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Letter to Software Developers and Payroll Service Providers on Allocation Guidance

DCL-06-10

Published: January 26, 2006
Information About:
State/Local Child Support Agencies, Employers
Topics:
Case Management, Collections/Distribution/State Disbursement Unit (SDU), Employer Responsibilities, Income/Wage Withholding
Types:
Policy, Dear Colleague Letters (DCL)

DEAR COLLEAGUE LETTER

DCL-06-10

ATTACHMENT: Sample Software Developers and Service Providers' Allocation Letter
Private Employer Guidance Document

DATE: January 26, 2006

TO: ALL STATE AND TRIBAL IV-D DIRECTORS

RE: Letter to Software Developers and Payroll Service Providers

Dear Colleague:

It has come to our attention that some payroll software (used by both individual employers and payroll service providers) may not be programmed to allocate child support payments correctly in situations where the noncustodial parent/employee’s disposable income is not sufficient to satisfy all the current orders for child support.

Some payroll software programs may still be following the “first-come, first-served” policy rather than allocating payments across all current orders for child support as required by State laws and Title 5, Code of Federal Regulations, 581.303 and Title 45, Code of Federal Regulations, 303.100(a)(5) to ensure that each order receives some funds.

Recently, the Federal Office of Child Support Enforcement mailed a letter to 78 companies that outlined the proper way to allocate multiple child support orders. We want to inform you of this mailing as it may prompt an increase in calls to your agency. Some payroll software developers, payroll service providers, or individual employers may be contacting child support offices for clarification. In addition, as payroll software is upgraded and implemented, some custodial parents may see a decrease in payment while others, who have received little or no support before, may see a substantial increase in the amount of support received. We do not anticipate a large volume of calls, but want to make you aware of these questions that may arise.

You may wish to review your own statutes and written policies to make sure that they are current with Federal requirements, since most software and payroll companies program their software based on state statutes. This could be a good opportunity for you to ensure that employers are provided with a clear and accurate policy.

If you have any questions, please contact Nancy Benner at (202) 401-5528 or nbenner@acf.hhs.gov. Thank you for your continued commitment to serving the needs of our nation’s children.

Sincerely,

Margot Bean
Commissioner
Office of Child Support Enforcement

Attachment: Copy of letter sent to software developers and payroll service providers

cc: Regional Program Managers
ACF Regional Administrators
State EFT/EDI Contacts
State Disbursement Unit Contacts