Tuesday, August 23, 2016

Change in Child Support Admin Fee Headed to Pennsylvania

PNN: PA Child Support Fees

A change to the Pennsylvania law regarding the administrative fee charged for processing child support orders raises several questions and could cause a host of problems for payroll professionals. Effective August 30, 2016, the administrative fee an employer may withhold from an employee’s income for processing a child support order will now be a one-time fee of $50 [S.B. 936, L. 2016]. Currently, employers may withhold up to 2% of the amount paid under the order.

Will There Be a Conflict of Law?
There is uncertainty about how the law will be interpreted by the state – and if this will create a conflict between Pennsylvania law and federal law. It is possible that the Pennsylvania Department of Human Services (DHS) will interpret the law in a way that may prohibit employers from being able to ever recoup the administrative expense of processing a lengthy child support order.

Employers Worried About Costs, Implementation
Employers are concerned that the new fee structure will not cover the actual costs of processing child support orders. There are also concerns of how to transition between the old and new fee. Implementing the new fee will likely be hard for employers without additional guidance. The DHS will need to provide employers with information on how to transition from collecting the ongoing 2% fee to collecting the $50 one-time fee.

APA Working With PA, OCSE
APA’s Government Relations Task Force (GRTF) Subcommittee on Child Support and Other Garnishments is working with the federal Office of Child Support Enforcement (OCSE) and the Pennsylvania DHS to better understand why this change was made and how it will be implemented.

Read more in PayState Update on the latest to this Pennsylvania law.