dcl9349.htm

Draft Order/Notice for Income Withholdig

DCL-93-49

October 12, 1993

TO ALL STATE IV-D DIRECTORS

Dear Colleague:

Enclosed is a draft Order/Notice for Income Withholding that the Federal Office of Child Support Enforcement (OCSE) is developing in conjunction with representatives of State Child Support Enforcement (CSE) agencies and employer and payroll groups. OCSE and the work group have met several times since April 1993, to develop a standardized form for uniformly transmitting to employers the information necessary to withhold income from obligors' paychecks in a straightforward, simple manner. A standardized form should be especially useful to multi-state employers who receive myriad income withholding orders or notices.

We are sending a copy to you for your review and comment so the final version of the form will be adaptable to every State's needs and user-friendly for employers.

Once in final form, the Order/Notice will be piloted in several jurisdictions (to be determined later). If the pilot test is successful, OCSE will pursue mandating its use in all IV-D withholding cases (both intrastate and interstate). Eventually, we also will develop an electronic version of the form.

Also enclosed are specific remarks about the form, annotating some of the reasoning that went into the form's development. We suggest that the form be shared with anyone who works with income withholding orders/notices, especially clerks of court, caseworkers, hearing officers, attorneys, and judges. We welcome feedback from you and others to ensure that this form becomes useful and timesaving, once in use nationwide.

Please forward your comments before December 15, 1993, to: Yvette Hilderson Riddick, Branch Chief, National Training Center, Office of Child Support Enforcement, 370 L'Enfant Promenade, SW, Washington, DC 20447. She can be reached at (202) 401-4885 (telephone) or (202) 401-5559 (fax).

Sincerely,

Robert C. Harris

Acting Deputy Director

Office of Child Support Enforcement

cc: ACF Regional Administrators

ACF ARAs for Family Security

CSE Program Managers

Enclosure

STANDARDIZED WITHHOLDING FORM ANNOTATIONS

GENERAL TERMS

The Order/Notice is designed to serve as an order, a notice, or both. In some States, the issuing clerk, judge, or agency official sends out an "order" to withhold. In other States, the issuer sends out a "notice" to withhold. A third group of States sends out writs of assignment or wage garnishment. This form attempts to cover orders and notices issued for income withholding purposes under either initiated or immediate income withholding procedures. The form does not signify any change in the Federal Office of Child Support Enforcement's policy concerning withholding implementation, or notice or hearing requirements.

The form uses the terms "income withholding," (applying to sources of income in addition to wages), "obligor," "obligee," and "payee." While not every State uses these terms, they are used in the recently-promulgated Uniform Interstate Family Support Act (UIFSA) and in many States.

FRONT

The form is designed for use for the first issuance of a withholding Order/Notice as well as subsequent modifications of the original terms. It breaks down the amount of the ordered payments into current and past-due support (requiring State Child Support Enforcement (CSE) agencies to calculate arrearage payoffs). This is needed in case an employer cannot pay the entire amount to be paid under two or more child support order/notices for the same obligor, since current support must be satisfied for each obligee before arrearages are satisfied. The frequency of the child support installment is dependent on the original order in most States and is therefore left blank. Child Support Enforcement agencies can place the correct frequency in the blank, or if desired, can list the payment frequency based on the employer's pay cycle. (An employer cannot be asked to vary his/her pay cycle.)

States allow employers to deduct fees for withholding. Since the amount varies, a blank is left. Since the form is trying to incorporate all variations on regulatory requirements, the deadline for beginning withholding is also left blank. Some States have set more stringent timeframes on employers than the Federal regulations require. The same is true for the remittance deadline.

The Federal Consumer Credit Protection Act (CCPA) places limits on the amount of disposable pay one can withhold for child support purposes. States may set lower ceilings than the 50-65 percent range of the CCPA. Again, a blank is left for the State CSE agency to fill in to reflect state-specific law and case-specific information (e.g., if an obligor owes arrearages that are 12 weeks or more past-due, 5 percent may be added to the CCPA limit).

If the withholder remits by check, the payee's name and address are listed. For remittances transmitted by electronic funds transfer/electronic data interchange (EFT/EDI), identifying payee information is included. Any withholder interested in using EFT/EDI for child support should receive guidance from State CSE agencies. EFT/EDI entries are shaded on the form. The final version will have a shaded box surrounding white space so that photocopied versions are legible.

Health insurance coverage for the obligor's dependent children has become an important part of the child support system. Information about health coverage was included originally on the first draft of the form. Payroll groups pointed out that in many medium-to-large sized businesses a separate entity handles health coverage issues. A separate sheet for health insurance allows both forms to be processed simultaneously in those businesses and ensures more privacy for the employee. Since States have various coverage requirements, this form is left to the States to devise.

The form includes the name, telephone number, and if available, a facsimile transmission (fax) number of a State CSE agency contact person to answer any questions. The Order/Notice is signed by the person authorized to sign the form, with the issuing agency's address to the right.

At the bottom of the front, there is a check off line for employers if the employee has been terminated or is not currently earning money from the employer (e.g., a seasonal worker). Employers are to send back the form if the employee is terminated, and to give the new working address of the obligor, if known.

BACK

On the back of the form is the set of instructions to withholders that details what the Federal laws and regulations require. States may want to add information on the bottom of the page, especially if the State's withholding ceiling is less than that authorized under the CCPA.

The pay cycle/support-installment cycle ratios are based on the Department of Labor's regulations for the CCPA. The employer will have to calculate the amount to withhold based on the pay cycle frequency if different from the installment frequency using the listed coefficients.

Obligors who are under more than one withholding Order/Notice are fairly common. State law determines the apportionment as long as each obligee receives some current support and arrearages are not withheld for any order until all current support is withheld. The employer should contact the CSE agency that sent the last Order/Notice and ask the contact person to clarify the apportionment.

ORDER/NOTICE TO WITHHOLD INCOME FOR CHILD SUPPORT

State of , Co./City/Dist. of

Date of Order/Notice Original Order/Notice Amended Order/Notice

TO: / ) RE:

Employer/Withholder Fed. ER ID # ) Employee/Obligor(L ast, First, MI)

)

Employer/Withholder's Address ) Employee/Obligor's Social Security Number

)

) Employee/Obligor's Case Identifier

)

Custodial Parent (Last, First, MI)

This is an Order/Notice to Withhold Income for Child Support. Under ,

State Code Provision

you are required to deduct these amounts from the above-named employee/obligor's income:

$ per in current support

$ per in past-due support

$ per in other (specify)

for a total of $ per to be forwarded to the payee below.

Additionally, you have the option to deduct a fee to offset your withholding costs. That amount is: per . The total withheld amount, including the fee, cannot exceed % of the employee/obligor's aggregate disposable weekly earnings (see #10 on back).

You must begin withholding by or no later than the next pay period that begins no later than 14 working days after the date of this Order/Notice.

Send payment within working days of the date of withholding.

If remitting by EFT/EDI, include the date of withholding and case identifier in the EDI addendum and use this FIPS code: ;Bank routing code ; Bank account number: _

If remitting by check, put the date of withholding and the case identifier (see above) on the check or an attached paper. Make it payable to:Payee

Send check to:

Payee's Address

If you have any questions, contact: by phone at ( ) - , or by FAX at ( ) - . If your employee/obligor has questions,he/she may contact at ( ) - .

Issuing Agency

Authorized signature

Printed signature

EFT/EDI information is shaded.

FOR EMPLOYER'S USE ONLY: MARK AND RETURN ORDER/NOTICE TO ISSUING AGENCY IF EMPLOYEE/OBLIGOR:

IS STILL EMPLOYED BY YOU BUT IS NOT CURRENTLY RECEIVING INCOME AND IS IN INACTIVE STATUS. THE DATE YOU EXPECT THE EMPLOYEE/OBLIGOR TO RESUME WORK IS ; OR

NO LONGER IS EMPLOYED BY YOU (see #9 on back). THE NEW WORK ADDRESS (IF KNOWN) OF YOUR EX-EMPLOYEE IS:

ADDITIONAL INFORMATION TO EMPLOYERS AND OTHER WITHHOLDERS

1.Liability: If you fail to withhold income as the Order/Notice directs, you are liable for the accumulated amount you should have withheld from the employee/obligor's income. You may also face a penalty.

2.Anti-discrimination: You are subject to a fine determined under State law for discharging an employee/obligor from employment, refusing to employ, or taking disciplinary action against any employee/obligor because of the withholding.

3.Binding Effect: This Order/Notice is binding on you until further notice by the State.

4.Priority: Withholding under this Order/Notice has priority over any other legal process under State law against the same income. Federal tax levies in effect before receipt of this order have priority unless otherwise agreed to by IRS.

5.No Pay Cycle Variance: You do not have to vary your pay cycle to be in compliance with the support order. If your pay cycle does not match the ordered support payment cycle, use the following to determine how much to withhold:

If you pay weekly, and the order's payment schedule is:

þ monthly, divide ordered amt. by 4.33;

þ semi-monthly, divide ordered amt. by 2.17; þ biweekly, divide ordered amt. by 2.0.

If you pay biweekly and the order's payment schedule is:

þ monthly, divide ordered amt. by 2.17;

þ semi-monthly, divide ordered amt. by 1.08;

þ weekly, multiply ordered amt. by 2.0.

If you pay semi-monthly and the order's payment schedule is:

þ monthly, divide ordered amt. by 2.0;

þ biweekly, multiply ordered amt. by 1.08;

þ weekly, multiply ordered amt. by 2.17.

If you pay monthly and the order's payment

schedule is:

þ semi-monthly, multiply ordered amt. by 2.0;

þ biweekly, multiply ordered amt. by 2.17;

þ weekly, multiply ordered amt. by 4.33.

6.Combining Payments: You may combine withheld amounts from more than one employee/obligor's income in a single payment to each appropriate agency requesting withholding. Separately identify the portion of the single payment that is attributable to each employee/obligor.

7.Reporting Withholding Date: You must report the date of withholding when sending the payment. The date of withholding is the date the income was withheld from the employee's pay.

8.Employee/obligor with Multiple Support Withholdings: If you have more than one Order/Notice to Withhold Income for child support against this employee/obligor and are unable to honor all support Orders/Notices due to Federal or State withholding limits, you must immediately contact the agency that sent the most recent Order/Notice to determine how to divide the withheld income. You must honor all Order/Notices to the greatest extent possible.

9.Termination Notification: Mark the space provided on the front if you have terminated the employee/obligor or the employee/obligor is in inactive status (employed but not receiving pay). You must promptly notify the State when the obligor no longer works for you. You must provide the State with the employee/obligor last known home address and the name and address of the employee/obligor new employer, if known.

10.Withholding Limits: You may not withhold more than the limits imposed by the Federal Consumer Credit Protection Act (15 U.S.C. õ 1673(b)) or the limits of the State where this order was served, whichever results in less money being withheld.

Federal limit: if the employee/obligor has a second family to support, the Federal limit is 50% of aggregate disposable weekly earnings (ADWE). ADWE is the net income left after making mandatory deductions such as State, Federal and local taxes, Social Security and Medicare taxes. Deductions for union dues, insurance or pursuant to a state court order or writ are not allowable deductions for the purpose of calculating ADWE. If the employee/obligor does not support a second family, the limit increases to 60%. If the employee/obligor owes arrearage that are 12 weeks or older, another 5% is added to either the 50% or 60% limit, for a total of 55% or 65%.

State limit:

11.Lump Sum Payments: If you have any questions about withholding from lump sum payments such as bonuses or commissions, contact the person listed on the front.