Child support is court ordered support, usually paid by the non-custodial parent to the custodial parent as a contribution to the costs incurred in raising a child. This order is typically issued during court proceedings for a divorce or after paternity has been established in cases of unmarried parents. Both divorce and child support are governed by state law, but many of the states have similar policies regarding child support interest.
In most states, child support interest accrues when court ordered support payments are not made on time. Several things may occur that will cause a payment to be missed, late, or only a portion of the amount ordered. Unemployment is one of the biggest reasons a child support payment is not received. Many states require child support payments to be automatically deducted from the non-custodial parent's paycheck, but this isn't as helpful when the non-custodial parent isn't employed. Even when the non-custodial parent receives unemployment checks, often the amount is not enough to cover an entire child support payment.
Each state has policies that determine how much of a child support payment can be deducted from a non-custodial parent's paycheck. The non-custodial parent must be allowed to keep a portion of his or her pay that is significant enough to allow for housing, food, and other bills required to live. Though some states will take as much as 60% of a paycheck, when multiple support orders exist, a paycheck still might not be enough to cover an entire payment.
Any amount of a child support payment that is not made by the date ordered by the court is added to the non-custodial parent's past due balance. Missing a payment does not mean the payment will not have to be made in the future. This past due balance is also referred to as arrearage and delinquency, depending on the state and the child support order. Almost every state applies child support interest to this past due balance, to be paid to the custodial parent even after a child has entered adulthood and child support is no longer required. The past due balance never disappears.
The amount of child support interest varies by state, but most charge a fixed annual rate, commonly around ten percent. Custodial parents can initiate collection of this interest by going to court and having a judgment issued for the amount past due. Collection methods for past due child support and child support interest include wage garnishments, property liens, and interception of federal income tax refunds. Though, since each state and each case may be different, it is best to consult state law and a local attorney or child support enforcement agency for the most accurate information on specific cases.