Formula for Allocation to 2 States (Aug. 2005)

Question: “I have a question on this case. We have an employer calling needing to know how to determine which state should get the most money. He has an employee that has direct wage withholding from Michigan and we have one for his KY case. Two separate cases. Would he satisfy the older order first in this situation?”

Answer: No, the oldest order would not be satisfied first. In accordance with 45 CFR 303.100(5), in cases where there is more than one notice for withholding against a noncustodial parent, the state must allocate amounts available for withholding giving priority to current support up to the limits imposed under section 303(b) of the Consumer Credit Protection Act (15 U.S.C. 1673).

In this particular case, the state can not allocate the monies across each case since Kentucky does not have both cases. Therefore, it will be up to the employer to determine how to allocate the money using the formula below.

So if an employee has more than one child support obligation, and the employee’s disposable income is not sufficient under CCPA limits to cover the total amount due for ALL withholding orders/notices, the amount withheld must be prorated according to the following criteria:

1.If the total to be withheld for current support alone exceeds the limits, you must prorate the withholding based on the amounts due under the order. For example, if Family A has $150 due in current support and Family B has $200 due in current support, the total current support due for both is $350. If the employee has only $300 available for withholding, you must compute the percentage due to each family.

$150 ÷ $350 = 43% to Family A or $129 of the $300 available

$200 ÷ $350 = 57% to Family B or $171 of the $300 available

2. If the total support to be withheld for current and past due support exceeds the CCPA limits, withholding for all current support must be satisfied first. The remainder must be prorated based on the amounts due for past child support under each order.

A wage withholding order/notice for costs must be honored to the fullest extent only if the full amount of child support, medical support, and arrearage payments for all families have been satisfied. Apply the same formula for pro-rating if more than one order/notice to withhold for costs is received.