Child Enforcement Services (CSS) agencies must always use income withholding as an initial enforcement effort, when appropriate. It is an efficient and reliable means of collecting periodic child support obligations. This topic contains information on the following subjects:
Income withholding is an efficient and reliable means of collecting periodic child support obligations. Money is deducted from a noncustodial parent’s (NCP’s) paycheck and forwarded to the NCCSCC by the NCP's employer within seven (7) business days. (A business day is defined as any day that the CSS Central Office is open to conduct normal business.) Income withholding must always be used as an initial enforcement effort in appropriate CSS cases as defined in the next section. Income withholding can also be initiated with entities other than employers when the NCP has other sources of income, such as Social Security (SSA) benefits, Unemployment Insurance Benefits, and Worker's Compensation.
Nongovernmental entities or individuals can also use the income withholding process. These entities are to submit a copy of the withholding order to employers/payors along with an Income Withholding For Support (DSS-4702) document, if initiating an income withholding.
NCGS 110-136.3(b)(3) provides for the implementation of income withholding through immediate income withholding, withholding based on arrearages, or withholding initiated at the request of either the obligor or the obligee or on the obligor's eligibility for withholding.
Income withholding can also be implemented to collect child support arrearages that have been reduced to a judgement (Griffin v. Griffin, 404 S.E. 2d 478 1991) or to enforce medical support orders for specified dollar amounts.
NCGS 108A-69 requires that if the defendant fails to comply with the court order to provide medical coverage for the dependent child(ren) and the coverage is available through the employer/payor, the employer/payor must enroll the child under family coverage upon receipt of the National Medical Support Notice (DSS-4733) from the CSS agency. In addition, the employer/payor must deduct the amount of insurance premium from the wages of the defendant and send the premium to the health insurance provider.
Withholding, attachments, or garnishments imposed by the Internal Revenue Service for the collection of delinquent income taxes has priority over a child support withholding requirement.
Income withholding can be initiated for an NCP who has an order in North Carolina but is located in another state. The Income Withholding For Support (DSS-4702) should be served on the employer/payor.
"Disposable income" is defined as any form of periodic payment to an individual, regardless of the source. This includes (but is not limited to) wages, salary, commission, self-employment income, bonus pay, severance pay, sick pay, incentive pay, vacation pay, compensation as an independent contractor, Workers' Compensation, Unemployment Insurance Benefits, disability, annuity, survivor's benefits, pension and retirement benefits, interest, dividends, rents, royalties, trust income, and other similar payments that remain after the deduction of Federal, state, and local taxes, Social Security, and involuntary retirement contributions.
For military personnel, including veterans, disposable income includes military pension and retirement benefits, military active duty and special pay, and Federal civilian employee's pay. Social Security retirement and disability benefits and state-administered retirement pay are also considered disposable income.
Information needed to verify disposable income can be sought from the NCP and/or directly from the employer or other payor. NCGS 110-136.8(b)(6) requires that employers/payors of disposable income cooperate with the CSS agency in the verification of the amount of the NCP's income.
Longshoreman workers' compensation and unemployment benefits generally are exempt from attachment; however, attachment is allowed in some instances. Contact the local attorney on a case by case basis to determine if attachment is feasible.
Longshoreman workers' compensation, longshoreman unemployment benefits, veterans' disability, and death benefits are to be considered a source of income when establishing an order for child support.
Veterans' benefits are subject to attachment through garnishment or income withholding only when the veteran is eligible to receive military retired/retainer pay and has waived a portion of the retired/retainer pay in order to receive disability compensation from the Department of Veterans' Affairs. Veterans' benefits are a disability payment, not unlike Social Security disability and SSI. A retired veteran’s retirement is paid by the Department of Defense, not the Department of Veterans' Affairs. That portion of the VA benefit received in lieu of retired/retainer pay is subject to garnishment or income withholding.
The VA regional office serving the veteran determines if the veteran has waived any portion of retired/retainer pay in order to receive VA benefits. To effect income withholding from veterans' benefits, caseworkers must complete the Notice To Withhold Other Than Wages (DSS-4630) document.
The director of the VA Regional Office that serves the veteran receives the notice. The VA Regional Office reports whether the veteran has waived any portion of retired/retainer pay in order to receive VA benefits in answer to the DSS-4630 document.
With the exceptions of California, Maryland, Massachusetts, New York, Pennsylvania, Texas, Virginia, and West Virginia, each state is served by one VA Regional Office located within the state.
If the veteran's children are not residing with the veteran and the veteran is not reasonably discharging his/her responsibility for the child(ren) by providing support, all or any part of the veteran's pension, compensation, or emergency officers' retirement pay can be apportioned.
Where a hardship is shown to exist, the Department of Veterans' Affairs authorizes a special apportionment of a beneficiary's pension, compensation, emergency officers' retirement pay, or dependency and indemnity compensation between the veteran and his/her dependents.
To expedite the process, caseworkers should send an Appointment Review Request with the DSS-4630 document. This request is addressed to the Director of the Regional Office and must be on the agency's letterhead. Both the responsible CSS caseworker and the custodial parent/custodial parent must sign the request.
Caseworkers must complete and attach a "Statement in Support of Claim" (VA Form 21-4138) to the apportionment review request and record information concerning the income (including TANF and SSI, if applicable) and the resources of the custodian on the form.
NOTE: In order for the apportionment review request to succeed, one of the following two conditions must be met. EITHER the claimant (the custodian of the child) must show expenses that exceed household income, OR the veteran must be receiving additional veterans' benefits for dependents, and evidence must show that the veteran is not reasonably contributing to the dependents' support.
Other funds that are not subject to withholding include:
Funds held for individuals in a wage and hour dispute with an employer for whom the Department of Labor or other Federal agency is acting as mediator are not subject to income withholding. However, once the funds have been disbursed to an NCP, the CSS agency can pursue collection through garnishment of the obligor's account. The CSS agency can also seek an order of the court to deposit the back pay award in the form of a bond or security to guarantee payment.
Social Security Administration (SSA) benefits received by an NCP can be considered for the purposes of income withholding. However, if any portion of the SSA check is for the benefit of a dependent child, this portion is not considered as a source of income for the purpose of income withholding.
Income withholding documents for a benefit payment from the Social Security Administration (SSA) are sent to the nearest local Social Security office, regardless of the address of the custodial parent or noncustodial parent. The documents must be sent by regular mail to the office manager of the local field office. SSA cannot process income withholding orders sent directly to a Program Service Center (PSC) or the Central Office of Disability Operations located in Baltimore, and it will return the documents to the sending agency.
The field office does accept service of process and will determine the benefit status of the NCP. If the person is receiving benefits, the local office notifies the appropriate SSA PSC to begin the withholding. The PSC notifies the local CSS agency once the withholding is initiated. If the NCP’s claim is pending and no benefits are being paid currently, the local SSA office staff loads the withholding information into the SSA’s Court Order Garnishment System (COGS). The information remains in COGS until SSA resolves the NCP’s SSA claim.
If a claim is pending, the PSC begins the income withholding once the claim has been approved. Since the application review process can take several months, the NCP's first benefit check might be a lump-sum payment for retroactive benefits from the date of the application. The child support withholding payment can also be retroactive for the same period of time.
The income withholding must always recognize an amount sufficient to pay the current support obligation, health insurance premiums for the enrollment of the child(ren), cash medical payments, spousal support (if included in the income withholding), an additional amount toward any accrued arrearages (under certain conditions that are discussed later in this section), and a $2.00 processing fee, which can be retained by the payor.
Withholding can be from any type of the NCP's disposable income, including (but not limited to) regular wages, overtime pay, vacation pay, or lump sum payments. The employer/payor is responsible for calculating the NCP's disposable income and determining the amount that can be withheld based on the maximum percentage amount that State law allows.
However, once the employer/payor has withheld the total monthly amount that is indicated on the Income Withholding For Support document (DSS-4702), no further withholding can be required from any additional income paid to the NCP during that month. CSS must not advise an employer or other payor to withhold more than the required withholding amount or the maximum amount allowed by State law.
Under NCGS 110-136.6, the total amount withheld from the NCP's disposable income for one (1) pay period cannot exceed the following limitations:
The Federal Consumer Credit Protection Act percentages are:
ACTS does not calculate the percentages that an employer/payor should withhold when an NCP is six (6) weeks past due. Therefore, the only FCCPA percentage limit that can appear on an Income Withholding for Support (DSS-4702) document when spousal support is included is 50% or 60%.
All support obligations, including NIVD court orders and direct support, must be considered when computing the amount to withhold. To ensure that ACTS applies the correct maximum withholding amount that is allowed by State law, it is imperative that the I/W Worksheet include all appropriate cases and that ACTS is updated to indicate whether the NCP is supporting a family in addition to court-ordered support obligations.
If the amount required to satisfy the current support obligation is more than the maximum allowable withholding, the NCP should be informed that it is his/her responsibility to ensure that the payments are current. NCPs must arrange another payment method to make up the difference. It is not the responsibility of the employer/payor to monitor the arrearages that are created if the amount sent is less than the obligation amount.
It is important that the responsible caseworker advise the NCP that any additional amounts withheld through such a request are prorated among all of the NCP's cases.
When the maximum allowable amount of withholding is more than the amount that is required to satisfy the current support obligation, the difference between these amounts should be applied to any arrearages in the case, if the following conditions exist:
The responsible caseworker can elect to apply a lesser amount to arrearages, if circumstances for that case justify a lesser amount. However, local CSS agencies should use a consistent procedure to determine the amount to apply for arrearages.
In multiple withholdings, withholding for current support that is collectible by income withholding has priority over arrearages, and each custodial parent must receive a pro rata share of the total amount withheld, based on the amounts of the child support orders being enforced.
For multiple cases, when it becomes necessary (due to the NCP's neglect or refusal to obtain dependent insurance coverage) to have an employer/payor deduct the amount of the insurance premium, current support and medical support has priority over arrearages. The withheld amount must not exceed the maximum allowable percentage that is permitted by State law.
If alimony or postseparation support payable to the custodial parent is being enforced with the child support order, the withholding percentage is limited to the percentages that are set by the Federal Consumer Credit Protection Act. This act limits the amount of the withholding to sixty-five percent (65%); therefore, current support, insurance premium, arrearages, and alimony or postseparation support cannot exceed this limit.
NOTE: When the amount of money is not sufficient to take the court-ordered amount for the arrearages in each of an NCP's cases, then each case receives a pro rata share of what is left. At no time should the State maximum of fifty percent (50%) be exceeded. If it is appropriate to apply the Federal Consumer Protection Act maximum of sixty-five percent (65%), that percentage should not be exceeded.
A processing fee of $2.00 per withholding can be retained by the employer/payor (unless it is UIB withholding.) This fee is not included in the total amount that the employer/payor is told to withhold, but it must be assumed that the employer/payor will retain it.
If the NCP's current support obligation is less than the maximum allowable amount, the employer/payor withholds the obligation and also the $2.00 processing fee. (See Example A below.) If the NCP's current support obligation is greater than or equal to the maximum allowable amount, the employer/payor can only withhold an amount of the NCP’s disposable income up to the maximum allowable percentage specified on the Income Withholding For Support (DSS-4702); however, the employer/payor can keep $2.00 of that amount as a processing fee. (See Example B.)
Example A -
Obligation = $200.00
Maximum allowable amount = $250.00
Amount withheld for support = $200.00
Amount withheld for processing fee = $ 2.00
Total amount withheld by payor = $202.00
Example B -
Obligation = $200.00
Maximum allowable amount = $175.00
Amount withheld for support = $173.00
Amount withheld for processing fee = $ 2.00
Total amount withheld by payor = $175.00
All criminal or civil child support orders that are entered or modified on or after October 1, 1989, must contain a provision ordering income withholding to take effect immediately. If the NCP does not have a verified employer/payor at the time the support order goes into effect, income withholding is implemented as soon as a verified employer/payor is entered into the system. The NCP must be advised to make any payments that might become due prior to the employer/payor implementing the withholding.
Cases are eligible for immediate income withholding unless:
If a court order mandates immediate income withholding, caseworkers must initiate this type of income withholding when entering the court order information in ACTS. The NCP must have a current employment record in ACTS for income withholding to be initiated. CSS sends an Income Withholding For Support (DSS-4702) document for each of the NCP's eligible cases. If the NCP has more than one active and verified employer/payor, ACTS also generates a DSS-4702 document for each employer/payor.
The CSS program has authority to administratively increase an income withholding order in the collection of overdue child support. This can be done if a frequency amount due exists for the repayment of arrearages, or if the issue of frequency has not been addressed. It can be appropriate to administratively increase an income withholding due to a change in employment that results in additional income or to a promotion or increase in salary.
The income withholding must be completed in accordance with due process requirements. Pursuant to Rule 4 of the North Carolina Rules of Civil Procedure, the NCP must be served by certified mail (return receipt requested), by publication, or by the sheriff.
ACTS allows caseworkers to administratively increase an income
withholding amount, even if no frequency amount due for arrearages exists. The amount of the increase must not exceed the maximum allowable percentage amount of disposable income. The additional funds can be collected and applied toward the arrearages of NCPs with a disposable income that is high enough to support an administrative
Immediate withholding is not implemented for a case if either party can show good cause that such a withholding is not in the best interest of the child. A finding of good cause must include an explanation of why the implementation of immediate withholding would not be in the best interest of the child, and for cases involving the modification of support orders, it must show proof of timely payment of previously ordered support.
An alternative arrangement that benefits the child must be agreed upon by both parties.
NOTE: In WFFA/TANF cases, the CSS agency is the obligee (due to the assignment of rights to support.) However, in NPA cases, the custodial parent must also sign any agreement for an alternative arrangement, which must be written and signed by the appropriate parties.
Some examples of good cause or alternative arrangements are listed below:
The child support order must contain a statement of any agreement for an alternative arrangement and a statement that if the NCP subsequently does not abide by the agreement or defaults on the support payments, income withholding based on arrearages or the obligor's or obligee's request would apply per NCGS 110-136.4(a).
A case that does not meet the criteria for immediate income withholding can be subject to withholding based on arrearages. Income withholding based on arrearages can be implemented if the following conditions are met:
For withholding based on arrearages, the CSS agency must provide advance notice of the intent to withhold to the NCP before implementing the withholding. In accordance with Rule 4 of the North Carolina Rules of Civil Procedure, the NCP must be served by certified mail (return receipt requested) or by the sheriff.
Active duty, reserve, and retired members of the uniformed services (Army, Navy, Air Force, and Marines) are subject to the withholding statutes. The income withholding notice is sent to the Defense Finance and Accounting Service (DFAS) through Electronic Income Withholding ("e-IWO"). Otherwise, income withholdings for military personnel and civilian personnel on military installations are processed in the same manner as income withholdings for civilian employees. (See “Electronic Income Withholding”.)
NCGS 110-129.2(f) states that within two (2) business days of the date when employment information is entered into the NC New Hire Directory, a notice directing the employer of the newly hired employee to withhold child support from the employee's income must be transmitted to the employer. An interface between ACTS and the New Hire Directory is run twice a week, which attempts to match based on the NCP’s Social Security number. Upon a successful match, CSS sends an Income Withholding For Support (DSS-4702) document for each of the NCP's cases that have a court order and are subject to income withholding.
If the employer participates in electronic income withholding (e-IWO) with North Carolina, ACTS transmits the income withholding electronically to the New Hire employer.
When appropriate, CSS also sends the Notice Of Transfer I/W (DSS-4486).
It is imperative that caseworkers make the appropriate number of copies for the court file, the NCP, and the office file. The employer's copy must be sent immediately by regular mail to comply with the two-day time frame. If the employer participates in e-IWO, caseworkers must follow the procedures for service of the e-IWO. Notices are sent to the most recent address stored in ACTS for the NCP.
An Employer Verification Letter (DSS-4685) is generated and sent from the State Print Shop Office at the same time the income withholding notices are produced. Because of the two-day time frame, however, the automatically generated I/W notices must be sent out before caseworkers can receive verified income information from the new employer.
Caseworkers should also contact an NCP's previous employer(s) immediately to determine whether or not the NCP still works there. If not, caseworkers should record the date when the NCP stopped working for that employer in ACTS
For purposes of New Hire income withholding, the definition of support obligation includes the latest order for current support and any order for payment of past due support that includes a frequency amount due. This should reduce the risk of withholding too much income in those instances where the obligation has changed or arrearages have been liquidated since the last withholding. The amount of withholding reported to the new employer/payor does not include any amounts increased administratively to collect arrearages sent to a previous employer/payor.
Once information that verifies employment and income is received from the new employer/payor, caseworkers must generate the Notice Of Income Withholding Increase to 40% (DSS-4481) again for the NCP before they can send an Income Withholding For Support (DSS-4702) document to the new employer/payor to withhold more than the default maximum allowable percentage ordered amounts.
If the new employer has not responded to the Employer Verification Letter (DSS-4685) within thirty (30) days, caseworkers can consider sending a change notice to increase the amount of withholding administratively at that time.
Since notices to the new employer are produced automatically upon making a match, a few cases can exist where the NCP has not actually changed employment, but is now working at a second job. This situation increases the potential of having two withholdings in place and of withholding too much income to satisfy the child support obligation.
Upon learning of such situations, caseworkers are expected to:
After receiving income information from the new employer, caseworkers must update the employer record that was created in ACTS by the New Hire match, so that the CSS case is included on the I/W Worksheet.
ACTS notifies the responsible caseworker when an NCP with a court order that meets the criteria for income withholding also has another support order that is outside CSS. If the NCP has a Non-IV-D (NIVD) support order under income withholding, either ACTS generates the Income Withholding For Support (DSS-4702) document automatically or the caseworker generates this document manually, depending on certain settings for the NCP in ACTS.
DSS-4702 documents for NIVD cases are printed at the NIVD Unit at CSS Central Office, and NIVD workers mail these documents weekly to the appropriate Clerks of Court, who process and mail them. Caseworkers must contact the Clerk of Court who is enforcing the NIVD order and remind the Clerk to review the income withholding documents and, if appropriate, serve them on the employer/payor as soon as possible. This enables CSS to get its share of the withheld wages. NCGS 110-136.5 addresses income withholding for NIVD cases and the responsibility that the court has regarding income withholding for NIVD cases.
Caseworkers must send the original DSS-4702 document for the IV-D case to the NCP's employer/payor (or that employer's/payor's registered agent) by regular mail and a copy to the NCP by regular mail. They also file a copy of the DSS-4702 document along with a Certificate Of Service in the court record and retain copies in the case file.
Income withholding begins on the date when the NCP's employer/payor (or that employer's/payor's registered agent) receives the notice. If the employer/payor participates in electronic income withholding (e-IWO), caseworkers follow e-IWO procedures for the IV-D case.
If an obligor's support order does not provide for immediate income withholding, the obligor can request that income withholding be initiated. When the obligor makes the request for income withholding, local CSS must obtain a notarized written statement
NCGS 110-136.3 allows the obligee to request that income withholding be implemented to collect child support. Since the obligee in a CSS case is defined as the CSS agency (NCGS 110-129), the agency can initiate income withholding before a 30-day arrearage has accumulated if the location of the NCP can be determined and that NCP has a verified NC employer or a NC registered agent. A request for withholding from the custodial parent is honored if the same criteria are met. However, if the NCP is in compliance with the terms of an alternative arrangement, such a request should be denied.
For withholding by request, the CSS agency must notify the NCP in advance of the intent to withhold before implementing withholding. In accordance with Rule 4 of the North Carolina Rules of Civil Procedure, the NCP must be served by certified mail (return receipt requested) or by the sheriff.
The following situations are examples of when the income withholding notices are NOT automatically generated:
1. The NCP requests income withholding; see Income Withholding Requested by Obligor or Obligee.
2. The NCP requests an increase in the maximum percentage to be withheld from his/her income;
3. The NCP's disposable income increases, but his/her employer remains the same;
4. The NCP has a Non-IV-D obligation under income withholding, and this fact is documented in ACTS.
The Notice of Intent to Income Withhold (DSS-4485) provides advance notice to the NCP that CSS intends to implement income withholding based on arrearages or a party's request. This document includes the amount of the withholding and the procedure for contesting. The Notice of Intent should be sent by certified mail (return receipt requested) or served by the Sheriff.
The Notice of Intent is not necessary when immediate income withholding is ordered. The court order containing the immediate income withholding provision serves as notice to the NCP of the impending withholding. Once the order containing this provision has been signed by the judge, CSS must notify any known employer to implement income withholding within fifteen (15) calendar days.
Rules of civil procedure require that proof of service of this notice be a part of the court file. An affidavit signed by the CSS attorney must be filed, along with a copy of the green card showing proof of service, within five (5) days of receipt of the return. Since the original green card is considered evidence of proof of service, it is preferable to file a copy of the return with the court. The green card must be maintained in the hard-copy CSS case file.
If the notice is returned by the post office as undeliverable, it can be mailed "restricted delivery" to the NCP at his/her place of employment. If the notice cannot be successfully served by certified mail and the NCP’s location is known, the local CSS agency should obtain personal service through the sheriff's department. The withholding cannot be implemented until the NCP is served with the notice either in person or by certified mail (NCGS 1A-1, Rule 4, Rules of Civil Procedure).
The NCP has ten (10) days from the date of receipt of the Notice of Intent to Income Withhold (DSS-4485) to contest the requirement for withholding in the local District Court. In addition to requesting a hearing in the District Court, the NCP must inform the local CSS agency on what grounds the withholding is being contested. The Notice also instructs the NCP to contact the local CSS agency when officially requesting a hearing since most NCPs’ concerns should be resolved without a hearing. The withholding can be contested based only on one or more of the mistakes of fact listed below:
1. The notified person is not the individual who is responsible for the child support in the CSS case;
2. The NCP did not owe the current support or arrearage amount that was stated on the specified date;
3. The rate of withholding exceeds the amount of support specified in the court order;
4. Block 1a. of the form is checked and the arrearage amount does not equal at least one (1) month's support payments; and/or
5. Block 1b. of the form is checked and the NCP claims that he/she did not request that income withholding begin.
NOTE: The payment of arrearages can never be a basis for canceling or for not implementing withholding.
If the NCP’s concerns cannot be resolved without a hearing, the NCP can request a hearing by completing the Request for Hearing to Contest Income Withholding to Enforce Child Support (AOC-CV-619), which is obtained from the Clerk of Court.
The Clerk of Court should send a copy of the NCP's request to the CSS caseworker. This form should include the place, date, and time of the hearing. Caseworkers should advise the NCP to cancel a formally requested hearing if his/her concerns are resolved prior to the court date.
The hearing to contest the withholding must be held within thirty (30) days of the date when the NCP receives the Notice of Intent to Income Withhold (DSS-4485). No withholding can occur in a contested case until the hearing decision has been made. If the NCP appeals the hearing decision, the withholding is not stayed. However, if the appeal is ultimately decided in favor of the NCP, the withholding must be terminated and all amounts promptly repaid to the NCP.
When this occurs, the employer/payor should be sent the Income Withholding For Support (DSS-4702) document. The local caseworker must also request that the Distribution Unit at the CSS Central Office adjust the account balances in ACTS and issue a refund.
If an NCP's child support payments are to be withheld from wages, the NCP's employer is sent an Income Withholding For Support (DSS-4702) document, which notifies the employer of the requirement to withhold. If income other than wages is to be withheld, the payor responsible for withholding the income is sent the Notice Of Obligation To Withhold Other Than Wages (DSS-463O), which notifies them of the requirement to withhold.
Local CSS serves the DSS-4702 document or the DSS-4630 document on the employer/payor by regular mail within fifteen (15) calendar days of the order for immediate income withholding. If the employer/payor participates in electronic income withholding (e-IWO), caseworkers follow e-IWO procedures.
A copy of the I/W notice, accompanied by an affidavit of service signed by the CSS attorney, must be filed with the Clerk of Court within five (5) days of service. Local CSS must also send a copy of the I/W notice to the NCP by regular mail at the same time the I/W notice is sent to the employer/payor.
In uncontested withholdings based on arrearages or request, the local CSS agency completes and forwards the I/W notice by certified mail (return receipt requested) to the NCP's employer/payor, within fifteen (15) days of the end of the 10-day response period.
In contested cases in which a hearing determines that no mistake of fact exists (or the hearing decision is being appealed), the notice must be forwarded within forty-five (45) days of the NCP's receipt of Notice of Intent to Income Withhold (DSS-4485).
The employer is responsible for notifying the local CSS agency when an NCP is no longer employed. If the employers know the NCP's last known address and/or new employer, they must provide this information to the CSS agency. If the court finds that the employer or other payor has willfully refused to comply with the withholding requirement, the employer or payor is required to pay any amounts that would have been withheld and continue the withholding.
Employers are prohibited from firing, refusing to hire, or taking disciplinary action against an NCP solely because of the withholding; however, the local CSS agency does not represent the NCP in such a dispute. If NCPs inquire about their rights, the local CSS agency should advise them to seek legal counsel. NCGS 110-136.8(e) addresses the penalties that an employer faces for violation of these provisions.
If a court finds that an employer has taken any of these actions, a civil penalty must be paid to the county. The penalties include:
A payor can also be held liable for reasonable damages suffered by the obligor, and the reinstatement of NCPs to their former position can be ordered. This action has a statute of limitations of one (1) year.
Per Federal regulations, the CSS program, courts, tribes that operate CSS programs, private entities, and individuals are all required to use the Income Withholding For Support (DSS-4702) document. This document contains appropriate wording and instructions for all entities submitting the form to employers for collection through income withholding.
NOTE: Nongovernmental entities or individuals are required to submit a copy of the withholding order along with their Income Withholding For Support (DSS-4702) document. This requirement does not apply to CSS cases or support orders enforced by AOC.
The Income Withholding For Support (DSS-4702) document is generated when:
Depending on the case circumstances, a field on this document indicates whether this document is an ORIGINAL, AMENDED, or TERMINATE DSS-4702 document. More information on the three types of this document follows:
Once the criteria to initiate income withholding have been met, ACTS generates an ORIGINAL DSS-4702 document for each of the NCP’s cases that is under income withholding. (The information on this document is based on the total court-ordered frequency amounts for the NCP and any administrative increase, if applicable.)
As part of the income withholding process, the maximum allowable percentage of withholding is determined. If the disposable wages for a pay period are less than the required amount, the maximum allowable percentage is set to the smaller of the following two (2) amounts:
If caseworkers perform an administrative increase for an NCP that has multiple cases, the amount of that administrative increase is prorated among all of the NCP's cases.
When changes have been made to income withholding for a case and a new I/W Worksheet is created by caseworkers or the system to reflect these changes, ACTS generates an AMENDED DSS-4702 document for each of the NCP’s cases that is under income withholding. (The information on this document is based on the total court-ordered frequency amounts for the NCP and any administrative increase, if applicable.)
When income withholding is terminated for a case and a new I/W Worksheet is created by the caseworker or the system to reflect this change, ACTS generates a TERMINATE DSS-4702 document for each of the NCP’s cases that is under income withholding.. (The case and employer/payor information on this document is based on the most recent I/W Worksheet.)
The first page of the Income Withholding For Support (DSS-4702) document includes the following information:
A. The MONTHLY amount that the employee/obligor owes for each listed support type (current and/or past due child support, current and/or past due medical support, current and/or past due spousal support, and other support) and the total MONTHLY amount to withhold.
B. A check box is provided beside the past due child support information to indicate whether the obligor has been in arrears for more than twelve (12) weeks.
C. Following the "other" support field is a field that is designated as "Administrative Increase" automatically, if applicable.
D. The "Total Amount to Withhold" field is the sum total amount of the seven (7) preceding fields. This field also includes the frequency amount(s) for legal and/or genetic testing fees, if the court ordered them as frequency payments due.
A. The amount to withhold if their pay cycle does not match the ordered support payment cycle that is indicated in the “ORDER INFORMATION” section. It displays how much the employer should withhold for WEEKLY, BIWEEKLY, SEMI-MONTHLY, and MONTHLY pay periods.
B. The amount of a ONE-TIME LUMP SUM PAYMENT. (CSS workers are NOT to use this field unless such a one-time payment is ordered by the court. Using this field does not stop any existing I/W order. If income withholding is terminated, a TERMINATE DSS-4702 document must be sent to the employer.)
A. If the employee/obligor's principal place of employment is in NC, employers must begin withholding no later than the first pay period that occurs fourteen (14) days after the date when this order/notice was served.
B. The first payment must be sent within seven (7) working days of the pay date/date of withholding.
C. The maximum percentage that can be withheld (including the processing fee) from the employee/obligor's aggregate disposable earnings if employers cannot withhold the total ordered amount for any or all of the employee/ obligor’s orders.
D. If the employee/obligor's principal place of employment is not in NC, employers must follow the laws/procedures of the "work state" concerning limits on withholding, time requirements, and any allowable employer fees. This section provides a web site address to aid employers in determining other states' laws/ procedures.
E. Employer instructions to contact the EFT/EDI web site before and to call the EFT Contact at the CSS Central Office (919-855-4755) before the first submittal of an EFT/EDI payment.
F. Employer instructions to include the Remittance Identifier (including the FIPS code, if necessary) with the payment, the SDU (State Disbursement Unit) name and address where the payment is to be sent, and a checkbox for employers to complete if they are returning the document because the payment is not directed to an SDU/tribal payee or the document is not regular on its face (it has been altered).
G. A space for the worker's signature and date of signature, and the printed name (last, first) and title of the issuing official.
H. A check box to indicate whether the employer is required to provide a copy of this form to the employee/obligor. (If the employee/obligor works in a different state than the one indicated on this document, employers/other withholders must provide the employee/obligor with a copy, even if the box is not checked.
A. A website which contains state-specific information for withholders: "http://www.acf.hhs.gov/programs/cse/newhire/employer/contacts/contact_map.htm".
B. "Priority" - A subsection stating that this withholding order/notice has priority over any other legal process under state law against the same income. (If a federal tax levy is in effect, the contact person listed on this document should be notified.)
C. "Combining Payments" - A subsection stating that employers can combine withheld amounts from multiple employees/ obligors in one payment to an SDU or tribal child support agency, as long as they identify the portion that is attributable to each employee/obligor.
D. "Payments to SDU" - A subsection stating that employers must must send the income withholding payments to the appropriate SDU or tribal child support agency. If the notice instructs the employer to send a payment to another entity (such as the custodial parent, court, or attorney), employers must check the "Return to Sender" box and return the notice to the sender. (EXCEPTION: If the notice was sent by a court, attorney, or private individual and the initial order was entered prior to January 1, 1994, or the order was issued by a tribal child support agency, employers must follow the "Remit Payment to" instructions on the notice.)
E. "Reporting the Pay Date" - A subsection stating that employers must report the pay date/date of withholding when sending the payment. This date is when the amount was withheld from the employee's wages. Employers must comply with the law of the state of the employee/ obligor's principal place of employment.
F. "Multiple IWOs" -A subsection stating that if employees/obligors have multiple income withholding orders (IWOs) and employers are unable to honor all support orders/notices due to Federal, state, or tribal withholding limits, they must follow the state or tribal law of the employee's principal place of employment. Employers must honor orders/notices to the greatest extent possible.
G. "Lump Sum Payments" -A subsection stating that the employer could be required to notify a state or tribal CSS agency of upcoming lump sum payments to the employee (such as bonuses, commissions, or severance pay) and that the employer should contact the agency or person listed on the I/W document to determine if they are required to report and/or withhold lump sum payments.
H. "Liability" - A subsection stating that if employers have doubts about the validity of the I/W notice to contact the sender. It also informs employers that if they fail to withhold income as the order/notice directs, they are liable for both the accumulated amount that should have been withheld and any other penalties set by state or tribal law/procedure.
I. "Anti-discrimination" -A subsection stating that if employers discharge, refuse to employ, or take disciplinary action against an employee/obilgor because of the I/W notice, they are subject to a fine (or fines) determined under state or tribal law/procedures of the employee/obligor's principal place of employment.
J. "Withholding Limits" - A subsection stating that the employer cannot withhold more than the lesser of:
1.) The amounts allowed by the Federal Consumer Credit Protection Act (CCPA) (15 USC 1673(b)); or
2.) The amounts allowed by the state or tribe of the employee/obligor's principal place of employment. Disposable income is the net income left after making mandatory deductions such as: state, federal, local taxes, Social Security taxes, statutory pension contributions, and Medicare taxes. The federal limit is fifty percent (50%) of the disposable income if the obligor is supporting another family and sixty percent (60%) of the disposable income if the obligor is not supporting another family. However, that fifty percent (50%) limit is increased to fifty-five percent (55%) and that sixty percent (60%) limit is increased to sixty-five percent (65%) if the arrearages are greater than twelve (12) weeks. If permitted by the state or tribe, employers can deduct a fee for administrative costs. The combined support amount and the fee cannot exceed the limit indicated in this subsection. Depending on the state or tribal law, employers might need to consider the amounts paid for health care premiums in determining disposable income and applying appropriate withholding limits.
K. "Arrears greater than 12 weeks?" - A subsection stating that if the order information does not indicate whether the arrears are greater than twelve (12) weeks, then the employer should calculate the CCPA limit using the lower percentage. For tribal orders, the employer cannot withhold more than the amounts allowed under the law of the issuing tribe. For tribal employers who receive a State order, the employer cannot withhold more than the lesser of the limit set by the law of the jurisdiction in which the employer is located or the maximum amount permitted under section 303(d) of the CCPA (15 USC 1673 (b)). Depending upon applicable state law, the employer might need to take into consideration the amounts paid for health care premiums in determining disposable income and applying appropriate withholding limits.
L. "Additional Information" - A subsection containing additional information, such as fees that an employer can charge for income withholding or children's names and dates of birth on the document if more than six (6) children exist for the case.
A. The person has never worked for that employer nor received periodic income; or
B. The person no longer works for that employer nor receives periodic income.
It provides fields for the employer to complete with the employee's termination date, last known phone number and home address, the date and amount of the final payment submitted to NCCSCC, and the employee's new employer's name and address.
A header appears on the top of the page containing this section that displays the employer's name and FEIN, the Agency Case Identifier (the CSS case number), and the Order Identifier (the court docket number).
A. The name, phone number, fax number, and e-mail or web site address of a contact person; and
B. The address to send a termination/ income status notice and/or other correspondence.
If the Income Withholding For Support (DSS-4702) notice is transmitted by e-IWO (Electronic Income Withholding), "***EIWO***" appears at the bottom of each page of the notice. For more information, see “e-IWO”.
Caseworkers must have each DSS-4702 document served by regular mail. If for some reason multiple CSS cases with the same docket number exist for a single NCP/custodial parent pair, multiple I/W notices are generated. In this situation, caseworkers can send all these notices together and place a single certificate of service in the court file.
Once income withholding has been established, employers (or other payors) must withhold child support payments from the NCP’s first pay period that occurs fourteen (14) days AFTER the employer/other payor received the Income Withholding For Support(DSS-4702) document. Employers/other payors must forward these funds to the North Carolina Child Support Centralized Collections Operation (NCCSCC) within seven (7) days of the NCP's payday and indicate the date when each payment was withheld from the NCP's income.
An employer/other payors can combine the amounts withheld for all cases with the same court in a single payment to NCCSCC, but they must identify separately the portion of the single payment that is attributable to each NCP by name and docket number and include the date when each payment was withheld.
ACTS distributes a noncustodial parent's (NCP's) payment according to the federal distribution hierarchy when prorating the payment. The system first applies the payment to the current support (CSUP) subaccount(s) until the total CSUP obligation amount is met for the charging cycle. It then applies any excess amount of the payment toward the arrearage frequency amount(s) due. If any funds from the payment still remain, ACTS distributes them to the arrearage subaccount that is highest in the distribution hierarchy up to the balance in that subaccount, before applying any remaining funds to the next arrearage subaccount in the hierarchy.
To prorate a payment made by the NCP, ACTS multiplies the custodial parent's (CP's) support obligation by the payment amount and divides the resulting amount by the sum of the obligations. (ACTS performs this calculation when the system distributes collections in accordance with the established rules of distribution.)
If an NCP's income is being withheld for more than one case, any current support and arrearage collections are automatically prorated across the cases that are listed on the MOST RECENT I/W Worksheet.
The current support obligations determine the amount of current support collections and the arrearage balances determine the amount of arrearage collections that are allocated to each case on the most recent I/W Worksheet.
When ACTS receives an income withholding payment, it first distributes the money to ALL of the NCP's current support obligations. Once they are satisfied for the charge cycle, ACTS then distributes payments to arrearage subaccounts with ordered frequency amount(s) due.
Any funds that remain are prorated toward any remaining obligations according to the standard distribution hierarchy.
Examples of proration of I/W payments for multiple cases follow:
In this example, payment is less than the amount due for multiple CSUP obligations. No amount can be applied to arrearages because the current support obligations have priority over any arrearages, and the payment amount is not sufficient to meet the current support obligations.
Custodial Parent (CP) A - $100 support obligation
Custodial Parent (CP) B - $ 50 support obligation
$150 sum of obligations
Payment amount = $140
CP A receives $93.33 = $100 X $140 / $150
CP B receives $46.67 = $ 50 X $140 / $150
When payment amount is greater than the total of the NCP's multiple CSUP obligations but is less than the sum of the CSUP obligations and the total of the arrearage frequency amount(s) due, the same type of calculation is used to determine the proration for the arrearage frequency amounts.
CP A - $200 NPA arrearage balance with $20 frequency amount due
CP B - $400 NPA arrearage balance with $40 frequency amount due
$60 total freq. amt. due
Payment amount = $630
Current support due = $600
$ 30 must be prorated
CP A receives $10.00 = $20 x $30 / $60
CP B receives $20.00 = $40 x $30 / $60
When the payment is greater than the total of the amounts due for multiple CSUP obligations and arrearage frequency amount(s), a pro rata share of the difference between the payment amount and the sum of the CSUP obligation amounts and the arrearage frequency amount(s) due can be applied to the remaining arrearages. To prorate the amount to be applied toward arrearages after the amounts for current support and arrearage frequency amount(s) due have been deducted, one CP's arrearage is multiplied by the remaining payment amount, and that amount is divided by the sum of the arrearages for all CPs.
ACTS also uses the distribution hierarchy to determine the distribution of the excess payment. (EX: If one CP has arrearages only in an NPAAU subaccount and the other CP has arrearages only in an AFDCU subaccount, the payment is distributed to the NPAAU subaccount until that subaccount is satisfied and before any of the payment is applied to the AFDCU subaccount.)
In this example, the NCP owes current support (CSUP), arrearage frequency amounts, and NPAAU arrearages to two CPs; the NCP makes a $350 payment.
CP A - $100 CSUP obligation & $360 arrearage w/ $10 arrs. freq. due
CP B - $150 CSUP obligation & $715 arrearage w/ $15 arrs. freq. due
Total paid for CSUP $250 = ($100+$150)
Total paid for arrearage frequency amount due $ 25 = ($ 10+$ 15)
Total paid for CSUP and arrearage freq. amt. due $275
Payment amount = $350
-$275 (Total paid for CSUP & arrearage freq. amt. due)
$ 75 Amount to be prorated for arrearages
CP A – Arrearage balance is now $ 350 = ($360 - $10)
CP B - Arrearage balance is now $ 700 = ($715 - $15)
$1050 – Total arrearages
CP A receives for arrearages $25.00 = $350 x $75 / $1050
CP B receives for arrearages $50.00 = $700 x $75 / $1050
The income withholding notices that are sent to employers/payors advise them to call or write the local CSS agency when they have questions regarding the appropriate amount to withhold. If an employer/payor informs the agency that the NCP's disposable income has been temporarily reduced, it is not necessary to modify the withholding.
When caseworkers call the employer/payor, they should document the call. Regardless of whether an employer/payor or a caseworker initiated the telephone call, caseworkers can follow up on the telephone communication by sending a letter to the employer/payor to confirm the information that was provided over the telephone. In addition, caseworkers should document this information in ACTS.
Once employers (or other payors) have received the Income Withholding For Support (DSS-4702) document, they must begin withholding from the first pay period that occurs fourteen (14) days following the service date. After income withholding has been established, the employer/other payor is required to submit payments to the NCCSCC within seven (7) days after withholding the money (or notify the local CSS agency of the reason for not doing so.)
If either of the two conditions above is unmet, the employer/other payor is “out of compliance”. ACTS monitors employer compliance by first calculating fourteen (14) days from the service date, and then identifying the next pay date for that employee and counting an additional fourteen (14) days. If a payment is not received by that compliance date, CSS sends an Employer Non-Compliance Letter (DSS-4484) to the NCP's employer/other payor as notice of their failure to comply.
NOTE: If employers are flagged as exempt from delinquency testing, no action is taken against them when they are out of compliance. (Only the CSS Central Office can set this exemption flag, and it is set only in rare circumstances.)
ACTS monitors employer compliance until either CSS notifies the employer/other payor to terminate the withholding or the employer/other payor notifies CSS that the NCP's employment has been terminated or suspended.
The SECOND time that ACTS finds an employer/other payor to be out of compliance, it notifies the responsible caseworker for each case under income withholding with that employer. The THIRD time that ACTS finds an employer/other payor to be out of compliance, it notifies the responsible caseworker(s) and generates the Motion To Join Employer (DSS-4483). Caseworkers send this document to the employer/other payor by certified mail (return receipt requested) or by personal service.
When the Motion To Join Employer has been served, caseworkers enter the service of process information in ACTS and schedule a hearing to join employer as third-party defendant) on the next court date available thirty-three (33) days after the date of service.
If the employer/other payor is not successfully joined during the hearing and is subsequently found to be out of compliance, ACTS notifies the responsible caseworker. ACTS does NOT generate the Motion To Join Employer (DSS-4483) in this situation. If caseworkers choose to make another attempt to join the employer/other payor, they must generate the Motion to Join document using ACTS.
NOTE: ACTS functionality does not allow caseworkers to enter the name of the NCP's employer/other payor on any document that is related to employer compliance monitoring. Caseworkers should consult with the local CSS attorney regarding the entry of the employer's/other payor's name as a third-party defendant on the order and any other pertinent documents. The employer/other payor remains a third-party defendant, and the employer's/other payor's name remains on the court order and on all motions arising out of the court order, until such time as the employer/other payor files a motion to be removed as a third-party defendant and the judge approves such a motion.
If the NCP has multiple employers/other payors and ACTS detects that a payment is late, the system notifies the responsible caseworker. Caseworkers then determine which employer/other payor is out of compliance and send an Employer Non-Compliance Letter (DSS-4484) to the appropriate employer/other payor.
If caseworkers determine that the employer/other employer is not responsible for the delay in income withholding payments (for example, the NCP is unable to work and is not being paid), they can change the compliance indicator in ACTS.
Circumstances can exist when employer compliance monitoring should be suspended for a specific period of time. For example, if an NCP is out of work due to an injury and is expected to return in six weeks, the responsible caseworker can suspend employer compliance monitoring for that time period by:
If the time period for suspension is extended, caseworkers can repeat these steps.
NOTE: Employer compliance tracks from the original notice and service date once the suspension period ends.
The amount of income withholding can change under the following circumstances:
The NCP and the employer/payor must be informed of changes to the amount of income withholding through the I/W documents that CSS generates. The type and number of these documents are determined by the type of income that the NCP receives, the number of cases that the NCP has under order for I/W, and the number of employers/payors that the NCP has.
If the NCP has one (or multiple) cases under income withholding for one (or multiple) court orders and the amount of the withholding changes, ACTS generates an AMENDED Income Withholding For Support (DSS-4702) document for each eligible case.
If the NCP has one (or multiple) active and verified employers/payors, ACTS generates a DSS-4702 document for each employer/payor and notifies the responsible caseworker. Caseworkers must determine whether the records that show the NCP having multiple employers/payors are accurate.
If the NCP is under income withholding but only has unearned (or non-wage) income, caseworkers must destroy the Order/Notice(s) that were generated and manually generate a Notice Of Change/Termination Other Than Wages (DSS-4631) for each appropriate case and payor/source of that unearned income.
Caseworkers must send a copy of the appropriate document(s) to the NCP and each employer/payor by regular mail. A copy of each notice must be filed with the Clerk of Superior Court along with proof of service that is signed by the CSS attorney. The local CSS agency must also maintain hard copies of these documents in the case file for future reference.
If the NCP becomes unemployed while under income withholding and begins to receive Unemployment Insurance Benefits (UIB), income can be withheld from these benefits. When the NCP becomes employed again, ACTS generates a Notice Of Transfer Of Income Withholding (DSS-4486) that is sent to the NCP. ACTS also generates an Order/Notice To Withhold Income for each new verified employer/payor and each of the NCP's eligible cases.
If the NCP’s source of income changes while income withholding is in effect, the requirement for the withholding continues. The NCP cannot contest the transfer of income withholding. The law requires that once income withholding has been established, it must be transferred to new employers/payors.
ACTS generates a Notice Of Transfer Of Income Withholding (DSS-4486) when an NCP who has previously been under income withholding has a new verified employer/payor.
If the amount of the withholding remains the same, the Notice of Transfer can be sent to the NCP by first class mail. Whenever there is change in the amount of the withholding, the NCP must be served with notice prior to the action.
NOTE: While the Notice of Transfer is sent to the NCP, the Income Withholding For Support (DSS-4702) or the Notice To Withhold Other Than Wages (DSS-4630) must be sent to the new verified employer/payor by regular mail.
In many instances, an NCP returns to a previous employer/payor with whom income withholding has already been established. Caseworkers must determine whether or the interface with the Division of Employment Security (DES) has created a new employment record in ACTS. Once caseworkers receive verification from the employer/payor, they enter the necessary information for income withholding
Once the new employer/payor has been verified in ACTS, the system generates the DSS-4702 document to the employer/payor for each of the NCP's eligible cases.
If the income withholding has been transferred to a new employer and the NCP returns to a previous employer (with whom income withholding was established previously), caseworkers must notify the NCP of the transfer. CSS generates the Notice Of Transfer Of Income Withholding (DSS-4486) when the new employment record is entered and verified in ACTS. This notice is sent to the NCP by certified mail (return receipt requested) or served by the sheriff in accordance with Rule 4 of NC Civil Procedures.
When CSS services are terminated while income withholding is in place, the withholding remains in effect; however, the NCP, custodial parent, and the Clerk of Court must be notified that the CSS agency is no longer responsible for the case. The custodial parent should be clearly informed that local CSS will provide no further services, make any changes, or do any follow-up whatsoever. The responsibility for enforcement remains with CSS until all WFFA/TANF arrearages, overpayments, and/or cost recovery amounts are paid. Once these amounts are paid, the responsible caseworker generates a Redirection Notice To Clerk (DSS-4473) and mails it to the Clerk of Superior Court. A copy of this notice is also mailed to the NCP.
The requirement for withholding can be terminated and the employer/payor notified to stop withholding for the following reasons ONLY:
If an NCP has only one case, ACTS can terminate income withholding for the following reasons:
When ACTS terminates income withholding, it generates the TERMINATE Income Withholding For Support (DSS-4702) document and notifies the responsible caseworker.
If the NCP only has unearned income, caseworkers must destroy this notice and manually generate a Notice Of Change/Termination Other Than Wages (DSS-4631).
Caseworkers must send the original DSS-4702 to the employer/payor, to that employer’s/payor’s registered agent, or to the other source of income through regular mail; file a copy of the DSS-4702 document with the clerk of court; and send a copy of the DSS-4702 document to the NCP through regular mail.
NOTE: If unadjudicated arrearages exist for the case, caseworkers should NOT send the document to the NCP, employer/payor, or other source of income.
If the NCP only has one case with an ordered frequency amount due, the arrearage balances are $0.00 (or judge has decided not to require a frequency amount due for the arrearages), AND the NCP no longer owes current support, caseworkers can terminate income withholding by:
For questions or clarification on any of the policy contained in these manuals, please contact your local county office.