Income Withholding

Introduction

Income withholding is the most effective method to ensure regular and timely child support payments. Before 1990, income withholding to collect child support could not be implemented unless the NCP had defaulted on payments. The default threshold varied from 14 to 25 days and was within the discretion of the court. NCPs appearing in court on enforcement motions often resisted the implementation of income withholding because they did not want “their employer to know their business.” In other words, imposition of income withholding was viewed as a stigma because it revealed that an NCP had already defaulted on payments.

In 1990, the statute related to income withholding for child support orders (not including alimony/spousal support only) was amended to provide for immediate withholding on issuance of the order. Under the Child Support Program Improvement Act of 1998, the income withholding provision was amended to its present form as New Jersey Statutes Annotated (N.J.S.A.) 2A:17-56.9. The following elements of the statute are key to the work of the PCSE Unit:

• If support is not paid through immediate income withholding and the arrears amount equals 14 days, a Notice to Obligor of Income Withholding form is generated. The notice of income withholding, together with the process to contest it, is set out in N.J.S.A. 2A:17-56.10(a).
• The total amount withheld may not exceed that permitted under § 303(b) of the Federal Consumer Credit Protection ActFederal Consumer Credit Protection ActUnited States Code, 15 U.S.C. § 1673(b).

Note: A child support income withholding order supersedes other creditor collections, with the exception of past due Federal tax debts and certain federal obligation collections.

Once a verified employer’s information is entered, a Notice to Payor of Income Withholding is sent to the NCP’s current employer. The notice demands the following:

• Income withholding must become effective immediately.
• The employer is to pay the withheld amount at the same time the NCP is paid.
• The employer must begin the withholding by the first pay period after the notice was postmarked.
• The employer may deduct one dollar for each withholding from the NCP’s remaining income to compensate the employer for processing costs.
• An employer who fails to deduct income as required by the notice is liable to the CP for those amounts that should have been withheld.

Enforceable Income Sources

Examples of enforceable income sources are shown in the table below. It is clear that income withholding transcends the traditional employer-employee relationship and includes much more than wages. Consistent with this definition of income, the one responsible for withholding is a “payor,” defined as “an employer or individual or entity that disburses or is in possession of income or assets payable to an obligorobligor N.J.S.A. 2A:17-56.52 .”

Enforceable Income Sources
Commissions Wages Workers’ Compensation Accounts Trusts Retirement Benefits Unemployment Compensation	Salaries Rental Income Insurance Benefits Assets of Estates State Lottery Prizes Veterans Benefits Casino and Racetrack Winnings	Earnings Claims Annuities Inheritances Homestead Rebates Union Income Federal / State Income Tax Refunds

Federal law also restricts the maximum amount withheld from an NCP’s weekly income. Non–child support garnishments (outstanding debts) are generally restricted to 25% of net disposable income for the week. The maximum amount of disposable earnings withheld for child support in any workweek shall not exceed the following:

• 50%, if the individual is supporting a spouse or additional dependent children, other than the one for whom the support order was entered; 55% when child support arrears are owed for more than 12 weeks
• 60%, if the individual is not supporting a spouse or other dependent children; 65% when child support arrears are owed for more than 12 weeks12 weeks15 U.S.C. § 1673(b)

Qualified Domestic Relations Order

A QDROQualified Domestic Relations Order is a specific and limited type of withholding order entered by the court that attaches sources of income, such as private pension benefits.

Eligible Domestic Relations Order

An EDROEligible Domestic Relations Order is a specific and limited type of withholding order entered by the court that divides a public employee’s retirement pension.

Intergovernmental Income Withholding

Intergovernmental income withholding orders are sent directly to an out-of-state employer under the authority of that state’s UIFSAUniform Interstate Family Support Act, without the need to register the support order in that state first. Regardless of the state in which the employer is located, the same Notice to Payor of Income Withholding form is generated.

In the event the intergovernmental income withholding is unsuccessful, it may be necessary to register the support order for enforcement in the state of the employer. To do so, the PCSE Unit sends a Child Support Enforcement Transmittal–Intergovernmental form to the appropriate state.

Unemployment Insurance Benefits

Title 45 CFR 302.65 allows income to be withheld from UIBUnemployment Insurance Benefits. In New Jersey, income withholding of UIB is performed by computer interface with the New Jersey DOLDepartment of Labor. For out-of-state income withholding of UIB, a Notice to Payor of Income Withholding is generated and sent to the appropriate state’s DOL.

National and State New Hire

The NDNHNational Directory of New Hires and the SDNHState Directory of New Hires databasesdatabasesN.J.S.A. 2A:17-56.61 contain employment data supplied by employers. These databases provide employment information on NCPs, including names and SSNSocial Security Numbers. The information must be carefully reviewed for accuracy because there is normally a delay in receiving it. Care must be taken to recognize the possibility of multiple income withholdings, if the NCP has multiple employers.

Changes to the Child Support Order

When there are changes to the child support order, there may be an impact on income withholding, resulting in a modified withholding notice to the employer. Types of change include a biennialbiennialRule 5:6B COLAcost-of-living adjustment, a triennial review, a modification of the amount of current support, or the addition of a payment toward arrears.

For further information and guidance on submitting a request for New Entry, Modification, or Merge of Other Party Information on the OTHP table, please refer to IT-10-27: Procedures for Submitting the Request for New Entry, Modification of Other Party Information (OTHP).

For further information and guidance on incoming withholding as it relates to DFAS, please refer to IT-10-04: eFlash 09-14 and 10-05: eFlash for 09-17.

Probation Child Support Enforcement Operations Manual

To review the Probation Manual section for Income Withholding procedures, please refer to the following document:

• Section 1603: Income Withholding Procedures (Revised - 05/04/20)

NJCSI Handout Materials

For more information and guidance, please refer to the following document:

• Immediate and Initiated Income Withholding

Related Information

• United States Code, 15 U.S.C. § 1673(b)
• N.J.S.A. 2A:17-56.52
• 15 U.S.C. § 1673(b)
• N.J.S.A. 2A:17-56.61
• Rule 5:6B

 

Institute for Families, School of Social Work  Rutgers, the State University of New Jersey - Child Support Program Manual 2020 Release