Income Withholding for Child Support

Techniques for Effective Management of Program Operations (TEMPO)

Office of Child Support Enforcement


Table of Contents

Introduction
Statement of the Problem
The Evolution of IV-D Income Withholding
The Federal Consumer Credit Protection Act (CCPA)
Immediate Income Withholding
Income Withholding in Interstate Cases
Managing Income Withholding to Collect Arrears
Conclusion
A. Federal Order/Notice to Withhold Income for Child Support and Instructions

Abstract

Income withholding in child support cases is a federally mandated enforcement tool. OCSE issues this TEMPO to provide IV-D program guidance to the State and local child support enforcement agencies and offices.

This TEMPO considers:

  • Immediate Income Withholding

  • Federal CCPA Protections

  • Intrastate and Interstate Withholding

  • Automated Income Withholding

  • The Federal Income Withholding Form

Introduction

The "IV-D" child support enforcement program is a cooperative initiative involving Federal, State, local, and tribal governments. The program began in 1975 when Congress amended Title IV of the Social Security Act to include the child support enforcement program as a new Part D. Today, all States, the District of Columbia, some Federally recognized Tribes, the Commonwealth of Puerto Rico, the Virgin Islands, and Guam participate in the IV-D program.

The Federal Office of Child Support Enforcement (OCSE) is the agency responsible for providing Federal program oversight. In addition, OCSE is responsible for providing technical assistance to the State and local IV-D agencies, to assist in an efficient, effective, and uniform implementation of the nation's child support enforcement program.

OCSE publishes this TEMPO on income withholding in child support cases as a technical assistance tool for all IV-D agencies. This TEMPO considers income withholding from the viewpoint of the IV-D caseworker or IV-D attorney. The purpose of this TEMPO is to assist the IV-D community in the effective management of the income withholding remedy in order to maximize child support collections in cases with child support orders.

Statement of the Problem

The American family experienced a significant evolution in the latter half of the 20th century. These years saw tremendous increases in the rates of divorce and out-of-wedlock births. As a direct result, the "single parent household" became increasingly common in America. Unfortunately, in far too many instances, this single parent received little or no financial support from the nonresidential parent. Many of these single parent families had no order setting a periodic financial child support obligation. When there was a child support order, these orders went unpaid in too many cases.

Most, if not all, States experienced dramatic increases in the numbers of families turning to public aid during this timeframe. The public assistance program in those years ("Aid to Dependent Children," later renamed "Aid to Families with Dependent Children") was funded by a combination of Federal and State funds. Therefore, the increases in the numbers of families receiving public aid taxed both Federal and State resources. As the magnitude of this problem continued to grow, the need for a nationwide solution prompted Congress to take action. In 1975, Congress enacted the nationwide child support enforcement program we refer to as the IV-D program, because of its location in Title IV, Part D of the Social Security Act, 42 U.S.C. 651, et seq.

Since its creation, a primary goal of the IV-D program has been the enforcement of child support obligations. In fact, when the IV-D program was established in 1975, Congress cited the enforcement of child support obligations as the lead purpose justifying the appropriation of Federal funding for the new program. When enacted in 1975, the first sentence of the first section of the "new" Part D authorized Federal funding "[f]or the purpose of enforcing the support obligations owed by noncustodial parents to their children…" Although Part D has experienced many revisions throughout the years, this phrase remains essentially unchanged. (See 42 U.S.C. 651.)

It is interesting to note that when Congress originally enacted the IV-D program in 1975, income withholding was not a State plan requirement. In fact, income withholding did not become a State plan requirement until Congress amended the IV-D program in 1984. However, today very few would argue with the statement that income withholding has proven to be the most effective tool to enforce child support obligations. In its most recently published report to Congress, OCSE reports nationwide child support collections for FY '98 in the amount of $14.3 billion. OCSE also reports that income withholding was responsible for over half of the child support collected for FY '98. (OCSE's 23rd Annual Report to Congress, Table 17: "Total Collections Made by the States by Method of Collection.")

Unfortunately, as successful as income withholding has proven to be in enforcing child support obligations, there remains much room for improvement. OCSE also reports that nationwide in FY '98, only 14% of the child support cases with orders received at least one collection. (OCSE's 23rd Annual Report to Congress, Table 28: "Average Number of Total CSE Cases in Which a Collection was Made on an Obligation.") Yet, there is reason to be optimistic.

In its 1996 review of the IV-D program, Congress provided the States with the means to bring real improvement to the effectiveness of income withholding in child support cases. The expanded Federal Parent Locator Service now provides the States with a nationwide "New Hire" database that offers the potential for increases in both efficiency and effectiveness in the management of the income withholding remedy. Issuance of income withholding orders across State lines is now in effect. The challenge now facing the Federal, State, and local IV-D agencies is to obtain the maximum possible benefit from the automation of the income withholding remedy.

The Evolution of IV-D Income Withholding

As stated above, when originally enacted in 1975 (P.L. 93-647), Congress did not include income withholding as a IV-D State Plan requirement. The Child Support Enforcement Amendments of 1984 (P.L. 98-378) represented Congress' first significant revision of the IV-D program. The 1984 Amendments created section 466 of the Social Security Act (Act) (42 U.S.C. 666). Section 466 contains the list of specific child support enforcement procedures that each State is required to have in place in order to satisfy the State Plan requirements of section 454 of the Act. Here, for the first time, income withholding became a IV-D State Plan requirement. (See 42 U.S.C. 666(a)(1) and (b).) In addition to requiring income withholding in intrastate cases, the 1984 Amendments also required interstate income withholding.

The version of income withholding introduced in the 1984 Amendments is referred to as "mandatory income withholding." The fact that it was delinquency-based is the most striking example of how mandatory income withholding differs from today's form of income withholding. That is, the income withholding was required to be initiated when the obligor became delinquent in an amount of child support that was equal to one month's support obligation. In addition, any States that had not implemented an income withholding process for child support cases by 1984 were required to send the obligor advance notice of their intent to withhold income. (States that had a system for income withholding in place at that time were allowed to meet the due process requirements of State law.)

In the Family Support Act of 1988 (P.L. 100-485), Congress enacted the most comprehensive revisions to the IV-D program to that date. Included in these revisions were substantial changes to the income withholding remedy. Delinquency-based income withholding was made obsolete when the Family Support Act of 1988 introduced "immediate income withholding."

Immediate income withholding requires that the wages of the obligated parent be subject to income withholding "regardless of whether support payments by such parent are in arrears." (See P.L. 100-485, section 101.) Congress included two exceptions to immediate income withholding:

  1. when one of the parties demonstrates, or the court or administrative process finds, that there is good cause not to require immediate income withholding, or

  2. when a written agreement between the parties provides for an alternative arrangement.

(See 42 U.S.C. 666(b)(3)(A).)

Immediate income withholding remains the Federally mandated standard.

Congress' next significant revision to the IV-D program occurred in 1996 with the enactment of The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (P.L. 104-193). PRWORA included many enhancements to the income withholding remedy. For the first time, the Federal law provided a definition of "income," clarifying what types of income are subject to withholding. (See 42 U.S.C. 666(b)(8).) PRWORA also included provisions requiring that the State IV-D agency has the authority to issue income withholding orders administratively. (See 42 U.S.C. 666(c)(1)(F).) However, rather than introducing a new form of income withholding, the provisions in PRWORA primarily focused upon the manner in which income-withholding orders are issued.

PRWORA added a new requirement at 454A(g) of the Social Security Act to require the States to use their automated system "to the maximum extent feasible" to assist in the collection of child support. This new subsection stresses the importance of automation to the income withholding process by requiring close ties between the State IV-D automated system and the issuance of the income withholding order. Specifically, subsection 454A(g) of the Act requires the transmission of an income withholding order to the employer within two business days from the date a State IV-D agency receives notice of the source of income. In addition, this subsection requires the State IV-D agencies to issue an income withholding order using the "uniform formats prescribed by the Secretary." (See 42 U.S.C. 654A(g)(1)(A) and 666 (b)(6)(A)(ii).) In a related revision, again emphasizing the interplay of automation and income withholding, PRWORA added a new section to the Social Security Act, 454B, that requires the use of "automated procedures" and "computer-driven technology" for the collection and disbursement of child support payments. (See 42 U.S.C. 654B(b).)

The automation of income withholding offers the potential for increasing both child support collections and the percentage of cases with orders that receive a collection. The challenge facing the IV-D community is to incorporate automation into the management of the income withholding remedy so as to maximize the full potential that automation offers.

The Federal Consumer Credit Protection Act (CCPA)

Congress enacted the Federal Consumer Credit Protection Act (CCPA) to provide wage earners nationwide with uniform protections against excessive wage garnishments. As a general rule, the CCPA will not allow the garnishment of more than 25% of an individual's "disposable earnings." (See 15 U.S.C. 1673(a).)

The CCPA defines "disposable earnings" as "that part of the earnings of an individual remaining after the deduction from those earnings of any amounts required by law to be withheld." (See 15 U.S.C. 1672(B).) However, wage withholding actions to collect child support are one of the expressed exceptions to the CCPA's general rule restricting wage withholding actions to a maximum of 25% of an individual's disposable earnings.

Under the CCPA, if the wage earner is supporting a spouse or dependent child (other than the spouse or child covered by the support order being enforced), then up to 50% of this individual's disposable income may be attached "to enforce any order for the support of any person." If the wage earner is not supporting a second family, then up to 60% of this individual's disposable income may be attached to enforce a child support order. However, if the wage earner is more than twelve weeks delinquent in the payment of the support obligation, then the 50% and 60% ceilings are increased to 55% and 65% respectively. (See table below and 15 U.S.C. 1673(b)(2).)

Table 1. CCPA Withholding Limits

Case Facts

CCPA Withholding Limits

Obligor Supports a Spouse or Dependent Child; Less Than 12 Weeks in Arrears

50% of wages may be withheld to enforce a support obligation

Obligor Supports a Spouse or Dependent Child; More Than 12 Weeks in Arrears

55% of wages may be withheld to enforce a support obligation

Obligor Does Not Support a Spouse or Dependent Child; Less Than 12 Weeks in Arrears

60% of wages may be withheld to enforce a support obligation

Obligor Does Not Support a Spouse or Dependent Child; More Than 12 Weeks in Arrears

65% of wages may be withheld to enforce a support obligation

It is important to note that the CCPA only precludes a State from providing wage earners with less protection against income withholding actions than the levels of protection provided by the Federal law. The States are free to provide (and many States do provide) greater protections than the CCPA's 50%–60% / 55%-65% ceilings. As a result, in some States the maximum amount that may be withheld from an individual's wages for child support is 50%, regardless of whether the individual is supporting a second family or more than twelve weeks delinquent in the payment of child support. Check the table below for the appropriate State exemption levels applicable in income withholding actions to enforce child support.

Table 2. Income Withholding Exemption Scheme for Child Support

State

Income Withholding Exemption Scheme for Child Support

Alabama

Follows the CCPA

Alaska

Follows the CCPA

Arizona

Exempts 50% of disposable income from attachment

Arkansas

Follows the CCPA

California

Follows the CCPA

Colorado

Follows the CCPA

Connecticut

Exempts the greater of the CCPA or $145 week

Delaware

Follows the CCPA

District of Columbia

Follows the CCPA

Florida

Follows the CCPA

Georgia

Follows the CCPA

Guam

Exempts 40% of disposable income if obligor is not supporting spouse or dependent child; Exempts 50% of disposable income if obligor is supporting a spouse or dependent child.

Hawaii

Follows the CCPA

Idaho

Follows the CCPA

Illinois

Follows the CCPA

Indiana

Follows the CCPA

Iowa

Follows the CCPA

Kansas

Follows the CCPA

Kentucky

Follows the CCPA

Louisiana

Exempts 50% of disposable income from attachment for child support or a combination of child support and spousal support

Maine

Follows the CCPA

Maryland

Follows the CCPA

Massachusetts

Follows the CCPA

Michigan

Follows the CCPA

Minnesota

Follows the CCPA

Mississippi

Follows the CCPA

Missouri

Follows the CCPA

Montana

Follows the CCPA

Nebraska

Follows the CCPA

Nevada

Follows the CCPA

New Hampshire

Follows the CCPA

New Jersey

Follows the CCPA

New Mexico

Exempts 50% of disposable income from attachment

New York

Follows the CCPA

North Carolina

Exempts 60% of disposable income in an action to enforce one support order; in actions involving multiple withholdings: exempts 55% when the obligor is supporting a second family and 50% when the obligor is not supporting a second family.

North Dakota

Exempts 50% of disposable income from attachment

Ohio

Follows the CCPA

Oklahoma

Follows the CCPA

Oregon

Exempts 50% of disposable income from attachment

Pennsylvania

Follows the CCPA

Puerto Rico

Follows the CCPA

Rhode Island

Follows the CCPA

South Carolina

Follows the CCPA

South Dakota

Follows the CCPA

Tennessee

Exempts 50% of disposable income from attachment

Texas

Exempts 50% of disposable income from attachment

Utah

Follows the CCPA

Vermont

Follows the CCPA

Virginia

Follows the CCPA

Virgin Islands

Follows the CCPA

Washington

In administrative enforcement actions, 50% of disposable income is exempt from attachment; in judicial actions, 40% is exempt if the obligor is supporting a second family; if not, 50% is exempt.

West Virginia

Follows the CCPA

Wisconsin

Follows the CCPA

Wyoming

Exempts 65% of disposable income from attachment

*State exemption research conducted in 1998

The Federal IV-D income withholding requirements in section 466(b)(1) of the Act specifically reference the CCPA. The IV-D income withholding provision requires the withholding of income in an amount sufficient to comply with the support order "up to the maximum amount permitted under section 303(b) of the Consumer Credit Protection Act (15 U.S.C. 1673(b))." The employer is responsible for implementing the CCPA limitations (or appropriate State exemption protections) at the time the withholding order is applied against the wages. It is important to remember that the Federal CCPA exemptions only apply to "disposable income." For example, once the income is deposited into a savings or checking account, the CCPA protections no longer insulate any portion of the bank account from attachment.

Immediate Income Withholding

The Family Support Act of 1988 (P.L. 100-485) introduced "immediate income withholding" and it remains the Federally mandated income-withholding standard. Immediate income withholding appears at 42 U.S.C. 666(b)(3):

(A) The income of a noncustodial parent shall be subject to such withholding, regardless of whether support payments by such parent are in arrears, in the case of a support order being enforced under this part that is issued or modified on or after the first day of the 25th month beginning after the date of the enactment of this paragraph [October 13, 1988], on the effective date of the order; except that such income shall not be subject to such withholding under this subparagraph 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 income withholding, or

  2. a written agreement is reached between both parties which provides for an alternative arrangement.

(B) The income of a noncustodial parent shall become subject to such withholding, in the case of income not subject to withholding under subparagraph (A), on the date on which the payments which the noncustodial parent has failed to make under a support order are at least equal to the support payable for one month or, if earlier, and without regard to whether there is an arrearage, the earliest of -

  1. the date as of which the noncustodial parent requests that such withholding begin,

  2. the date as of which the custodial parent requests that such withholding begin, if the State determines, in accordance with such procedures and standards as it may establish, that the request should be approved, or

  3. such earlier date that the State may select.

It is the phrase "regardless of whether support payments by such parent are in arrears" that makes this standard of income withholding "immediate." The theory behind immediate income withholding is that it is more difficult for arrears to accumulate in a case if the monthly support obligation is enforced via income withholding from the very beginning of the obligation. Although this theory seems fairly innocuous today, it was very controversial in 1988. Fortunately, in the years since then most, if not all, of the negative stigma associated with the issuance of an income withholding order to enforce a child support obligation has disappeared.

The Federal law allows two exceptions to immediate income withholding. The first exception requires one of the parties to demonstrate to the satisfaction of the court (or administrative forum) that there is "good cause" not to require immediate income withholding in the case. This exception requires the court or administrative forum to include in the child support order a finding supporting the claim of good cause. Although the Federal statute did not define either "good cause" or a "written agreement" for an "alternative arrangement," OCSE issued Federal regulations to define these terms.

OCSE issued 45 C.F.R. 303.100(b)(2) to define "good cause" for not requiring immediate income withholding in a case:

For purposes of this paragraph, any finding that there is good cause not to require immediate income withholding must be based on at least:

  1. A written determination that, and explanation by the court or administrative authority of why, implementing immediate wage withholding would not be in the best interests of the child; and

  2. Proof of timely payment of previously ordered support in cases involving the modification of support orders.

OCSE issued a related regulation, 45 C.F.R. 303.100(b)(3), to define the written agreement that provides for an alternative arrangement exception:

For purposes of this paragraph, "written agreement" means a written alternative arrangement signed by both the custodial and noncustodial parent, and, at State option, by the State in IV-D cases in which there is an assignment of support rights to the State, and reviewed and entered in the record by the court or administrative authority.

It is important to remember both exceptions to immediate income withholding because one or the other may be appropriate in a given case. For example, assume that the obligor needs to maintain a particular security-clearance level to maintain his or her career path. Further assume that this level of security clearance is jeopardized by the issuance of an income withholding order. That is, although the employer may not terminate the obligor's employment due to the receipt of the income withholding order, the employer may restrict the type of employment offered to the obligor. In our contrived hypothetical, rather than issuing an income withholding order, the court may find it appropriate to implement either the good cause or written agreement for an alternative agreement exception.

In our example, good cause could be shown by proof of the employer's security-clearance policy supported by the obligor's written promise to voluntarily make payments as ordered. On the other hand, the parties could enter into a written agreement that stated the employer's policy and authorized an automatic transfer from the obligor's checking or saving account to a like account for the obligee (i.e., an "alternative arrangement"). As long as the obligor continued to make the required payments or complied with the terms of the alternative arrangement, income withholding would not be implemented. However, a IV-D office is required to initiate income withholding upon the obligor's failure to comply with the terms of either exception or upon a request from the custodial parent that is approved by the State.

As stated above, the Act as amended by PRWORA retains immediate income withholding as the required IV-D income-withholding standard. However, the amendments in PRWORA affect income withholding by emphasizing the potential improvements that automation offers this remedy. For example, each State is required to implement a New Hire Reporting program and the Act establishes a nationwide New Hire network by linking these State programs with the National Directory of New Hires operated by OCSE as part of the expanded Federal Parent Locator Service.

As a direct result, the States are receiving employer leads in numbers so vast that managing these leads manually is clearly impractical, if not impossible. The Act recognizes that the States need to employ high levels of automation to effectively manage these numbers. A good example of the marriage of automation and income withholding appears in the requirement that the States use their automated systems to issue an income withholding order to an employer within two business days of receiving notice of the income source. (42 U.S.C. 654A(g)(1).)

However, while a computer may be capable of issuing thousands of income withholding orders each day, the State and local IV-D programs must be prepared to deal with the consequences of such large-scale issuances. As was true when income-withholding orders were issued manually, the service of the order upon an employer occasionally results in a contact with the IV-D office by the obligor or employer (or both). In addition, any changes to the support amount disbursed to the custodial parent are also likely to generate responsive telephone contacts.

It is important to keep in mind that an automated issuance is unlikely to alter the obligor's desire to contact the IV-D office to discuss his or her income withholding order. The IV-D programs must consider this factor when determining how to implement increased automation to their income withholding process. For example, it may be prudent to consider developing an automated telephone inquiry system to assist with increases in telephone contacts that are likely to accompany a large scale automated income-withholding program.

In addition to planning for increased telephone contacts, a truly automated income withholding order issuance process necessitates related system programming to guard against inappropriate issuance. Examples of such inappropriate issuance include:

  • an income withholding order is already in place for that employer and obligor

  • the obligor is protected by a Federal bankruptcy automatic stay

  • paternity is not established in the case.

The goal is to implement an automated income withholding process that automatically generates an order whenever it is appropriate to do so. A successful implementation is not one that focuses narrowly upon the automatic generation of the order. A successful implementation of an automated income withholding process is one that focuses upon the income withholding process globally by considering all activities related to the income withholding process.

Income Withholding in Interstate Cases

The Uniform Interstate Family Support Act (UIFSA) governs most interstate child support enforcement actions throughout the nation. Section 321 of PRWORA revised section 466 of the Social Security Act by adding a new subsection (f). As a result, all States were required to enact and implement UIFSA by January 1, 1998 in order to continue to receive Federal funding for their State IV-D programs. Therefore, although it is Federally mandated, UIFSA is a State law that has been enacted and implemented in each State.

Both UIFSA and 42 U.S.C. 666(b)(6) allow an IV-D office (or other individual or entity) to send a child support enforcement income withholding order directly to an out-of-state employer. The IV-D office does not need to route the income withholding order to the IV-D program in the employer's State. UIFSA refers to this provision as "Direct Income Withholding" (DIW).

Under UIFSA's DIW provisions, an employer is required to honor an income withholding order sent by another State if the withholding order appears "regular on its face." (See section 502 of the UIFSA Model Act.) The employer is required to comply with terms of the income withholding order with respect to these five elements:

  1. The obligation's duration and amount (stated in a sum certain);

  2. The person or agency identified to receive the payment;

  3. The medical support provisions (cash payment or health insurance);

  4. The amount of any fees charged by the IV-D agency, the issuing tribunal, or obligee's attorney (stated in sums certain); and

  5. The arrears and interest payment (stated in a sum certain).

This same section of UIFSA provides that the employer is to look to the "law of the obligor's principal place of employment" for these three income-withholding elements:

  1. The fee the employer can charge for processing the income withholding order;

  2. The maximum amount allowed to be withheld from the obligor's wages (CCPA or State exemption amounts); and

  3. The timeframes for implementing the income withholding order and disbursing the withheld amounts.

42 U.S.C. 666(b)(6) adds two additional instances where the income withholding law of the obligor's principal place of employment controls:

  1. In determining the priorities for withholding and allocating income withheld for multiple child support obligees, and

  2. In determining any withholding terms or conditions not specified in the order.

In the event an employer fails to honor a DIW for any reason, OCSE recommends that the IV-D agency issuing the DIW contact the employer in an initial attempt to resolve the matter. If the issuing State IV-D agency is unable to resolve the matter, OCSE further recommends that the agency terminate the DIW and initiate a formal two-State enforcement action. Should the employer fail to honor an enforcement action initiated by the IV-D agency in the employer's State, then that IV-D agency is in the position to resolve the issue of employer noncompliance. (See OCSE AT-98-30, Q&A # 19.)

As discussed above, section 502 of the Model Act requires the employer to comply with the terms of the income withholding order and send the withheld payment to the "person or agency designated to receive payments…" Due to this requirement, it is very important that the IV-D agency or office issuing the DIW identify the appropriate payment location. When an agency is requesting direct income withholding to enforce another state's support order, the IV-D agency should list the same payment location (name and address) on the Federal form as that specified in the existing support order. If there has been a determination of Controlling Order, the payment location should be the same as that identified in the Controlling Order, as the Controlling Order is the one order under UIFSA entitled to prospective enforcement. A DIW should not be used as a vehicle to redirect the payments to a location other than that provided in the Controlling Order. (See OCSE-PIQ-01-01.)

Under DIW, the employer is responsible for notifying the obligor of the action by providing the obligor with a copy of the income withholding order. If the obligor disputes the validity of the income withholding order, the obligor may contest the action by following the appropriate procedures in the State that is the obligor's principal place of employment. This requirement has proven very difficult for the IV-D program to implement because the IV-D agency in the obligor's principal place of employment frequently has no knowledge of the case or the action. As a result, when a contest is requested to a DIW, OCSE has encouraged the States to withdraw the DIW and initiate a two-state enforcement action. (See OCSE-AT-98-30, Q&A # 23.)

Federal IV-D law requires the States to transmit income withholding orders to employers "using uniform formats prescribed by the Secretary." (See 42 U.S.C. 654A(g)(1)(A)(ii) and 42 U.S.C. 666(b)(6)(ii).) The Federal Order/Notice to Withhold Income for Child Support form contains the uniform formats approved by the DHHS Secretary. The Federal OCSE requires that all States use the Federal Order/Notice to Withhold Income for Child Support form. (This form and its instructions appear in the TEMPO's Appendix.)

According to OCSE-AT-98-03, "the Order/Notice to Withhold Income for Child Support is a standardized form used for income withholding in intrastate and interstate cases." OCSE developed this form in conjunction with representatives from State IV-D agencies and employer and payroll associations (e.g., the American Payroll Association and the American Society for Payroll Management).

In today's UIFSA world, "long-arm income withholding" is an often-overlooked interstate remedy. It is an enforcement tool that has been in existence for many years, predating both UIFSA and the IV-D program. Under long-arm income withholding, an individual or entity may issue an income withholding order to an employer in another State when that employer has sufficient minimum contacts with the issuing State.

Long-arm income withholding differs from DIW in one important aspect. As stated above, it is the law of the obligor's principal place of employment that governs much of the income withholding process in a DIW action. However, in long-arm income withholding, it is the law of the State issuing the income withholding order that controls all aspects of the withholding process. It is important to keep this remedy in mind because there may be instances when the application of your local State law (e.g., employer noncompliance procedures) may prove to be the most efficient manner to process a case.

Managing Income Withholding to Collect Arrears

The Social Security Act includes a required State law that income withholding be used to collect delinquent child support. The Act states:

[I]f there are arrearages to be collected, amounts withheld to satisfy such arrearages, when added to the amounts withheld to pay current support and provide for the [employer] fee, may not exceed the limit permitted under such section 303(b) [CCPA - 15 U.S.C.1673(b)] but the State need not withhold up to the maximum amount permitted under such section in order to satisfy arrearages.

(See Section 466(b)(1) of the Act.)

It is important to note at the outset that the Federal law provides the States with considerable discretion in managing the income withholding remedy to collect any arrears owed in a case. The law requiring the use of income withholding to collect arrears expressly states that the States are not required to withhold up to the CCPA maximums to collect any arrears. Rather, the States are allowed to use their discretion in crafting an income withholding order to collect the arrears.

In some cases, the circumstances of the case allow no discretion. For example, the amount of the current support obligation may be equal to, or greater than, the amount available under the CCPA. However, in other cases there will be sufficient income available to collect the full current support obligation and an additional amount for application against any arrearage. In these cases, State law or procedure may allow the IV-D agency to collect less than the absolute maximum authorized by State law. These procedures must be applied by the IV-D agency in a consistent manner throughout the State.

Circumstances that may warrant a reduction to the arrearage payback amount should be considered on a case-by-case basis. In the absence of a statutory mandatory payback amount, it may be appropriate for the worker to consider the obligor's payment history, necessary living expenses, extraordinary medical expenses, special needs of any child in the case (obligor's second family or child at issue), and the amount of the arrears. If negotiating the arrearage payback amount, the worker should remember that the amount of the current support obligation cannot be negotiated. A modification of the child support order is required to change the current support obligation.

This discretion regarding the arrearage payback amount should not be abused. For example, it is inappropriate and contrary to Federal regulations to revise the income withholding order to remove all amounts over the current support obligation thereby leaving no payment to be applied against the arrears. Federal regulations require that "in addition to the amount to be withheld to pay the current month's obligation, the amount to be withheld must include an amount to be applied toward liquidation of overdue support." (See 45 C.F.R. 303.100(a)(2) (emphasis added)).

Conclusion

As stated in the Introduction, the purpose of this TEMPO is to assist the IV-D community in the effective management of the income withholding remedy in order to maximize collections in cases with child support orders. It is important that we direct both considerable thought and effective management toward the task of programming the automated issuance of income withholding orders.

Federal IV-D law continues to recognize the authority of the State and local IV-D programs to manage income withholding. It allows States discretion to collect less than the maximum allowed under the law, but enough to satisfy the current support and include a reasonable payment to be applied to any arrears. The challenge is to blend automation and human oversight to maximize the effectiveness of the income withholding remedy. We can only claim success in meeting this challenge when the obligation for every child in every order is collected.

A. Federal Order/Notice to Withhold Income for Child Support and Instructions

The Federal Order/Notice to Withhold Income for Child Support and Instructions immediately follow.

Federal Order/Notice to Withhold Income for Child Support (MicroSoft Word Format)

Federal Order/Notice to Withhold Income for Child Support (Adobe PDF Format)