The document discusses a new federal electronic system for processing child support wage garnishment orders that will be available to employers starting October 1. It provides background on child support enforcement processes and an employer's responsibilities when receiving income withholding orders. The new electronic system allows employers to acknowledge receipt of electronic income withholding orders and respond to state child support agencies faster and more efficiently. Larger employers with more staff processing such orders stand to benefit most from the time and resources saved by adopting the optional electronic system.

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Phone: 281.880.6525
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New System Streamlines Child
Support Wage Garnishment

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A federal electronic system for the management of income withholding
orders (IWO) related to child support wage garnishment is scheduled to be
available to employers October 1. Chances are, as an employer you've had to
deal with the tough issue of withholding employee wages to cover IWOs for
child support.
Even if you're an old pro at this, a little background on the basics of the
process might be helpful in deciding whether to adopt this optional system.

3. Income Withholding
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Child support cases are managed by the state or handled by private agencies,
private attorneys, parents or other private citizens. The federal government,
however, assists by overseeing and shoring up the efforts of state agencies.

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• Establish and modify child support orders,
• Operate the automated child support computer system required in
each state,
• Process payments at a single, centralized site,
• Maintain a registry of all child support cases, and
• Track down noncustodial parents and establish paternity when
necessary.
Each state child support office must:

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Employers are reminded of the seriousness of the IWO by a warning on the
standardized IWO form from the U.S. Department of Health and Human
Services that reads:
"If you fail to withhold income from the employee/obligor's income as the
IWO directs, you are liable for both the accumulated amount you should have
withheld and any penalties set by state or tribal law/procedure."

6. Employer Responsibilities
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As an employer, your general responsibilities are to:
• Report new and rehired employees and answer requests for employment
verification,
• Withhold child support payments and premiums (or income) for medical
insurance,
• Send payments to the "state disbursement unit" (under most
circumstances), and
• Report any upcoming lump sum payments and terminations of employees
making child support payments.

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You might, however, find that an IWO conflicts with withholding limits
imposed by federal law. For example, the Federal Consumer Protection Act
sets a limit of 50 percent of the disposable income of the "obligator" if that
person is supporting another family, and 60 percent if not.
Some states allow the employee's share of health benefit costs to be
deducted from his or her wages in determining the level of disposable
income.
If you have an employee subject to more than one IWO and withholding the
combined total would put you in conflict with federal or state ceilings, "you
must honor all IWOs to the greatest extent possible, giving priority to current
support before payment of any past-due support," according to the IWO
employer questionnaire form.

8. The Changes
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By October 1, all states are expected to have the electronic IWO (e-IWO)
system in place. The federal Office of Child Support Enforcement — which is
part of the Department of Health and Human Services (HHS) — describes the
e-IWO system as "an efficient and cost-effective way to electronically
exchange income withholding order information between state child support
agencies and employers."
The benefits of this system include the following:
• Money gets to the family faster,
• The employer can acknowledge receipt of each IWO and quickly respond
to the state when an employee is no longer employed,
• The data is more reliable and accurate, and
• Time, money and resources are saved.

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Assuming you decide to adopt the electronic system, you will need to
designate a secure server for receiving e-IWOs. When an e-IWO is sent to you
(which is generally the day after the order of support is issued), you simply
acknowledge receipt and answer any questions that may be asked.
To acknowledge receipt of an e-IWO, you must log onto your secure server
with either a secure file transfer protocol or a file transfer protocol using a
virtual private network.
Alternatively, you can choose a simpler option, which requires no
programming of your system. Under this option, you receive an e-IWO in a
PDF form, which is already filled out. All you need to do is acknowledge
receipt of the form.

10. The Decision
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Whether you choose to adopt the e-IWO system, which is a free service, may
depend on how much of an issue wage withholding is in your company. The
larger the workforce, of course, the more time your staff devotes to handling
IWOs, and the more time that could be saved by going electronic.
If you decide the e-IWO system might benefit your business, you can sign up
simply by emailing one federal official: william.stuart@acf.hhs.gov

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