1. IPPA 2009 Tax & Operational Excellence Workshop November 5, 2009 Child Support, EFT and e-IWO Nancy Benner and Bill Stuart Employer Services Federal Office of Child Support Enforcement

2. Session agenda Child support program background Child support program background Federal, state and employer roles Federal, state and employer roles Current statistics Current statistics Electronic processes Electronic processes e-payments e-payments e-IWO e-IWO Other child support programs Other child support programs

3. Child support program: background Established in 1975 Established in 1975 State/county-run programs State/county-run programs Federal Government provides oversight, policy guidance and funding Federal Government provides oversight, policy guidance and funding

4. OCSE’s role Maintains the National Directory of New Hires (Are you submitting your new hires?) Maintains the National Directory of New Hires (Are you submitting your new hires?) Assists States to develop, manage and operate their child support programs Assists States to develop, manage and operate their child support programs Pays major share of state program operating costs (66%) Pays major share of state program operating costs (66%) Provides policy guidance and technical support Provides policy guidance and technical support

5. State’s role Locate non-custodial parents (New hire reporting is our best tool) Locate non-custodial parents (New hire reporting is our best tool) Establish paternity Establish paternity Establish child and medical support orders Establish child and medical support orders Enforce support orders Enforce support orders Collect and distribute support payments Collect and distribute support payments

6. Employers are vitally important to the program In 2008, employers Reported 59 million new hires Reported 59 million new hires Collected 68% of the $26.6 billion Collected 68% of the $26.6 billion distributed for child support distributed for child support Enrolled children in medical insurance Enrolled children in medical insurance Thank You, Employers!!

7. PRWORA legislation mandates e-payments State disbursement units (SDUs) are established State disbursement units (SDUs) are established Two days to process payments Two days to process payments All SDUs are now receiving/sending All SDUs are now receiving/sending e-payments except South Carolina

8. Employers benefit from e-Payments Safer: prevents theft and fraud Safer: prevents theft and fraud Cheaper: eliminates postage costs Cheaper: eliminates postage costs Faster: eliminates lost mail and mail delays Faster: eliminates lost mail and mail delays More accurate: savings in time and labor More accurate: savings in time and labor Standardization: single file format valid for all SDUs Standardization: single file format valid for all SDUs Supported by most software Supported by most software Complies with growing trend in state legislation mandating EFT Complies with growing trend in state legislation mandating EFT Fewer calls from CPs and NCPs Fewer calls from CPs and NCPs

9. EFT choices for employers EFT choices for employers Employers can: Use their own payroll/accounting system (ACH credit payments) Use their own payroll/accounting system (ACH credit payments) Outsource to payroll service providers Outsource to payroll service providers Use state online payment services (recommended for small employers) Use state online payment services (recommended for small employers)

10. 11 States require e-payments

11. 11 States Require E-Payments CA, FL, IL, IN, MA, NE, OH, OR, PA, TX, and VA CA, FL, IL, IN, MA, NE, OH, OR, PA, TX, and VA IL’s legislation was a breakthrough IL’s legislation was a breakthrough Employers realized EFT isn’t going away Employers realized EFT isn’t going away Software developers realized they might lose market share if they didn’t support EFT for child support Software developers realized they might lose market share if they didn’t support EFT for child support

12. Online payment option for employers 30 states offer free or low-cost online payment services to employers: 30 states offer free or low-cost online payment services to employers: AR, CA, FL, IA, ID, IL, IN, LA, MA, MD, MI, MN, MO, MT, NC, NE, ND, NH, NJ, NY, OH, OK, OR, PA, TN, TX, VA, WA, WI, and WV AR, CA, FL, IA, ID, IL, IN, LA, MA, MD, MI, MN, MO, MT, NC, NE, ND, NH, NJ, NY, OH, OK, OR, PA, TN, TX, VA, WA, WI, and WV

13. Getting set up Getting set up Contact your bank to discuss sending ACH credit payments Contact your bank to discuss sending ACH credit payments Contact the SDU Contact the SDU Perform case reconciliation Perform case reconciliation Send a test file Send a test file Send live payment Send live payment

14. Sample items for checklist Find EFT contact person at SDU Find EFT contact person at SDU Gather requirements Gather requirements Send case verification file Send case verification file Receive file Receive file Complete data clean- up Complete data clean- up Bank information to vendor maintenance team Bank information to vendor maintenance team Does the State require a test file? Does the State require a test file? FIPS number FIPS number Vendor number Vendor number

15. Record Layout DED01Application Identifier [CS for child support] DED01Application Identifier [CS for child support] DED02Case Identifier DED02Case Identifier DED03Pay Date DED03Pay Date DED04Payment Amount DED04Payment Amount DED05Noncustodial Parent Social Security Number DED05Noncustodial Parent Social Security Number DED06Medical Support Indicator DED06Medical Support Indicator DED07Noncustodial Parent Name DED07Noncustodial Parent Name DED08FIPS Code DED08FIPS Code DED09Employment Termination Indicator DED09Employment Termination Indicator

16. Payment Instructions & Remittance Information ACH Network Employer Employer’s Bank Remittance Information Child Support Entity Order/Notice Child Support Entity’s Bank Payment Data Flow

17. E-Collections: How are we doing? Percent of e-payments from employers, interstate and payments from direct payers sent electronically: Percent of e-payments from employers, interstate and payments from direct payers sent electronically: 2004: 21% 2004: 21% 2006: 33% 2006: 33% 2007: 38% 2007: 38% 2008: 42% 2008: 42%

18. Challenges Have all child support payments go to the SDU, including:Have all child support payments go to the SDU, including: Payments court-ordered to the CP Payments court-ordered to the CP Private collection agency payments Private collection agency payments Payments to county and district courts Payments to county and district courts

19. E-payment items to consider What What to do if you send an incorrect file or duplicate file Adding Adding new employees (case ID issue) You You can send to all SDUs at once (similar to direct deposit)

20. Next steps Download the User Guide to Electronic Child Support Payments at NACHA’s website: http://ecsp.nacha.org Download the User Guide to Electronic Child Support Payments at NACHA’s website: http://ecsp.nacha.org Visit our Employer page Visit our Employer pagewww.acf.hhs.gov/programs/cse Click on “Employer Information” Click on “Employer Information”

21. Other child support programs Insurance Match Insurance Match MSFIDM MSFIDM Federal Tax Refund and Administrative Offset Federal Tax Refund and Administrative Offset Passport Denial Passport Denial

22. Contact information: Employer Services Team Lynnetta Thompson lynnetta.thompson@acf.hhs.gov (202) 401-6982 lynnetta.thompson@acf.hhs.gov Sherri Grigsby sherri.grigsby@acf.hhs.gov (202) 401-6114 sherri.grigsby@acf.hhs.gov Nancy Benner (EFT) nancy.benner@acf.hhs.gov (202) 401-5528 nancy.benner@acf.hhs.gov Bill Stuart (e-IWO) william.k.stuart@lmco.com (518) 399-9241 william.k.stuart@lmco.com Cindy Holdren cynthia.holdren@acf.hhs.gov (240) 676-2808

23. 2009 Tax & Operational Excellence Workshop The electronic Income Withholding Order (e-IWO) process made easy Bill Stuart – Federal Office of Child Support Enforcement

24. 24 What is e-IWO? States electronically send IWOs States electronically send IWOs Employers electronically acknowledge IWO Employers electronically acknowledge IWO Federal Employer Identification Number (FEIN) is key Federal Employer Identification Number (FEIN) is key Handles Terminations, Lump Sum payments Handles Terminations, Lump Sum payments System to system System to system Fillable PDF and Spreadsheet options Fillable PDF and Spreadsheet options

25. Get Rid of the Crates!

26. First workgroup Chicago – August 2004 First workgroup Chicago – August 2004 11 employers, 18 States 11 employers, 18 States The workgroup designed and developed: The workgroup designed and developed: –flat file layouts and XML schema –an electronic acknowledgment process How It All Began…

27. Tested layouts and process Tested layouts and process Used OCSENet for file transfers Used OCSENet for file transfers System to system interface System to system interface The Pilot

28. Facilitates transmission of e-IWO’s Facilitates transmission of e-IWO’s Just 1 communication point Just 1 communication point Transforms file to receivers format Transforms file to receivers format PDF’s offered with data file PDF’s offered with data file Handles payroll processors Handles payroll processors Secure Transmissions – SFTP and PGP Secure Transmissions – SFTP and PGP Record Level Tracking Record Level Tracking No programming options (PDF/Spreadsheet) No programming options (PDF/Spreadsheet) The Portal

30. eZ-IWO No Programming Options Option 1 Option 1 –PDF Income Withholding Order and –PDF Acknowledgment Pretty Darn Fast Pretty Darn Fast Option 2 Option 2 –PDF Income Withholding Order and –XLS Acknowledgment eXtreme Lightning Speed eXtreme Lightning Speed

31. Target population Target population –Employers who don’t want to program –Employers with smaller # of incoming e-IWOs Interested companies Interested companies –KBR – PDF –Tyson – PDF –TLC – XLS –Yum Brands – XLS Bulls-eye for these Companies

32. Ready, Set, Go! SPEED LIMIT 100 Speed records will be broken with this process Speed records will be broken with this process –Fill out Profile –Set up connectivity –Conduct a test –Start receiving Acknowledgments What do I need? What do I need? –Secure File Transfer Protocol (SFTP) Server or –FTP Server with a Virtual Private Network –We will help you establish connectivity

33. The Income Withholding Order

34. In Production In Production Sample Sample Sample Reduces the IT resources required Reduces the IT resources required Accept or Reject IWO Accept or Reject IWO Acknowledgment information provided to States Acknowledgment information provided to States Handles Termination and Lump Sums Handles Termination and Lump Sums The XLS Acknowledgment Option

35. In Production In Production Sample Sample Sample Reduces the IT resources required Reduces the IT resources required Accept or Reject IWO Accept or Reject IWO Acknowledgment information provided to States Acknowledgment information provided to States Handles Termination and Lump Sums Handles Termination and Lump Sums The PDF Acknowledgment Option

37. Tracking Missing Acknowledgments is Easy 457 Maryland : 07/03/2009 – 07/17/2009 Case Identifier Order Identifier Document Tracking Num EIN Order Sent Date Days Missing C00000000001 O000000000001 4500020090703265738595 521975183 07/03/2009 21 C00000000003 O000000000003 4500020090705265738595 845618574 07/05/2009 19 C00000000004 O000000000004 4500020090710262738595 521975183 07/10/2009 14 C00000000005 O000000000005 4500020090710265738595 521975183 07/10/2009 14 C00000000009 O000000000009 4500020090711265738595 521975183 07/11/2009 13 C00000000010 O000000000010 4500020090712265738595 845618574 07/12/2009 12 C00000000013 O000000000013 4500020090712265738595 521975183 07/12/2009 12

38. California California Colorado Colorado District of Columbia District of Columbia Illinois Illinois Indiana Indiana Massachusetts Massachusetts Michigan Michigan Nebraska Nebraska New York New York North Carolina North Carolina North Dakota North Dakota Ohio Ohio Oklahoma Oklahoma Oregon Oregon Pennsylvania Pennsylvania Texas Texas Virginia Virginia Washington Washington West Virginia West Virginia States Using e-IWO

39. 2009 Arizona Arizona New Jersey New Jersey Idaho Idaho 2010 Missouri Missouri South Dakota South Dakota Iowa Iowa Up Coming State Implementations

40. Everyone must register Everyone must register Complete a Profile form Complete a Profile form Registration includes Agreement Registration includes Agreement Automated Testing Module Automated Testing Module Portal Registration

41. Adding additional employers (for States) or States (for employers) is straightforward Adding additional employers (for States) or States (for employers) is straightforward Increases collections Increases collections Saves time, money, and resources Saves time, money, and resources Ensures uniform IWO data from all States Ensures uniform IWO data from all States Increases accuracy and reliability of data Increases accuracy and reliability of data Acknowledgement provides timely feedback Acknowledgement provides timely feedback The Benefits

42. Software Interface Specification Document (SIS) http://www.acf.hhs.gov/programs/cs e/newhire/employer/publication/eiwo/ sis/eiwo_sis_qc.htm Software Interface Specification Document (SIS) http://www.acf.hhs.gov/programs/cs e/newhire/employer/publication/eiwo/ sis/eiwo_sis_qc.htm http://www.acf.hhs.gov/programs/cs e/newhire/employer/publication/eiwo/ sis/eiwo_sis_qc.htm http://www.acf.hhs.gov/programs/cs e/newhire/employer/publication/eiwo/ sis/eiwo_sis_qc.htm e-IWO Workgroup e-IWO Workgroup –31 States and 50+ employers - monthly calls e-IWO Workplace e-IWO Workplace –Minutes of meetings, business rules, etc. –Contact Bill Stuart to register and access the Workplace ResourcesResources

43. A project has just started A project has just started Uses the Portal Uses the Portal Follows e-IWO processes and procedures Follows e-IWO processes and procedures Will include a fillable PDF option Will include a fillable PDF option National Medical Support Notice

44. Contact Bill Stuart – (518) 399-9241 Contact Bill Stuart – (518) 399-9241 –william.k.stuart@lmco.com william.k.stuart@lmco.com Got Questions?