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

5.0 CONCLUSIONS

5.1 Summary

The primary purpose of this report is to provide an overview of the operations of licence restriction programs in the United States, in order to give Canadian policy makers information on the strategies employed in that country. A secondary purpose is to describe the drivers' licence restriction programs currently in operation in Canada.

This method of enforcement began in the United States, where income withholding is the typical method by which support orders are paid. "New hire" programs are now universally available in the United States, providing a means of reaching employed payors. The suspension of occupational and drivers' licences is a method of reaching payors who are self-employed and able to pay child support. Licence restriction programs are targeted towards the "won't pay", not the "can't pay", group of child support payors. Their objective is not to suspend or deny occupational licences, but to increase the payment of overdue child support by means of warnings of suspension. The suspension of drivers' and occupational licences is believed to address this gap in enforcement strategies in the United States.

The federal government in the United States required state programs in 1996, but even before that, about 40 percent of United States jurisdictions had some form of licence denial or suspension program. By late 1999, the large majority of states passed legislation authorizing the suspension of state-issued licences. In most states, drivers' licences and all professional and occupational licences issued by the state are subject to the suspension for non-payment of child support.

Because United States federal legislation gives few guidelines other than that the states must develop restriction programs and collect social security numbers on applications for drivers' and occupational licences, the way in which the programs have been designed and implemented vary enormously across the country. An important difference is the extent to which the courts are involved, i.e., whether a judge has to approve of the licence restriction or whether it can be done administratively. Since the administrative process is more efficient, the Office of Child Support Enforcement in the United States has encouraged states to adopt this approach, and the majority have done so, at least in part. Appeals to state courts are possible in most jurisdictions. Some statutes in states using administrative processing mention that the payor can raise hardship issues at the Appellate stage, but not earlier (e.g. in an administrative hearing).

The amount of arrears that triggers the start of suspension procedures is usually defined in state legislation as the number of months of non-payment. The number of months ranges from one to 12, with about three quarters of the states specifying that three months or less of arrearages can initiate suspension proceedings. Several states specify both the months in arrears and a dollar amount (e.g. the payor is three months in arrears and owes more than $2,000). States with the ability to suspend or restrict licences administratively vary in the extent to which the enforcement action is used. Some use the threat of licence suspension as a last resort, and others use it routinely. In most but not all states, it appears that there is some discretionary decision making by staff of the child support agency before the process is initiated.

Material prepared by the states and the United States Office of Child Support Enforcement present a positive picture of the child support payments received as a result of threats of suspension. However, few states are able to differentiate between payments received from drivers and persons who have received occupational licence suspension warnings. The information available suggests that most states have concentrated on drivers' licence suspensions rather than on occupational licence suspensions. This may be because automated processing is much more likely to be available for drivers' licences than for occupational licences, because occupational licences are more difficult to suspend, or because very few delinquent child support payors possess an occupational licence. With regard to the last point, no data were found in the documentation that estimated the percentage of payors with occupational licences.

Also pertinent to any examination of the impact of this enforcement action is the cost of implementing a licence suspension program. No information on cost-effectiveness was found in the United States material.

In the United States, the main benefit is that licence suspension targets the self-employed and those working in the underground economy, payors who are not trackable through employment records. The main drawback is that some payors do not take the suspension or revocation seriously, and continue to drive and to work. A different problem is that some payors do not hold any valid licences at all.

With regard to consultative activity with certain interest groups, little evidence was found of such activity in the documents available, other than testimony from fathers' rights groups before state legislative committees reviewing the bills. Of course, it is possible that negotiations between state legislators and lobbyists for occupational groups occurred.

Most of the publicity on the suspension laws emphasized the drivers' licence component. It is not known if public education and communications efforts increased compliance among delinquent payors. However, the publicity--which in some states was extensive--undoubtedly assisted in raising the public profile of child support enforcement.

Eight jurisdictions in Canada have drivers' licence suspension or denial programs; five of the eight have the authority to suspend the licence, whereas the remainder can only withhold the licence upon an application for reissuance or renewal. Two of the five jurisdictions that suspend licences permit restricted licences for employment purposes. Monitoring data and anecdotal reports from the jurisdictions with these mechanisms suggest that the threat of licence denial and suspension have been effective in encouraging payment of outstanding amounts owed for child support. In the majority of Canadian jurisdictions, licence suspension and denial are used as a "last resort" enforcement action.

Canadian passports and federally issued occupational licences can be revoked by the federal government upon request of MEPs. The payor must owe $3,000 or three support payments and all other enforcement strategies must have been attempted.

In summary, licence suspension programs, particularly drivers' licence suspension actions, are very attractive to child support agencies in the United States (and to a lesser extent in Canada) at least in part because of the ease with which suspensions can be automatically invoked. However, no thorough evaluations of the effectiveness of suspension and restriction programs are available. Data on the effects of occupational licence suspensions are notably absent from the documentation reviewed for this report. As mentioned earlier, it may be that few child support payors possess such a licence.

5.2 Policy Implications

The following issues should be addressed by Canadian policy and program personnel who are considering licence suspension programs.

  1. What is the target group for this enforcement tool? Is it the "can pay but won't pay" group as in many of the jurisdictions in the United States? Do MEP staff know whether the debtor is in this group? In the United States, licence suspension tends to be a "niche" enforcement action, taken against payors who are self-employed or in the underground economy and who therefore cannot be reached by income/wage withholding.
  2. An allied issue is where does the licence suspension fit into the range of enforcement actions that are to be taken by the Maintenance Enforcement Program? Is licence suspension to be utilized as a last resort? Or should it be utilized automatically in all cases of arrears or at the discretion of the MEP?
  3. What rights of appeal, if any, should be permitted? Should the licence holder be able to claim exigent circumstances or hardship? Should appeals be administrative or judicial?
  4. How much time should the payor be given to pay off the arrears or come to an arrangement satisfactory to the MEP? That is, how many days should there be between the notice of suspension/denial and the decision to suspend or deny? Should two notices be sent as in Saskatchewan?
  5. Should legislation specify the amount of arrears (in months or in an amount or both) or should the MEP have complete discretion as to when to initiate suspension proceedings?
  6. In all United States jurisdictions and in five of the eight Canadian jurisdictions with this legislation, the MEP has the authority to suspend a driver's licence, not just to deny renewal, issuance or reissuance. We do not know with certainty if the threat of denial is as effective as the threat of suspension. One would expect that in jurisdictions where licences are in effect for five years, the threat of denial would be less effective than in those where the licence must be renewed annually.
  7. Is licence suspension a "one-shot" enforcement tool? Although not addressed in the documents reviewed for this report, it seems likely that some child support payors may repeatedly be served with a warning that their licences are liable for suspension. That is, some payors may be in arrears, receive the warning, pay the outstanding amount or make arrangements to pay, and then a short time later be in arrears again. Does the MEP then re-start the suspension process? How many debtors are repeatedly warned and then temporarily comply? Is this approach cost-effective?
  8. Should the jurisdiction institute conditional drivers' licences for employment purposes? Conditional licences may be particularly desirable if the debtor has a history of going into arrears but has the apparent means to pay (e.g. a regular job).
  9. Some estimates of the costs of licence suspension/restriction/denial should be made before legislating this enforcement action. Occupational licence suspension programs may be particularly costly because of the large number of licensing agencies involved and incompatibility of information systems; they may also require a good deal of negotiation with licensing agencies before they can be instituted.
  10. It is probable that widespread publicity and public education are desirable before instituting licence restriction. The threat of suspension should be seen as "real" and imminent by those who are in arrears, and public information is one way to encourage that perception. The costs of the public information activities should be incorporated into the cost estimates for both program start-up and ongoing operations.
  11. There are a number of unknowns in licence suspension programs, such as:
    • how many debtors have valid drivers' and occupational licences; and
    • how many debtors would respond to the threat of suspension by making arrangements satisfactory to the MEP, and how many are scofflaws who would ignore the threat and continue to drive even when their licence is suspended? How often are suspended drivers identified and charged by police?
  12. If a MEP decides to introduce a licence suspension or restriction program, the MEP should ensure that its information system captures all activity related to this enforcement tool:
    • dates of letters sent to debtors;
    • amounts in arrears/months in arrears;
    • the amount collected from the payor;
    • whether the debtor pays the amount in full;
    • whether the debtor makes a satisfactory arrangement to pay the amount owing;
    • whether the debtor makes no or an unsatisfactory response to the warning; and
    • whether the licence is suspended. The information system should also be able to provide regular reports on these actions. This type of data is essential to monitor the impact of suspension programs.
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