Depafiment  of  Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
EXCEPTIONS  TO  WAGE  WITHHOLDING 
FOR  CHILD  SUPPORT 
MARCH  1994  OEI-07-91-01220  OFFICE OF INSPECTOR GENERAL 
The  mission  of the  Office of Inspector  General  (OIG),  as mandated  by Public  Law 95-452, as 
amended,  is to protect  the  integrity  of the  Department  of Health  and Human  Services (HHS) 
programs  as well as the  health  and welfare  of beneficiaries  served  by those  programs.  This 
statutory  mission  is carried  out  through  a nationwide  network  of audits,  investigations,  and 
inspections  conducted  by three  OIG  operating  components:  the  Office of Audit  Services, the 
Office of Investigations,  and the  Office of Evaluation  and Inspections.  The  OIG  also informs 
the  Secretary  of HHS  of program  and management  problems  and recommends  courses  to 
correct  them. 
OFFICE OF AUDIT  SERVICES 
The  OIGS Office of Audit  Services  (OAS)  provides  all auditing  services for HHS,  either  by 
conducting  audits with its own audit  resources  or by overseeing  audit work done  by others. 
Audits  examine  the  performance  of HHS  programs  and/or  its grantees  and contractors  in 
carrying  out  their  respective  responsibilities  and are intended  to provide  independent 
assessments  of HHS  programs  and operations  in order  to reduce  waste,  abuse,  and 
mismanagement  and to promote  economy  and efficiency throughout  the Department. 
OFFICE OF INVESTIGATIONS 
The  OIGS  Office of Investigations  (01)  conducts  criminal,  civil, and administrative 
investigations  of allegations  of wrongdoing  in HHS  programs  or to HHS  beneficiaries  and of 
unjust  enrichment  by providers.  The  investigative  efforts  of 01  lead to criminal  convictions, 
administrative  sanctions,  or civil money  penalties.  The  01  also oversees  State  Medicaid  fraud 
control  units which investigate  and prosecute  fraud  and patient  abuse  in the Medicaid  program. 
OFFICE OF EVALUATION  AND  INSPECTIONS 
The  OIGS  Office of Evaluation  and Inspections  (OEI)  conducts  short-term  management  and 
program  evaluations  (called inspections)  that  focus on issues of concern  to the Department, 
the Congress,  and the  public.  The findings  and recommendations  contained  in these  inspection 
reports  generate  rapid,  accurate,  and up-to-date  information  on the  efficiency, vulnerability, 
and effectiveness  of departmental  programs. 
This report  was prepared  in the Kansas  City Regional  Office under  the  direction  of James 
Wolf, Regional  Inspector  General.  Project  staff 
REGION  HEADQUARTERS 
Raymond  Balandron,  Project  Leader	 David Wright,  Program  Specialist 
Barbara  Tedesco,  Mathematical 
Statistician 
For  additional  copies  of this report,  please  contact  the Kansas  City Regional  Office  at (816) 
426-3697.  Depafiment  of  Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
EXCEPTIONS  TO  WAGE  WITHHOLDING 
FOR  CHILD  SUPPORT 
I  w 
A 
MARCH  1994  EXECUTIVE  SUMMARY 
PURPOSE 
To  assess  the  extent  that  States  are  requiring  immediate  wage  withholding  by  Child 
Support  Enforcement  (CSE)  agencies  forabsent  parents  ordered  topay  child  support. 
BACKGROUND 
The  Child  Support  Enforcement  Amendments  of  1984  (P.L.  98-378)  added  sections 
454(2)  and  466  to  Title  IV  of the  Social  Security  Act.  These  sections  require  all States 
to  implement  certain  mandatory  procedures  which  have  proven  to  noticeably  increase 
the  effectiveness  of State  programs,  including  procedures  for  wage  withholding. 
Section  101  of the  Family  Support  Act  of  1988  (P.L.  100-485)  amended  section  466  of 
the  Act,  requiring  States  to  enact  laws  and  implement  procedures  for  immediate  wage 
withholding  in  certain  cases  being  enforced  by  the  IV-D  agency  which  administers  the 
child  support  enforcement  provisions.  Under  amended  section  466(b)(3),  a new 
subparagraph  (A)  provided,  effective  November  1, 1990,  that  immediate  withholding  is 
required  for  ~  IV-D  cases  with  new  or  modified  support  orders  regardless  of the 
support  payment  status. 
This  provision,  however,  allowed  exceptions  to wage  withholding  if one  parent 
demonstrates,  and  the  court  or  administrative  authority  finds  good  cause  not  to  require 
wage  withholding,  or  if both  parents  agree  in writing  to  an  alternative  arrangement. 
Section  466(b)(3)(A)  of the  Act,  as implemented  by Federal  regulations  45  CFR  Part 
303. 100(b)(2)  and  (b)(3),  establishes  minimum  definitions  of good  cause  and  written 
agreement. 
FINDINGS 
State  CSE  agencies are essentially comp&ing with the provikion for  immediate  wage 
withholding  in IV-D  child support ordem 
Our  study  found  that  in most  IV-D  child  support  orders,  State  CSE  agencies  are 
including  and  enforcing  an  immediate  wage  withholding  provision.  our  analysis  of a 
sample  of child  support  cases  reviewed  identified  four  groups  of cases.  These  groups 
are:  (I)  Cases  with  wages  withheld,  (II)  Cases  where  an  exception  to  wage  withholding 
was  granted,  (III)  Cases  where  there  are  no  wages  to  withhold,  and  (IV)  Cases  with 
no  provision  for  wage  withholding  in the  order. 
National  estimates  calculated  for  the  four  groups  of child  support  cases  substantiated 
that  overall  there  is not  a problem  with  the  exclusion  of immediate  wage  withholding 
in  IV-D  child  support  orders.  We  determined  that: 
i   State  CSE  agencies  are  enforcing  immediate  wage  withholding  in  91,8%  of 
child  support  orders. 
.	 State  CSE  agencies  are  granting  very  few  exceptions  to  immediate  wage 
withholding  in IV-D  child  support  orders.  They  are  granting  exceptions  in  only 
1.370 of  child  support  orders. 
.	 In  cases  where  there  is no  income  to  withhold  because  the  absent  parent  is 
unemployed,  self-employed,  on  assistance,  etc.,  State  CSE  agencies  are 
including  a stipulation  for  wage  withholding  in  6.3%  of  child  support  orders. 
The  inclusion  of this  stipulation  authorizes  the  CSE  agencies  to  enforce  wage 
withholding  at  any  future  time  without  further  order  by the  court. 
.	 State  CSE  agencies  do  not  include  an  immediate  wage  withholding  provision 
nor  explicitly  grant  an  exception  in  only  0.6?4  of child  support  orders. 
CONCLUSION

As  indicated  in  the  findings,  State  CSE  agencies  are  essentially  complying  with  section

466(b)(3)(A)  of the  Act.  Because  of the  significantly  high  level  of compliance  in  this

area,  we  are  not  making  any  formal  recommendation  for  action  by  the  Administration

for  Children  and  Families  (ACF)  in  our  report,  It  should  be  noted,  however,  while

the  noncompliance  is minimal,  the  exclusion  of the  wage  withholding  provision

requires  future  modification  of the  orders  before  withholding  of  payments  can  be

initiated  and  it prolongs  the  time  the  children  are  deprived  of support  dollars.

Therefore,  ACF  may  wish  to  remind  States  to  ensure  compliance  in  each  and  every

case.

ii  TABLE  OF  CONTENTS

PAGE

EXECUTIVESUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..i

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...  . . ...1

FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...5

CONCLUSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...6

APPENDIX

A.  Breakdown  of Sampled  Child  Support  Cases  Reported  by  State  . . . . . . .  A-1
 INTRODUCTION

PURPOSE

To  assess  the  extent  that  States  are  requiring  immediate  wage  withholding  by  Child

Support  Enforcement  (CSE)  agencies  for  absent  parents  ordered  to  pay  child  support.

BACKGROUND

The  Child  Support  Enforcement  Amendments  of  1984  (P.L.  98-378)  added  sections

454(2)  and  466  to  Title  IV  of the  Social  Security  Act,  requiring  all States  to  implement

certain  mandatory  procedures,  including  procedures  for  wage  withholding,  which  have

proven  to  noticeably  increase  the  effectiveness  of State  programs.  Specifically,  section

466  of the  Act  requires  that  States  have  in  effect  two  distinct  procedures  for  carrying

out  a wage  withholding  program.

The  first  procedure,  required  under  section  466(a)(1)  and  (b)  of the  Act,  pertains  to

cases  being  enforced  through  the  IV-D  agency  which  administers  the  child  support

enforcement  provisions.  Under  this  requirement,  States  are  required  to  have  and  use

a procedure  under  which  wage  withholding  is initiated  in  all IV-D  cases  where

payments  are  in  arrears  by  at  least  one  month.  States  are  also  required  to  implement

wage  withholding  at  any  earlier  date  in  accordance  with  State  laws  or  at  the  request  of

the  absent  parent.

The  second  procedure,  required  under  section  466(a)(8)(A)  of the  Act,  provides  that

all new  or  modified  orders  issued  in  the  State  include  a provision  for  wage  withholding

when  an  arrearage  occurs,  in  order  to  ensure  that  withholding  is available  without  the

necessity  of filing  an  application  for  IV-D  services.

Section  101  of the  Family  Support  Act  of  1988  (P.L.  100-485)  amended  section  466  of

the  Act,  to  require  States  to  enact  laws  and  implement  procedures  for  immediate

wage  withholding  in  certain  cases  being  enforced  by  the  IV-D  agency.  Under

amended  section  466(b)(3),  a new  subparagraph  (A)  provides,  effective  November  1,

1990,  that  immediate  withholding  is required  for  ~  IV-D  cases  with  new  or  modified

support  orders  regardless  of the  support  payment  status.  This  section,  however,  also

provides  that  exceptions  to wage  withholding  may  be  granted  if one  parent

demonstrates,  and  the  court  or  administrative  authority  finds  good  cause  not  to  require

wage  withholding,  or  if both  parents  agree  in writing  to  an  alternative  arrangement.

Section  466(b)(3)(A)  of the  Act  is implemented  by Federal  regulations  45  CFR  Part

303.100  (b)(2)  and  (b)(3)  and  establishes  minimum  definitions  of good  cause  and

written  agreement.

1
 .	 Paragraph  (b)(2)  provides  that,  at  a minimum,  goodcausem ustbebasedon 
(i)  a written  determination  that,  and  explanation  by  the  court  or  administrative 
authority  of why,  implementing  immediate  wage  withholding  would  not  be  in 
the  best  interests  of the  child;  and  (ii)  proof  of timely  payment  of previously 
ordered  support  in  cases  involving  the  modification  of  support  orders. 
.	 Paragraph  (b)(3)  provides  that  written  agreement  means  a written  alternative 
arrangement  signed  by both  the  custodial  and  absent  parent  and,  at  State 
option,  by the  State  in  IV-D  cases  in which  there  is an  assignment  of support 
rights  to  the  State,  and  reviewed  and  entered  in  the  record  by  the  court  or 
administrative  authority. 
METHODOLOGY 
We  stratified  43 States  and  the  District  of Columbia  into  4 strata  based  upon  the  size 
of their  1990  average  annual  IV-D  caseload.  A fifth  strata  was  made  up  of the 
remaining  seven  States  which  had  applied  for  and  were  granted  an  exemption  to  the 
immediate  wage  withholding  provisions.  Under  State  law,  these  seven  States  would 
never  grant  an  exception  to wage  withholding  under  any  circumstances. 
The  source  of the  caseload  information  is the  form  OCSE-56  which  lists  the  average 
annual  IV-D  caseload  for  the  last  five  fiscal  years.  The  Policy  Branch,  Office  of Child 
Support  Enforcement  (OCSE),  provided  us with  the  seven  States  which  have  been 
granted  an  exemption  to  the  wage  withholding  provisions.  They  are  Arizona,  Hawaii 
Illinois,  Kentucky,  New  York,  Ohio,  and  Wisconsin. 
From  the  population  of States  we  selected  a stratified  random  sample  of  10.  These 
States  are  shown  by  strata  in  the  following  chart. 
STRATA  1  STRATA  2  STRATA  3  STRATA  4  STRATA  5 
Michigan*  Oregon  Oklahoma  Nevada  Hawaii 
Pennsylvania  Washington  Kansas  South  Dakota  Arizona 
* Michigan  was excluded from  the sample  of States as it was not able to meet  the 
inspections  data requirements. 
We  contacted  each  sample  State  and  requested  two  lists  of IV-D  child  support  cases 
for  the  review  period  February  - April,  1993.  The  first  was  a list  of  all IV-D  child 
support  cases  in which  a new  or  modified  order  was  issued.  The  second  list,  a subset 
of the  first,  was  a more  detailed  list  that  identified  the  orders  which  were  issued 
without  immediate  wage  withholding  and  the  reasons  for  excluding  the  wage 
withholding. 
2
 All  but  one  of the  sampled  States  submitted  the  lists  as requested.  That  State, 
Pennsylvania,  submitted  a copy  of every  child  support  order  issued  for  the  review 
period.  Of  the  remaining  eight  States,  the  two  States  in  strata  five  have  been  granted 
an  exemption  from  the  exception  to wage  withholding  provision  and  included  it in 
every  child  support  order  issued  during  the  review  period.  The  lists  submitted  by  the 
rest  of the  States  did  identi&  those  cases  where  there  was  no  wage  withholding  being 
enforced.  However,  in  many  of those  cases  it was  difficult  to  determine  the  actual 
reasons  for  the  immediate  wage  withholding  being  excluded  from  the  child  support 
orders. 
For  this  reason,  we  recontacted  those  six States  and  requested  copies  of  all the  child 
support  orders  for  those  cases  with  no  wage  withholding  being  enforced.  Upon 
receipt  of the  requested  orders,  we  conducted  a review  to  determine  the  reasons  for 
nonenforcement  of immediate  wage  withholding. 
As  a result  of our  analysis  of  all the  cases  provided  by  the  States,  we  divided  them  into 
four  groups.  The  groups  are: 
Group  I	 Wages  Withheld  - Cases  which  have  an  immediate  wage  withholding 
provision  in the  child  support  order  and  it is being  enforced. 
Group  II	 Exceptions  Granted  - Cases  in which  an  exception  was  granted  for  good 
cause  or  an  alternative  arrangement. 
Group  III	 No Wages  Available  - Cases  where  there  were  no  wages  to  withhold  at 
the  time  of the  order,  but  the  orders  stipulated  that  immediate  wage 
withholding  could  be  enforced  in  the  future  without  further  order  of the 
court. 
Group  IV	 No Provision for Wage  Withholding  - Cases  which  did  not  include  any 
provision  for  immediate  wage  withholding  in the  child  support  orders 
nor  explicitly  provided  for  an  exception. 
Appendix  A  indicates  the  breakdown  of  child  support  cases  reported  by  each  sample 
State  for  the  review  period  February  1 through  April  30,  1993. 
In  our  calculation  of national  estimates  for  all  child  support  cases,  we  took  into 
account  that  Michigan  was  excluded  from  the  original  sample  of  10 States  and  its 
effect  on  the  first  strata.  Therefore,  for  purposes  of calculating  the  variances  of the 
national  estimates,  Pennsylvania  was  combined  with  the  two  States  in  the  second  strata 
(Oregon  and  Washington).  Consequently,  the  projected  totals  reported  are  for  the 
population  excluding  the  State  of Michigan. 
The  estimates  were  calculated  based  on  our  review  of all  cases  within  a State  with  the 
exception  of Pennsylvania.  Due  to  the  large  number  of orders  (over  24,000)  sent  to  us 
and  the  way  in which  they  were  organized,  these  child  support  orders  were  sampled. 
3
 The  variance  within  the  State  of Pennsylvania  was  ignored  since  we  believe  it to  be 
very  small  when  compared  to  the  overall  variance  of the  sample. 
We  conducted  our  review  in  accordance  with  the  Quality Standards for Inspections 
issued  by  the  Presidents  Council  on  Integrity  and  Efficiency. 
4
 FINDINGS

State  CSE  agencies are eswntially  compljing  with the provtion  for  immediate  wage 
withhokiing  in IV-D  child support ordem 
Our  study  found  that  in most  IV-D  child  support  orders,  State  CSE  agencies  are 
including  and  enforcing  an  immediate  wage  withholding  provision.  As  indicated  in the 
following  table,  national  estimates  calculated  for  the  four  groups  of child  support  cases 
substantiated  that  overall  there  is not  a problem  with  the  exclusion  of immediate  wage 
withholding  in  IV-D  child  support  orders. 
Type  of Child  Support  Order  Estimate  95%  Confidence  Interval 
Group  I  - Wages  Withheld  91.8%  80.1  - 100% 
Group  II  - Exceptions  Granted  1.3%  0.0  - 3.3%  I 
Group  111- No  Wages  Available  6.3%  0.0  - 14.470  I 
Group  IV  - No  Provision  for  Wage  0.6%  0.32  - 0.88% 
Withholdirw 
The  table  shows  the  estimated  proportions  for  each  of the  four  groups  and  the  95% 
confidence  intervals  for  these  estimates.  It  shows  that: 
.	 State  CSE  agencies  are  enforcing  immediate  wage  withholding  in  91.89o of 
child  support  orders. 
	 State  CSE agencies  are  granting  very  few  exceptions  to  immediate  wage 
withholding  in  IV-D  child  support  orders.  We  found  that  exceptions  are  being 
granted  in  only  1.3%  of  child  support  orders. 
.	 In  cases  where  there  is no  income  to  withhold  because  the  absent  parent  is 
unemployed,  self-employed,  on  assistance,  etc.,  State  CSE  agencies  are 
including  a stipulation  for  wage  withholding  in  6.3  of child  support  orders. 
YO 
This  stipulation  authorizes  the  CSE  agencies  to  enforce  wage  withholding  at 
any  future  time  without  further  order  by  the  court. 
.	 State  CSE  agencies  do  not  include  an  immediate  wage  withholding  provision 
nor  explicitly  grant  an  exception  in  only  0.6!Z0 of  child  support  orders. 
5
 CONCLUSION

As  indicated  in  the  findings,  State  CSE  agencies  are  essentially  complying  with  section 
466(b)(3)(A)  of the  Act.  Because  of the  significantly  high  level  of compliance  in  this 
area,  we  are  not  making  any  formal  recommendation  for  action  by ACF  in  our  report. 
It  should  be  noted,  however,  while  this  occurrence  is minimal,  the  exclusion  of the 
wage  withholding  provision  requires  future  modification  of the  orders  before 
withholding  of payments  can  be  initiated  and  it prolongs  the  time  the  children  are 
deprived  of support  dollars.  Therefore,  ACF  may  wish  to  remind  States  to  ensure 
compliance  in  each  and  every  case. 
6
 APPENDIX  A

Breakdown  of Sampled  Child Support  Cases Reported 
Period  of Review  February  1- April  30, 1993 
STATE  Group  I  Group  II 
Wages  Exceptions 
Withheld  Granted 
PA*  18,885  1,134 
OR  2,129  11  -o- I  -O- II  2,140 
I 
WA  4,927  17  199  42 II  5,185 
OK  1,459  -o- 21  11 II  1,472 
KS  1,093  26  31  22 II  1,144 
I 
NV  3,193  52  547  288  II  4,080 
SD  936  -o- -o- I  13 II  949 
HI  333  -o- -o- I  -0- II  333 
Az  392  -o- 71 
-0- L---!E 
TOTAL  33,347  1,240  4.812  514  -
*The figures for Pennsylvania  are estimated  based upon  a sample. 
A-1