Iowa holding millions in years-old child support payments

Iowa is holding more than $4 million in child support payments — many of those more than five years old — because the parent or caregiver receiving the payments has died and there’s no court order for how to disperse the money.

That means money intended to help children has been sitting in state coffers with only limited attempts to reach families, according to one former state employee.

“Managers not following or training the correct policy, workers not completing procedures and changes made to the Iowa Code in 2007 appear to have created the perfect set of hurdles that keep families from learning about these payments,” said Bonnie Castillo, who was a child support recovery officer for Iowa Health and Human Services until April 12.

Child support is ongoing, periodic payments made by a noncustodial parent to the other parent or guardian for the child’s basic living expenses, such as food, clothing, shelter, health care and education, usually until the child turns 18.

As of March 31, the Child Support Services unit of Iowa Health and Human Services was holding funds for 2,383 child support cases where the person who was to be paid has died, the agency told The Gazette.

Those funds total a little over $4 million, with the bulk of the funds — $3.4 million — being held more than five years. Dividing the total amount by the number of cases, it’s an average $1,691 per case.

The funds represent a small portion of the average $325 million in child support payments handled by the state each year. But Iowa HHS officials acknowledge these held funds can be hard to disperse.

“Deceased payee cases are complex and have unique challenges,” Iowa HHS Spokesman Alex Carfrae said in an email. “Funds owed to a support payee who has died become the property of the individual’s estate and can only be distributed under probate law and at the direction of the court when an estate is settled.”

But if an estate isn’t opened in probate court, Iowa HHS can’t distribute the held child support payments, Carfrae said. Iowa Code Chapter 252B.15(4) prohibits the state from listing the funds with the Great Iowa Treasure Hunt, an online database of unclaimed funds users can search by name.

⧉ Related article: Nearly $500 million waiting to be reclaimed by Iowans, state treasurer says

The state “attempts to locate estates for deceased payee cases, attempts to notify potential heirs, and has a process by which heirs may claim funds,” Carfrae said. The state also tries to figure out whether a child has a new caretaker who should be getting the money.

But when Castillo was working in child support recovery, she didn’t think Iowa HHS did enough to try to get the money to children or back to the parent who paid the child support.

“The front-line workers at Child Support are amazing people, but have huge caseloads, and are also covering the many vacant caseloads,“ she said.

Castillo said supervisors told recovery workers if a family member called to ask about a held child support payment, employees were supposed to tell them confidentiality laws prohibited them from disclosing whether there was a case.

If family members don’t know whether there are unclaimed funds as part of a child support case, they likely won’t hire a lawyer to file a claim for money in probate court, she said.

When Castillo was trying to resolve some of these payments, she learned policy allowed caseworkers to mail a letter about the payments to the children of the person who died. But when she asked whether she could start sending letters, a supervisor said “workers have better things to do,” Castillo said.

Iowa HHS did not respond last week to specific questions about whether letters may be sent to children or how often this happens.

Castillo persisted in her complaints about what she perceived as a lack of action to distribute the held child support payments. She said she wrote a letter to Iowa Gov. Kim Reynolds through an online submission portal and emailed Iowa HHS Director Kelly Garcia May 30.

Iowa HHS put Castillo on paid leave April 12 as the agency launched an investigation of whether she had breached client confidentiality and violated other agency policies, according to a letter Castillo shared with The Gazette.

Castillo said the alleged breach was when she told media outlets about her concerns about the held child support payments. The probe has since been closed, Castillo said, and she now is working as director of Union County Emergency Management.

Comments: (319) 339-3157; erin.jordan@thegazette.com