Child support income withholding notices not just an afterthought

For many practitioners, sending an Income Withholding Notice/Order (IWO) after obtaining a child support order is nothing more than a perfunctory step in closing a file. Secretaries or legal assistants often prepare the documents from forms that have been in use for many years. Other times, lawyers rely upon the forms provided by their local clerks’ offices. Within the last 18 months, significant changes have been made to both Federal and State laws governing IWOs. These changes require implementation of new procedures and the creation of new forms. Failure to recognize the latest protocols could result in complaints to the ARDC or charges of malpractice as the penalties attributable to employers who fail to withhold are substantial.

42 USC §666(b)(6)(A)(ii) requires all IWOs to comport with the standard form as prescribed by the Secretary of the U.S. Department of Health and Human Services. A new standard form became effective on May 31, 2012. The form, OMB 0970-0154, can be downloaded at <www.acf.hhs.gov/sites/default/files/ocse/omb_0970_0154.pdf>.

Pursuant to Federal Law, an IWO must be rejected and returned to the sender in the following instances:

1. The form is not standard on its face;

2. The IWO instructs the employer/withholder to send payments to any entity other than a State Disbursement Unit, unless the notice was issued before 1994;

3. The form does not contain the necessary information for the employer to comply with the withholding;

4. The form is altered or contains invalid information;

5. The amount to withhold is not a dollar amount;

6. The sender has not used the OMB-approved form (referenced above);

7. A copy of the underlying support order is not included and the IWO is promulgated by someone other than a state or tribal support agency or a court.

Illinois’ Income Withholding for Support Act, located at 750 ILCS 28/1 et seq., has also undergone significant changes over the past several years. Reviewing the statute as a whole is strongly recommended, particularly if you prosecute failure to withhold matters.

Although not a change in the law, savvy practitioners note that 750 ILCS 28/20 mandates all child support orders entered after July 1, 1997 to:

1. Require an IWO to be prepared and served either by the obligee or public office unless a written agreement is reached and signed by both parties. The agreement must provide for an alternative arrangement. Such an alternative arrangement must be approved by the Court and provide a means for serving an IWO if the obligor becomes delinquent in support.

2. Contain a dollar amount for current support. If an arrearage has accrued, the payments on the delinquency shall be paid at a rate no less than 20% of the current support obligation. Percentage orders are not enforceable through an IWO.

3. Include the obligor’s Social Security Number. For a non-citizen, the order must include the alien registration number, passport number and home country’s social security or national health number.

750 ILCS 28/20 also enumerates the state requirements for an effective IWO. Under Illinois Law an IWO shall:

1. Be in the standard format prescribed by the Federal Department of Health and Human Services;

2. State the date of entry of the order for support upon which the IWO is based;

3. Direct the payor to withhold the dollar amount for current support;

4. Direct the payor to withhold the arrears as delineated in the underlying support order;

5. Direct the payor, labor union or trade union to enroll children in health insurance plans as provided in the underlying order;

6. State the amount of the Payor Income Withholding Fee, if applicable;

7. State that the amount withheld from the obligor cannot exceed the maximum amount permitted under the Federal Consumer Credit Protection Act;

8. In bold face type, the size of which equals the largest type on the notice, state the duties of the payor and the fines and penalties for failure to withhold and pay over income and for discharging, disciplining, refusing to hire, or otherwise penalizing the obligator because of the duty to withhold and pay over income;

9. State the rights, remedies and duties of the obligor;

10. Include the Social Security Number of the obligor;

11. Direct any payor to pay over any amounts withheld to the State Disbursement Unit.

The most substantial addition to Illinois’ IWO form requirements is enumerated in Section 8. All IWOs must clearly identify the duties, penalties and fines Illinois imposes on payors. The language regarding the typeface, font and size is new to Illinois and distinguishable from Federal requirements. Notably, the requirements for an Illinois IWO are mandatory and strict compliance with the terms is required in order for them to be enforceable. See Jennifer Schultz v. Performance Lighting, Inc., 2013 IL App (2d), 120405 (Ill. App., 2013) and In re Marriage of Chen, 820 N.E.2d 1136, 2-03-0824 (Ill, App., 1996).

An attorney’s failure to properly format and serve an IWO can result in significant implications. Deficiencies in an IWO compromise an obligee’s ability to successfully sue for damages stemming from an employer’s failure to properly withhold and/or pay child support. In The Marriage of Chen, the Court held that an obligee could not enforce the $100/day penalty for failure to withhold support when the IWO failed to specifically delineate those penalties within the four corners of the document. In re Marriage of Chen, 820 N.E.2d 1136, 2-03-0824 (Ill, App., 1996). Moreover, in Schultz v. Performance Lighting, the obligee was estopped from enforcing the same penalty for failure to include the obligor’s Social Security Number on the IWO. Schultz v. Performance Lighting, 2013 IL App (2d), 120405 (Ill. App., 2013).

In order to ensure that your IWO complies with Federal and State Law, modify your form to comport with OMB 0970-0154 and always attach a copy of the underlying support order. Serve the IWO by certified mail and file a copy of the return receipt with the Clerk of the Court. Whenever possible, also serve an additional copy of the IWO by facsimile or e-mail.

Best practices dictate that a separate Uniform Child Support Order be entered, particularly when the underlying orders address issues other than support. Remember, your client’s custodial schedule can be sensitive information. Tread lightly upon the information you disclose about minor children’s schedules and activities.

Changes to Illinois Supreme Court Rule 138 will soon prohibit the use of Social Security Numbers in pleadings and orders. Thus, in order to satisfy both Federal and State Law, a Notice of Confidential Information Within a Court Filing must be filed with the IWO. In addition, as the Illinois requirements for a proper IWO exceed those prescribed by Federal Law, in order to satisfy both, attach an Illinois Supplement to the Federally mandated form. The supplement should include all the requirements delineated in 750 ILCS 28/20, in the appropriate type and size.

If an IWO is returned, contact the employer to determine the issues they have with the document. After making the changes, serve the new IWO by facsimile/email and by certified mail. This will not only allow withholding to begin more quickly, but will preserve your client’s right to sue if the employer fails to properly withhold support.

Maintain the original return of service in your file. Do not destroy the withholding notice or the return of service until all arrearages have been paid and the children are no longer entitled to receive support.

Preparation and service of a proper IWO should never be an afterthought. Given the strict enforcement of Federal and State requirements, neither you nor your client can afford to be anything but precise. ■

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The Shaw Law Group offers Practical Solutions for All Aspects of Family Law, including prosecution of Failure to Withhold Actions. Located in the Metro-East, we strive to provide high quality legal services throughout the State of Illinois.