TN 25 (07-07)
GN 02410.215 How Garnishment Withholding Is Calculated
Although the system calculates the garnishment withholding, this section provides a synopsis of how it is done. See MSOM SPECPAYSYS 003.001 through MSOM SPECPAYSYS 003.020, Court Order Garnishment System (COGS), for processing instructions.
1. Garnishment Order Specifies Withholding a Dollar Amount Per Week
If the garnishment order specifies withholding a dollar amount per week, multiply the amount specified by 52, then divide by 12 and round up to the next dime.
Example: Withholding requested $137.00 x 52 = $7124.00; $7124.00 divided by 12 = $593.66. Rounded up to the next dime = $593.70.
2. Garnishment Amount Calculated from Beneficiary’s MBC After All Deductions
The garnishment withholding is calculated from the beneficiary's monthly benefit credited (MBC) after all other deductions (e.g., SMI premiums, overpayment recovery, etc.) have been made. Garnishment will apply against title 2 payments and underpayments, including lump-sum death payments, misused funds, returned checks, and conserved funds. We will not garnish Supplemental Medical Insurance (SMI) premiums or Medicare benefits. IRS levies take priority over garnishment only if the levy was received before the date of the garnishment order.
3. Garnishment Limited to Lesser of State Maximum or Maximum Under CCPA
The system limits the garnishment amount to the lesser of the State maximum or the maximum under the Consumer Credit Protection Act (CCPA) (15 U.S.C. 1673(b)) and is based on the law of the State where the beneficiary resides. Hereafter, the CCPA limit is referred to as the “Federal” limit. The CCPA limits garnishment to:
50%, if the beneficiary is supporting a spouse and/or child other than the spouse and/or child whose support has been ordered.
60%, if the beneficiary is not supporting another spouse and/or child.
55% or 65% respectively, if the garnishment order or other evidence submitted indicates the original support ordered is 12 or more weeks in arrears.
4. Multiple Orders
Garnishment orders for child support are no longer paid on a ‘first come, first served” basis. 5 CFR 581.303(a) and 5 CFR 581.305(d ) require that some money be paid on each order for current child support if there is more than one withholding order. Current child support takes priority over child support arrearages. Garnishment for alimony is not included in the prorating. It will be considered after child support payments (both current and arrearages) are calculated.
If there is enough allowable disposable income, pay the full amount of current child support due for each order. If not, follow the allocation method of the state or territory of the garnished beneficiary’s residence to determine how much to pay for each order. Use one of the following two methods when allocation is necessary:
Prorate by allocating a percentage to each order based on the total dollar amount of current child support ordered; or
Share equally by dividing the allowable disposable income by the total number of orders.
For multiple orders, COGS will prorate or divide equally, based on the “Allocation of Orders,” for the appropriate jurisdiction. To find State requirements, develop through the State Disbursement Unit (SDU) contact at the http://www.acf.hhs.gov/programs/cse/newhire/employer/contacts/contact_map.htm .
NOTE: Allocation of garnishment by either the prorating formula or the equal sharing formula will apply to both monthly garnishment payments and lump sum dispersal.
a. Prorating formula
Add the total current support due on all withholding orders for current child support.
Divide each order’s current support due by the total of all orders to figure each order’s percentage total.
Withhold the percentage of allowable disposable income for each order.
The maximum that can be withheld is $550. There are three orders. Order A is for $220; order B is for $200; and order C is for $180. The total current support owed is $600. Order A is for $220 which is 36.7% of $600. Order B is for $200 which is 33.3%. And order C is for $180 which is 30%. The maximum that can be withheld is $550. Order A will be paid $201.85 (36.7%); .order B will be paid $183.15 (33.3%); order C will be paid $165 (30%).
b. Equal Sharing Formula
Divide the amount that can be garnished by the number of orders. If that yields an amount that is more than one of the orders requires, subtract the amount of that order from the total. Divide the remainder by the number of remaining orders and pay that to the remaining orders.
The maximum that can be withheld is $550. There are three orders. Order A is for $220; order B is for $200; and order C is for $180. Dividing by 3 yields $183.33 to be applied to each order. Additional calculations are necessary because order C only asks for $180.
Subtract the $180 from the total $550. Divide the remainder ($370) by 2. Pay $185 to orders A and B.
5. Prior Month Accruals (PMAs)
If a PMA of $500.00 or more is due, COGS will apply the Federal limit (CCPA) and withhold that amount from the PMA. The beneficiary will be paid the amount that exceeds the Federal limit. An alert will be generated to the PC for development. COGS will stop all payover (including the regular monthly payment) until the PMA issue is resolved. The PC will contact the court for instructions on how much of the PMA the court should receive. (SM 00832.900)
6. Overriding the Withholding Limit
This can only be done if the court order instructs SSA to override the Federal limits because the beneficiary has other resources. See SM 00832.260.
7. Processing Illinois Department of Revenue Order Labeled “Delinquent Child Support, Notice of Levy on Wages, Salary, and Other Compensation”
Illinois orders labeled “Delinquent Child Support, Notice of Levy on Wages, Salary, and Other Compensation” requesting payment to the Illinois Department of Revenue (IL Dept of Revenue) because the SSA beneficiary did not pay his/her child support are processed differently than Illinois garnishment orders.
These withholding orders entitle the claimant to an exempt amount (similar to a tax levy) of at least $1004.25. This amount is calculated by multiplying the federal minimum wage ($5.15) times 45 which is multiplied by 52 weeks and divided by 12 months.
Determine the withholding amount as follows: (This is a simplified version of filling out columns A-H, Step 2 on the Illinois Form EDC-111.)
Determine the current MBP as shown on the MBR query. If the MBP is $1004.25 or less, SSA cannot comply with the withholding order since the exempt amount is not met or it is just met with no excess for withholding.
If the MBP is greater than $1004.25, subtract $1004.25 from the MBP; calculate 15% (.15) of the MBP. The amount to send to the Illinois Department of Revenue is the smaller of these two amounts.
Enter the amount from this calculation into COGS. Do not enter a percentage amount. Due to the unique calculation of the garnishment amount for these orders, an actual money amount must be entered into COGS.
If the case number of an existing order (s) is the same as the new order from the IL Department of Revenue, both orders must be honored. Send the money on both the existing order and the newly calculated amount to the Illinois SDU, P.O Box 5400, Carol Stream, Il 60197-5400.
These orders may not contain a court order case number and generally request that the payment be made using the Debtor I.D. number, which is the beneficiary’s SSN. We cannot comply with this request because doing so would result in the SSN being visible in the check envelope window which violates our confidentiality regulations. If these orders do not have a court case number, use the contact information provided to obtain a court case number. If the order does not contain contact information, contact RO support staff or PC OA staff for guidance.
EXAMPLE 1—Exempt amount not met.
Existing garnishment deduction of $65.00
The current MBP from the MBR query is $999.00. Since the MBP is less than $1004.25, SSA cannot comply with the order. Send a manual notice to the IL Dept of Revenue explaining that SSA cannot comply with the order because the beneficiary’s benefits are below the $1004.25 exempt amount. We will continue to send $65 to the IL SDU. Do not enter into COGS because it is not yet programmed to accept this type of reject.
EXAMPLE 2—Exempt amount met.
Existing garnishment deduction of $30.00
The current MBP from the MBR query is $1085.00. Since the MBP is greater than $1004.25, continue with the following steps.
MBP of $1085.00 minus $1004.25 = $80.75
Calculate 15% (.15) of MBP of $1085.00 or $162.75
Compare a. and b. and take the smaller amount or $80.75
The withholding amount input to COGS and sent to the IL Dept of Revenue is $80.75. We will continue to send $30 to the IL SDU.
NOTE: If the amount due under the two orders exceeds the Federal limits, the payments will be prorated. That calculation will be done by COGS.
EXAMPLE 3—Exempt amount met, no existing garnishment.
The current MBP from MBR query is $1431.00. Since the MBP is greater than $1004.25, continue with the following steps.
MBP of $1431.00 minus $1004.25 = $426.75
Calculate 15% (.15) of MPA of $1431.00 or $214.65
Compare a. and b. and take the smaller amount or $214.65
The withholding amount input to COGS and sent to IL Dept of Revenue is $214.65.
If an inquiry is received about an Illinois “Delinquent Order” because we have reduced the withholding rate, inform the beneficiary that SSA has corrected the withholding amount based on a communication received from the Illinois Department of Revenue. If they want to dispute amounts previously withheld, tell them that SSA is unable to repay any benefits previously withheld based on federal law. They must take their dispute to the Illinois Department of Revenue.
If an inquiry from is received from an individual because the amount of money he/she receives from the State of Illinois has been reduced as a result of this change, refer the individual to the Illinois Department of Revenue.
8. Dual entitlement and garnishment
The garnishment will be established on the account with the highest benefit amount.
If both accounts are pending adjudication when the garnishment order is received:
We want to provide for the highest rate of garnishment should both benefits be awarded. A special message will be posted if an MBR is present to alert the adjudicating technician that a dual entitlement garnishment exists. A comparable remark should be annotated to MCS if this is the only available electronic record for both claims.