child support update - starchapter · office of child support enforcement •federal and state laws...

Child Support Update

Midwest Regional Payroll Conference

September 26, 2018

Office of Child Support Enforcement

• Employers reported over 67 million new hires in fiscal year

2017

• 75% of all child support collected nationwide is attributed to

employers implementing income withholding orders and

sending payments to child support agencies

• When available, employers enrolled millions of children in

health insurance plans

2

PARTNERSHIP PAYS OFF FOR FAMILIES

THANK YOU EMPLOYERS!

LET’S SEE HOW MUCH YOU KNOW

ABOUT AN EMPLOYER’S ROLE IN

THE CHILD SUPPORT PROGRAM BY

PLAYING

PAYROLL SAYS! 3

P_____

A_________

A_________

5

EMPLOYER RESPONSIBILITIES

7


• Report new hires and respond to requests for employment verification

• Process income withholding for support (IWO) orders/notices

• Withhold income for support payments, health insurance premiums, and cash medical support

• Remit payments to the state disbursement unit (SDU) or tribal payee

• Forward National Medical Support Notice (NMSN) Part B to Plan Administrators to enroll children in health care

• Report terminations

8

EMPLOYER RESPONSIBILITIES

N___ H____

T___________ I_____

N_____

P______

GO 9

VERIFICATION OF EMPLOYMENT

10


• Employers must respond to child support agencies requesting information about the following*

– wages

– withholdings

– health insurance availability

• Child support agencies and courts need recent verifications of income to help

– establish, modify, and enforce child support orders

– determine whether or not health insurance is available to a parent

*Not an all-inclusive list

11

VERIFICATION OF EMPLOYMENT (VOE)

W_____

W___________

H____

GO 12

I_________


• https://www.acf.hhs.gov/css/employers/employer-

responsibilities/verification-of-employment

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MORE INFORMATION ABOUT VOES

https://www.acf.hhs.gov/css/employers/employer-responsibilities/verification-of-employment

NEW HIRE REPORTING

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Office of Child Support Enforcement 15

NEW HIRE REPORTING – 7 FEDERALLY

REQUIRED DATA ELEMENTSData Element Definition

Employer Name Name associated with the Federal Employer Identification Number (FEIN)

Employer Address* Address associated with the FEIN entity that employs the individual

Federal Employer

Identification Number (FEIN)**Nine-digit number assigned to the employer by the Internal Revenue Service

Employee Name Full name associated with that employee's Social Security number (SSN)

Employee Address Current residential address of the new employee

Employee SSN Nine-digit SSN assigned to the employee by the Social Security Administration

Date of Hire First date the employee received pay for services

*It is strongly recommended that employers also report the payroll office address if it is different than the FEIN

address.

**It is critical that employers report both new hires and quarterly wages using the same FEIN. If employers report

under different FEINs, it could appear that they are not complying with new hire reporting requirements.

NOTE: Some states require additional data elements. See the State New Hire Reporting Contacts and Program

Requirements matrix for state-specific reporting requirements.

https://www.acf.hhs.gov/css/resource/state-new-hire-reporting-contacts-and-program-requirements



• Federal and state laws require all employers to report newly hired and rehired employees to a State Directory of New Hires (SDNH) within 20 days of the employee’s first day of work; some states may require shorter timeframes.

• Newly hired and rehired employees are defined as

– an employee not previously employed; or

– an employee previously employed but separated for at least 60 consecutive days

Remember: Report new hires under the same Federal Employer Identification Number (FEIN) used to report Quarterly Wages

16

NEW HIRE REPORTING LEGAL

REQUIREMENTS


• Multistate employers can choose to report:

– to the state where each individual works; or

– all new hires to one state where they have employees

• Multistate employers must register with the Secretary of the

Department of Health and Human Services to report all new

hires to one state

– the Multistate Employer Registry is now on the Portal!

17

MULTISTATE EMPLOYER REPORTING

GO

EMPLOYER

INFORMATION

N_____

F___

ADDRESS

EMPLOYEE

INFORMATION

N_____

S___ A________

D____O_ H____

18


• https://www.acf.hhs.gov/css/employers/employer-

responsibilities/new-hire-reporting

19

MORE INFORMATION ABOUT NEW HIRE

REPORTING


INCOME WITHHOLDING ORDER

(IWO) FOR SUPPORT

20


• Standard form approved by the Office of Management and

Budget (OMB) that must be used by any entity sending a

withholding/garnishment request to an employer or other

income payor to deduct child and medical support payments

from a parent’s income

• Courts, private attorneys, child support agencies, and others

must send the OMB-approved Income Withholding for Support

Order to employers

21

IWO

C___ S_______A______

A________C_________ P____

C_____

GO 23

P___ D__ S_______

GO

L___S___

C______ S_______

23

C___ M______ S_______


• Federal Consumer Credit Protection Act Withholding Limits:

– 50% - Supports a second family with no arrearage or less than 12

weeks in arrears

– 55% - Supports a second family and more than 12 weeks in arrears

– 60% - Does not support a second family with no arrearage or less than

12 weeks in arrears

– 65% - Does not support a second family and more than 12 weeks in

arrears

24

WITHHOLDING LIMITS


• Additional Information About Withholding Limits

– state limits may be lower than federal limits

– applies only to employees, not non-employees/independent contractors

– check the income withholding matrix for more information

acf.hhs.gov/programs/css/resource/state-income-withholding-contacts-and-

program-information

25

WITHHOLDING LIMITS (continued)

http://www.acf.hhs.gov/programs/css/resource/state-income-withholding-contacts-and-program-information


• UIFSA 2008 changes the definition of “state”; the Act no longer

requires an employer to honor a foreign income withholding

order issued directly by a foreign country

• Employers should return any IWOs from foreign countries and

advise them to send a request to the state child support

agency

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IWOs FROM OTHER COUNTRIES


• Added optional field for employee’s date of birth

• Clarified that a One-Time Order/Notice for Lump Sum Payment is

sent after notice of an upcoming lump sum payment by an

employer or other source

• Clarified that the CCPA limit is one specific percentage and not a

range

• Changed Federal Information Processing Standard Code to

Locator Code

• Rewrote text regarding tribal withholding limits and added link to

addresses and contacts for tribes

• Added a link to the Child Support Portal27

REVISED IWO FORM – 2017 CHANGES

DETERMINE WHICH STATE LAW

APPLIES

28


Follow the law of the issuing state for:

– duration and amount of child support, both current and

arrears

– medical support terms

– where to remit payments

– payment of fees and costs charged (if any) by the child

support agency, issuing court, or custodial party’s attorney

29

DETERMINE WHICH STATE LAW APPLIES


Follow the law of the employee’s principal place of employment for:

– when to begin withholding

– when to remit payments (this may be from 1 to 7 days after payday)

– mandatory deductions

– maximum amount to be withheld (within CCPA limits)

– how to allocate withholding across multiple child support orders

– administrative fee that employer is permitted to charge

– other terms and conditions that may be set by state law

30

DETERMINE WHICH STATE LAW APPLIES

(continued)

F____

M_____

P________

GO

DURATION

31

S______


• Always withhold child support first unless:

– an IRS tax levy is already in place and pre-dates the underlying child

support order (not the IWO)

• Contact the sender of the IWO to determine the date of the

underlying child support order if it was not sent with the IWO by an

attorney or other party

• When both a child support order and a creditor garnishment are in

effect:

– deduct the child support withholding first

– you may not be able to withhold for the creditor garnishment if the

child support withholding exceeds the CCPA withholding limits32

PRIORITY OF IWO OVER OTHER

GARNISHMENTS


• IWO Form

acf.hhs.gov/programs/css/resource/income-withholding-for-

support-form

• IWO Instructions


support-instructions

• IWO Training Presentation


support-iwo-training

33

IWO FORM, INSTRUCTIONS, AND TRAINING

http://www.acf.hhs.gov/programs/css/resource/income-withholding-for-support-form

http://www.acf.hhs.gov/programs/css/resource/income-withholding-for-support-instructions

http://www.acf.hhs.gov/programs/css/resource/income-withholding-for-support-iwo-training

ELECTRONIC INCOME

WITHHOLDING ORDER FOR

SUPPORT (e-IWO)

34


• e-IWO is an efficient and cost-effective way to electronically exchange IWO

information between child support agencies and employers

• OCSE is the hub

• All states and territories are using e-IWO except Guam, South Carolina, and U.S.

Virgin Islands

• More than 9 million e-IWOs processed since 2005!

• FEIN is the key to passing e-IWO data between the state and employer

• Factors to consider when selecting an option to implement e-IWO:

‒ number of IWOs received each week

‒ IT resource availability

‒ time available to implement

35

e-IWO


• System-to-System

– If you receive a significant number

of IWOs per week or month and

have available IT resources for a

three- to five-month programming

effort, “System-to-System” may

be the option for you.

e-IWO: YOUR CHOICE

• No Programming

– If you do not have IT resources, the fillable portable document format (PDF) or Excel spreadsheet are your best options.

– You receive an electronic PDF version of the IWO along with a prefilled PDF or Excel spreadsheet acknowledgement.

– You can complete an acknowledgement very quickly and easily.

36


INCOME WITHHOLDING

ACKNOWLEDGEMENT


EMPLOYER INITIATED INCOME

WITHHOLDING ACKNOWLEDGEMENT

F_____ P_______

E__________

I____________________

R______ E_____

GO 39

P______

C


• [email protected]

• https://www.acf.hhs.gov/css/employers/e-iwo

40

MORE INFORMATION ABOUT e-IWO

https://www.acf.hhs.gov/css/employers/e-iwo

https://www.acf.hhs.gov/css/employers/e-iwo

S__________

C_________

GO 41


PACSS and the SDU

will be phased in over

a 10-month period,

beginning in October

2018

42

PALMETTO AUTOMATED CHILD SUPPORT

SYSTEM (PACSS) AND STATE DISBURSEMENT

UNIT (SDU)


• Impacts ALL support cases enforced in family court, not just

child support agency (Title IV-D) cases

• Changes where payments are collected and disbursed

• Automates the generation of the income withholding on ALL

cases (IV-D and non-IV-D)

• Offers EFT/electronic income withholding options once

statewide

• Automates the generation of the National Medical Support

Notices

43

EMPLOYERS NEED TO KNOW


• Employers should expect a higher volume of IWOs and

employment verifications as a result of automated matching in

IV-D cases

• If paying through income withholding, employers will

continue to send payments to the Clerks of Court until all

counties have converted to PACSS (August 2019)

44

MORE INFORMATION FOR EMPLOYERS

EMPLOYER SERVICES

PORTAL APPLICATION

45


Employer Services Portal Application:

• Employer Information Updates

– provide contacts, addresses, and other information about your company that is shared with

child support agencies

• Multistate Employer Registry

– employers with employees in two or more states may register with OCSE to report all new

hires to one state

• Employer Reporting

– upcoming lump sum payments to employees

– employee terminations

46

CHILD SUPPORT PORTAL


Employer Reporting

• Lump Sum Entry – enter information on the Portal about an employee who is eligible for a lump sum payment

• File Upload – report multiple employees who are eligible for a lump sum payment

• File Errors – view file errors

• Termination Entry – report employee termination or respond to a new income withholding order that the person never worked or no longer works for you

• Reporting History – view information reported by your organization for 60 days

• Glossary – view common child support terms

47

EMPLOYER REPORTING


STATES

Contact employers to withhold child support, when applicable

FEDERAL OFFICE OF CHILD SUPPORT ENFORCEMENT (OCSE)

Matches employees to individuals who owe child support and notifies states when there is a match

EMPLOYERS

Report employee pending lump sum payouts

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LUMP SUM REPORTING OVERVIEW


• Bonus

• Cash Service Award

• Commission

• Insurance Settlement

• Life Insurance Proceeds

49

LUMP SUM ENTRY – PAYOUT TYPE

• Severance

• Sign-on Bonus

• Vacation Pay

• Workers’ Compensation

• Other

Payout Types:


Expected Payout Date

– Must be 5 days later than today

– Early reporting is recommended!

50

LUMP SUM EXPECTED PAYOUT DATE

• Some states require notification prior to making a lump sum payment to a parent who owes child support; you must follow applicable state law concerning hold periods.

U_____ I____________

R_____ T___________

P________R_____

52

S__ L___

EMPLOYER SERVICES CONTACT INFO

• Sherri Grigsby

– [email protected]

• General


• Portal


• e-IWO


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mailto:[email protected]




T__________

Y__54

child support update - starchapter · office of child support enforcement •federal and state laws...

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