DOL Opinion on Consumer Credit Protection Act and Lump Sum Payments

IM-18-06

Publication Date: May 2, 2018

INFORMATION MEMORANDUM

IM-18-06

DATE: May 2, 2018

TO: State and Tribal IV-D Agencies

SUBJECT: DOL Opinion Letter on Consumer Credit Protection Act and Lump Sum Payments

On April 12, 2018, the Department of Labor (DOL) issued Opinion Letter CCPA2018-1NA Visit disclaimer page to clarify whether employer-issued lump sum payments are subject to withholding limits for child support under Title III of the Consumer Credit Protection Act (CCPA).

The Opinion Letter addresses 18 specific types of lump sum payments and identifies which ones qualify as earnings subject to the 50 percent to 65 percent withholding limits under the CCPA.  Of the 18 types of payments, only three do not qualify as earnings:

  • Buybacks of company shares
  • Workers’ compensation for medical reimbursement
  • Wrongful termination insurance settlements for compensatory or punitive damages

The remaining 15 types of lump sum payments are subject to the CCPA limitations on child support withholdings.  Please review the Opinion Letter to ensure that your agency follows the guidance provided by DOL.

INQUIRIES: ACF/OCSE Regional Program Managers

Scott M. Lekan
Commissioner
Office of Child Support Enforcement

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