May 10, 2005
CHILD SUPPORT ENFORCEMENT OPTIONS
By: Susan Price, Principal Legislative Analyst
You asked (1) what methods the state uses to locate and seize assets of non-custodial parents owing child support and (2) how the enforcement program is funded.
The state uses a wide array of techniques to collect unpaid child support. These include income withholding orders; federal and state income tax refund intercepts; property liens, asset attachments, and seizures; lottery offsets; license suspensions; and passport denials.
Several state agencies are involved in these efforts. The Department of Social Service's (DSS) Bureau of Child Support Enforcement (BCSE) is the lead agency. It oversees and administers the child support program in accordance with state and federal laws. Among other things, it is responsible for coordinating services, locating obligors, and administrative enforcement activities. The Judicial Department's Support Enforcement Services Division is mainly responsible for court-based enforcement, including contempt citations, placing income-withholding orders with new employers, and establishing and enforcing orders when one of the parents does not live in Connecticut.
Collection costs are initially paid from the General Fund. But the federal government reimburses a substantial portion of them. Clients also pay for some services.
We enclose the state regulations addressing child support enforcement actions (Regs. State Agencies § 52-362d-1, et seq.) and a table prepared by BCSE showing total collections for 2001 through 2004.
CHILD SUPPORT ENFORCEMENT
Finding Non-custodial Parents
BCSE must provide enforcement services to any parent that comes to its office and fills out an application. After this occurs, the first step the bureau takes is to locate the obligor. Child support investigators search a number of information sources, including state and national parent locator databases, and Internal Revenue Service, Social Security Administration, Department of Defense, state motor vehicle, labor department, and law enforcement agencies' records.
Federal Case Registry. The Federal Case Registry (FCR) contains state child support enforcement (IV-D cases in which the state is owed money) and non IV-D case data and serves as a pointer system to help locate persons across state lines. Personal data in the FCR are matched daily against employment data in the National Directory of New Hires (NDNH) and sent to states to facilitate case processing and increase collections, especially through automated income withholding. Additionally, matches are sent to states to inform them if a IV-D case participant in their state appears as a participant in a IV-D or non IV-D case in another state. The FCR also serves as the conduit for matching against the following sources: Social Security Administration, Department of Veteran Affairs, Department of Defense, Federal Bureau of Investigation, and Internal Revenue Service (IRS). Matches made through the Multistate Financial Institution Data Match (MSFIDM) are returned to states through the FCR.
Federal Parent Locator Service (FPLS). The FPLS, established under Title IV-D of the Social Security Act and expanded by the Personal Responsibility and Work Opportunities Act (PRWORA, the 1996 federal welfare reform law), is a computerized network of information on individuals, including their social security numbers, most recent addresses, wage and benefit information, and employment data. This national database is amassed from information that state and federal agencies provide to the federal Office of Child Support Enforcement
(OCSE). Federal law requires each state to have its own computerized parent locator service, including both new hire and child support registry information and to link its database with the FPLS.
National Directory of New Hires. The NDNH is a national repository of employment, unemployment insurance, and quarterly wage information. Data in the NDNH includes: records from each state's new hire directory, quarterly wage and unemployment insurance data from state labor departments, and new hire and quarterly wage data from federal agencies.
The FPLS automatically and regularly compares the data in the NDNH against registered child support orders in the FCR. In addition, states can make a locate request to the FPLS, which includes an NDNH search. When there is a match, the FPLS provides the new hire, quarterly wage, or unemployment information concerning the custodial or non-custodial parent to requesting states. Those states use the information to establish initial child support obligations, or enforce (through income withholding) existing orders.
In many instances the FPLS will learn through the NDNH that a non-custodial parent is living and/or working in a state different from his or her dependents. With this information, a state can take appropriate actions regarding interstate establishment, modification, or enforcement of a child support order.
Multistate Financial Institution Data Match. The federal welfare reform law requires each state, in cooperation with the financial institutions doing business there, to develop and operate an automated data match program. Each institution transmits quarterly reports to the state's child support enforcement agency containing the name, record address, social security number, and other identifying information for each non-custodial parent account-holder who owes past-due child support. Financial institutions are prohibited from telling the account-holder that his name has been received from or furnished to the state enforcement agency.
The financial institution must freeze the assets of the delinquent obligor, up to the amount of the child support delinquency specified, in response to a notice of lien or levy issued by the state's support enforcement agency. The agency also notifies the obligor of the levy and of his right to challenge this action by requesting an administrative hearing. He must file a written hearing request within 15 days of receipt of the notice. Unless a hearing is requested, the financial institution turns the funds over to the state agency 21 days after receiving the lien.
State Enforcement Methods
BCSE uses a variety of general civil and administrative enforcement methods once obligors are located. These include income withholding, income tax refund intercepts, credit agency reporting, lien placement, seizure of real and personal property, lottery offsets, license suspensions, and passport denials.
Income Withholding. Child support payments can be taken directly out of paychecks, unemployment and workers' compensation benefits, and most retirement checks. Judges or family support magistrates must include an income withholding order when the support order is entered or modified. BCSE notifies employers to immediately begin the withholding even if an order does not contain a provision for this, according to Diane Fray, the bureau's executive director. The obligor is notified of his right to contest the withholding, but his challenge does not stay the employer's obligation to withhold the money and send it to BCSE.
Income Tax Refund Interception. If the obligor owes back support (at least $150 in cash welfare cases and $500 otherwise), BCSE must notify him that it will seek to intercept some or all of his income tax refunds. The obligor has a right to an administrative hearing at DSS, to show cause why he should not be reported for tax offset. Otherwise, BCSE reports the person to the IRS and DSS, through the Department of Administrative Services, reports him to the state Department of Revenue Services (CGS § 52-362e).
Credit Bureau Reporting. If an obligor falls at least $1,000 behind in support payments, BCSE must report the name and debt to credit reporting agencies. Such reports can make it more difficult for the person to obtain loans or other credit. The obligor must be informed of this planned step and given 60 days to ask for a hearing or pay the overdue child support (CGS § 52-362d).
Liens. If an obligor owes at least $500 in back child support, BCSE can place a lien on his real and personal property, usually by filing a notice in city or town land records. Normally, the state collects on the lien when the obligor sells or refinances the property or another creditor forecloses. The obligor must be given notice and an opportunity to contest the lien before it is recorded (CGS § 52-362d).
Attachment, Seizure of Assets and Benefits. The state can seize a delinquent obligor's assets and benefits. Although the law generally exempts some items from seizure to satisfy a debt (such as a vehicle or home valued at up to $1,500 and $75,000, respectively), the child support collection law permits attachment and seizure of all of the obligor's property. The obligor must get advance notice and a hearing on request (CGS § 46b-84).
Lottery Offset. When any person redeems a winning lottery ticket worth $5,000 or more, the Connecticut Lottery Corporation must check the winner's name and other identifying information against a list of obligors supplied by BCSE. If his name appears on the list, the lottery corporation must contact BCSE and confirm the accuracy of this information. If verified, it must withhold the amount of child support owed, tell the winner why it has been withheld, and of his right to request an administrative hearing (CGS § 52-362d(c).
License Suspension. The state can suspend the driver's, professional, occupational, and certain recreational licenses of people who are more than 90 days delinquent or fail to provide court-ordered medical insurance. The licenses subject to suspension are motor vehicle licenses; Department of Environmental Protection recreational licenses; and various professional and occupational licenses, certifications, and permits. The latter affect, among others, medical practitioners, counselors and therapists, pharmacists, psychologists, embalmers and funeral directors, barbers and hairdressers, real estate agents, architects and designers, sanitarians, tradesmen (such as plumbers and electricians), auctioneers, junk dealers, itinerant vendors, and pawnbrokers.
As in other cases, the obligor must get advance notice and an opportunity to contest this action (CGS § 46b-220).
Passport Denial. States must notify the federal Office of Child Support Enforcement (OCSE) when an obligor owes more than $5,000 in unpaid child support. Once notified, OCSE must certify the arrearage to the Department of State, which must deny the obligor's application for a passport (42 USC § 652).
CHILD SUPPORT COLLECTION COSTS
The following information comes from Diane Fray, the executive director of BCSE.
During federal fiscal year 2004 (October 1, 2003 through September 30, 2004) the state spent $76,443,534 to collect child support. Child support services are provided for families in the community (non-assistance families) and to collect child support to reimburse the state for funds paid out under its welfare and Medicaid programs. The costs are for services rendered by staff at the departments of Social Services and Judicial, the Office of the Attorney General, and by several private contractors hired to maintain the automated child support system, perform genetic testing, and disburse collections.
The costs are paid from the General Fund, but the federal government and parents reimburse some, as shown in Table 1 below.
Table 1: Child Support Enforcement Reimbursements
All Administrative Functions
90% of amount not recovered from father
State keeps 50%
Meeting or Exceeding Federal Benchmarks
Yearly incentive payments range from $3 to $4 million
Federal Income Tax Offsets
Custodial parent pays $15
Court-ordered paternity testing
Father pays some or all test costs
Source: BCSE, 4/20/2005