Debt Collection, Garnishment, Repossession Article


Wage Garnishment for Payment of Child Support

Since 1988, all Arizona child support orders have been issued with an automatic wage withholding order. Wage or income withholding orders are basically a form of wage garnishment. What is income withholding/wage garnishment? It is an order from a court or a government agency like the IRS instructing your employer to withhold a designated amount of money from your paycheck and send that money to your creditor. In child support orders, the creditor is the other parent.

What Types and Amounts of Income Can be Garnished for Child Support?

Earnings are subject to withholding for child support. Earnings include wages, commissions, pensions or bonuses paid or payable to the debtor. (We will call the parent ordered to pay child support “the debtor” for this purpose.) Other non-earned sources of income may also be considered in calculating a parent’s gross income for child support obligations. As stated in the 2018 Arizona Child Support Guidelines in Section 5. Determining the Gross Income of the Parents:

Gross income includes income from any source, and may include but is not limited to, income from salaries, wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits (subject to Section 26), worker’s compensation benefits, unemployment insurance benefits, disability insurance benefits, recurring gifts, prizes and spousal maintenance. Cash value shall be assigned to in-kind or other non-cash benefits. Seasonal or fluctuating income shall be annualized. Income from any source which is not continuing or recurring in nature need not necessarily be deemed gross income for child support purposes. Generally, the court should not attribute income greater than what would have been earned from full-time employment.

Federal law limits how much money can be deducted from your paychecks for child support. However, the law allows a larger deduction for child support than for other types of garnishments. Two different percentages apply. Here is an example to illustrate each type.

John and his ex-wife, Joan, have two minor children. The children live full time with Joan, and John pays child support. John has not remarried since his divorce from Joan, and his only children are those he shares with Joan. The court can order up to 60% of John’s disposable earnings be withheld to pay child support. Disposable earnings are his earnings after taxes, health insurance premiums, etc. have been deducted.

Henry and his ex-wife, Helen, also have two minor children, and the children live full time with Helen. A year after the divorce, Henry remarried. He and his new wife, Hannah, are expecting their first child. Because Henry has remarried, the maximum that can be withheld from his disposable earnings is 50%. Hannah’s earnings are not subject to the child support order. The only income the court can consider is that of the parent. It cannot consider the income of the new spouse.

Employer Obligations and Responsibilities.

When an employer receives a notice/order to withhold income for child support, he is required by both state and federal law to comply by doing the following:

o Start withholding the designated amount of child support from the employee’s paychecks no later than the first pay period after receipt of the order/notice. That pay day can be no later than 14 days after the order/notice is received.

o Send the withheld child support to the address listed in the order/notice within 2 business days of the employee being paid.

o All support payments and handling fees must be paid to the Support Payment Clearinghouse.

The employer is required to continue withholding the support payments until he is officially notified in writing by the Division of Child Support Services (DCSS) to either modify or terminate the payments. Employers are entitled to take a processing fee of up to $1.00 per pay period or a maximum of $4.00 per month from the employee’s paycheck. That fee may not be deducted from the child support.

Employers are also required by both state and federal law to report all newly hired employees to the Arizona New Hire Reporting Center. That allows the agency to check records for child support orders. Employers need to be aware that withholding for child support obligations takes priority over garnishments for debt or other withholding orders. The only exception is a federal tax levy that the employer receives before receiving the child support order.

Yes, child support orders are a hassle for employers. However, they may not use child support withholding as an excuse to fire an employee or to refuse to hire an employee. Federal law protects employees who have one wage garnishment. Multiple garnishments are a different story. If an employee has one garnishment for child support, plus another for debt or unpaid taxes, the federal protection disappears.

The Arizona Department of Economic Security/Division of Child Support Services is the State Agency Handling Child Support.

DCSS can help either party with child support issues like establishing, enforcing or modifying support. The agency’s services are provided without cost or for a small fee that will not be more than $25.00 per year. DCSS can do the following:

o Review a case for possible modification;

o Calculate the amount of arrears owed;

o Locate the current employer of the parent obligated to pay support;

o Collect child support by withholding from unemployment or worker’s compensation benefits;

o Seize state and federal income tax refunds, lottery winnings, stock dividends, or bank accounts;

o Suspend professional or occupational licenses;

o Place a lien on real estate for unpaid child support;

o Institute court cases for collection of unpaid support by linking with the collection agency in the state where the debtor lives;

o Refer the case to the U.S. Attorney General’s Office for criminal prosecution;

o Report the debtor to the Office of the U.S. Secretary of State for denial of passport.

What Happens When the Parent Paying Support Loses His or Her Job?

Arizona law (A.R.S. § 23-789) requires that child support be deducted from unemployment insurance benefits. If the paying parent loses his or her job, that parent is encouraged to contact DCSS and to apply for unemployment. Otherwise, child support arrearages will continue to accrue. Suppose the job loss means the parent, required by family court to provide health insurance for the children, no longer has health coverage. That parent should contact DCSS to discuss the possibility of modifying the support order.

The Consequences of a Parent Failing to Pay Child Support.

The consequences for failing to pay child support can be severe. Both state and federal agencies can aggressively pursue you for the money. They can confiscate bank accounts, put a lien on any real estate you own, deny you a passport, suspend your driver license, and intercept your tax refunds. Sometimes, government agencies publish newspaper or internet ads listing offenders and calling them “deadbeats”.

Parents with large arrearages may look for ways to escape the debt. However, parents cannot use either a Chapter 7 or a Chapter 13 bankruptcy to discharge child support arrearages. You are stuck owing the money.

Stopping Child Support When Your Child Turns Eighteen.

Arizona law requires child support to be paid until a child turns 18 years of age. However, if your child reaches the age of 18 and is still attending high school or a high school equivalency program, you must continue support until the child graduates or turns 19 years of age, whichever comes first. If the child is disabled, the court may order support to be continued beyond the age of 18 or 19. (A.R.S. § 25-501).

Most Arizona child support orders issued in the past 8-10 years contain a presumptive date for the termination of support. So long as there are no child support arrears, the employer should discontinue withholding after the termination date. Some older child support orders do not have a presumptive termination date. If that is the case with your child support order, you will need to file a Request to Stop Income Withholding Order in the Superior Court for your county. You will then need to work with DCSS to collect any overpaid support.

If you and your ex agree that it is time for support to end and your order does not contain a termination date, you can both sign an agreement to stop income withholding. For your agreement to be effective the following conditions must be met:

o The parties need to sign the wage withholding order and support order in front of a Clerk of the Court or a notary. If DCSS was involved in your case, a DCSS representative must also sign the order.

o You must be up to date on your child support payments, and the date when your obligation is due to end is no more than 90 days from the date of filing the agreement.

o You do not owe any arrearages in either child support or spousal maintenance.

The usual reason for ending support is the child turning 18. However, there are other reasons to end child support. Perhaps, the parents have remarried one another; a stepparent has legally adopted the child; or the judge has changed the custody (legal decision-making) order. There are also situations where either the parent who pays support or the child being supported has died.

There will be cases where the two parents cannot agree that it is time to end child support. Then, the parent who pays support must file a Petition to Stop the Income Withholding Order and serve that order on the other parent. A hearing must be requested, and the judge will decide the issue.

Published: April 2020

Resources:

https://des.az.gov/services/child-and-family/child-support/employers

https://family-law.freeadvice.com/family-law/child_support/arizona-child-support-garnishment-limits-exemptions-protections.htm

https://www.azcourts.gov/selfservicecenter/Garnishment

https://www.azcourts.gov/familylaw


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