Payroll Forum Answers Child Support Questions, Provides Updates

Employers received answers to child support questions and updates to the federal child support program in a federal payroll forum that took place May 17.

Sherri Grigsby, deputy director of the federal Office of Child Support Enforcement’s federal systems division, answered questions regarding child support remittances and provided updates on the National Medical Support Notice. Also mentioned during PayrollOrg’s 41st Payroll Congress was the potential impact that daily pay might have on the child support program.

Child Support Remittances

In most cases, employers should send child support payments to state disbursement units, not directly to custodial parents, Grigsby said. The only exceptions are if employers are remitting to a tribal child support agency or if the initial income withholding order was entered before Jan. 1, 1994, accrued arrears, and was never modified.

If an income withholding order states that payments must be sent directly to a custodial parent instead of a state disbursement unit, employers should return the order to the sender, she advised. The form contains instructions on how to return it to the sender, and employers will have to check off the “Return to Sender” box.

The check box signifies that the order is not “regular on its face,” she said. “One of the reasons it is not regular on its face is because payment is not directed to the state disbursement unit.”

Electronic National Medical Support Notice

The OCSE recently made an automated, electronic version of the National Medical Support Notice, she said. The NMSN is the federal form used to provide health insurance coverage for dependent children.

“For many years, we have gotten questions about automating the NMSN like we did the income withholding order, or e-IWO,” Grigsby said. “Well, I am happy to say that we automated the national medical support notice, or e-NMSN.”

One benefit of e-NMSN is that there is an option for employers to implement it without needing to program it into their software, she said. However, state child support agencies must update their systems.

Two states, Virginia and Nebraska, are currently programmed to use e-NMSN, and five other states are in various stages of developing their software, Grigsby added. So far, ten employers have implemented the e-NMSN process.

“How do we get more states to get on board and how do we get employers to come on board?” Grigsby asked. “States want more employers to come on so they can justify the cost of programming, and employers want more states to come on just because it’s a bigger benefit.”

Daily Pay and Child Support

The OCSE expects daily pay to impact the child support program, but officials are unsure what the effects of it will be, Grigsby said. Employers offering daily pay provide employees wages on a daily basis.

The OCSE might need to make changes to its current IWO form by adding a daily withholding option, she said. Currently, the form only provides for child support withholding based on weekly, biweekly, semimonthly, and monthly pay periods.

“The IWO form doesn’t have a field for a daily amount,” Grigsby said. “Is this something we might consider with the next renewal of the form?”

Daily pay might also affect the frequency of child support remittances and the administrative fees that employers charge, Grigsby added.

“Would employers be remitting payments daily or would they maybe remit them once a week? We don’t know,” Grigsby said. “There’s also fees that employers charge noncustodial parents for processing income withholding orders. If you were on a biweekly pay cycle and maybe there was a fee twice a month but now it’s daily, there’s considerations there.”

So far, most employers are not currently offering daily pay, but many are considering implementing it, she said.

“We hope to work closely with you all as this develops and figure out what the impact is going to be and how to minimize that impact,” she said.