# How to Calculate Interest on Child Support Arrears

How to Calculate Interest on Child Support Arrears

Child support payments play a crucial role in ensuring the well-being and financial stability of a child. When a parent falls behind on child support payments, they are considered to be in arrears. To encourage timely payments, most jurisdictions impose interest on child support arrears. Understanding how to calculate interest on child support arrears is important for both custodial and non-custodial parents. In this article, we will discuss the steps involved in calculating interest on child support arrears, along with some frequently asked questions.

Calculating Interest on Child Support Arrears:

Step 1: Determine the interest rate – The first step is to find out the interest rate applicable to child support arrears in your jurisdiction. This information can usually be obtained from the local child support enforcement agency or the court handling your child support case.

Step 2: Identify the outstanding balance – Determine the total amount of child support arrears owed by the non-custodial parent. This can be obtained from court orders, or by contacting the child support enforcement agency.

Step 3: Determine the time period – Calculate the number of days or months for which the child support arrears have remained unpaid. This can be done by subtracting the last payment date from the current date.

Step 4: Calculate the interest – Multiply the outstanding balance by the interest rate and divide it by the number of days or months in a year, depending on how interest is calculated in your jurisdiction. This will give you the daily or monthly interest amount.

Step 5: Determine the total interest owed – Multiply the daily or monthly interest amount by the number of days or months the arrears have remained unpaid. This will give you the total interest owed.

1. What is the purpose of charging interest on child support arrears?
Interest is charged on child support arrears to incentivize timely payments and compensate the custodial parent for the delay in receiving the funds.

2. Who receives the interest payments?
The interest payments are typically credited to the custodial parent’s account to benefit the child.

3. Can the interest rate change over time?
Yes, the interest rate on child support arrears can be adjusted periodically to reflect changes in the economy or legislative decisions.

4. Is interest charged on the principal amount or the total owed?
Interest is charged on the total amount of child support arrears, including both the principal and any previously accrued interest.

5. Can the interest be waived or reduced?
In some cases, the court may have the discretion to waive or reduce the interest owed, depending on the circumstances. It is important to consult with a family law attorney to understand your options.

6. Does interest accrue during periods of non-payment?
Yes, interest continues to accrue on child support arrears even during periods when no payments are being made.

7. Can interest be retroactively applied?
In some jurisdictions, interest can be calculated retroactively from the date of the original court order or from the date the arrears began to accumulate.