1. Integrity - Service - Innovation 2011 ERICSA Annual Conference Neal W. Nelson Assistant General Counsel Director, Garnishment Operations Defense Finance and Accounting Service May, 2011

2. 8/16/2015 Integrity - Service - Innovation 2 DFAS – Garnishment Operations Responsibilities Workload Systems New Initiatives Child Support Locate and Enforcement Issues Servicemembers’ Civil Relief Act Various Garnishment Issues

3. 8/16/2015 Integrity - Service - Innovation 3 Responsibilities All Child Support/Alimony Garnishments for All Civilian Employees and Military members Paid by DFAS – DoD, DOE, DHHS, EPA, BBG, DVA USFSPA Applications for Court-Ordered Divisions of Military Retired Pay Commercial Garnishments – Civilian Employees Military Commercial Debt Involuntary Allotments Chapter 13 and Chapter 7 Personal Bankruptcies

4. 8/16/2015 Integrity - Service - Innovation 4 Staff Composition Assistant General Counsel, Director– Neal W. Nelson Deputy Assistant General Counsel, Deputy Director– Scott Lafferty Four Team Attorneys Four Multi-disciplined Teams – 52 Employees  Four Supervisory Paralegals  Eleven/Twelve Paralegals Per Team Five Support Staff:  Executive Assistant  Systems Analyst (IGS), State Child Support Liaison  Systems Analyst (IGARN), Telework Coordinator  Legal Assistant  Secretary Document Control Center – 11 Employees  Supervisory Mail Equipment Operator  Nine Mail Equipment Operators

5. 8/16/2015 Integrity - Service - Innovation 5 Workload Court Ordered Actions Processed: FY 2005:341,281 FY 2006:324,281 FY 2007:342,734 FY 2008: 353,807 FY 2009:409,133 15.6% Increase FY 2010410,940 FY 2011196,957 - FYTD Average Monthly Pay Out: $130 -140 Million

6. 8/16/2015 Integrity - Service - Innovation 6 Workload by Case Type Alimony/Child Support:67.88% USFSPA:12.26% Commercial Debt:16.16% Military: 2.96% Civilian:13.20% Bankruptcy: 3.69%

7. 8/16/2015 Integrity - Service - Innovation 7 Garnishment Systems Payroll Locator File System (PLFS)  PLFS contains DoD Civilians, Military Active Duty, Reserves and Retirees – Also contains information for employees of other agencies that DFAS pays: Currently DOE, DHHS, EPA, BBG and DVA Employees  Utilized throughout DFAS Electronic Document Management System (IGARN) Workflow Management & Imaging System  All Documents Received by Mail are Imaged  Interfaces with PLFS & IGS  Fax Gateway – Electronically routes Documents to IGARN

8. 8/16/2015 Integrity - Service - Innovation 8 Garnishment Systems (Continued) Integrated Garnishment System (IGS) Facilitates automated processing of garnishments Paralegal is solely responsible for implementing the garnishment Completely eliminates hand-offs and re-entry of data Eliminates errors and re-work  Assists paralegals with the validation of legal documents through legal review functionality  Automates the creation of a variety of notification letters  The single interface between IGARN, PLFS and Payroll Systems  All DFAS pay systems except DJMS-RC are interfaced  Interfaces provide status updates for both the affected employee and the garnishment transaction – IGS creates notifications based on feedback from the pay system  IGS utilizes Smart Docs to send electronic notification of garnishments  Decreases receipt time  Reduces costs: postage, paper, man hours

9. 8/16/2015 Integrity - Service - Innovation 9 Electronic Commerce Initiatives – Kids 1st DFAS Kids 1 st Program  Child Support Enforcement Agencies Send Orders Directly to DFAS over secure network - First of its kind in the country!  Kids 1 st file layout served as the model for the electronic Income Withholding Order (eIWO) program – Developed in coordination with DFAS, Federal Office of Child Support Enforcement (OCSE) and the states We currently have 30 states using EC to send child support orders to DFAS FY 09 - eIWO Production up 40% over FY 08 FY 10 Production – Over 100,000 electronic orders received

10. 8/16/2015 Integrity - Service - Innovation 10 Kids 1 st - eIWO Five states use the Web Based process;  Georgia - Hawaii – New Mexico – Utah - Wisconsin Two states use the Batch Process;  South Dakota – Iowa Twenty-three states in Production with eIWO;  Arizona - California – Colorado – Idaho - Illinois - Indiana – Massachusetts – Michigan – Missouri -Nebraska – New Jersey - New York - North Carolina – North Dakota – Ohio - Oklahoma – Oregon – Pennsylvania – Texas – Virginia – Washington – Washington D.C. - West Virginia Four states In Development/Testing – Projected Implementation – FY ‘11  Mississippi – Hawaii (Conversion)

11. 8/16/2015 Integrity - Service - Innovation 11 Electronic Bankruptcy Court Interface eBCI Implemented February 2010 We are now receiving bankruptcy documents electronically by batch file FY 2011 – 973 documents received Benefits –  Decreases time to receive bankruptcy documents  Eliminates need to process hard copy documents received by mail  Eliminates manual workload to look up missing SSN’s  Decreases the probability of violation of the automatic stay by giving us the opportunity to stop garnishments & debt collections  Automates the re-routing process of “no-match SSN” documents to Debt and Claims Management

12. 8/16/2015 Integrity - Service - Innovation 12 DoD Policy Parents Are To Be Fiscally Responsible For Their Children

13. 8/16/2015 Integrity - Service - Innovation 13 Service Regulations Army - AR 608-99 Air Force - AFI 36-2906 Navy - SECNAVINST 7431.1 Marine Corps - Marine Corps Order P5800.16 (LEGADMIN) Chapter 15 Coast Guard - PERSMAN Chapter 8M

14. 8/16/2015 Integrity - Service - Innovation 14 Service of Process Jurisdictional Issue Personal Service Service Overseas http://www.travel.state.gov/law/info/judicial/judicial_680.html

15. 8/16/2015 Integrity - Service - Innovation 15 Resources ‘A Caseworker’s Guide to Support Enforcement and Military Personnel’  http://www.acf.hhs.gov/programs/cse/fct/militaryguide2000.htm (Click on virtual library of training materials) ‘Working with the Military on Child Support Matters: Trainer Guide’  http://www.acf.hhs.gov/programs/cse/pubs/training/working_with_military

16. 8/16/2015 Integrity - Service - Innovation 16 Locate Issues and VOE’S The information is contained in the Quarterly Wage & New Hire Reports ─ these include all pays the member received for the quarter. Ask State Child Support Office for DoD External Locate Requests ─ sent from the state to DMDC  Active duty/unit duty address  Reserves-unit/duty address  Retired-home address  Contact your state technical support liaison listed on ACF website under new hire contacts Use of subpoena is cumbersome for states & puts heavy burden on DFAS.

17. 8/16/2015 Integrity - Service - Innovation 17 Facilitating Service of Process Army: Office of the Judge Advocate General Attn: DAJA-LA 2200 Army Pentagon Washington, D.C. 20310 (703) 588-6708 Navy: Office of the Judge Advocate General (Code 16) 1322 Patterson Avenue, SE Suite 3000 Washington Navy Yard, D.C. 20374-5066 (202) 685-4637 Air Force : AFLSA/JACA 1420 Air Force Pentagon Washington, D.C. 20330- 1420 (703) 697-0413

18. Army Active Duty: Army Worldwide Locator 8899 E. 56th Street Indianapolis, IN 46249-5301 1-866-771-6357 Permanently disabled! Army Reserve: Commander ARPERCEN 9700 Page Blvd St. Louis, MO 63132 (314) 538-3777 Navy: Navy Personnel Command (PERS 312) 5720 Integrity Drive Millington, TN 38055-3120 (901) 874-3388 fax (901) 874-2000 Air Force: HQ/AFPC/DPDXIDL 550 C. St. West, Suite 50 Randolph AFB, TX 78150-4752 (210) 565-2660 (210) 565-1675 Military Locator

19. Military Locator (Cont’d) Marine Corps: HQMC – MMSB -17 2008 Elliot Road, Room 203 Quantico, VA 22134-5030 (703) 784-3941 www.mmsb.usmc.mil Coast Guard: US Coast Guard Personnel Command 2100 2nd St. SW Washington, DC 20593 (202) 493-1200 fax (202) 267-4985

20. Facilitating Service of Process Army: Office of the Judge Advocate General Attn: DAJA-LA 2200 Army Pentagon Washington, D.C. 20310 (703) 588-6708 Navy: Office of the Judge Advocate General (Code 16) 1322 Patterson Avenue, SE Suite 3000 Washington Navy Yard, D.C. 20374-5066 (202) 685-4637 Air Force: AFLSA/JACA 1420 Air Force Pentagon Washington, D.C. 20330-1420 (703) 697-0413

21. Facilitating Service of Process Marine Corps: Paralegal Specialist Headquarters, US Marine Corps (JAR) 2 Navy Annex Quantico, VA 22134 (703) 614-3880 Coast Guard: United States Coast Guard G-PC (USCG) Room 4100E, CGHQ Department of Transportation Washington, D.C. 20590 (202) 267-2799

22. 8/16/2015 Integrity - Service - Innovation 22 Voluntary Acknowledgement of Paternity Previous DoD policy - Out of wedlock children were dependents for health care benefits  Judicial determination of paternity  Dependent upon member for more than 50 percent of his or her support January 28, 2008 - New policy expands and creates a third category: a voluntary acknowledgement of paternity  Policy is to facilitate entitlements to military benefits provided to children of Uniformed Service Members

23. 8/16/2015 Integrity - Service - Innovation 23 Servicemembers’ Civil Relief Act (SCRA)

24. 8/16/2015 Integrity - Service - Innovation 24 Time for a Change “Congress has long recognized that the men and women of our military services should have civil legal protections so they can "devote their entire energy to the defense needs of the Nation." With hundreds of thousands of servicemembers fighting in the war on terrorism and the war in Iraq, many of them mobilized from the reserve components, the Committee believes the Soldiers' and Sailors' Civil Relief Act (SSCRA) should be restated and strengthened to ensure that its protections meet their needs in the 21st century.” House Committee on Veterans Affairs Report 108 H. Rpt. 81

25. 8/16/2015 Integrity - Service - Innovation 25 Servicemembers’ Civil Relief Act (SCRA) Purposes of the SCRA: (1) to provide for, strengthen, and expedite the national defense through protection extended by this Act to service members of the United States to enable such persons to devote their entire energy to the defense needs of the Nation; and (2) to provide for the temporary suspension of judicial and administrative proceedings and transactions that may adversely affect the civil rights of service members during their military service.

26. 8/16/2015 Integrity - Service - Innovation 26 ORGANIZATION Found at 50 USC App. §§ 501-596 (cites herein are to 50 U.S.C. App. § ___) Title I - General Provisions Title II - General Relief  Default judgments and stays --§§ 521, 522, 524, 525  Fines & Penalties in contracts - § 523  Statutes of Limitation --§ 526  Maximum rate of interest - § 527 Title III (§§ 531-538)  Major substantive protections against evictions, termination of installment contracts, foreclosure on mortgages, and termination of leases by lessees, protection to dependents

27. 8/16/2015 Integrity - Service - Innovation 27 ORGANIZATION (cont.) Title IV - Life Insurance (§§ 541-549) Title V - Taxes and Public Lands  § 571 - Residence for tax purposes Title VI - Administrative Remedies Title VII - Further Relief

28. 8/16/2015 Integrity - Service - Innovation 28 New Improved SCRA On 19 December 2003, President Bush signed the SCRA, a complete revision of the SSCRA. The SCRA was written to:  Clarify the language of the SSCRA  Incorporate and codify many years of judicial interpretation of the SSCRA  Update the SSCRA to reflect developments in American life since 1940

29. 8/16/2015 Integrity - Service - Innovation 29 Scope of the SCRA Who is Covered:  Active Military  Army, Navy, Air Force, Marine Corps, Coast Guard  Reservists called to active duty  National Guard in Title 10 status or Title 32 status if called to active duty for more than 30 days for purposes of responding to a national emergency declared by the President and supported by federal funds Not applicable to:  Retirees  Civilian Employees  DoD Contractors  Dependents* *Certain protections may apply to contractual obligations of dependents (e.g., leases terminations)

30. 8/16/2015 Integrity - Service - Innovation 30 Proceedings/Orders Covered by SCRA Judicial Proceedings Administrative proceedings (as of Dec. 2003) Entry of interim orders (as of Dec. 2004) Entry of final orders The SCRA has very limited effect on the enforcement of withholding orders (garnishments)

31. 8/16/2015 Integrity - Service - Innovation 31 Automatic Stays As a general rule, the court must grant an initial stay of proceeding for no less than 90 days if properly requested by the Service member (plaintiff or defendant). Rationale: With delayed mail delivery and diminished opportunities to consult with legal counsel so common to military service, a period of time is needed to allow an adequate opportunity for servicemembers to consult with military or civilian counsel, and to respond to the courts.

32. 8/16/2015 Integrity - Service - Innovation 32 Member Requests for Stay of Proceedings Two-fold request:  Communication from the service member:  Setting forth facts in which current military duty requirements materially affect his/her ability to appear  Stating a date when the Service member will be available to appear  Letter from the Service member’s commanding officer affirming the following:  Service member's military duty prevents an appearance  Military leave is not authorized for the Service member at the time of the letter  If this letter contains the Service member’s available court dates, the court may deem the letter sufficient to pass the two-fold test.

33. 8/16/2015 Integrity - Service - Innovation 33 Effect of Request for Stay on Member’s Rights Application for a stay under §522 does not constitute an appearance for jurisdictional purposes and does not constitute a waiver of any substantive or procedural defense (including a defense relating to lack of personal jurisdiction).

34. 8/16/2015 Integrity - Service - Innovation 34 DOD Instruction 1327.6 - Leave & Liberty Mandates that service member’s commander grant leave for paternity and support hearings. Exceptions:  Service member is deployed in a war  Exigencies of military service require denial of such a request

35. 8/16/2015 Integrity - Service - Innovation 35 Subsequent Requests for Stay Court has the discretion to grant or deny the stay If the court denies the stay, it must appoint an attorney to represent the service member

36. 8/16/2015 Integrity - Service - Innovation 36 SCRA and Default Judgments When a defendant does not appear in court or respond to court summons, the SCRA requires a sworn affidavit by the plaintiff stating either:  Whether or not the defendant is in military service and showing necessary facts to support the affidavit  The plaintiff is unable to determine whether or not the defendant is in military service. Consequences of failing to file an affidavit  A non-service member defendant has no remedy.  If the defendant is a service member, then the order can be voided and is subject to attack upon a showing that the service member:  is materially affected by reason of military service in making a defense to the action  has a meritorious or legal defense to all or part of the action.

37. 8/16/2015 Integrity - Service - Innovation 37 SCRA and Default Judgments If defendant is not in the military, the plaintiff may proceed to final judgment. If defendant is in the military, the court is required to appoint an attorney for the defendant.

38. 8/16/2015 Integrity - Service - Innovation 38 Appointed Counsel When defendant is a service member, the court must appoint an attorney prior to granting a default judgment Duties of appointed attorney  protects Service member’s rights  determines status and seeks stay Can’t waive rights or bind service member

39. 8/16/2015 Integrity - Service - Innovation 39 SCRA and Default Judgments SCRA default guidance applies to all of the following:  Final Judgments  Interim Orders (New)  Court Orders  Administrative Support Orders but… not to administrative enforcement remedies, such as liens, wage withholdings, etc.

40. 8/16/2015 Integrity - Service - Innovation 40 Certificate of Military Status Defense Manpower Data Center (DMDC) Provide Certificate as to military service on the Internet – acceptable documentation to show whether he/she is in the military https://www.dmdc.osd.mil/scra/owa/scra.home

41. 8/16/2015 Integrity - Service - Innovation 41 DMDC Certificate of Military Status If the Service member is on active duty, this is what you’ll see:

42. 8/16/2015 Integrity - Service - Innovation 42 DMDC Certificate of Non-Military Status If the Service member is NOT on active duty, this is what you’ll see:

43. 8/16/2015 Integrity - Service - Innovation 43 Reopening a Default Judgment Service member can request court to re-open judgment any time during Service member’s period of military service Service member or their attorney can also file an application to re-open within 90 days of the end of military service

44. 6% Rate Cap SCRA rule on interest New law clarifies that interest above 6% must be forgiven (some creditors were deferring interest) Applies to child/spousal support arrearages Applies to only those arrearages incurred prior to induction to active duty Material affect analysis applies Under SCRA, Service member must request the cap and produce orders

45. 8/16/2015 Integrity - Service - Innovation 45 FEIN for Military & Civilian Employees Army (Active Duty) 359990000 Army (Reserve Duty) 351819323 Air Force (Active Duty) 849990000 Air Force (Reserve Duty) 849980000 Navy (Active Duty)349990000 Navy (Reserve Duty)349980000 Marine Corp (Active & Reserve) 539990000 Retired Pay340727612 DoD Civilian Employees311575142 DoE Civilian Employees530197006 HHS Civilian Employees530196960 EPA Civilian Employees520852695 BBG Civilian Employees522260085 Department of Veterans Affairs123456789

46. DoD Pay Tables http://www.dfas.mil/militarypay/militarypaytables.html Basic Allowance for Housing (BAH) http://perdiem.hqda.pentagon.mil/perdiem/ (Contains BAH tables & zip code feature to search) Leave and Earnings Statement (LES) http://www.dfas.mil/militarypay/newinformation.html Military Pay

47. 8/16/2015 Integrity - Service - Innovation 47 States will establish support amount in accordance with their State’s guidelines:  Most States use “all income” to compute the amount  Includes both taxable and non-taxable income  Includes pay and allowances Military Base Pay by Rank and Time in Service Special Pays Allowances:  BAH (Basic Allowance for Housing) - Amount increases with Rank  BAS (Basic Allowance for Subsistence) Figuring Support Obligations

48. 8/16/2015 Integrity - Service - Innovation 48 IT DEPENDS! The type of garnishment action determines how Disposable Pay is calculated – Generally:  Gross Pay Minus Authorized Deductions For Child Support Cases:  Includes All “Pay Items” – Base Pay and Special Pays  Bonuses Included – However…  Excludes – Allowances like BAH, BAS, Taxes – But…  “Normal” retirement deductions – TSP See 5 C.F.R. §581 What is Disposable Pay?

49. 8/16/2015 Integrity - Service - Innovation 49 The quarterly wage report provided to NDNH includes all income received by a military person. Special Skills Pays Flight pay Hazardous duty pay Career Sea pay Submarine duty pay Jump pay Many others Bonuses Lump-sum (usually for Re-enlisting) A detailed list of those pays can be found in the DFAS Quick Guide. (See DFAS web site under child support agencies’ information). Military Pay

50. 8/16/2015 Integrity - Service - Innovation 50 Pay Office Addresses Obtain Service Members’ Payroll Information from the Appropriate Military Finance Center Air Force Active Duty, Air Force Reserves & National Guard DFAS Indianapolis Attn: DFAS IN-GA 8899 East 56th Street Indianapolis, IN 46249 Army Active Duty, Army Reserves & Army National Guard DFAS Indianapolis Attn: DFAS IN-FJEF 8899 East 56th Street Indianapolis, IN 46249-0865 Navy Active Duty, Navy Reserves DFAS Cleveland Attn: DFAS CL-GAF 1240 E. 9th Street Cleveland, OH 44199 Marine Corps Active Duty DFAS Cleveland Attn: DFAS-CL -FCRAF 1240 E. 9th Street Cleveland, OH 44199 Marine Corps Reserve Duty DFAS Cleveland Attn: DFAS-CL-FPPR 1240 East 9th Street Cleveland, OH 44199

51. 8/16/2015 Integrity - Service - Innovation 51 Legal Authority The laws and regulations we use: Child Support/Alimony  Statutory Involuntary Allotments - 42 USC 665, 32 CFR 54  Garnishments - 42 USC 659, 5 CFR 581 Commercial Debt - Civilian/Military  Civilian - 5 USC 5520a, 5 CFR 582  Military - 5 USC 5520a, 32 CFR 112, 113 Uniformed Services Former Spouses’ Protection Act  10 USC 1408, DoDFMR Vol 7B, Chap 29 Consumer Credit Protection Act - 15 USC 1673 Servicemembers’ Civil Relief Act - 50 USC App. 501 Et seq.

52. 8/16/2015 Integrity - Service - Innovation 52 Child Support Use Income Withholding Orders (IWO) under 42 U.S.C. §659 or statutory allotment under 42 U.S.C. §665 IWO quicker to Implement IWO can also be sent electronically through Kids 1 st – eIWO Allocation - When we receive a second or subsequent order and the member’s disposable pay is insufficient to pay all ordered amounts, we must allocate payments between the orders.

53. 8/16/2015 Integrity - Service - Innovation 53 Send garnishment orders to: DFAS-HGA-CL P O Box 998002 Cleveland, OH 44199-8002 Customer Service: 1-888-332-7411 Fax Gateway: 1-877-622-5930 Website: http://www.dfas.mil/ http://www.dfas.mil/ (click on the Garnishment link under the Quick Links Section) Contact Information

54. Allows Applicant to Apply for Payment of:  Division of Retired Pay as Property  Current Child Support  Child Support Arrears  Current Alimony Maximum Payment:  50% of Disposable Pay  If Combined with Garnishment Order - 65% Maximum Uniformed Services Former Spouses’ Protection Act (USFSPA)

55. Helpful Website Links

56. 8/16/2015 Integrity - Service - Innovation 56 Organization: Garnishment – Notable Awards 1997 Hammer Award from Vice President Al Gore 1999 ASMC Team Achievement Award for Meritorious Performance in Electronic Data Management 2000 Valued Partner Award from the Federal Office of Child Support Enforcement Commissioner 2001 DoD Electronic Commerce Pioneer Finalist Award from the DoD Joint Electronic Commerce Program Office 2001 Employer of the Year in Recognition of Helping Children through the Kids 1 st Program from the State of Oklahoma

57. 8/16/2015 Integrity - Service - Innovation 57 Garnishment Notable Awards, (Cont’d) 2004 DoD Applied Innovation Medallion Award for the Interface of IGS with MyPay 2004 Eastern Regional Interstate Child Support Association Recognition Award to Garnishment Operations for recognition of its efforts in electronic child support initiatives 2004 Administration for Children & Families Office of Child Support Enforcement Commissioners Award for Achievement Beyond the Call of Duty 2006 National Child Support Enforcement Association Award for the Outstanding Employer of the Year (Letter of Recognition from DoD Comptroller)

58. 8/16/2015 Integrity - Service - Innovation 58 Questions?