Presentation on theme: "Speaker: Sherri Grigsby, Federal Office of Child Support Enforcement"— Presentation transcript:
1 Speaker: Sherri Grigsby, Federal Office of Child Support Enforcement Employers & the Child Support Program; A Partnership that Benefits our Nation’s ChildrenSpeaker: Sherri Grigsby, Federal Office of Child Support Enforcement
3 RCH CREDITThis is an APA & HRCI approved program for 1 (one) RCH creditYou 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.
5 Contents at a glance Child support program background and statistics New hire reportingStandard response to Verification of Employment (VOE)Income Withholding for Support Order/Notice (IWO)Electronic Income Withholding (e-IWO)Lump sum reporting/Debt Inquiry ServiceElectronic payments (e-Payments)Employer services website update
6 Once Upon a Time, there were two mice who were in love….
7 The Happy FamilyRicky Mouse loved his wife Winnie so much that he used to bring her flowersand chocolates. They had three children, triplets, Harley,Larry and Darrell.
8 The Break UpAfter 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 ActCharged with locating noncustodial parents, establishing paternity and child support orders, enforcing child and medical support ordersPartnership between the public and private sectors
11 Roles and Responsibilities Federal Office of Child Support Enforcement (OCSE)State Child Support AgenciesEmployersOCSE’s RoleOperate Federal Parent Locator Service (FPLS)Help states develop, manage and operate their child support programsFund the major share of state program operating costsProvide policy guidance and technical support to statesConduct audits and provide trainingState ResponsibilityLocate noncustodial parents (NCP)Establish paternityEstablish child and medical support ordersEnforce child support ordersCollect and distribute support paymentsEmployer responsibilities under the Social Security ActReport new hires and respond to requests for employment verificationWithhold income for support payments and health insurance premiums and/or cash medical supportRemit payments to the State Disbursement Unit (SDU)Forward National Medical Support Notice (NMSN) Part B to Plan Administrators to enroll children in health careReport 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 2010The number of children living in poverty increased to 16.4 million from 15.5 million during the same periodChildren comprise 36% of people living in poverty but only 24% of the general population
13 Largest source of payments? Employers/income withholders! In FY 2011Accounted for nearly 70% of the child support collectedReported 48.6 million new hiresEnrolled millions of children in health insurance plans
14 Ricky Finds a New JobRicky 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 elementsEmployer NameEmployer AddressFederal Employer Identification Number (FEIN)Employee NameEmployee AddressEmployee Social Security Number (SSN)Date of HireSome 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, 2012Changed 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 reportingAL, AK, CA, CT, GU, IA, MA, ME, MI, MN, NE, NH, NJ, NV and OHInformation to reportMost 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 recordfor Ricky, they sent a Verification of Employment to the employer to gatherVerification of EmploymentVOE
19 Verification of Employment (VOE) Why must states send VOEs?Obtain wage information when establishing or modifying an orderObtain health insurance informationStandard response to VOESee our websiteemployer/publication/forms/voeform.pdfThird party VOE providers
20 Which states accept the standard VOE response form? Accepting the formNot accepting the formOther states undecidedAL, AK, AZ, AR, CA, CO, GA, HI, IN, IA, KS, KY, MEMA, MN, MT, NV, OK, OR, PA SD, TX, VT, WA, WVCT, FL, ID, MI, MS ,MONE, NY, ND, TN, VA----- Meeting Notes (5/7/12 11:12) -----Automating VOE?
21 Income Withholdingtime 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 supportRevised IWO approved by Office of Management and Budget (OMB) May 2011
23 IWO Changes*Checkbox for employer to return IWO to sender for following reasonsPayment is not directed to a State Disbursement Unit (SDU)Form does not contain all information for employer to comply with orderForm is altered or contains invalid informationAmount to withhold is not a dollar amountSender 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 employersIWOs issued on or after 05/31/12 (i.e., new IWOs)Payment not directed to SDUUse of OMB-approved IWOIWOs issued before 05/31/12 (i.e., IWOs already processed by employer)*The changes to the form will include:Numerous wording changes andRemoving the shading from the form andAdding 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 limitsAn 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 wagesNon-tax federal debtState and local tax leviesCreditor garnishmentImplement the IWO and apply the laws of the state that issued the order for:Duration and amount of child support, both current and arrearsMedical support termsWhere to remit paymentsPayment of fees and costs charged (if any) by the child support enforcement agency, issuing court or custodial party's attorneyApply the laws of the principle place of employment for:When to begin withholdingWhen to remit payments (this may be from 1 to 7 days after payday)Mandatory deductionsMaximum amount to be withheld (within Consumer Credit Protection Act limits)How to allocate withholding across multiple child support ordersAdministrative fee that employer is permitted to chargeOther 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.htmProvide copies of all orders to the SDUProblems?Contact Cindy Holdrenor----- Meeting Notes (5/7/12 11:18) -----Several employers told us that they do not feed
27 IWO Training Presentation Visitpublication/training/iwo_training.pdf
28 Remitting PaymentsOnce the employer started withholding child support from Ricky’s wages,the fastest, most efficient way to get the money to the child supportagency was to send the payments electronically.
29 PaymentsFederal law requires all employer-withheld payments (with a few exceptions) be sent to the SDUContact the SDU to redirect payments for a private, non-IV-D orderSee our website for SDU contactsClick on “Employer Information”
30 Electronic Payments Cheaper, faster, safer, more accurate Most large employers and payroll service providers remit e-Payments through the ACH networkMost payroll software supports EFT for child supporte-Payments from employers to SDUs are increasing46% % 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 WVDesigned for small to mid-sized employers
33 Tribal IWOsWinnie moved on with her life and decided to move back with her tribe on the reservation.She closed her child support case in FLand 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 IWOsDo 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 decidedto move back to Orlando to be closerto the Magic Castle where she was ableto find a job as adouble 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 IWOsOne “point of contact”Federal Employer Identification Number (FEIN) is keyHandles terminations, lump sum paymentsChild Support invades cyberspace session—Tuesday 4—5:30.
38 24 States Using e-IWO—Represents over 70% of the child support caseload! New YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaTennesseeTexasVirginiaWashingtonWest VirginiaArizonaCaliforniaColoradoDistrict of ColumbiaIdahoIllinoisIndianaMassachusettsMichiganMissouriNebraskaNew Jersey
39 Want more information about e-IWO? Contact: Bill Stuart e-IWO presentation available at Ascentis.com, under Resources and 2012 Webinar Archive. Or click hereChild 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 paymentOne-by-one or batch file reportingContact us if interested in participatingDIS-Success Story-An employer received a response in 45 minutes!
42 30 States participating in Debt Inquiry ArkansasCaliforniaColoradoConnecticutDistrict of ColumbiaFloridaGuamIdahoIllinoisIndianaIowaKansasKentuckyMaineMinnesotaMissouriMontanaNebraskaNew JerseyNew MexicoNew YorkNorth DakotaOklahomaOregonPennsylvaniaPuerto RicoTennesseeTexasUtahVirginia
43 The Kids Are All Grown Up! In June, the triplets graduated from high school and Ricky’s employer received a termination noticefor the child support order since all ofBoys were also 18.The triplets were accepted to Mouse University where they would study graphic design with a focus on character animation.
49 RCH CreditIf you attended this webinar for the full hour you will receive a certificate for credit1 (one) RCH Credit – APA & HRCICertificate ed by July 25th.
50 Upcoming webinarsCould International Expansion Expose You to Permanent Establishment RiskJuly 3rd, 10am PSTTaxing and Reporting Fringe BenefitsJuly 17th, 10am PSTStrategic Leadership for HR ExecutivesJuly 5th, 10am PSTHow to Prepare and Deliver Legal and Effective Performance AppraisalsJuly 11th, 10am PST
51 How Ascentis Can Help New hire reporting – automatically generated Support for electronic paymentHandling of complex scenarios involving IWO’sSpecify priority orders to pay IWOMax % of earnings setupWhen max hit, pay based on order or pro- rated