an arrearage when the parent is disabled or unable to find work (Missouri House Bill 411, 1997).

Multimedia campaigns are the typical means by which the public is informed of licence restrictions. Billboards and public service announcements on radio and television are among the main methods mentioned in the documentation available.

"Warning" or "courtesy" (depending on the state) letters mailed to persons in arrears were the methods by which states informed payors about the licence restriction laws. State enforcement agencies also frequently use the Internet to inform child support payors of their licence restriction/denial legislation and the consequences.

An example of communications and public education activity can be found in Maryland, when the state introduced drivers' licence suspensions in October 1996. The campaign began well before the introduction of the program with a joint press release by the child support and the motor vehicle agencies, followed by another press release from the governor's office. Notices were mailed to all delinquent payors in the state informing them of the date of the law and suggesting that they pay their arrears. Multimedia advertising included brochures, billboards, posters, transit advertising, and radio and television ads. When the target date for the first licence suspensions grew near, full-page ads were taken out in newspapers and posters were placed in all the stores of a major food chain (Clark and Cullen, 1997).

In the United States, slogans and messages found in news releases tend to focus on drivers' licences.

  • The theme of the Maryland advertising was "if you don't want to lose your drivers' licence, pay your child support."

  • The August 1995 press release for New York State cited the governor saying "My message to 'dead beat' parents is simple: if you fail to make your child support payments you risk losing your driver's licence."

  • In Florida as well, the emphasis was on driving permits: "Pay up or walk!" Like New York State, news releases mentioned "deadbeats." In Florida's publicity, "deadbeats who repeatedly thumb their nose at the system" were cited as the targets. This state, like others, emphasized that "the goal is to collect more dollars for the children, not deny people the opportunity to drive or work" (Florida Department of Revenue, 1995).

  • In Idaho, legislation specified that the court may suspend licences of parents who violate visitation orders as well as those who are in arrears. According to the initial press release, the law had two messages: "It is not OK to withhold support because you haven't seen your kids. It also is not acceptable to deny visitation because support has not been paid."

The publicity about licence restriction programs frequently contains anecdotes that illustrate the success of the program, including the names, amounts owing and payments made by the payor after being informed of the possibility of suspension.

Publicity has been identified as critical to encouraging delinquent payors to arrange payment plans. A Rhode Island official noted that the state may not have sufficiently publicized the suspension program before its implementation. If more publicity had been employed, "we may have enticed more payors to come forward to settle their accounts before the suspension process was started" (Rhode Island Division of Taxation, 1999). It is not known whether this observation is accurate, however. Does more intensive publicity increase the likelihood of voluntary compliance? All (or almost all) states require that delinquent payors must be informed by mail of the possibility of suspension and be given an opportunity to make payment arrangements. If such warnings are not effective, is it likely that public education efforts will have an independent effect on compliance? Perhaps the publicity helps to convince the delinquent payor to comply because he or she is then aware that the threat is a serious one.

3.10 Benefits and Drawbacks of Licence Restriction Programs in the United States

3.10.1 Benefits

Substantial amounts of child support payments are attributed to the introduction of these enforcement methods, as described in Section 3.8. In addition, a sizeable percentage of the cases targeted are self-employed or working in the underground economy. These payors are not reachable by means such as "new hire" reporting and income withholding. In Maine, a computer match between the child support agency and labour agency records found that 71 percent of cases targeted for suspension had no income reported to the Department of Economic Security; some of this group may be self-employed. In Oregon, the Office of the Inspector General found that 29 percent of a sample of delinquent occupational and professional licencees were self-employed (see U.S. DHHS, OIG, 1997.)

Another advantage is that, if automated and administrative, the suspension of drivers' licences may be a relatively low-cost enforcement action. However, in the absence of cost-benefit analyses, we hesitate to conclude with certainty that licence suspensions are a cost-effective addition to the repertoire of actions that can be taken by support enforcement agencies.

3.10.2 Drawbacks and Operational Problems

One of the most important problems encountered is the response from some delinquent payors threatened with licence suspension: they refuse to make payment arrangements and continue to drive or to work. Many suspended drivers drive with relative impunity and one would imagine that this would apply to occupations as well. While some professionals may find that licence suspension definitely limits their work, this almost certainly is not the case for other occupations. How often are trade licences inspected?

A different issue was identified in New Jersey, which has encountered problems in identifying cases that qualify for suspensions, "as a large number of child support payors do not possess professional or drivers' licences" (New Jersey Administrative Office of the Courts, 1996).

Some legislators have expressed concern about the constitutionality of licence suspensions. However, in September 1997, the Alaska Supreme Court upheld the provisions to revoke Alaska drivers' licences for failure to pay child support. Although this decision is not binding elsewhere, it is encouraging to state legislators and child support agencies who have been concerned about possible legal challenges to licence suspension laws (National Conference of State Legislatures, 1998; see also Usher, 1996).

When compared to judicial processing, the administrative suspension of drivers' and occupational licences is faster, requires fewer resources of the child support agency, and may increase collections because large numbers of cases can be targeted at the same time. On the other hand, the payor who is in temporary financial difficulties may be unfairly deprived of a licence to drive or to work. Even if there are appeal provisions in the legislation that take "hardship" into account, the indigent payor may lack the resources to initiate an appeal.

Perhaps partly for this reason, anecdotal reports mention that the courts are sometimes reluctant to suspend licences[24] (Myers, 1999). Indeed, the law in Louisiana was amended in 1999 to make it more difficult for the courts to refuse to suspend a licence. The amended legislation required courts to either suspend a licence or provide a written reason why the court finds "good cause" not to do so. At the request of judges, the law also provided the courts with a second option with regard to drivers' licence suspensions. The court can suspend the licence during specified times of the day, thereby permitting the payor to maintain his or her employment (Louisiana Department of Social Services, 1999).

Therefore, in some circumstances the licence suspension may be too harsh and incompatible with achieving an objective of many child support agencies, i.e. to increase voluntary compliance in paying child support.

Particularly harsh are automated administrative systems that target delinquent payors regardless of their circumstances. In Colorado, the complete automation of driving suspensions eliminated all discretionary decisions. The system automatically sends the notices, sets review dates, and notifies the MVA of persons who have not complied or responded to the warning letter. State officials reported that:

the automated system can work against payors genuinely trying to comply... payors may be making payments regularly, but their cases have been flagged as delinquent... because of late payments. Such flagging... sets in motion a process of licence suspension that can cause havoc for an obligor who is mostly in compliance. (Pearson et al., 1998)

Complete automation is probably less expensive than systems requiring human intervention, but automated systems do not discriminate between the "can't pay" and the "won't pay" groups of delinquent child support obligors. Questions of fairness clearly arise if there is automatic targeting of all delinquent payors without consideration of their circumstances.

A number of recreational permits are granted for a limited time, e.g. annually. Depending on the time of year that the payor becomes delinquent, many months may pass before the next fishing or hunting season, consequently suspension of these licences may have little practical effect. Secondly, states often lack automated licensing systems for these permits.

Finally, there is always multiple agency involvement in licence restriction programs. Agreements must be established with each agency or licensing board, many of which require payment for their participation in the program. The establishment of agreements and reimbursement schedules require time and negotiation.

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