Licence Suspension and Denial: Overview of a New Mechanism for Child Support Enforcement
This report examines the various licence denial and suspension programs in place across the United States and Canada that encourage compliance with child support orders. The types of licences examined for the study include drivers' licences, occupational licences and passports. In the United States, such programs are based on state legislation, which authorizes states to deny or suspend licences for child support payors who are in default of making their payments. In Canada, licence denial and suspension programs have recently been implemented in nine of the 14 jurisdictions, including the federal jurisdiction, over federal licences and passports. The description of programs in the United States and Canada is intended to inform and assist future policy decisions concerning the possible implementation or enhancement of similar programs across Canada.
The study utilizes documentation collected on licence denial and suspension programs provided by New Brunswick and the Child Support Team, Department of Justice Canada. In addition, a search of the Internet was conducted in mid-1999 to obtain up-to-date state legislation on licence denial and suspension programs in the United States. This was supplemented by a report containing state-by-state details of licence restriction procedures as of January 1998, published by the Office of Child Support Enforcement in the United States.
The other jurisdictions examined as part of this project (New Zealand, Australia and the United Kingdom) have not considered expanding their child support enforcement actions to include occupational or drivers' licence suspensions.
Licence Suspension in the United States
The expansion of licence denial and suspension programs in 1996 is directly linked to the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) adopted by the United States federal government. The Act requires state child support agencies (CSAs) to withhold, suspend or restrict drivers' and occupational licences for persons owing support. The law also required that applicants for professional, occupational and drivers' licences must provide their social security number (SSN) on their applications. No other requirements were mandated in the federal legislation, so that, in effect, the states were permitted to implement licence suspension programs as they saw fit. Thus, the states have full discretion over how such programs are implemented, leaving specifics such as the definition of licence, criteria for initiating denial and suspension, and the delivery model (i.e. judicial versus administrative) up to the state.
In cases where states do not introduce the programs mandated by the PRWORA, the federal government has the option of imposing a financial penalty. States unwilling to implement the licence denial programs could be deemed to be in non-compliance with the federal enforcement plan requirements, which are a condition of eligibility for federal financial assistance.
It is worth noting that many states had already established these programs well before the passage of the PRWORA in mid-1996. However, the majority (12 out of 19) focussed specifically on occupational licences. With the passage of the PRWORA, every state included drivers' licence suspension in its legislation to avoid the loss of federal financial assistance.
State Legislative Authority
As a result of the federal requirements (e.g. inclusion of social security numbers) under the PRWORA, numerous state laws were amended. The extent of amendments varied between individual states. In some states, the bulk of the requirements were set out in administrative guidelines (or procedure manuals) rather than statutes. In Minnesota, the legislature required the CSA to provide data every two years for:
- number of child support payors notified of intent to suspend a drivers' licence;
- amount collected in payments from the child support payors notified;
- number of cases paid in full and payment agreements executed;
- number of cases in which there has been notification but no payments or payment agreements;
- the number of drivers' licences suspended; and
- the cost of implementation and operation.
The Types of Occupational Licences Subject to Suspension
Following the passage of the PRWROA, all states adopted laws facilitating the suspension of drivers' licences for failure to comply with child support obligations. Of the 52 states and territories for which data were available, all adopted legislation authorizing the suspension of professional licences; 44 could suspend occupational and/or trade licences; 25 had authority to suspend business licences; and 39 were able to suspend recreational licences (e.g. fishing and hunting permits). The research found that the definition of occupational licences (i.e. those included or not) differed across states, and that in some cases occupations required a licence in one state but not in others. Unlike drivers' licences, occupational licences were not universally alike across all states and territories. Furthermore, the study found that some occupations (i.e. lawyers) were treated differently across states. Applying denial and suspensions to recreational licences was found to be difficult, given the lack of automation and because most are issued by retail outlets for a short period of time. As a result, some states have excluded recreational licences from their programs. Some states have adopted the suspension of other licences and permits, such as boat registrations, liquor licences and, in Idaho, permits to carry concealed weapons. In Idaho, Michigan and Pennsylvania, laws permit the suspension of licences of a percent who has interfered with the visitation rights of the other parent.
Trigger Points: Arrearage Necessary before Payors are Targeted
Regardless of the criteria set for initiating the denial and/or suspension of a licence, the option is often described as a "last resort." Except for Florida, the vast majority of statues have criteria that must be met before any suspension action is taken. These criteria are typically the number of months in arrears and amount of arrears. In Florida, drivers' and occupational licence suspensions can be initiated for any delinquent child support payor, regardless of the amount owed or the month in arrears. However, for occupational licences, the state legislation requires that the Florida CSA must have "exhausted all other available remedies" before proceeding with the suspension to court. With the delays inherent in the court process, determined child support delinquents would probably be in substantial arrears before licence suspension is initiated. Kansas also did not define a specified amount of arrears before proceeding with suspension; the decision is up to the court, which may "in addition to any other remedies" order that a notice be served on the licensing party.
The threshold for triggering licence suspension procedures ranges from less than one to 12 months of arrearages, with more than 70 percent of states having established three months or less as the trigger point. One judicial process state mentions
"contempt of court" as the trigger, and two other states indicate that less drastic remedies must first have been attempted before licence suspension can be initiated. Fifteen states have specified in their legislation the dollar amounts and number of months of arrears required before licence denial/suspension proceedings may begin. For example, payors in Indiana must be three months in arrears or owe more than $2,000.
Administrative and Judicial Decision Making and Procedural Safeguards
The PRWORA allows flexibility to the states in implementing licence suspension programs. States have therefore enacted either an administrative or judicial process, or a combination of both. States with an administrative program issue licence suspension notices by mail to the debtor, giving them 20 to 30 days to reply to the CSA and make payment arrangements. As mentioned above, Florida, which has a mixed administrative and judicial process, issues a notice allowing 30 days before it petitions the court for an occupational licence suspension (this does not apply to drivers' licences). In general, states with judicial processes have found that delinquent payors may be better able to stave off licence suspension by litigating successfully if they can prove "irreparable harm" to their livelihood, that the failure to pay child support is not "wilful", and that they have made a "good faith" effort to pay.
Matching Payors to Licence Holders
The majority of funding provided as part of the PRWORA initiative is aimed at improving state CSAs information systems, improvements that are scheduled to continue until 2001. The improvements to CSAs information systems are assumed to be aimed at improving electronic communications with state motor vehicle agencies (MVAs) and other licensing bodies.
The matching of debtors with drivers' and occupational licences is dependent on social security numbers (SSN). Although all applications for such licences require an SSN, the full matching potential of the programs will be realized after an initial implementation period, when all licence applications provide an SSN at the time of renewal. Furthermore, electronic matching of delinquent payors is more likely to occur for drivers' licences than for occupational licences, because most if not all states have automated licensing systems for driving permits. Typically, the CSA sends a list of delinquent payors who meet the criteria for suspension or denial to the MVA, which then suspends the licence.
Monitoring and Evaluation: Child Support Payments Received
Reports published by the various CSAs correctly focus on payments rather than the number of denials or suspensions as a measure of success. This focus is supported by the primary objective of such programs, which is to increase voluntary compliance with the payment of child support and not to suspend licences. The study found that the amount of money collected as a result of suspension notifications is large, and that the majority of suspension notices were resolved with the establishment of a payment agreement. For example, in the state of Maryland, 58,000 notification letters sent to payors generated the collection of $40 million in response. In Texas, $12.6 million were collected in the first six months of the program. However, not all state CSAs are able to determine what proportion of money was collected as a result of the notification of licence suspension.
Overall, a number of states and the United States Office of Child Support Enforcement have emphasized the large amounts of payments received through their licensing suspension programs. Despite the general enthusiasm for this enforcement method, there is a paucity of 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 prompted to make payment arrangements if threatened with the loss of their drivers' or occupational licences. Thus extent to which the loss of a licence acts as an incentive to making regular payments by persons who are financially able to do so is not known.
Communications and Public Legal Education
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.
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." It is not known whether this observation is accurate: 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 convince the delinquent payor to comply, because the payor is then aware that the threat is a serious one.
Benefits and Drawbacks of Licence Restriction Programs in the United States
Besides encouraging debtors to pay their child support, the primary benefit of drivers' and occupational licence programs (more so of drivers' licence programs) is that they can target delinquent payors who are "self-employed" or those who work in the "underground economy." Since the programs are typically used as a "last resort," they supplement other detection and enforcement programs (e.g. "new hires" programs in various states across the U.S. provide information on newly hired employees for the detection of unemployment insurance over-payment and to locate payors who are in default of child support obligations). Although the study was unable to find strong evidence to support this claim, it assumed that an automated administrative system for a drivers' licence suspension program may be a relatively low-cost enforcement action.
As for drawbacks, individuals who receive notification and/or suspension of their driver's licence may continue to drive anyway and continue to avoid making child support payments. Likewise, not all occupations or trades require licensing and, as a result, debtors may continue to evade detection and child support payments. Some legislators have expressed concern over the constitutionality of the schemes; however, a recent Alaska Supreme Court decision upheld the program as constitutional (although the decision is not binding on other states). The use of a judicial/manual system to match licence holders with delinquent payors is said to be more costly when compared to an automated system. Administrative automated systems are less sensitive to the payors' circumstances--they do not discriminate between individuals who "can't pay" and those who "won't pay." As a final drawback, the establishment of licence suspension programs requires agreements between CSAs and other licensing bodies and agencies, which may have further cost and resource implications.
Licence Restriction in Canada
Prince Edward Island, Nova Scotia, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia and Yukon have all implemented drivers' licence denial or suspension programs in recent years. There are no occupational licence denial/suspension programs in Canada presently. The federal government administers a federal licence (e.g. an aviation licence) and passport denial/ suspension program to assist the provincial and territorial Maintenance Enforcement Programs in their enforcement efforts.
Unlike in the United States, all of the programs in Canada are administrative in nature. Similarly, however, these programs have also been described as "last resort" enforcement tools. All of the above jurisdictions have legislation that permits officials to deny the issuance of new or renewal drivers' licences. Only Manitoba, Nova Scotia, Ontario, Prince Edward Island and Yukon have legislation to facilitate the suspension of existing licences of delinquent payors. Legislation in Saskatchewan and British Columbia provide specific amount of arrears owing (dollars and months) before officials can proceed with a suspension or denial. In most jurisdictions, suspension or denial may be used at any stage of the delinquency, but in practice is used only when other methods have failed. Use of the program is discretionary, not automatic.
Although no formal evaluations have been conducted on the effectiveness of the drivers' licence programs in Canada to date, anecdotal evidence from provincial and territorial officials suggests that a number of payors make payment arrangements after a notice is sent. Only a small percentage of cases actually result in licence suspension or denial.
The research report concludes by highlighting several issues and research questions that should be considered by those developing policy and infrastructure when considering licence suspension/denial programs. The issues raised include the following:
- the type of "triggers" to use (the amount of arrears or number of missed payments);
- who the enforcement method targets and when to use it;
- the need for an appeal process and conditional licences;
- the costs of implementation and partnerships with licensing agencies;
- how this enforcement method fits with existing enforcement methods;
- the use of communications, such as mass media campaigns, to advertise the program; and
- the reporting and monitoring of its use and effectiveness.
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