Maine law has been changed to require the charge of a $2 fee per pay period to all obligors for child support. While SSA is obligated to withhold the fee of $2.00 per month, the withholding will not be made without receipt of notice from the State of the additional fee. Notification will be made in the form of OMB Form 0970-0154, (Income Withholding Order, IWO).

Additional fees may not be applied retroactively and any fee added to current garnishment amounts is subject to the limits of the Consumer Credit Protection Act.

 

BACKGROUND

In 2012, the Maine state legislature passed a budget that mandated enforcement of an existing but apparently dormant statutory provision requiring the Department of Health and Human Services to collect a $2 per pay period fee from all obligors for child support obligations paid to the department. See Maine Department of Health and Human Services, Maine Child Support: Division of Support Enforcement & Recovery – Employers Page, http:/www.maine.gov/dhhs/ofi/dser/employer/index.html (last visited Nov. 29, 2012). SSA is now receiving Income Withholding for Support forms from the Maine Department of Health and Human Services asking SSA to add the $2 per pay period fee to current withholdings based on garnishment orders. The Center for Programs Support has asked for guidance on how the collection of this fee should be implemented in accordance with federal law and agency policy.

ISSUES AND SHORT ANSWERS

(1) Is SSA obligated to withhold the fee of $2.00 per pay period charged by the State of Maine Department of Health and Human Services to reduce the department’s costs in providing support enforcement services?

Yes.

(2) Must future orders specifically state that SSA deduct a fee for each payment pursuant to section 2103 of title 19-A of the Maine Revised Statutes?

It is not necessary for the child support order to specifically state that SSA must deduct the fee, but the Income Withholding for Support Notice submitted to SSA should specify the amount of the fee and the basis for the fee.

(3) How should SSA compute the fee, since the statute specifies payment of the fee on a weekly basis while SSA makes payments on a monthly basis?

The question is based on an outdated version of the statute. The revised statute indicates that the fee shall be $2 per pay period, not per week. See Me. Rev. Stat. Ann. 19-A § 2103(3) (2012). 42 U.S.C. § 659(e) provides that the government has no requirement to vary its pay cycles to comply with legal process when served by legal process for the enforcement of an individual’s child support. See 42 U.S.C. § 659(e); see also 5 C.F.R. § 581.305(f). Accordingly, SSA should follow the instructions for calculating garnishment withholding in POMS GN 02410.215, and calculate the $2 fee as an additional amount to be withheld with each monthly disbursement.

(4)(a) For orders where SSA is already garnishing funds, would a new or amended order be required for each beneficiary in order for SSA to begin to deduct the fee for that beneficiary?

No, but the state must provide SSA with a notice that complies with state and federal statutory requirements, including specification of the amount to be withheld. See 42 U.S.C. §§ 659(a), 659(i)(5), 666(b)(2), (6)

(4)(b) If yes, what specific language could explain this requirement to the Maine Office of Family Independence?

 

This question is no longer applicable given the answer to question 4(a).

(5) Can the state issue an order for fees where garnishing of SSA benefits has already ceased?

No.

(6)(a) Does the fee count towards the withholding limits in POMS GN 02410.215?

Yes.

(6)(b) Do we deduct the fee even if it would raise the total deduction above the limits of the Consumer Credit Protection Act?

We are obligated to deduct the $2 fee, but the total amount withheld should not exceed the limits set by the Consumer Credit Protection Act. If deduction of the $2 fee results in a shortfall in the amount of child support collected, the Maine Department of Health and Human Services will bear responsibility for allocating and accounting for the shortfall.

DISCUSSION

(1) SSA is Obligated to Withhold the $2.00 Per Pay Period Fee Included in the State of Maine Garnishment Order.

A. SSA Must Comply with Valid State Orders to Enforce Child Support Obligations.

The Social Security Act prohibits the assignment, attachment, or garnishment of money paid or pursuable pursuant to Title II of the Act. 42 U.S.C. § 407(a). An exception to this general rule applies to state laws enacted pursuant to 42 U.S.C. § 666(a)(1) & (b),^[1] and to “any other legal process brought, by a State agency administering a program under a State plan approved under this part or by an individual obligee, to enforce the legal obligation of the individual to provide child support or alimony.” 42 U.S.C. § 659(a). The United States has waived its sovereign immunity from enforcement of such orders, and thus, federal government agencies are subject to the orders “in like manner and to the same extent as if … [the agency] were a private person…”. 42 U.S.C. § 659(a).

B. Governing Federal Law Defines “Child Support” to Include Related Fees.

The Act defines “child support” to include “other related costs and fees… .” See 42 U.S.C. § 659(i)(2). The implementing regulations adopt the same definition, defining child support to include “other related costs and fees… .” See 5 C.F.R. § 581.102(d). Accordingly, the $2 administrative fee should be treated as “child support” for purposes of garnishment and withholding. 42 U.S.C. § 659(i)(2); 5 C.F.R. § 581.102(d). Federal law requires federal agencies to comply with state laws enacted pursuant to 42 U.S.C. § 666(a)(1) & (b), and to other legal process brought by a state agency administering a program to enforce the legal obligation of an individual to provide child support. 42 U.S.C. § 659(a); 5 C.F.R. § 581.305(a)(1). Accordingly, if the fee is being collected pursuant to valid legal process by a state agency administering a program to enforce a legal obligation to provide child support, SSA must honor the fee.

C. The $2 Administrative Fee is Being Collected by the Maine Department of Health and Human Services, a State Agency Administering a Program to Enforce a Legal Obligation to Provide Child Support.

The Maine Department of Health and Human Services administers the state program to enforce child support obligations. See Me. Rev. Stat. Ann. tit. 19-A, § 2108. The Maine legislature has instituted a law requiring the Maine Department of Health and Human Services ^[2] to charge a fee of “$2 per pay period to all obligors whose child support payments are made to the department to reduce the department’s costs in providing support enforcement services.” See Me. Rev. Stat. Ann. 19-A § 2103(3). SSA is obligated to withhold the $2.00 per pay period fee, assuming that the garnishment order satisfies the requirements of POMS GN 02410.210, because the fee constitutes “child support” as defined in the statute and implementing regulations, and because the fee is being collected by the state agency administering the child support enforcement program. See 42 U.S.C. §§ 659(a), (i)(2); 5 C.F.R. § 581.102(d); Me. Rev. Stat. Ann. tit. 19-A, § 2108.

(2) SSA Need Not Insist That Future Support Orders Specifically State That SSA Must Deduct a Fee Pursuant to Section 2103 of Title 19-A of the Maine Revised Statutes, But the Income Withholding for Support Notice Should Specify the Amount of the Fee and the Basis for the Fee.

SSA must comply with state laws enacted pursuant to 42 U.S.C. § 666(a)(1) & (b), and to “any other legal process brought, by a State agency administering a program under a State plan approved under this part or by an individual obligee, to enforce the legal obligation of the individual to provide child support or alimony.” 42 U.S.C. § 659(a). As explained above, the statutory definition of “child support” includes “amounts required to be paid under a judgment, decree, or order, whether temporary, final, or subject to modification, issued by a court or an administrative agency of competent jurisdiction, for the support and maintenance of a child… which may include other related costs and fees…” 42 U.S.C. § 659(i)(2). Further, section 659(a) subjects moneys payable by SSA to “withholding in accordance with State law enacted pursuant to subsections (a)(1) and (b) of section 666 of this title and … to any other legal process brought, by a State agency administering a program under a State plan approved under this part….”. 42 U.S.C. § 659(a).

The Maine Department of Health and Human Services is a state agency administering a plan approved under Part IV-D of the Social Security Act. ^[3] Maine law provides that a child support order must include, among other information, the amount of income to be withheld and a notice to the payor of income of the requirement to withhold and send to the department a fee of $2 per week. ^[4] See Me. Rev. Stat. Ann. tit. 19-A, § 2652. However, Maine law also allows enforcement of income withholding through serving a notice upon the payor of income. Me. Rev. Stat. Ann. tit. 19-A, § 2652(3-A). The statutory provision governing the notice to the payor merely states that the form must conform with the standard format prescribed by the Secretary of Health and Human Services and the requirements of Part IV-D of the Social Security Act. Me. Rev. Stat. Ann. tit. 19-A, § 2655. Fortunately, the United States Secretary of Health and Human Services has promulgated regulations setting forth the requirements of the notice to the payor. See 45 C.F.R. § 303.100(e)(1). The Office of Management and Budget has approved a standard form that embodies all of the requirements. See OMB Form 0970-0154 (attached), available at: http://www.acf.hhs.gov/sites/default/files/ocse/omb_0970_0154.pdf (last visited Nov. 30, 2012); OMB Form 0970-0154 Instructions (attached), available at: http://www.acf.hhs.gov/sites/default/files/ocse/omb_0970_0154_instructions.pdf (last visited Nov. 30, 2012). Significantly, the instructions make clear that OMB Form 0970-0154 “is the standard format prescribed by the Secretary in accordance with” 42 U.S.C. § 666(b)(6)(A)(ii). Maine uses the approved form to enforce income withholding for support. See Maine sample order, attached. Because the OMB Form 0970-0154 used by the state of Maine to enforce income withholding for support satisfies the requirements of 42 U.S.C. § 666(b)(6)(A)(ii) and 45 C.F.R. § 303.100(e)(1), SSA is obligated to honor it. See 42 U.S.C. §§ 659(a) (United States agencies and subdivisions are subject “to withholding in accordance with State law enacted pursuant to subsections (a)(1) and (b) of section 666 of this title and regulations of the Secretary under such subsections… to enforce the legal obligation of the individual to provide child support…”).

Because, under Maine law, a separate order is not required to collect the administrative fee, we need not insist that future orders contain language referencing the administrative fee. See Me. Rev. Stat. Ann. 19-A, §§ 2103(3), 2652 (“the department may implement immediate income withholding by serving the notice required under section 2655 upon the obligor’s payor of income without providing an attested copy of the support order.”). However, SSA should insist that the Income Withholding for Support Notice contain the amount to be withheld, including the amount to be withheld as a fee pursuant to Maine Revised Statute title 19-A, section 2103. See 45 C.F.R. § 303.100(e)(1)(i); Me. Rev. Stat. Ann. 19-A, § 2655. The controlling federal regulation specifies that the notice for withholding must include “[t]he amount to be withheld from the noncustodial parent’s income, and a statement that the amount actually withheld for support and other purposes… may not be in excess of the maximum amounts permitted under [15 U.S.C. § 1673(b)].”. 45 C.F.R. § 303.100(e)(1)(i). As the instructions for the OMB Form 0970-0145 state, the notice must contain a description of “[m]iscellaneous obligations… Must specify. Description of the obligation.” See OMB Form 0970-0154, Income Withholding for Support - Instructions at p.3 (emphasis in original), available at: http://www.acf.hhs.gov/sites/default/files/ocse/omb_0970_0154_instructions.pdf (last visited Nov. 30, 2012). Thus, while the underlying support order need not specifically refer to the $2 administrative fee, the Income Withholding for Support Notice should specifically identify the amount of the fee and reference the statutory basis for the obligation. See OMB Form 0970-0154, Income Withholding for Support - Instructions.

(3) SSA Should Compute the $2 Per Pay Period Fee by Adding the Fee to its Regularly Scheduled Disbursements.

Maine law requires the Maine Department of Health and Human Services (DHHS) to charge a fee of $2 per pay period to all obligors whose child support payments are made to the department to reduce the department’s costs in providing support enforcement services. See Me. Rev. Stat. Ann. tit. 19-A, § 2103(3); see also Me. Rev. Stat. Ann. tit. 19-A, § 101(4) (defining “department” to mean the Department of Health and Human Services and its agents and authorized representatives). DHHS must notify the obligor in advance of the increase in withholding. Me. Rev. Stat. Ann. tit. 19-A, § 2103(3). This statutory provision was amended in 2011. See 2011 Me. Legis. Serv. ch. 477, § L-1. The statute previously required collection of a fee of $2 per week. See Me. Rev. Stat. Ann. 19-A, § 2103(3) (historical and statutory notes). Accordingly, the question of how SSA should compute the $2 fee is moot, since the fee now requires payment “per pay period.” “Pay period” is not defined in the statute, but it is reasonable to construe that language as indicating that the obligor need not alter its payment schedule to accommodate the fee, and should instead add the $2 fee each time it makes a disbursement. This reading conforms with 42 U.S.C. § 659(e), which provides: “[a] governmental entity that is affected by legal process served for the enforcement of an individual’s child support or alimony payment obligations shall not be required to vary its normal pay and disbursement cycle in order to comply with the legal process.” See also 42 U.S.C. § 666(b)(6)(C) (“employer shall not be required to vary the normal pay and distribution cycles in order to comply” with employer’s liability to state for failing to withhold income following receipt of proper notice). Since the governing federal statute specifies that the government is not required to alter its pay cycle to accommodate a state order, and the state order itself states that the fee is required “per pay period,” SSA should add the $2 fee to each of its regularly scheduled disbursements. See also 5 C.F.R. § 581.305(f).

(4) Where SSA is Already Garnishing Funds Pursuant to a Valid Support Order, a New or Amended Order is Not Required for SSA to Begin to Deduct the Fee.

A new or amended order is not required, but an updated Income Withholding for Support Notice is required. The governing federal statute provides that “withholding [from income of amounts payable as support] must occur without the need for any amendment to the support order involved or for any further action (other than those actions required under this part) by the court or other entity which issued such order.” 42 U.S.C. § 666(b)(2). Further, the employer. ^[5] of a noncustodial parent, upon being given a notice “in a standard format prescribed by the Secretary [] contain[ing] only such information as may be necessary for the employer to comply with the withholding order[,]” shall withhold the funds as directed in the notice. 42 U.S.C. § 666(b)(6)(A). Additionally, 42 U.S.C. § 659(a) provides that federal government agencies are subject to withholding in accordance with state laws enacted pursuant to 42 U.S.C. § 666(a)(1) and (b) to the same extent as private persons. Maine state law, enacted pursuant to 42 U.S.C. § 666(a)(1) and (b), specifies that the Maine Department of Health and Human Services “is not required to issue a new or amended withholding order to collect the fee…”. Me. Rev. Stat. Ann. tit. 19-A, § 2103(3). Since federal law requires procedures to enable withholding of income to enforce a support order without obtaining an amended order and subjects federal government agencies to state law, and because state law provides that an amended order is not required to collect the fee, there is no need for a new or amended order before SSA begins deducting the fee for the beneficiary. See 42 U.S.C. §§ 659(a), 666(a)(1), (b)(6)(A); Me. Rev. Stat. Ann. tit. 19-A, § 2103(3).

(5) The State Cannot Issue an Order for Fees Where Garnishing of SSA Benefits Has Already Ceased.

As the Maine statute explains, “[t]he department shall charge a fee of $2 per pay period to all obligors [COMMENT: remove underline] whose child support whose child support payments are made to the department…”. Me. Rev. Stat. Ann. tit. 19 A, § 2103(3). The department collects the fee from obligors “whose child support is paid to the department under an income withholding order by notifying the payor of income to the obligor to increase withholding by $2 per pay period.” Id. If the garnishment of SSA benefits had already ceased, then the child support would not be “paid to the department under an income withholding order” and thus the department could not collect the fee from SSA. Id.

(6(a)) The $2 Administrative Fee Counts Toward the Withholding Limits Described in POMS GN 02410.215.

POMS GN 02410.215 explains that the garnishment amount is limited to the lesser of the State maximum or the maximum under the Consumer Credit Protection Act, 15 U.S.C. § 1673(b). See POMS GN 02410.215.A.3. The governing federal statute explains that a state enforcing a support order may withhold as much of a parent’s income as necessary to comply with the order … “up to the maximum amount permitted under section 1673(b) of Title 15. If there are arrearages to be collected, amounts withheld to satisfy such arrearages, when added to the amounts withheld to pay current support and provide for the fee, may not exceed the limit permitted under section 1673(b), but the State need not withhold up to the maximum amount permitted…” 42 U.S.C. § 666(b)(1). As explained above, the controlling federal statute defines “child support” to include “related fees,” which would encompass Maine’s $2 administrative fee. As “child support,” the fees are subject to the statutory limit on withholding, 42 U.S.C. § 666(b)(1). The state may not withhold more than the amount allowed by 15 U.S.C. § 1673(b). See 42 U.S.C. § 666(b)(1); see also 45 C.F.R. § 303.100(a)(3), 303.100(e)(1)(i) (notice to employer initiating withholding must state that the amount to be withheld, including a fee the employer may deduct for administrative costs, may not exceed the maximum amounts permitted by 15 U.S.C. § 1673(b)).

(6(b)) SSA is Obligated to Deduct the $2 Administrative Fee, But the Total Amount Withheld May Not Exceed the Limits Set by 15 U.S.C. § 1673(b).

The amount withheld shall not exceed the maximum amount permitted under 15 U.S.C. § 1673(b), but the fee should still be deducted. The U.S. Department of Health and Human Services, Administration for Children and Families, Office of Child Support Enforcement, explains that if a fee plus child support “exceeds the maximum amount allowed to be withheld under 15 U.S.C. § 1673(b), the employer may take the entire amount of its administrative fee and make the child support payment less than the amount in the notice. The amount of support that was not paid because the employer deducted the administrative fee instead becomes part of the arrears owed by the non-custodial parent.” See U.S. Department of Health and Human Services, Administration for Children and Families, Office of Child Support Enforcement, Federal Agency Frequently Asked Questions on Income Withholding, available at http://www.acf.hhs.gov/programs/css/resource/federal-agency-faqs-on-income-withholding (last visited Nov. 29, 2012). While that particular guidance refers to an employer’s administrative fee for processing the withholding of income, the principle applies with equal force to the administrative fee charged by the state of Maine. SSA may not withhold more than the amount permitted by 15 U.S.C. § 1673(b), but SSA is obligated to pay the $2 fee. If the $2 fee would push the total amount withheld above the statutory threshold, SSA cannot withhold more than the statutory threshold. ^[6] As a practical matter, SSA should withhold as much as the order requires, including the $2 fee, up to the limits permitted by 15 U.S.C. § 1673(b), and if Maine wants to collect its $2 fee, then the state of Maine will add the $2 in child support that was displaced by collection of the fee to the arrears owed by the noncustodial parent. SSA remains bound by the limits of 15 U.S.C. § 1673(b). ^[7] The allocation and calculation of any shortfall in the obligor’s child support is a matter for the Maine Department of Health and Human Services to resolve.