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Speaker: Sherri Grigsby, Federal Office of Child Support Enforcement

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1 Speaker: Sherri Grigsby, Federal Office of Child Support Enforcement
Employers & the Child Support Program; A Partnership that Benefits our Nation’s Children Speaker: Sherri Grigsby, Federal Office of Child Support Enforcement

2 Sponsored by:

3 RCH CREDIT This is an APA & HRCI approved program for 1 (one) RCH credit You must attend the entire 1-hour course. Within 30 calendar days of today, you will be sent a certificate with the program course code upon completion for your file folder.

4 A Child Support Story

5 Contents at a glance Child support program background and statistics
New hire reporting Standard response to Verification of Employment (VOE) Income Withholding for Support Order/Notice (IWO) Electronic Income Withholding (e-IWO) Lump sum reporting/Debt Inquiry Service Electronic payments (e-Payments) Employer services website update

6 Once Upon a Time, there were two mice who were in love….

7 The Happy Family Ricky Mouse loved his wife Winnie so much that he used to bring her flowers and chocolates. They had three children, triplets, Harley, Larry and Darrell.

8 The Break Up After the break up, Ricky was hitting the cheese pretty hard and lost his job. Unfortunately, not all fairy tales have a happy ending. For Sale by Owner

9 Applying for Child Support
How could Winnie be sure Ricky would pay child support? She found lots of information about the child support program on OCSE’s website.

10 The Child Support Program
Established under Title IV-D of the Social Security Act Charged with locating noncustodial parents, establishing paternity and child support orders, enforcing child and medical support orders Partnership between the public and private sectors

11 Roles and Responsibilities
Federal Office of Child Support Enforcement (OCSE) State Child Support Agencies Employers OCSE’s Role Operate Federal Parent Locator Service (FPLS) Help states develop, manage and operate their child support programs Fund the major share of state program operating costs Provide policy guidance and technical support to states Conduct audits and provide training State Responsibility Locate noncustodial parents (NCP) Establish paternity Establish child and medical support orders Enforce child support orders Collect and distribute support payments Employer responsibilities under the Social Security Act Report new hires and respond to requests for employment verification Withhold income for support payments and health insurance premiums and/or cash medical support Remit payments to the State Disbursement Unit (SDU) Forward National Medical Support Notice (NMSN) Part B to Plan Administrators to enroll children in health care Report terminations

12 Why is the child support program important?
The poverty rate for children under age 18 increased to 22% from 20.7% from 2009 to 2010 The number of children living in poverty increased to 16.4 million from 15.5 million during the same period Children comprise 36% of people living in poverty but only 24% of the general population

13 Largest source of payments? Employers/income withholders!
In FY 2011 Accounted for nearly 70% of the child support collected Reported 48.6 million new hires Enrolled millions of children in health insurance plans

14 Ricky Finds a New Job Ricky got the job and his new employer reported the new hire to the State of Florida. Ricky saw an ad in classified section looking for a stunt double for a very famous mouse actor and the worksite was none other than the Magic Castle.

15 New Hire Reporting Requirements
Mandatory elements Employer Name Employer Address Federal Employer Identification Number (FEIN) Employee Name Employee Address Employee Social Security Number (SSN) Date of Hire Some states may require additional elements

16 New Reporting Requirements
Trade Adjustment Assistance Extension Act of 2011 amended section 453A(a)(2) of the Social Security Act, effective April 21, 2012 Changed the definition of Newly Hired Employee to an employee who— (i) has not previously been employed by the employer; or (ii) was previously employed by the employer but has been separated from such prior employment for at least 60 consecutive days

17 Independent Contractor (IC) Reporting
14 states and 1 territory require IC reporting AL, AK, CA, CT, GU, IA, MA, ME, MI, MN, NE, NH, NJ, NV and OH Information to report Most states require the same information on the W-4 form (name, address, TIN - some states require additional data) Accounts payable may have this information

18 Establishing the Child Support Order
information necessary to establish the child support order. When the Florida Child Support Agency received the new hire record for Ricky, they sent a Verification of Employment to the employer to gather Verification of Employment VOE

19 Verification of Employment (VOE)
Why must states send VOEs? Obtain wage information when establishing or modifying an order Obtain health insurance information Standard response to VOE See our website employer/publication/forms/voeform.pdf Third party VOE providers

20 Which states accept the standard VOE response form?
Accepting the form Not accepting the form Other states undecided AL, AK, AZ, AR, CA, CO, GA, HI, IN, IA, KS, KY, ME MA, MN, MT, NV, OK, OR, PA SD, TX, VT, WA, WV CT, FL, ID, MI, MS ,MO NE, NY, ND, TN, VA ----- Meeting Notes (5/7/12 11:12) ----- Automating VOE?

21 Income Withholding time he was hitting the cheese, he got behind on some other payments including his student loans and his credit cards. Using the VOE, FL established a child support order based on Ricky’s income. FL issued an IWO to the employer. Unfortunately for Ricky, during the

22 Income Withholding Order
Income withholding is the most effective means of collecting child support Revised IWO approved by Office of Management and Budget (OMB) May 2011

23 IWO Changes* Checkbox for employer to return IWO to sender for following reasons Payment is not directed to a State Disbursement Unit (SDU) Form does not contain all information for employer to comply with order Form is altered or contains invalid information Amount to withhold is not a dollar amount Sender has not used the OMB-approved form (effective May 31, 2012) Copy of underlying order is required and not included *Does not reflect all changes to the revised IWO

24 Need More IWO Information?
Action Transmittal provides guidance to employers IWOs issued on or after 05/31/12 (i.e., new IWOs) Payment not directed to SDU Use of OMB-approved IWO IWOs issued before 05/31/12 (i.e., IWOs already processed by employer)* The changes to the form will include: Numerous wording changes and Removing the shading from the form and Adding language that if an employer receives an IWO and it is not payable to a State Disbursement Unit (SDU) they may return the IWO to the issuing entity. Assuming theses are the only changes no modifications will need to be made to the e-IWO record layouts * Exceptions

25 How do employers process IWOs when…
there is already an IWO in place from another state for the same children? there is already an IWO in place for another family? there are other garnishments from creditors and/or government entities? the IWO is from a state other than the employer’s state? the IWO directs payment to the CP? Continue to honor the first order received. Give your employee a copy of the second order. Contact the issuing agency that sent the second withholding order and inform it that you are already sending withheld payments for the same child to another jurisdiction. Provide payment information such as the amount of the withholding and where the withholding is being sent. Contact the issuing agency that sent the first withholding order and inform it of the second order. Implement the IWO and withhold up to the CCPA limits An IRS tax levy takes precedence over a child support withholding order only if the tax levy was entered before the child support order was established. The priority determination between a child support withholding order and an IRS tax levy depends on the date that the original child support order was established. Remember that the child support order is the order on which the income withholding order is based. The employer usually is not informed of the original order date. Therefore, the following action is recommended: If a child support IWO is received for an employee who already has a federal tax levy in place, contact the issuing child support agency about this situation. The child support agency can then contact the IRS to discuss an alternate payment plan. If a federal tax levy is received for an employee who already has a child support withholding order in place, contact the IRS and tell them a withholding order is already being honored. The IRS may then elect to contact the issuing child support agency. A federal tax levy is the only deduction that takes precedence over child support. Remember that child support should always be withheld before the following voluntary and involuntary deductions: Assignment of wages Non-tax federal debt State and local tax levies Creditor garnishment Implement the IWO and apply the laws of the state that issued the order 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 enforcement agency, issuing court or custodial party's attorney Apply the laws of the principle 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 Consumer Credit Protection Act 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

26 Employers’ Best Practices for Redirecting Payments
Contact the SDU – see matrix: newhire/employer/contacts/contact_map.htm Provide copies of all orders to the SDU Problems? Contact Cindy Holdren or ----- Meeting Notes (5/7/12 11:18) ----- Several employers told us that they do not feed

27 IWO Training Presentation
Visit publication/training/iwo_training.pdf

28 Remitting Payments Once the employer started withholding child support from Ricky’s wages, the fastest, most efficient way to get the money to the child support agency was to send the payments electronically.

29 Payments Federal law requires all employer-withheld payments (with a few exceptions) be sent to the SDU Contact the SDU to redirect payments for a private, non-IV-D order See our website for SDU contacts Click on “Employer Information”

30 Electronic Payments Cheaper, faster, safer, more accurate
Most large employers and payroll service providers remit e-Payments through the ACH network Most payroll software supports EFT for child support e-Payments from employers to SDUs are increasing 46% % 56% employers, state CSE agencies and families

31 16 States/Territories Require e-Payments for Child Support
California, Florida, Guam, Illinois, Indiana, Iowa, Massachusetts, Nebraska, Nevada, North Dakota, Ohio, Oregon, Pennsylvania, Texas, Virginia and West Virginia

32 Web-based Payments 38 states have web-based payment services
AR, AZ, CA, CO, CT, FL, GA, IA, ID, IL, IN, KS, KY, LA, MA, MD, MI, MN, MO, MT, NC, NE, ND, NH, NJ, NY, OH, OK, OR, PA, RI, TN, TX, UT, VA, WA, WI and WV Designed for small to mid-sized employers

33 Tribal IWOs Winnie moved on with her life and decided to move back with her tribe on the reservation. She closed her child support case in FL and opened a case with the tribal child support agency. The tribal CS agency issued an IWO to the employer.

34 Processing Tribal IWOs
Do tribes have their own child support programs? Yes. 42 tribes operate their own federally-funded child support programs. Should I honor an IWO from a tribe? Yes. You are required to honor an IWO sent from a tribal IV-D agency just as you would if it were sent from a state IV-D agency.

35 More on Tribal IWOs Do tribal IV-D agencies use the standard, federal income withholding order form? Yes. IV-D tribal agencies are required to use the standard, federal form. Where should I send payments for an order that comes from a tribe? Send them to the payee identified on the order.

36 Fast Forward— 2 Years in the Future
Winnie decided to move back to Orlando to be closer to the Magic Castle where she was able to find a job as a double for a famous mouse actress. She reopened her case in FL and FL issued an e-IWO to Ricky’s employer.

37 What is e-IWO? States electronically send and employers electronically acknowledge IWOs One “point of contact” Federal Employer Identification Number (FEIN) is key Handles terminations, lump sum payments Child Support invades cyberspace session—Tuesday 4—5:30.

38 24 States Using e-IWO—Represents over 70% of the child support caseload!
New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Tennessee Texas Virginia Washington West Virginia Arizona California Colorado District of Columbia Idaho Illinois Indiana Massachusetts Michigan Missouri Nebraska New Jersey

39 Want more information about e-IWO?
Contact: Bill Stuart e-IWO presentation available at, under Resources and 2012 Webinar Archive. Or click here Child Support invades cyberspace session—Tuesday 4—5:30.

40 Ricky Gets a Bonus! After returning to work and performing exceptionally well in a feature film, he was eligible to receive a bonus! His employer used the Debt Inquiry Service to notify FL about the payout. Last year, Ricky suffered an injury which prevented him from working for several months and he got behind in his child support payments.

41 Debt Inquiry Service (DIS)
Enables employers to notify child support agencies prior to awarding a lump sum payment One-by-one or batch file reporting Contact us if interested in participating DIS -Success Story- An employer received a response in 45 minutes!

42 30 States participating in Debt Inquiry
Arkansas California Colorado Connecticut District of Columbia Florida Guam Idaho Illinois Indiana Iowa Kansas Kentucky Maine Minnesota Missouri Montana Nebraska New Jersey New Mexico New York North Dakota Oklahoma Oregon Pennsylvania Puerto Rico Tennessee Texas Utah Virginia

43 The Kids Are All Grown Up!
In June, the triplets graduated from high school and Ricky’s employer received a termination notice for the child support order since all of Boys were also 18. The triplets were accepted to Mouse University where they would study graphic design with a focus on character animation.

44 Visit our Website!

45 Preview of new OCSE website

46 Employer Service Contacts
Sherri Grigsby Nancy Benner Lynnetta Thompson Bill Stuart (e-IWO) Cindy Holdren

47 The End. Thank you!

48 Q&A Copyright © 2007, SAS Institute Inc. All rights reserved. 48

49 RCH Credit If you attended this webinar for the full hour you will receive a certificate for credit 1 (one) RCH Credit – APA & HRCI Certificate ed by July 25th.

50 Upcoming webinars Could International Expansion Expose You to Permanent Establishment Risk July 3rd, 10am PST Taxing and Reporting Fringe Benefits July 17th, 10am PST Strategic Leadership for HR Executives July 5th, 10am PST How to Prepare and Deliver Legal and Effective Performance Appraisals July 11th, 10am PST

51 How Ascentis Can Help New hire reporting – automatically generated
Support for electronic payment Handling of complex scenarios involving IWO’s Specify priority orders to pay IWO Max % of earnings setup When max hit, pay based on order or pro- rated

52 Contact

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