Correctly Withholding Child Support from Weekly and Biweekly Pay Cycles
DATE: April 15, 2016
TO: State and Tribal Agencies Administering Child Support Plans under Title IV-D of the Social Security Act and Other Interested Individuals
SUBJECT: Correctly Withholding Child Support from Weekly and Biweekly Pay Cycles
SUMMARY: This Action Transmittal provides guidance regarding allowable withholding when the noncustodial parent is paid weekly or biweekly.
BACKGROUND: During the 2011 and 2014 Employer Symposiums, the staff from the federal Office of Child Support Enforcement (OCSE), states, and employers discussed concerns about some states’ interpretation of federal procedures to withhold when a noncustodial parent is paid weekly or biweekly. For employers that pay weekly or biweekly, some child support agencies are adding an amount due, in addition to the monthly amount ordered by a tribunal, to the Office of Management and Budget (OMB)-approved Income Withholding for Support (IWO) form. This causes confusion and leads to errors in withholding.
Withholding an amount that is not based on the underlying child support order is inconsistent with federal law and regulations and causes the following consequences:
- The annual withholding amount is greater than the amount ordered by the tribunal.
- Allocation of payments among multiple child support orders may result in reduced payments to other states’ support orders when the employer is required to apply Consumer Credit Protection Act (CCPA) withholding limits.
- Payments for overdue support may exceed amounts specified in the underlying child support order.
- There is a lack of uniform withholding process among child support agencies.
STATUTORY AND REGULATORY REFERENCES: States are required under 45 CFR 303.100(a)(1) to have income withholding procedures that “ensure that in the case of each noncustodial parent against whom a support order is or has been issued or modified in the State, and is being enforced under the State plan, so much of his or her income as defined in sections 466(b)(1) and (8) of the Act must be withheld, in accordance with this section, as is necessary to comply with the order.” In accordance with 45 CFR 303.100(a)(2) and (3), the IWO must include an amount to be applied toward liquidation of overdue support in addition to the amount of the current monthly obligation, and the total amount withheld may not exceed the maximum permitted under section 303(b) of the CCPA [15 U.S.C. 1673(b)]. These provisions do not authorize the state to issue an IWO requiring an employer to withhold an amount above the current monthly obligation and the monthly amount required to satisfy arrears. For employers with weekly or biweekly pay cycles, long-standing guidance permits states to annualize the support obligation.
In addition, section 466(b)(6)(B) of the Social Security Act requires states to establish methods to simplify the withholding process for employers. A single employer may receive income withholding orders from many sources including state and tribal child support agencies, courts, attorneys, custodial parents, and others.
OCSE Action Transmittal 14-05, “2014 Revisions to the Income Withholding for Support (IWO) Form and Instructions,” published July 15, 2014, contains revisions approved by OMB that provide the following information for employers when calculating withholding amounts:
NOTE TO EMPLOYER/INCOME WITHHOLDER
An acceptable method of determining the amount to be paid on a weekly or biweekly basis is to multiply the monthly amount of support due by 12 and divide that result by the number of pay periods in a year.
This language clarifies that child support collected from employers that pay weekly or biweekly, per this calculation method, meets the federal requirements for states to collect child support. There is no federal law or regulation that supports a requirement to instruct employers to collect more than the amount in the underlying order.
EXAMPLE: To help states direct employers to properly withhold payments, we provide an example of the allowable withholding method.
The IWO contains a monthly current support obligation of $528 with no arrears and no other amount ordered by the tribunal that issued the order; the total amount to withhold monthly is $528 or $6,336 annually ($528 x 12).
Weekly amount to withhold ($6,336 ÷ 52) = $121.85
Biweekly amount to withhold ($6,336 ÷ 26) = $243.69
Semimonthly amount to withhold ($6,336 ÷ 24) = $264
Monthly amount to withhold ($6,336 ÷ 12) = $528
Using this calculation, as described in the IWO instructions, results in withholding the ordered amount of child support each year and is consistent with federal laws and regulations.
Child support agencies may not instruct employers to withhold more than the amount in the underlying child support order. Adding an extra amount to attempt to equalize withholdings for noncustodial parents on weekly and biweekly pay cycles is not authorized or accepted as a method to accomplish income withholding under federal law and regulations.
We are available to assist states with the income withholding process. Please contact the Division of Policy and Training at OCSE.DPT@acf.hhs.gov if you have questions.
Office of Child Support Enforcement
cc: ACF/OCSE Regional Program Managers