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The gig economy and child support payments

On Behalf of | Dec 6, 2017 | Child Support |

Those who owe child support in Pennsylvania may make it easier to hide their income by working a contract job. Even if the state knows that a parent is making money though Uber or a similar company, it may only be possible to garnish wages if the company agrees to cooperate. Under most state laws, employers are required to add new hires to child support databases. However, this generally only applies to new employees as opposed to contract workers.

Across the nation, roughly $114 billion in child support payments go uncollected. The money is meant to provide for a child’s basic needs such as food, clothing and shelter. While some self-employed individuals may be using their job status as a way to hide their income, they may not stay in one job for long. In many cases, a person works a gig for no more than a month.

This may create a situation where state officials aren’t able to get money owed even through garnishment. The problem may grow as more people are expected to become contractors or participate in gig work. Currently, 2.5 million American adults work gig jobs, and the number could hit 5 million by 2020. Overall, 15.8 percent of Americans work as freelancers.

Parents who fail to pay child support could face a variety of penalties. These penalties may include a loss of professional licenses as well as fines or possible jail time. If a parent is having trouble meeting child support obligations, it may be possible to ask for a child support order modification. This might reduce a parent’s monthly support payments either temporarily or permanently based on current income levels. Modifications may also be made in the case of a medical event or other financial hardship.