TN 4 (07-07)
PR 04015.007 Colorado
A. PR 07-171 Validity of Direct Service by Mail from Attorney's Office of Notice to Withhold Income for Child Support in the State of Colorado (Justen W~)
DATE: July 3, 2007
A garnishment notice mailed sent by first class mail to SSA by the obligee's attorney is proper service in Colorado.
You requested an opinion as to whether the Agency must honor a Notice to Withhold Income for Child Support (Notice) from the disability benefits of Justen W~ that was mailed directly from the obligee's attorney's office to the servicing SSA field office.
Assuming the obligee's attorney mailed the Notice to the Agency by first class mail, the service requirements for income assignments have been met in this case. Nonetheless, the Agency may refuse to honor the income assignment on the grounds that the Notice does not contain all of the statutorily required information. If the obligee were to correct the deficiencies in the Notice and properly resubmit it by first-class mail, however, the Agency would be required to withhold an amount that does not exceed limits set by state and federal law.
According to the information you provided, Justen W~ ("obligor") filed for disability insurance benefits in July 2001, and is currently receiving benefits in the amount of $668.00 per month.
On March 10, 2005, the El Paso County, Colorado District Court ordered the obligor to pay child support to Jessica C~ ("obligee") in the amount of $483.13 per month in current child support, plus $1000.67 per month toward arrears in child support (totaling $21,257.72), for a total payment of $1,483.80 per month.
On March 8, 2005, Ruth M~, the obligee's attorney, mailed to the Agency a Notice to Withhold Income for Child Support from the Social Security benefits of the obligor with supporting documents.
On April 10, 2007, the obligee's attorney wrote a letter to your office, enclosed the documents previously submitted, and explained that Colo. Rev. Stat. Ann. § 14 14 111.5 authorized her to "issue the assignment."
On April 18, 2007, you requested our opinion as to whether the Agency must honor the Notice, in light of our March 29, 2006 opinion advising that Colorado law required personal service of garnishment orders by an adult not a party to the action.
tGenerally, federal law protects Social Security benefits against alienation or assignment. The Social Security Act (the Act) prohibits execution, levy, attachment or garnishment of Title II benefits, except where Congress has waived sovereign immunity from any of these processes. Section 207 of the Act, also known as the anti-assignment provision, is codified at 42 U.S.C. § 407(a) (2000) and provides that:
[T]he right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.
The Act provides, however, that, notwithstanding any other provision of law, Social Security retirement and disability benefits under Title II may be withheld to enforce obligations for child support in accordance with state laws. See 42 U.S.C. §§ 659(a) & (h)(1)(A)(iii), 666(b); see also 5 C.F.R. § 581.101 et seq. (2006); POMS GN 02410.001, GN 02410.200. In Colorado, an obligee may enforce a child support order by having a portion of the obligor's Social Security benefits paid directly to him or her through two distinct methods, "garnishment and its close cousin, the income assignment." See POMS PR 04505.007.
A garnishment (also known as a "writ of garnishment for support") may be used to collect arrearages for child support and maintenance in Colorado. See Colo. R. Civ. P. 103(3)(a)(1); Colo. Rev. Stat. Ann. § 14 14-105(1) (2007); Memorandum from Regional Chief Counsel, Denver, to Assistant Regional Commissioner for Management and Operations Support, Denver, Income Assignment for Child Support Debt and Maintenance - Colorado, (February 23, 1999). The procedures for initiating a garnishment order are more formal than those for activating an income assignment, and, as we previously advised, require strict adherence to the service of process rules set forth in the Colorado Rules of Civil Procedure. See Colo. R. Civ. P. Rule 403(1)(d) (service of writ of garnishment shall be in accordance with Rule 304); Colo. R. Civ. P. Rule 304 (service must be made via "personal service" "by the sheriff of the county where the service is made, or by the sheriff's deputy, or by any other person over the age eighteen years, not a party to the action"); Memorandum from Regional Chief Counsel, Denver, to Assistant Regional Commissioner for Management and Operations Support, Denver, Applicable State Laws Concerning the Proper Service of Garnishment Orders in Colorado, Montana, North Dakota, South Dakota, and Wyoming, (March 29, 2006) (revised April 10, 2006); POMS GN 02410.205(A); POMS PR 04505.007.
Here, however, the obligee sought to enforce the child support order by income assignment, rather than garnishment. See POMS PR 04505.007 ("Garnishment of wages and income assignments are easily distinguished."). Pursuant to the Colorado Child Support Enforcement Procedures Act (CCSEPA), Colorado has adopted the term '"income assignment' to be used to provide consistency and standardization of the process for collecting child support and maintenance." Colo. Rev. Stat. Ann. §14 14 111.5(1). The CCSEPA further provides that when an obligation for child support or maintenance is initially determined by a court order entered into after July 1, 1996, the debt shall be ordered by the court to be activated immediately as an "income assignment." Id. § 14-14-111(2)(f). In order for the income assignment to be activated, "the obligee, the obligee's representative, or the delegate child support enforcement unit shall cause a notice of income assignment to be served immediately as described in subsection (4) of this section." Id. § 14-14-111.5(3)(a). Subsection (4) states that immediately after the court order imposing an obligation for child support or maintenance is entered,
an income assignment may be activated by the obligee, the obligee's representative, or the delegate child support enforcement unit by causing a notice to withhold income for support to be served upon the employer, trustee, or other payor of funds, by first-class mail or by electronic service, if such employer, trustee, or other payor of funds mutually agrees with the state child support enforcement agency to receive such income assignments electronically. Receipt of such notice by the employer, trustee, or other payor of funds confers jurisdiction of the court over the employer, trustee, or other payor funds. . . .
Id. § 14-14-111.5(4) (emphasis added). Thus, the CCSEPA clearly allows the obligee's attorney to activate an income assignment by mailing, by first class mail, a valid notice to withhold income to the Agency, i.e., the "payor of funds." Here, assuming that the obligee's attorney used first class mail, it appears that she has complied with the service requirements of the CCSEPA, and the Agency cannot refuse to enforce the income assignment on this basis.
We note, however, that the Notice itself may not be valid in this case. "A notice of income assignment is valid if it contains the information required by statute [Colo. Rev. Stat. Ann. § 14 14 111.5(4)(a)-(n )] and is consistent with the court's order for [child support], which should be attached if served by the obligee or his/her representative." POMS PR 04505.007. The notice at issue here does not contain a "statement specifying whether or not the obligor is required to provide health insurance for the children who are the subject of the order," pursuant to Colo. Rev. Stat. Ann. § 14-14-111.5(4)(e). Nor does it include in its disbursement instructions the requirements that each disbursement "[s]hall be forwarded to the address indicated on the Notice" and "[s]hall be identified by the case number [and] the name and social security number of each obligor . . . ." See Colo. Rev. Stat. Ann. § 14-14-111.5(4)(d)(III) and (IV). We also note that the amount requested in the Notice ($1,363.31) does not precisely match that set forth in the Support Order ($1,483.80). Thus, while it appears that the obligee complied with the service requirements (assuming she utilized first-class mail), the Agency may refuse to enforce the income assignment on the grounds that the Notice is invalid.
If, however, the obligee were to correct these deficiencies and resubmit a valid Notice by first class mail, the Agency must honor the income assignment. See, e.g., Colo. Rev. Stat. Ann. § 14 14 111.5(4)(I.5); see also, e.g., In re Barnes, 692 P.2d 329 (Colo. App. 1984); In re Sabala, 802 P.2d 1163 (Colo. App. 1990); In re Connell, 831 P.2d 913 (Colo. App. 1992).
Nonetheless, the income assignment would be subject to the maximum income withholding limits established by federal and state law. See 42 U.S.C. §§ 659(a),(h)(1)(A)(ii)(I); 666(a),(b). Federal law, section 1673(b) of the Consumer Credit Protection Act (CCPA), provides maximum amounts that can be withheld from "aggregate disposable earnings," or earnings remaining after deductions of any amounts required by law to be withheld from earnings paid or payable for personal services (wages, salary, commission, bonus, etc.), including disability benefits payable under Title II of the Social Security Act. See 15 U.S.C. § 1673(b)(2)(A), (B); 42 U.S.C. § 659(a),(h)(1)(A)(ii)(I). Such amounts cannot exceed (1) 50% where the individual is supporting a spouse or dependent child, other than the spouse or child that is the subject of the garnishment order, (2) 55% where the individual is supporting a spouse or child and is 12 weeks or more in arrears, (3) 60% percent where the person is not supporting a spouse or dependent child, and (4) 65% percent where the person is not supporting a spouse or dependent child and is 12 weeks or more in arrears. See 15 U.S.C. § 1673(b)(2)(A), (B). Colorado's maximum withholding restrictions on disposable earnings for purposes of income assignments are identical to the federal maximum withholding restrictions on disposable earnings. See Colo. Rev. Stat. Ann. §§ 13-54-104(3)(b)(I)(A,B), 13-54-104(3)(b)(II), 14-14-111.5(2)(f); POMS GN 02410.265.
In this case, the court has ordered that $1,483.80 be deducted from the obligor's benefits. However, according to the information you provided, the obligor's Social Security disability benefit is only $668.00 per month. Thus, the assignment amount ordered by the court appears to exceed the federal and Colorado withholding limits of 55% or 65%. See 15 U.S.C. § 1673(b)(2)(A), (B); Colo. Rev. Stat. §§ 13-54-104(3)(b)(I)(A), (B), 13-54-104(3)(b)(II), 14 14 111.5(2)(f); POMS GN 02410.265. As noted above, the withholding limits apply to the percentage of the individual's "aggregate disposable earnings." See 15 U.S.C. 1673(b)(2)(A), (B). The only way the Agency may legally withhold more than $434.20 (which is 65% of the obligor's Social Security check, assuming scenario four above applies and he is not supporting a spouse or dependent child and is 12 weeks or more in arrears), is if the obligor has other sources of disposable earnings beyond his Social Security disability check, and as explained below, the court issues another order.
We previously addressed the matter of an income assignment that exceeded statutory limits in a November 2005 opinion. See Memorandum from Regional Chief Counsel, Denver, to Assistant Regional Commissioner for Management and Operations Support, Denver, Legality of an Order Directing Respondent to Deposit Social Security Check into Petitioner's Account, (November 2, 2005). In that memorandum, we explained that the Agency cannot refuse to honor an income assignment simply because the withholding amount exceeds the legal limits, but must limit the amount of the assignment to comply with federal and state law. See POMS GN 02410.215 (PC Analysis Garnishments); POMS GN 02410.215 (payment center procedures). As discussed above, the maximum withholding amount may be 55% or 65% in this case, depending on the obligor's family circumstances. See 15 U.S.C. §1673(b)(2)(A), (B); Colo. Rev. Stat. §§ 13 54 104(3)(b)(I)(A), (B), 13-54-104(3)(b)(II), 14 14 111.5(2)(f); POMS GN 02410.265. It is the obligor's responsibility to prove he is supporting another spouse and/or child for purposes of being eligible for the lesser (55%) withholding limit. See POMS GN 02410.215.
Importantly, POMS NL 00703.712 provides that the Agency must notify the obligor about the different withholding amount in the form of a letter entitled, "Notice to Beneficiary/Payee-Initial Withholding Due to Garnishment-Court Ordered Amount More than Federal or State Limits." This notice explains the withholding maximums, and the obligor's burden to prove he supports another spouse/child if he believes he is entitled to the lower withholding amount.
Furthermore, Agency policy prohibits withholding more than the statutory maximum, unless the court issues a new or revised order explicitly stating that the obligor has additional sources of income, and that the $1,483.80 assignment amount does not exceed the legal limits. The Support Order in this case does not so specify. In the event the Agency learns the obligor has additional income and plans to withhold more than 55% or 65% of the obligor's disability benefits, we would recommend that the Agency send a letter to the court explaining that the Agency cannot withhold the entire amount without a new or revised order from the court.
If the obligee's attorney mailed the Notice to the Agency by first class mail, the service requirements for income assignments have been met in this case. However, the Agency may refuse to honor the income assignment on the grounds that the Notice does not contain all of the statutorily required information. In the event that a valid Notice is properly submitted to the Agency via first class mail, the Agency must honor the income assignment, but the amount withheld may need to be reduced to meet federal and Colorado maximum withholding limits.
Deana R. E~-L~
Regional Chief Counsel, Region VIII
Alexess D. R~
Assistant Regional Counsel