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

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Presentation on theme: "Employers & the Child Support Program; A Partnership that Benefits our Nation’s Children Speaker: Sherri Grigsby, Federal Office of Child Support Enforcement."— Presentation transcript:

1 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 4

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…. 6

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. 7

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

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. 9

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 10

11 Roles and Responsibilities Federal Office of Child Support Enforcement (OCSE) State Child Support Agencies Employers 11

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 12

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 13

14 Ricky Finds a New Job 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. 14 Ricky got the job and his new employer reported the new hire to the State of Florida.

15 New Hire Reporting Requirements Mandatory elements 1.Employer Name 2.Employer Address 3.Federal Employer Identification Number (FEIN) 4.Employee Name 5.Employee Address 6.Employee Social Security Number (SSN) 7.Date of Hire Some states may require additional elements 15

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 16

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 17

18 Establishing 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 18 information necessary to establish the child support order. 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 http://www.acf.hhs.gov/programs/cse/newhire/ employer/publication/forms/voeform.pdf 19

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,MONE, NY, ND, TN, VA 20

21 Income Withholding 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 21 time he was hitting the cheese, he got behind on some other payments including his student loans and his credit cards.

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 22

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 23

24 Need More IWO Information? Action Transmittal 11-05 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)* Payment not directed to SDU Use of OMB-approved IWO * Exceptions 24

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? 25

26 Employers’ Best Practices for Redirecting Payments Contact the SDU – see matrix: http://www.acf.hhs.gov/programs/cse/ newhire/employer/contacts/contact_map.htm Provide copies of all orders to the SDU Problems? Contact Cindy Holdren cynthia.holdren@acf.hhs.govcynthia.holdren@acf.hhs.gov or 240-676-2808

27 IWO Training Presentation Visit http://www.acf.hhs.gov/programs/cse/newhire/employer/ publication/training/iwo_training.pdf 27

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 28 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 http://www.acf.hhs.gov/programs/cse Click on “Employer Information” 29

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 2009 2010 2011 46% 53% 56% 30

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 31

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 32

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 33 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. 34

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. 35

36 Fast Forward— 2 Years in the Future 36 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 37

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

39 Want more information about e-IWO? Contact: Bill Stuart william.k.stuart@acf.hhs.gov 518-399-9241 e-IWO presentation available at Ascentis.com, under Resources and 2012 Webinar Archive.Ascentis.com2012 Webinar Archive Or click hereclick here 39

40 Ricky Gets a Bonus! Last year, Ricky suffered an injury which prevented him from working for several months and he got behind in his child support payments. 40 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.

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 41 DIS

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 42

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. 43 The triplets were accepted to Mouse University where they would study graphic design with a focus on character animation.

44 44 www.acf.hhs.gov/programs/cse/newhire/employer/home.htm Visit our Website!

45 Preview of new OCSE website 45

46 Employer Service Contacts Sherri Grigsby sherri.grigsby@acf.hhs.gov 202-401-6114 sherri.grigsby@acf.hhs.gov Nancy Benner nancy.benner@acf.hhs.gov 202-401-5528 nancy.benner@acf.hhs.gov Lynnetta Thompson lynnetta.thompson@acf.hhs.gov 202-401-6982 lynnetta.thompson@acf.hhs.gov Bill Stuart (e-IWO) william.stuart@acf.hhs.gov 518-399-9241 william.stuart@acf.hhs.gov Cindy Holdren cynthia.holdren@acf.hhs.gov 240-676-2808 46

47 The End. 47 Thank you!

48 Q&A

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 emailed by July 25th.

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

51  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 800.229.2713 info@ascentis.com www.ascentis.com


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