Action Transmittal AT-94-02
Program Instructions for Immediate Wage Withholding
Program Instruction
ACTION TRANSMITTAL
OCSE-AT-94-02
March 11, 1994
TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT
PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND
OTHER INTERESTED INDIVIDUALS
SUBJECT: Revised Program Instructions for the Statutory
Requirements for Immediate Wage Withholding in All
Child Support Orders Initially Issued In the State Not
Being Enforced Under Title IV-D of the Social Security
Act
STATUTORY
REFERENCE: 42 U.S.C. 666(a)(8)(B)
POLICY
ISSUANCES: PIQ-93-08, PIQ-93-09 and DC-94-01
EFFECTIVE
DATE: January 1, 1994
BACKGROUND: This Program Instruction supersedes instructions
contained in OCSE-AT-93-06 issued on April 5, 1993,
and consolidates PIQs 93-08, 93-09 and Dear Colleague
letter 94-01.
Section 101 of the Family Support Act of 1988 (P.L.
100-485) requires that, effective January 1, 1994,
States implement immediate withholding in all support
orders initially issued in the State which are not
being enforced under title IV-D of the Social Security
Act (the Act). This program instruction provides
guidance for States in enacting laws and developing
procedures, in accordance with 42 U.S.C. 666(a)(8)(B),
under which all child support orders which are
initially issued in the State on or after January 1,
1994, and are not being enforced under title IV-D of
the Act are subject to immediate withholding.
Subsequent to the issuance of OCSE-AT-93-06, we
received several inquiries regarding the requirement
at 666(a)(8)(B)(iii) and 666(b)(5) of the Act that
non-IV-D withholding be administered by a public
agency or publicly accountable entity. In response to
these inquiries we further emphasized and clarified
options available to States in administering a
non-IV-D withholding program. These clarifications
are contained in OCSE PIQ-93-08 dated December 28,
1993, OCSE PIQ-93-09 dated December 30, 1993 and Dear
Colleague Letter DC-94-01 dated January 4, 1994. The
information contained in these policy issuances has
been used to update Section VI. Questions & Answers
Regarding Statutory Requirements in this updated
program instruction.
SUPERSEDED
MATERIAL: OCSE-AT-93-06, except for Attachment: State Plan
Preprint page
2-12-8B.
INQUIRIES: ACF Regional Administrators
David Gray Ross
Deputy Director
Office of Child Support Enforcement
I. Introduction
This Action Transmittal sets forth the statutory requirements
which States must meet in implementing section 466(a)(8)(B) of
the Act. States may choose to extend these immediate wage
withholding requirements to apply to orders in non-IV-D cases
which are modified after January 1, 1994, in addition to orders
initially issued after that date. The instructions also address
issues raised with respect to implementing immediate withholding
in non-IV-D cases.
II. State Plan Requirements
As a condition of Federal funding, a State must comply with the
statutory requirements of Section 454 of the Act. Section
454(20) requires that the State IV-D plan provide that the State
shall have in effect all of the laws required under the
mandatory procedures established in section 466 of the Act.
Since the requirements for non-IV-D withholding are part of the
mandatory procedures set forth in section 466, States must
demonstrate conformity with these requirements as a condition
for having an approved State IV-D plan. Section 466(a)(8)(B) of
the Act specifies that each State must have laws requiring the
use of procedures under which all child support orders initially
issued in the State on and after January 1, 1994 and which are
not being enforced under Title IV-D will include provisions for:
Immediate withholding, with exceptions for good cause
and alternative arrangements;
Withholding for overdue support in addition to current
support;
Limitations on amounts withheld based on the Federal
Consumer Credit Protection Act (CCPA);
Withholding without the need to apply for IV-D
services or amendment to the order or further action
by court/administrative authority;
Administration of withholding by a public agency or a
publicly-accountable alternative;
Prompt distribution of amounts withheld;
Employer requirements;
Priority over other legal process against the same
wages under State law;
Optional extension to other forms of income;
Extension to enforcement of orders of other States;
Provisions for terminating withholding.
These requirements will be described and discussed in the
following section.
States failing to demonstrate conformity with the statutory
requirements will be subject to State plan disapproval
procedures outlined in OCSE-AT-86-21. Non-conformity could
result in the suspension of all IV-D funding as well as a
portion of title IV-A funding to the State.
III. Explanation of Non-IV-D Withholding Requirements
Section 466(a)(8)(B) of the Act requires immediate withholding
for all non-IV-D child support orders initially issued in the
State on or after January 1, 1994. In addition, by
cross-reference, it extends the same statutory requirements
applicable to title IV-D at paragraph (1) and, where applicable,
paragraphs (2), (4), (5), (6), (7), (8), (9) and (10) of section
466(b). The specific requirements applicable in non-IV-D cases
effective January 1, 1994, are:
A. When Immediate Withholding Is Required; Exceptions
The wages of a non-custodial parent must be subject to
withholding, regardless of whether support payments by such
parent are in arrears, on the effective date of the order. As
in the case of orders being enforced in IV-D cases, two
exceptions to immediate withholding are permitted. Wages shall
not be subject to withholding in any case where: (1) one of the
parties demonstrates, and the court (or administrative process)
finds, that there is good cause not to require immediate
withholding; or (2) a written agreement is reached between both
parties which provides for an alternative arrangement.
B. Limitations on Amounts Withheld
(1) So much of the non-custodial parent's wages must be
withheld as is necessary to comply with the order and provide
for any fee to the employer which may be required, up to the
maximum amount permitted under section 303(b) of the Consumer
Credit Protection Act (15 U.S.C. 1673(b)) [CCPA].
(2) If there are arrearages to be collected, amounts withheld to
pay such arrearages, when added to the amounts withheld to pay
current support and provide for the fee, may not exceed the
limit permitted under such section 303(b), but the State need
not withhold up to the maximum amount permitted under such
section in order to satisfy arrearages.
C. No Further Action By Court
Withholding must occur without the need for further action
(other than those actions required under these procedures) by
the court or other entity which issued such order.
D. Administration of Withholding by Public Agency
Withholding must be administered by a public agency designated
by the State, and the amounts withheld must be expeditiously
distributed by the State or such agency under procedures
(specified by the State) adequate to document payments of
support and to track and monitor such payments.
The law also allows a State to establish or permit the
establishment of alternative procedures for the collection and
distribution of such amounts (under the supervision of a public
agency) otherwise than through a public agency so long as:
(a) The entity making the collection and distribution is
publicly accountable for its actions taken in carrying out such
procedures; and,
(b) The procedures assure prompt distribution, provide for the
keeping of adequate records to document payments of support, and
permit the tracking and monitoring of such payments.
E. Employer Responsibilities
1) The employer of any parent who is subject to immediate
withholding in a non-IV-D case, upon being given notice of such
action, must be required by the State to withhold from the
non-custodial parent's wages the amount specified by the notice
(which may include a fee, established by the State, to be paid
to the employer unless waived by the employer).
(2) The employer must pay such amount (after deducting any fee)
to the appropriate agency (or other entity authorized to collect
such amounts withheld under the alternative procedure
established by the State) for distribution.
(3) The notice given to the employer shall contain only such
information as may be necessary for the employer to comply with
the withholding order.
(4) Methods must be established by the State to simplify the
withholding process for employers to the greatest extent
possible, including permitting any employer to combine all
withheld amounts into a single payment to each appropriate
agency or entity (with the portion which is attributable to each
individual employee being separately designated).
(5) The employer must be held liable to the State for any
amount which the employer fails to withhold from wages due an
employee following receipt by the employer of notice, but the
employer shall not be required to vary the normal pay and
disbursement cycles in order to comply with this paragraph.
(6) Provision must be made for the imposition of a fine against
any employer who discharges from employment, refuses to employ,
or takes disciplinary action against a non-custodial parent
subject to wage withholding because of the existence of the
withholding or additional obligations which it imposes upon the
employer.
F. Priority Over Other Legal Process
The State must provide that withholding of child support
obligations be given priority over any other legal process under
State law against the same wages.
G. Other Forms of Income
The State may take such actions as may be necessary to extend
its system of withholding so that the system will include
withholding from forms of income other than wages, in order to
assure that child support owed by non-custodial parents in the
State will be collected without regard to the types of such
parents' income or the nature of their income-producing
activities.
H. Interstate Requirements
The State must extend its withholding system so that such system
will include withholding from income derived within the State in
cases where the applicable support orders were issued in other
States, in order to assure that child support owed by
non-custodial parents in the State or any other State will be
collected without regard to the residence of the child for whom
the support is payable or of the child's custodial parent.
I. Termination
Provision must be made for terminating withholding.
J. Due Process Requirements
Withholding from income of amounts payable as support must be
carried out in full compliance with all procedural due process
requirements of the State.
IV. Availability of Federal Financial Participation (FFP)
Although States are required to enact laws and procedures for
non-IV-D withholding as a condition of having an approved State
IV-D plan, the activities mandated at section 466(a)(8)(B) of
the Act are for cases not being enforced under a IV-D State
plan. FFP is only available for services provided in cases
receiving services under title IV-D of the Act.
However, in cases where a State has chosen to use its IV-D
agency to implement
non-IV-D withholding, FFP would only be available for the IV-D
costs incurred in implementing a cost allocation system to
identify expenditures in IV-D and non-IV-D cases.
V. Exemptions
The provisions at section 466(d) of the Act with respect to
exemptions apply to the non-IV-D withholding requirements.
States may request, and OCSE may approve, an exemption from one
or more of the requirements for the enactment of any law or the
use of any procedure or procedures for non-IV-D withholding if
the State can demonstrate that the adoption of such laws or
procedures would not improve the effectiveness and efficiency of
the State child support program. Requests should be sent to the
appropriate ACF Regional Office in accordance with regulations
at 45 CFR 302.70(d) and program instructions set forth in
OCSE-AT-88-19.
VI. Questions & Answers Regarding Statutory Requirements
1. Question: Must a public agency administer non-IV-D
withholding? What are possible options a State may consider in
meeting the administrative requirements?
Answer: The State must specify which public entity is
responsible for immediate wage withholding in non-IV-D cases.
As the Federal statute provides, a State may establish, or
permit the establishment of, alternative procedures to carry out
non-IV-D withholding as long as the entity it designates is
under the supervision of a public agency. The entity must
follow procedures which will assure prompt distribution of
amounts withheld, provide for the keeping of adequate records to
document payments of support, and permit the tracking and
monitoring of such payments.
A State could designate the IV-D agency, or the entity which
administers withholding in IV-D cases, to be responsible for
the administration of non-IV-D withholding. If so, there must
be a system for allocating costs between IV-D and non-IV-D
operations, since FFP is not available for providing services to
non-IV-D cases.
A State could also opt to designate clerks of court or other
appropriate judicial entities to administer non-IV-D
withholding, since immediate withholding is applied at the time
the support order is initially entered.
Alternatively, the State could choose a private entity, such as
a bank, to administer this activity in non-IV-D cases, or opt
for a procedure where the employer sends the withheld amount
directly to the custodial parent's bank account through
electronic funds transfer (EFT) or by check. The bank records
associated with the custodial parent's account would provide an
adequate payment record. A bank, whether under contract to the
State to handle all payments, or a number of banks with
individual custodial parent bank accounts, would meet the test
for an alternative system, since a bank is publicly accountable
entity under both State and Federal law. This approach would
assure prompt distribution, provide for keeping adequate records
to document payment of support, and permit the tracking and
monitoring of such payments.
2. Question: Must the State designate only one entity in each
jurisdiction to administer withholding?
Answer: No. Although IV-D regulations at 45 CFR
303.100(g)(2)(ii) require that States may designate only one
entity to administer withholding in each jurisdiction, such a
restriction does not apply to withholding in non-IV-D cases.
3. Question: If there is no FFP for non-IV-D withholding
activities, may the State pass costs on to the user through fees
or other cost recovery systems?
Answer: Yes. States may finance their withholding
responsibilities in non-IV-D cases by charging fees and
recovering costs. States may recover the full cost of
administering withholding in non-IV-D cases from the custodial
parent or non-custodial parent. The $25 annual fee restriction
in 45 CFR 302.57(b)(3) does not apply to recovery of costs for
performing non-IV-D withholding activities.
4. Question: Is non-IV-D withholding subject to specific
regulatory requirements at 45 CFR 303.100, for timeframes for
distribution of amounts withheld?
Answer: No. Federal regulatory requirements applicable to IV-D
cases do not apply to immediate wage withholding in non-IV-D
cases.
5. Question: Must States meet the criteria in Federal
regulations for a finding of good cause or for an alternative
arrangement in IV-D cases in extending immediate withholding to
non-IV-D cases?
Answer: No. Federal regulations at 45 CFR 303.100(b)(2) and
(3), which set certain minimum criteria for good cause findings
and alternative arrangements in IV-D cases, do not apply to
non-IV-D cases. Consequently, States may develop their own
criteria for non-IV-D cases which differ from or are consistent
with those required under IV-D regulations. States could, for
example, design criteria for alternative arrangements which
allow the parents, in cases in which they do not want payments
to go through the public agency or publicly accountable entity,
or do not want to pay any fee that may be imposed, to choose on
a case-by-case basis to have withholding implemented through a
system where the employer would send withheld amounts directly
to the custodial parent (as opposed to the public agency or
publicly accountable entity). States would still need to
establish a system for non-IV-D withholding which meets the
mandatory requirements at 42 USC 666(a)(8)(B), but the volume of
cases under that procedure may be lessened by affording parents
an alternative arrangement.
6. Question: Is the State responsible for sending the notice
of withholding to the employer in non-IV-D cases effective
January 1, 1994?
Answer: No. Federal statutory requirements for withholding in
non-IV-D cases do not require States to send the withholding
notice to the employer. States may choose to do so or may
direct the obligor, obligee, or their attorneys, to send the
withholding notice to the employer as soon as the initial child
support order is issued.
Many States have already developed standardized wage withholding
notices which incorporate the information which must be given to
employers. States may adapt these documents for use in non-IV-D
situations.
7. Question: Is the State required to take enforcement actions
in non-IV-D cases when there have been good cause findings, or
alternative arrangements and the non-custodial parent
subsequently becomes delinquent in an amount which would trigger
an initiated withholding under IV-D requirements? Or when the
non-custodial parent leaves employment and becomes delinquent?
Answer: No. The statute does not require the State to take
enforcement actions, initiate, or to re-initiate withholding in
non-IV-D cases beyond subjecting the non-custodial parent to
immediate withholding when a child support order is initially
issued in the State. Enforcement of withholding orders may be
done by States or left to obligees or their attorneys to take
such action. Any individual who wants child support enforcement
services may also apply for IV-D services.
8. Question: What are the State's responsibilities with
respect to allocation of withheld amounts when there are
multiple withholding notices involving both non-IV-D and IV-D
cases for a single non-custodial parent?
Answer: If multiple withholdings from a single non-custodial
parent's earnings involve both a IV-D and a non-IV-D case,
Federal requirements must be applied to all withholdings with
respect to that non-custodial parent. Federal regulations at 45
CFR 303.100(a)(5), governing IV-D cases, require States, in
cases where there are more than one withholding against a single
non-custodial parent, to allocate withholding, but in no case
should the allocation result in one family getting nothing. For
consistency, States may choose to adopt allocation methods
mandated in Federal regulations for IV-D cases for all
withholdings, whether IV-D or non-IV-D. Since receipt of current
support is essential to many families, the State should attempt
to ensure that current support is paid first to any family due
current support.
9. Question: Do the specific criteria for termination of
withholding in IV-D cases apply to non-IV-D withholding?
Answer: No. Federal regulations at 45 CFR 303.100(a)(7) which
set certain minimum criteria for termination of withholding in
IV-D cases do not apply to non-IV-D cases.
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