The Local Child Support Agencies (LCSA) and the State Department of Child Support Services may, under certain circumstances, compromise child support arrearages owed to the government. There are two programs through which a child support obligor may apply to the LCSA for compromise:
- "Compromise of Arrearages-Family Reunification" (COA-FR)
- "Compromise of Arrears Program" (COAP)
The application process, criteria and amount of arrears that may be compromised is different for each program. This information is detailed below for each program.
Compromise of Arrearages-Family Reunification (COA-FR)
The first program, Compromise of Arrearages-Family Reunification (COA-FR), was created by statute (Family Code §17550) in 2001. This program was developed to assist parents with limited incomes who have been reunited with their children.
When an applicant qualifies for this program, up to 100% of the public assistance debt for the qualifying type of aid is eliminated (compromised). This allows the parent to have more money available to support the child(ren) who have been returned to his or her care and to lessen the risk of the child(ren) being removed from the home in the future because the parent is unable to care for them.
COA-FR Qualification Criteria
- The applicant parent must owe a public assistance debt as a result of their child(ren) receiving aid from one of the following programs, while living apart from the applicant parent.
- CalWORKS-Foster Care (The child was receiving some form of foster care)
- CalWORKS while in the care of a non-needy caretaker, not a parent
- Kin Gap (this type of aid is rare
- At the time the application is submitted, the child(ren) must be minors and living with the applicant at least 100% of the time
- The applicant's current income is less than 300% of the federal poverty level.
Arrears Not Qualifying for COA-FR
- CalWorks arrears owed for a period when the other parent was on aid with the child(ren). An obligor with this type of public assistance debt may qualify for a compromise under the COAP program. See "COAP" section below for details.
- Any type of arrears owed for an emancipated child. The obligor may qualify for a compromise under the COAP program. See "COAP" section below for details.
- Child support arrears owed to the custodial parent.
Note: if more than one child was aided under the qualifying aid type, and one or more of the child(ren) have emancipated and the other child(ren) have returned to the applicant parent, then the arrears owed for the child(ren) who are still minors may qualify for COA-FR but the arrears owed for the emancipated child(ren) will not be compromised under the COA-FR program.
COA-FR Application Process
The COA-FR application and an Income and Expense Declaration are sent to the applicant upon request. In Orange County the application can be requested by sending an e-mail to email@example.com or by calling 866.901.3212. Specifically request "COA-FR Application", and indicate the applicant's name and pin or case number.
- The completed application is reviewed by the LCSA for the following:
- Is the applicant's income less than 300% of the federal poverty level for the size of his family?
- Is the debt owed for one of the qualifying aid types?
- Is the child(ren) still a minor?
- Is the child(ren) currently living with the applicant parent at least 50% of the time?
- If the answers to all of these questions are yes, then the determination is made that the case qualifies for the compromise and up to 100% of the qualifying arrears owed will be compromised.
- CSS will send a letter to the applicant within 10 business days of receiving the completed application with the result of the review.
- If the case qualifies for COA-FR, the LCSA has 20 business days from the date the result letter is mailed to the applicant to process the agreement compromising the arrearage owed.
- The applicant and a representative of the LCSA sign the agreement and the agreement is then filed with the Superior Court and the compromise is finalized.
- The case will remain open with the LCSA for collection if there are non-qualifying public assistance or custodial parent arrears owed. If there are no other arrears owed, then the LCSA will close their case.
What qualifies as income less than 300% of the federal poverty level?
The Federal Poverty Level is revised annually, subject to cost of living adjustments. The table below indicates the yearly net income which qualifies for 300% of the poverty level based on family size.
Compromise of Arrears Program (COAP)
The second program under which an obligor may apply for the compromise of child support arrears owed to the government is the "Compromise of Arrears Program" (COAP). Authorized by statute (Family Code §17560) in 2003, this program went into effect July 1, 2005. If an applicant qualifies for compromise under this program, his public assistance arrearages may be compromised up to 90%. These arrears are not compromised 100% and if current support is still owed, the obligor must stay current with his current support payment as well as the agreed upon repayment amount.
The purpose of the COAP program is to allow child support agencies to concentrate on collecting current support that is owed to families. It reduces the debt of the obligor to ensure that he is able to pay current support owed to his family and it reduces the burden on State and County agencies to collect arrears that are in reality uncollectible.
COAP Qualification Criteria
- The amount of permanently assigned arrears (any aid type) owed by the applicant to the government of at least $501.
- There has not been a previous application to participate in COAP within one year prior to the date of application.
- There has not been a rescission of a previous COAP agreement within two years prior to the date of application.
- The applicant has not been found guilty of contempt for failure to pay child support within 6 months of the application.
- Effective 10/1/08, applicants with multiple cases in one or more LCSA's are eligible for review of an offer in compromise.
- The child support case cannot be a two state, interstate case.
- The applicant cannot have intentionally failed to pay child support in anticipation of COAP.
- The applicant has no ability or reasonable expectation of ability to pay all child support arrears and interest owed within three years. (This is a calculation that the program's computer makes based on applicants' income, debt and assets.)
- The applicant has not concealed his income or assets and has not intentionally withheld or falsified his financial information.
- The applicant has the ability to pay from any source within a three year period from the date of the agreement;
- Current support
- Arrears owed to custodial parent
- The repayment amount (the portion of government arrears obligor must pay in order to receive a compromise)
COAP Application Process
The COAP application consists of, Information Letter DCSS Form 0025; a Child Support Compromise of Arrears Information Sheet DCSS form 0019; and Income and Expense Declaration, FL-150. COAP applications are sent to the applicant upon request. In Orange County the application can be requested by sending an e-mail to firstname.lastname@example.org or by calling 866.901.3212. Specifically request "COAP Application", and indicate the applicant's name and pin or case number.
- The following supporting documentation must be included with the completed application:
- Most recent three pay-stubs
- Most recent tax return
- If self employed, a profit and loss statement for the last 12 months.
- The last 12 months of statements for all bank accounts in the applicants name including jointly held accounts.
- A mortgage statement showing amount owed on all real property owned in whole or in part by the applicant.
- Evidence of the approximate fair market value of all real property owned in whole or in part by the applicant.
- Rent receipts showing amount of monthly rent expense.
- Recent utilities receipts.
- Proof of vehicles owned or leased, amount owed on vehicles, and current fair market value of the vehicles.
- Proof of other assets owned and the assets value including stocks, bonds, mutual funds etc.
- The application and supporting documents will be reviewed by the local child support agency (LCSA) staff to ensure all information needed for the determination has been received. Incomplete applications will be returned to the applicant with further instructions.
- Once a complete application is received, the LCSA staff will enter the information into the State COAP Computer Program. This information includes the obligor's income, assets, expenses, current child support owed, arrears owed to the custodial parent, arrears owed to the government, total amount of aid expended and the amount obligor offered to pay in compromise.
- The computer program determines the amount the obligor will be required to repay the government and the amount of the government arrearages that will be compromised. It will also calculate a repayment schedule with the monthly payment required. The monthly payment required will be sufficient to ensure all arrears owed to the custodial parent (including interest) and the repayment amount owed to the government required for the compromise can be satisfied within a 36 month period.
- There is a 10% reduction in the repayment amount if the obligor is able to pay the custodial parent arrearages and the calculated repayment amount in a lump sum.
- The LCSA staff will contact the obligor to determine if the repayment schedule is feasible for him or her.
- If the amount calculated to be compromised is less then $5,000.00 then the director of the LCSA has the ability to approve the repayment schedule and compromise.
- If the amount calculated to be compromised is more then $5,000.00, then the application and proposed compromise and repayment schedule is transmitted to the State Department of Child Support Services for approval.
- If the compromise and repayment schedule is approved by the LCSA Director or the State, then the LCSA is notified and the LCSA staff will execute the agreement with the obligor. The agreement is then filed with the Superior Court.
Note: If the repayment amount is paid over a period of time (not to exceed 36 months) the compromised arrears are removed from the arrearage total incrementally as each scheduled payment occurs.
How is the repayment amount calculated?
The repayment amount calculated by the COAP program is the highest of three calculations:
- Income minus deductions projected out three years plus net assets. This amount is increased by 10% if the obligor had the historical ability to pay and substantially failed to do so.
- 10% of the assigned arrears owed to the government. This amount is increased by 10% if the obligor had the historical ability to pay and substantially failed to do so.
- The offered amount made by the obligor.
What occurs if there is a failure to comply with the agreement after it is executed?
- Within the first six months, if there is one missed or short payment on the repayment agreement or a missed current support payment, the compromise agreement will be rescinded. The initial payment and all other payments will be retained and credited to the arrears owed. The arrears compromised under the agreement are reinstated.
- After the first six months, if there is a missed or short payment on the repayment amount or a missed child support payment and the obligor fails to make up the missed or short payment within 3 months, the agreement will be partially rescinded. All arrears compromised up to the point of the missed payments will remain compromised and the obligor will owe the remaining arrears in full. All payments made by the obligor will remain credited to the obligor's account.
What occurs if the LCSA determines the obligor concealed assets or falsified information in the COAP application?
If after executing the COAP agreement the LCSA determines that the obligor concealed assets or falsified information in the COAP application the LCSA may rescind the agreement. All arrears compromised under the agreement will be reinstated.
Arrears Owed to the Custodial Parent
If in addition to the government arrears, the LCSA determines that there are arrears owed to the custodial parent, the LCSA will contact the custodial parent to determine if the custodial parent wishes to compromise part or all of the arrears owed. The custodial parent is given 20 days to respond to the LCSA's inquiry.
If the custodial parent elects to participate in COAP and chooses to compromise a portion of the arrears, the obligor will be required to pay the remainder of the arrears owed to the custodial parent in a lump sum, as part of the initial payment when the COAP agreement is executed.
If the custodial parent chooses to waive part or all compromise the arrears owed, the Stipulation and Order Waiving Unassigned Arrears (Judicial Council form FL626) must be completed and approved by the Court before the LCSA executes the Compromise Agreement.
If the custodial parent chooses not to compromise his or her arrears, these arrears will be included in the repayment schedule and will be paid to the custodial parent prior to any government owed arrears within a maximum 36 month timeframe.