Child Support Enforcement:

Clear Guidance Would Help Ensure Proper Access To Information and Use of Wage Withholding by Private Firms

GAO-02-349: Published: Mar 26, 2002. Publicly Released: Apr 15, 2002.

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To increase child support collections, Congress has considered proposals to improve the ability of private firms to gather information to help locate noncustodial parents and enforce the payment of child support. At the end of fiscal year 2000, the Office of Child Support Enforcement (OCSE) indicated that $89 billion in child support was owed but unpaid--a 96-percent increase since the end of fiscal year 1996. GAO believes that this amount is understated. Thousands of private and public sector entities can collect child support. Both private firms and state agencies reported collections from about 60 percent of their cases. Twenty-two of the 24 private firms GAO reviewed reported that they relied on private information vendors--commercial firms that sell information such as addresses, telephone numbers, and social security numbers--as their primary information source, whereas about one-third of state agencies reported using this source. State agencies relied heavily on state and federal automated databases to locate noncustodial parents and their assets. Additionally, private firms and the state agencies reported calling noncustodial parents to collect child support. However, only the private firms called third parties, such as relatives and neighbors of noncustodial parents to persuade them to prevail upon the noncustodial parent to make payments. The same enforcement tools are available to private firms and state agencies, but the process that they follow in using these tools often differ. Private firms, however, do not have access to federal tax refunds. Officials from both private firms and state agencies reported that the tool they most often use was wage withholding. However, the form and related guidance developed by OCSE for use in wage withholding make it difficult for employers to determine whether it is proper to begin withholding wages. Most of the state agencies had not provided information on noncustodial parents' location or assets from the Federal Parent Locator Service (FPLS). Practices for sharing with private firms were affected by differences in interpretation of whether federal law permits or requires state agencies to share FPLS data.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On July 15, 2004, OCSE issued an Action Transmittal, AT-04-05, notifying state and tribal agencies that the Federal Order/Notice to Withhold Income for Child Support and Notice of an Order to Withhold Income for Child Support, has been revised to (1) require that non IV-D attorneys, individuals, and non-government entities must submit a Notice and include a copy of the wage withholding order, unless under state law, an attorney in that state may issue a wage withholding order. In that case, the attorney may submit an Order/Notice to withhold and include a copy of the state law authorizing the attorney for such action; (2) allow employers to request request documents authorizing wage withholding when the forms are not sent by state agencies; and (3) revised the signature line so that the individual signing the Order/Notice must indicate what type of entity (government or non-government) he or she represents.

    Recommendation: To improve the wage withholding process, the Secretary of Health and Human Services should direct the Commissioner of OCSE to make changes to the wage withholding guidance and the form. Specifically, OCSE should modify the guidance to (1) require that all parties, except state agencies, send a copy of the wage withholding order or other document authorizing wage withholding when sending a notice to employers, (2) allow employers to request documents authorizing wage withholding when forms are not sent by state agencies, and (3) specify who should sign the form as the authorizing official. Additionally, OCSE should revise the form to clearly distinguish when the form is being sent by a state agency from when it is being sent by private firms or others.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: OCSE implemented this recommendation. On December 4, 2002, OCSE issued an Action Transmittal, OCSE-AT-02-04, that clarified policy and procedures for providing Federal Parent Locator Services to persons who qualify as an "agent of the child" for child support purposes. Specifically, the transmittal states that for purposes of requesting locate services, a for-profit, private collection agency or private attorney could act an an "agent of the child" provided it has a valid contract that meets the state's statutory and regulatory requirements for acting as an agent, if any.

    Recommendation: To ensure consistent and fair treatment of private firms and their clients, the Secretary of Health and Human Services should direct the Commissioner of OCSE to determine whether private firms should have access to the Federal Parent Locator Service data and issue explicit guidance addressing this issue.

    Agency Affected: Department of Health and Human Services

 

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