TN 3 (03-07)

PR 04015.016 Illinois

A. PR 07-076 Illinois Income Withholding Order Directing Payment To Obligee, Not State Disbursement Unit-Gerald C~ Our Reference: 06-0163

DATE: February 26, 2006

1. SYLLABUS

SSA cannot honor an Illinois IWO issued after October 1, 1999, that does not direct that payments be made to the SDU, because such an order is not regular "on its face."

The State where the obligor resides governs the amount that can be withheld for garnishment.

2. OPINION

You asked whether the Agency could honor an income withholding order (IWO) directing that payments be made to the obligee, and sent to her attorney, as opposed to being made to and sent to the Illinois State Disbursement Unit (SDU). You also asked which State's law governs the maximum withholding limit, the law of Iowa, where the obligor resides, or the law of Illinois, where the obligee resides and where the IWO was issued.

We conclude that the Agency cannot honor an Illinois IWO issued after October 1, 1999, that does not direct that payments be made to the SDU, because such an order is not regular "on its face." We also conclude that the State where the obligor resides, which in this case is Iowa, governs the maximum withholding limit, which should be stated as a sum certain, not as a percentage. Accordingly, the order is also not regular on its face because it is stated as a percentage, and not a sum certain. Because the order is not regular on its face, the Agency must respond directly to the court and explain its objections to the order. The Agency must also inform the party's representative who caused the legal process to be served that the legal process will not be honored.

BACKGROUND

Gerald L. C~ lives in Iowa; his ex-wife, Ruby L. S, lives in Illinois. They have a child, Eric C~. When Mr. C~ became delinquent in his child support payments, Ms. S~ sued. On March 27, 2006, an Illinois court found that Mr. C~ child support payments were over 12 weeks in arrears, and that he had not shown that he was supporting a second family. The court ordered that 55% of Mr. C~ monthly Social Security benefit be withheld to pay the arrearage, in a check payable to Ms. S~, sent to her attorney. The order notes that if the obligor does not work in Illinois, the laws of the obligor's place of employment govern limitations on withholding.

On April 27, 2006, the order was served on the Agency. On May 3, 2006, the Agency withheld $195.80 from Mr. C~ monthly Social Security benefit, and sent it to the Illinois SDU. From June through November 2006, the Agency withheld $652.50 per month, and from December 2006 through February 2007, the Agency withheld $674.00 per month, but the Agency has not sent these monies to the SDU, Ms. S~, or her attorney. As of February 2007, the Agency has withheld $5,263.00.

DISCUSSION

The Social Security Act provides that monies due from the United States to any individual may be withheld in accordance with State law in order to enforce the individual's child support obligation. 42 U.S.C. § 659(a). The implementing regulations provide that any governmental entity "shall" comply with a child support IWO unless certain conditions exist. 5 C.F.R. § 581.305(a). One of those conditions is if the IWO does not "on its face" conform to the laws of the issuing jurisdiction. 5 C.F.R. § 581.305(a)(1).

Here the IWO was issued by an Illinois court, and therefore Illinois law governs. 750 Ill. Comp. Stat. 22/604(a); Iowa Code § 252K.604.1. The Illinois enactment of the Uniform Interstate Family Support Act (UIFSA), at 750 Ill. Comp. Stat. 22/320(b)(2) requires any order for support entered on or after October 1, 1999, to be made to the SDU where the payments are made through income withholding. Although "order for support" is not defined by the Illinois UIFSA, it is defined by the Illinois Income Withholding for Support Act as including any payment of arrearage. 750 Ill. Comp. Stat. 28/15(a)(1). In addition, the UIFCA provides that "support payments shall be made to the State Disbursement Unit if . . . the support payments are made through income withholding." 750 Ill. Comp. Stat. 22/320(c)(2). Section 22/320(c)(2) is not limited to orders entered after 1999. Income is specifically defined as including "periodic entitlements to money from any source," 750 Ill. Comp. Stat. 22/102, which clearly includes monthly Social Security benefits. And an IWO is one directed to an obligor's employer or other debtor to withhold support from the income of the obligor. Id.

Sections 22/320(c)(2) and 22/320(b)(2) of the Illinois UIFSA, requiring payment to the SDU, are consistent with the Illinois Income Withholding for Support Act, which requires any income withholding to be paid to the SDU. 750 Ill. Comp. Stat. 28/20(c)(12).

Finally, the Illinois UIFSA specifies when payments be made as directed by the order for support, and not to the SDU, only when payments are not made through income withholding. 750 Ill. Comp. Stat. 22/320(c-5).

In sum, multiple provisions of the Illinois statutes require child support payments made through income withholding to go to the SDU. Moreover, the statutes specify that the only time that payments may be made as directed in the order for support, and not to the SDU, is when the payments are not through income withholding. Therefore, the March 27, 2006 IWO requiring payment be made to Ms. S~ and sent to her attorney does not "on its face" conform to the laws of the Illinois. Accordingly, the Agency should not comply with the order. 5 C.F.R. § 581.305(a)(1).

The second question is which State's law governs the maximum withholding limit, the law of Iowa, where the Mr. C~ resides, or the law of Illinois, where the Ms. S~ resides and where the IWO was issued. While generally the law of Illinois governs the IWO, 705 Ill. Comp. Stat. 22/604(a); Iowa Code § 252K.604.1, here the order specifically states that if the obligor does not work in Illinois, the laws of the obligor's place of employment govern limitations on withholding. The Agency stands as the employer under the statute. See 42 U.S.C. § 659(a). And under the Act and the Illinois UIFSA, the law of the obligor's principal place of employment controls the maximum amount that can be withheld from his income. 42 U.S.C. § 666(b)(6)(A)(i)(II); 750 Ill. Comp. Stat. 22/502(d)(2). Therefore, the law of Iowa governs the maximum that may be withheld from an obligor's income.

The Iowa statutes defer to the federal Consumer Credit Protection Act, which allows up to 65% of disposable earnings to be withheld. Iowa Code §§ 252D.17.3, 252D.18A.1. But the Iowa Administrative Code limits the amount of disposable earnings that may be withheld to 50% of disposable earnings. Iowa Admin. Code r. 441-98.40(1). And the March 27, 2006 IWO orders that 55% of Mr. C~ monthly Social Security benefit be withheld. This exceeds the Iowa maximum. Moreover, both Iowa and Illinois law require that the amount to be withheld be stated as a "sum certain," 705 Ill. Comp. Stat. 22/502(c)(1); Iowa Code § 252K.502.3.a, not a percentage. Thus, the IWO is also invalid on its face because the withholding amount exceeds the maximum allowed by the State of Iowa, and is not stated as a sum certain.

Under federal regulations, if the order does not, on its face, conform to the laws of the jurisdiction where it was issued, the Agency must respond directly to the court, setting forth its objections to compliance with the order and informing the party who served the process that the legal process will not be honored. 5 C.F.R. § 581.305(c); see gen. POMS NL 00703.728.

CONCLUSION

The Agency cannot honor the IWO because it directs that payments be made payable to the obligee and sent to her attorney, and not paid to the Illinois SDU, and is thus not regular "on its face." The IWO is also not regular on its face because the percentage withholding amount exceeds the maximum allowed by Iowa, and is stated as a percentage, not a sum certain, as required by law. Accordingly, the Agency must respond directly to the court, explaining that we object to complying with the order because it does not "on its face" comply with State law for these reasons. The Agency must also notify Ms. S~'s attorney that the legal process will not be honored


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PR 04015.016 - Illinois - 03/12/2007
Batch run: 01/27/2009
Rev:03/12/2007