Transcript Slide 1

T-9 Legal to Financial
A Roundtable Discussion!
Karen Young, Financial Manager, Monterey
Mary K. Clesi, Departmental Fiscal Officer, Santa Clara
Rebecca Durney, Chief Attorney, Siskiyou/Modoc
Non-Standard Orders
■ Impact to Customers
■ Impact in CSE
■ Interpreting Orders
■ Enforcing Orders
■ Tracking/Monitoring
Non-Standard Orders
■ Net/Split Custody Orders
■ Offset Orders
■ Retroactive Downward Modifications &
Overpayments
■ Unallocated / Non-Severable Orders
■ SSA Derivative Benefits
Non-Standard Orders
■ Tax Exemption in Alternating Tax Years
■ Employed vs Unemployed
■ Smith-Ostler Orders
■ Qualified Domestic Relations Orders (QDRO)
■ Tribal: Standard and/or In-Kind Orders
■ DOR Receivables and Determination of Arrears
Net/Split Custody Orders
Legal Description
 Two parent case
 Each parent has a child in their column for
calculations
 Each parent owes support for the child not in
their custody
 Guideline child support results in an overall NET
order for one parent to pay the other.
Net/Split Custody Orders
Legal Description (continued)
Practice Point: Even if you only have one parent
with one child in your case, you must include all
biological siblings on the case for the calculation,
even if your order will be enforced for just one child.
There is no other way to give parents credit for the
children in their custody. They are NOT hardship
children. FC Sec. 4071(a)(2)
Net/Split Custody Orders
■ Difficulties/Complications
 If it’s a Non-Welfare (NW) case, court may order an offset
of the net amount against NW arrears owed by one parent
to the other, so no money exchanges hands.
 If custody changes during the life of the order, it must be
modified quickly to capture the change of custody (i.e. if
both children go to one parent).
 If a child emancipates or charges stop for some reason,
charge the remainder of the order for the remaining child in
the full amount calculated or modify the order.
Net/Split Custody Orders
■ CSE Financials & Monitoring
 Add Current Support Charging Instructions (CI) based on
order (for the net amount).
 May need to end date Current Support CI if there is a case
with Current Support CI for the parent not required to pay.
 Add CI to increase Current Support in the future when older
dependent(s) emancipate.
Offset Orders
Legal Description
 Father owes mother Non-Welfare (NW) child
support arrears
 Now, mother owes NW father current support
Rather than have NW money change hands, the
court in its discretion or by parents agreement,
offsets NW current owed by mother against the NW
arrears owed by father. It reduces the arrears
balance owed by father and there is no out of
pocket for mother.
Offset Orders
■ Difficulties/Complications
 What happens when there are no arrears owed to offset?
Charge current support for mother?
 If cases are in two separate counties, the parents may ask
for venue in one county so they can obtain order that is in
the best interest of the family.
 Depending on amount of arrears owed, may need to
suppress Income Withholding Order (IWO) if Offset will pay
off arrears.
Offset Orders
■ CSE Financials & Monitoring
 Create Excel Worksheet to maintain list of cases requiring
an offset each month or use CSE task.
 Post a Non-SDU payment for the offset amount each
month.
 Notify caseworker or attorney, depending on LCSA policy,
when offset stops (i.e. arrears paid in full).
Note: Many LCSAs do not use the automated process in
CSE to perform the offset but choose to post manually.
Retroactive Downward Modifications & Overpayments
Legal Description
Obligor has low or no arrears while a downward
mod is pending. By the time of the hearing, the
effective date based on filing, is months ago. If
obligor continued to pay, it’s likely there will be an
overpayment which the obligee may not want or be
able to repay, and there are no arrears to apply to
the overpayment. FC 3653 (d)
Retroactive Downward Modifications & Overpayments
■ Difficulties/Complications
 Cannot adjust accounts to reflect credit balance if order
does not include a repayment plan.
 May require going back to court although repayments are
not guaranteed.
 Some LCSAs may choose to negotiate the repayment of
the overpayment with the parties instead of going back to
court.
Retroactive Downward Modifications & Overpayments
■ Difficulties/Complications (continued)
 May require placing an Allocation Hold to suspend
collections until after the court hearing.
 Have the court direct how to handle the funds on hold.
 Option to consider--If there is an overpayment, have the
parents handle outside of CSE. Stay out of it. Add wording
to order that overpayment will be addressed by parties
without DCSS involvement.
Retroactive Downward Modifications & Overpayments
■ CSE Financials & Monitoring
 If order does not result in an overpayment and there are
mixed accounts, carefully review the case to determine if
collections should be adjusted.
 If the order results in an overpayment and there is no
repayment agreement addressing the repayment, do not
adjust charging instruction to create a credit balance.
Retroactive Downward Modifications & Overpayments
■ CSE Financials & Monitoring (continued)
 If going back to court to modify order to address
overpayment, add charging instructions to zero the arrears
until the order can be modified or a repayment plan (if
negotiating with the parties directly) can be negotiated.
 Continue to send the CP current support until the matter is
resolved.
Unallocated / Non-Severable
Legal Description
A current support order for more than one child
containing a per child breakdown. However,
language in the order establishes that the total
child support amount will remain unchanged until
the youngest child emancipates or child support is
modified or terminated by operation of law. CSS
Letter 08-11.
Unallocated / Non-Severable
■ Difficulties/Complications
 If there is more than one child in the case and one child
goes to another payee or Foster Care, some LCSAs split
current support evenly between the dependents (i.e. 50/50)
until order is modified to get an allocated order.
■ CSE Financials & Monitoring
 Charging instructions should be associated to the youngest
child until the order is modified.
SSA Derivative Benefits
Legal Description
Per FC 4504 (b), any retirement or disability benefit
paid towards child support as a derivative of the
claim of the obligor parent shall be credited towards
current and past due child support. A best practice
is to calculate guideline child support and subtract
the monthly derivative benefit to arrive at a net child
support order.
SSA Derivative Benefits
■ Difficulties/Complications
 Manual process to post Non-SDU payment each month for
amount of the Derivative Benefit (DB) that exceeds current
support (when DB exceeds current support and current
support has been set to $0).
 Cost of Living Adjustments may change the DB amount;
may need to stipulate or go back to court if current support
not $0.
 Include language in order that allows administrative
adjustment of accounts if derivative benefits change due to
other children or COLA changes. Refer to CSS Letter 11-12
and 11-12 Errata.
SSA Derivative Benefits
■ CSE Financials & Monitoring
 Current Support charging instructions end dated if DB
exceeds Current Support until order is obtained setting
support to $0.
 Excel worksheet to maintain list of cases requiring a NonSDU payment each month for the DB - or use CSE task.
 Post a Non-SDU payment for the DB amount each month
(to post to arrears balance owing).
Tax Exemption in Alternating Years
Legal Description
 Both parents work.
 Parents agree or court orders, that dad gets odd
year exemption, mom gets even year
exemption. This will change alternate year
calculation.
Practice Point: Prepare two calculations
alternating the exemptions and annualize the child
support by averaging the support and make that
the static order. Include both calculations in your
motion and order.
Tax Exemption in Alternating Years
■ Difficulties/Complications
 If support is not “averaged”, the Charging Instruction List
page will have multiple entries.
 Employer will receive modified Income Withholding Order
(IWO) each time Charging Instruction changes.
 Not averaging alternating calculations results in
inconsistency for both obligor and obligee year to year.
Tax Exemption in Alternating Years
■ CSE Financials & Monitoring
 If support is not averaged, a Current Support Charging
Instruction is added to reflect the varied amounts the NCP
is obligated to pay each year, through emancipation of the
dependent.
 Averaged support sets one amount instead of varying
amounts each year. Allows for consistency.
Employed vs Unemployed
Legal Description
The parents do not want, or the court will not issue, an
order using “annualized” income for seasonal employment.
Therefore, there is one amount for employed periods and a
separate amount for periods of unemployment.
Best practice is to take periods of employment and
unemployment and average the income for a static order.
Employed vs Unemployed
■ Difficulties/Complications
If not an annualized order:
 Relies on NCP to communicate to DCSS when not
employed.
 Labor intensive to monitor case and continually modify
Current Support Charging Instructions.
 Charging Instructions List page will have multiple entries.
Employed vs Unemployed
■ Difficulties/Complications (continued)
 Employer will receive modified IWO every time current
support changes.
If not a DCSS order (the parties enter their own order),
consider modification to annualize the monthly support to
avoid the tracking issues.
Employed vs Unemployed
■ CSE Financials & Monitoring
 If not annualized, requires Current Support CI to be
reduced for periods of unemployment and modified upward
for periods of employment.
 If annualized, support Current Support CI set for one
amount instead of varying amounts each year.
Smith-Ostler Orders
Legal Description
Based on the case In re the Marriage of Ostler and
Smith (1990) 223 Cal.App.3d 33, 272 Cal.Rptr.
560, the trial court set guideline child support and
spousal support, but then allocated a percentage
interest of obligor’s future bonuses as additional
support: 10% for additional child support and 15%
for additional spousal support. The Court of Appeal
held that an order for additional support, based on
future bonuses, was within the trial court’s
discretion.
Smith-Ostler Orders
■ Difficulties/Complications
 Excel worksheet for Monthly Calculations for Overtime or
Commission S-O amount (legal staff).
 Dependent on NCP providing paycheck stub or further
contact with the employer.
 Initial calculation of arrears balance (old order-prior S-O
amounts due); audit case.
 Current Support CI List page may have many entries.
 Manual process for applying collections.
Smith-Ostler Orders
■ CSE Financials & Monitoring
 Once S-O amount calculated, modify Current Support CI to
increase CI by the amount of the S-O amount due. Some
LCSAs do not modify the Current Support CI until the
payment is received.
 Modify Current Support CI back to court ordered monthly
amount for the next month.
 Set Allocation Hold to manually release S-O collection.
Qualified Domestic Relations Orders (QDRO)
Legal Description
When the obligor has assets in a retirement plan
and we want those funds for support purposes,
submit pleadings to the court to obtain a QDR
order and serve the QDR order on the retirement
plan administrator.
Many plans require an alternate payee and some
plans require the LCSA to name the child as
alternate payee. Plan administrators can be
challenging.
Qualified Domestic Relations Orders (QDRO)
■ Difficulties/Complications
 The different plans require different legal wording
■ CSE Financials & Monitoring
 Set Allocation Hold if NCP has multiple cases and other
county/counties not participating in QDRO action.
 SDU frequently suspends collections even though three
identifiers are provided on the remittance.
Tribal: Standard and/or In-Kind Orders
Legal Description
A tribal court may issue a child support order that
is not for dollars but for “in kind” payment, such as
wood, meat, work or other form of valued
exchange.
Practice Point: These are fairly rare but you may
want to have a dollar value placed so you can
track compliance and enforcement in CSE.
Tribal: Standard and/or In-Kind Orders
■ Difficulties/Complications
 Manual process to issue monthly list of disbursements to
the CP.
 If order for In-Kind, refer to Attorney for instructions for
how to charge in CSE.
Tribal: Standard and/or In-Kind Orders
■ CSE Financials & Monitoring
 If CP receiving Tribal TANF, CP is required to open a case
with DCSS.
 Child support is issued directly to CP even though she is
receiving Tribal TANF.
 Once per month CP is required to obtain a list of
disbursements issued for the month and give to the Tribe.
DOR Receivables and Determination of Arrears
Description
State of California changed the legal date of collection to the
date of receipt when the LCSAs transitioned to the SDU.
A “loan” payment was posted to the NCP’s case(s) for the month
in which their LCSA transitioned to the SDU. The “Date of
Receipt” (DOR) payment reduced arrears that may have been
created, removed interest accrued and removed enforcement
actions that would have been triggered without a payment. A
DOR obligation was added to the case and a CP receivable was
created (no receivable if collection applied to welfare).
The NCPs were notified in 2/2007 by letter that the loan would
have to be repaid by the NCP after all other support obligations
have been satisfied.
DOR Receivables and Determination of Arrears
■ Difficulties/Complications
 If there is no DOR receivable in CSE (occurs when original
DOR collection applied to welfare accounts in the legacy
system), some LCSAs may not collect DOR if there is no
Account Receivable (A/R) to offset and collection will
cause an Excess if no Unreimbursed Assistance Pool
(UAP).
DOR Receivables and Determination of Arrears
■ CSE Financials & Monitoring
 When auditing a case, the DOR should be added to the
last month of the audit as an adjustment so correct amount
of arrears is reported.
 For LCSAs that had CASES as a legacy system, pre-CSE
receivables also should be added to the last month of the
audit as an adjustment.
Legal to Financial
Legal Tips
 Consider how other counties might interpret your order.
 Be specific with specialized orders or language so it can be
enforced and not raise more questions than answered.
 Provide an adequate summary in the CSE Activity Log so
enforcement can look back and determine how to proceed
in the future.
 Legal should work closely with Financial on complicated
matters BEFORE court. Don’t obtain orders that make
sense legally but that cannot be enforced in CSE.
Legal to Financial
Financial Tips
 Reach out to other LCSA financial staff; How do they
handle similar orders?
 Financial should work closely with Legal; Help Legal
understand CSE financial limitations but be open to
manually processing non-standard orders if possible.
Legal to Financial
Roundtable Discussion
Q&A
Speaker Contact Information
Karen Young:
[email protected]
Mary K. Clesi:
[email protected]
Rebecca Durney:
[email protected]