General Practice, Solo & Small Firm DivisionMagazine
Collecting Child Support From Federal Civilian Employees and Military Personnel
BY JOAN M. BURDA
© American Bar Association. All rights reserved.
Joan M. Burda is an Associate Counsel with the Defense Finance and Accounting Service in Cleveland, Ohio. She can be reached by e-mail at email@example.com
Federal law and regulations create the authority to garnish the wages of federal civilian employees and military personnel in order to collect child support. Federal agencies are required to comply with these regulations.
Lawyers who are seeking to help clients collect support need to familiarize themselves with these legal requirements. Obtaining direct payments of military retired pay as a division of property falls under the Uniformed Services Former Spouse’s Protection Act (USFSPA). The statute requires the Defense Finance and Accounting Service (DFAS) to ensure compliance with the provisions of the statute and the regulation.
Although garnishing federal wages and military pay for support obligations is not difficult, it can be confusing. The laws providing for garnishment have been in effect since 1975 under U.S.C. tit. 42. The procedure for initiating a garnishment against federal civilian employees or military personnel can be found in the enabling regulation, 5 C.F.R. 581.
In order to start a garnishment, the issuing entity must serve the designated agent for the agency with legal process. A list of the designated agents is found in 5 C.F.R. 581 app. A.
"Legal process" is any order in the nature of a garnishment. The order need not be signed by a judge or other judicial officer. Child support enforcement agencies (CSEA) can also issue income withholding notices.
A court of competent jurisdiction, including Indian tribal courts, within any U.S. state, territory, possession, or the District of Columbia, can issue the legal process. Authorized officials, including state agencies, can issue legal process pursuant to a court order or state or local law.
Federal agencies can accept foreign court orders issued by countries that have an agreement with the United States. At this time, Germany is the only country with any type of agreement. That agreement applies only while the obligor is living or stationed in Germany. The military bases in either Heidelberg or Ramstein review German support orders. Those offices translate the orders into English and submit them directly to the obligor’s pay office.
The legal process must direct the governmental entity to make payments from the obligor’s wages to satisfy a legal support obligation. A federal agency cannot honor court orders that direct the obligor to make payments but do not require the employer to make deductions.
Garnishment payments are deducted from the obligor’s disposable earnings. Federal regulations1 specify what earnings are subject to garnishment, what are not subject to garnishment, and the amounts that are excluded from gross pay in calculating disposable earnings. There is no legal authority to use an obligor’s gross earnings to calculate support payments.
Service of Legal Process
The issuing entity can serve legal process by regular U.S. mail, fax, or personal service. Electronic transmission of legal process is also being considered by some federal agencies. There is no longer a requirement to serve the order by certified or registered mail. Valid service is accomplished when the designated agent receives the legal process.
The legal process should clearly designate, on its face, that it is being brought to enforce a support obligation. If it is not clear from the face of the document, a certified copy of the underlying court order must accompany the legal process.
Court orders that seek to enforce an arrearage obligation must provide for such arrears on the face of the order. It is advisable to include the amount of arrears owed and the amount of the arrearage payment. This information assists the agency in correctly establishing the garnishment.
Identifying information. The legal process must provide sufficient information to correctly identify the obligor. The obligor’s Social Security number is the best way to identify the obligor. For example, DFAS Garnishment Operations cannot identify the correct obligor without the Social Security number. There are 5.6 million people, military and civilian, in the DFAS customer base. Experience has shown that no matter how unusual the name, there is often more than one such name listed. The Social Security number significantly reduces the risk of the wrong person being garnished.
Notification of the obligor. At present, the law requires the designated agent to send the obligor, within 15 calendar days after the date of service, written notice of the action being taken to enforce the support obligation. Along with that notice the agency sends a copy of the legal process to the obligor as well as other information, including the maximum garnishment limitations authorized by the Consumer Credit Protection Act2 (CCPA) and the percentage or amount of the deduction.
Multiple orders/allocation of funds. The issue of allocation of funds is very confusing. The Personal Responsibility and Work Opportunity Reconciliation Act of 19963 (Welfare Reform Act) (see The Complete Lawyer, Summer 1998, Volume 15, Number 3) addresses the issue of allocation. The Welfare Reform Act4 provides for allocating multiple support orders by having the employer apply the law of the state of the obligor’s principal place of employment. The federal regulation requires the Secretary of Health and Human Services to prescribe regulations on this subject, but has yet to do so in relation to the Welfare Reform Act. So far, there is no uniform method of dealing with the allocation issue.
Honoring legal process. The designated agent will honor legal process that appears to be valid on its face and complies with the requirements of federal regulations. The law does not require the designated agent to determine whether the issuing authority had personal jurisdiction over the obligor.
The law does not require governmental entities to vary the normal pay or disbursement cycles to comply with legal process. The agency will convert the order to match the pay cycle of the respective agency.
The regulations require the governmental entity to notify the issuing authority if money is not available to pay the support obligation. The law also requires the agency to notify the issuing authority if the obligor is no longer an employee of that agency.
Attorney fees, court costs, other costs. Prior to the passage of the Welfare Reform Act, it was not possible to include attorney fees and other costs in the support payment unless the court order specifically included them as additional support. The Welfare Reform Act amended the statute to provide for the collection of those fees if provided for in the court order.
Maximum garnishment limitations. The CCPA establishes the maximum garnishment percentages. State maximums may be lower than authorized by the CCPA but cannot be higher. The agency will follow the lower state maximum percentage if the withholding order so provides. The variances within the states can cause problems when allocation comes into play. For this reason, DFAS has adopted a policy to allocate based on a maximum of 55 percent.
Terminations. The law requires the designated agent to comply with the court order. Unfortunately, many obligors do not understand how the orders work and when they will end. It is not unusual for the obligor to contact the agency and request the termination of a support garnishment. The garnishment will terminate in accordance with the court order. If the garnishment is to continue until "further order of the court" a termination order is necessary in order to stop the garnishment.
It is helpful for the underlying court orders to include the names and birth dates of the children covered by the support obligation. This information is used to determine whether the garnishment is to be terminated upon a child reaching the age of majority. Many withholding orders are silent concerning a termination date. Some states, such as California, make it extremely difficult for obligors to obtain a termination order. The underlying order should also specify whether the total amount is for one or more children.
Military Personnel Statutory Allotments
Military personnel (active, reserve, and retired) are subject to the same garnishment rules5 as federal civilian employees. In addition to garnishment, active duty military personnel are also subject to statutory allotments. A statutory allotment is a form of garnishment for child and spousal support that applies only to active military personnel.6 The way disposable pay is calculated is different than garnishment. This procedure is extremely cumbersome, time-consuming, and rare.
The federal regulation governing statutory allotments7 defines who is authorized to submit a notice of statutory allotment. An "authorized person" is any agent or lawyer authorized under a state’s Title IV-D plan to collect support. It also includes the court that has the authority to issue a support order against the member.
The authorized person must prepare the statutory allotment notice to comply with the requirements specified in the regulation, or else DFAS cannot honor the notice. The statutory allotment procedure requires that current support be owed and arrears of two months or more exist. Once the agency receives the request for a statutory allotment, the agency notifies the member. The member has 30 days to seek legal assistance before the agency is authorized to initiate the allotment.
Voluntary Separation Incentive (VSI) Program
VSI was a program of financial incentives designed to encourage eligible military personnel to volunteer to leave the armed forces before October 1, 1995. This voluntary separation program was not synonymous with early retirement. The Department of Defense’s goal was to use voluntary means to reduce the size of the armed forces without adversely affecting the readiness of the military.
The VSI Program provides annual payments to the former service members. The payments are equal to 2.5 percent of the separating member’s final monthly basic pay multiplied by 12 and the number of years of active duty service. The payments are made each year for two times the number of years of service (i.e., ten years of active duty service equals 20 years of VSI payments).
VSI payments are only subject to garnishment for support orders issued pursuant to 42 U.S.C. 659. There is no federal statutory authority to enforce an award of VSI payments as a division of property. The issuing entity must serve a withholding order on DFAS, Cleveland Center, before the payment is made, to effect a garnishment. The agency does not provide a reminder to the CSEAs in advance of the annual payment.
Finding the Reserve Centers
If your case involves a member of the active reserve, you can obtain information on the reservist’s military retired pay from his or her point summary.
Air Force Reserve Personnel Center/DPAR
6760 E. Irvington Place
Denver, CO 80279-7000
(ARMY) Defense Finance and Accounting Service
8899 E. 56th Street
Indianapolis, IN 46249-0801
Customer Service: 800/318-5298
Naval Reserve Personnel Center
4400 Dauphine Street
New Orleans, LA 70149-7800
(written requests only; no phone calls)
Marine Corps Reserve Center
1500 Bannister Road
Kansas City, MO 64197-0001
Uniformed Services Former Spouse’s Protection Act
Congress passed the Uniformed Services Former Spouses’ Protection Act8 (USFSPA) in response to the Supreme Court decision in McCarty v. McCarty.9 This statute provides for the division of disposable military retired pay as a division of property. The USFSPA also provides for direct payment of current child support, child support arrears, and current alimony.10 The total amount of disposable retired pay subject to division under the USFSPA may not exceed 50 percent. The maximum percentage increases to 65 percent if there is a USFSPA order and a subsequent garnishment order issued under title 42.
The USFSPA is not a difficult statute, but failure to comply with its provisions will result in a former spouse being unable to receive direct payments of a member’s military retired pay.
It is essential for any practitioner, former spouse, judge, or magistrate to become familiar with the statute and the enabling regulation. Most of the problems associated with court orders that attempt to divide military retired pay result from the failure of legal counsel and the court to understand the law. By taking the time to examine the law, lawyers can avoid many of the problems that result in an application and court order being rejected. By reading the law and asking questions, the lawyer can draft a document that complies with the requirements and avoid potential malpractice allegations.
Child support and alimony under the USFSPA. The former spouse of a retired member of the military can apply for payment of a support obligation under the USFSPA. The former spouse must submit a certified copy of the court order that provides for child support or alimony. The application form, DD Form 2293, must accompany the certified copy of the court order. The law requires that the court order be certified or authenticated within 90 days immediately preceding service on the designated agent.
The Welfare Reform Act provides that child support arrearages can now be collected under the USFSPA. It is not possible to collect alimony arrearages under the USFSPA.
The designated agent for USFSPA applications (support and division of property) is DFAS, Cleveland Center. The address for the Center is: Defense Finance and Accounting Service, Cleveland Center, Code L, P.O. Box 998002, Cleveland, OH 44199-8002.
The former spouse can serve the application by regular U.S. mail, commercial mail services, or fax. There is no longer any requirement that the application be served by certified or registered mail.
The law requires that DFAS send the member written notice of the application within 30 days of valid service. The member has 30 days, from the date the notice is mailed, to submit proof that the court order has been amended, superseded, or set aside. The member’s failure to respond within that time period may result in the payment of retired pay as provided in the notice. Payments will not begin before the expiration of that 30-day period but must be made within 90 days of service of a complete and valid application.
The USFSPA specifies the authorized deductions for determining disposable military retired pay. These authorized deductions are somewhat different from the specifications in the garnishment laws.
Garnishment for division of property other than a division of military retired pay. In addition to an award of disposable military retired pay as property, a court order may award a former spouse a division of property other than military retired pay. The former spouse may enforce that award through a garnishment withholding order. This award of property must be in addition to an amount of child support or alimony or an award of military retired pay as property. This is the only instance where a separate garnishment order is required or allowed under the USFSPA. Court orders that award a division of property but do not award a portion of military retired pay as property cannot be enforced under the USFSPA.
The maximum percentage limitations of the CCPA and 32 C.F.R. 63.6(e) apply in these situations. The provisions of 5 C.F.R. 581 govern these garnishments for property other than military retired pay.
Military retired pay is not subject to garnishment for commercial debts. Furthermore, the USFSPA is the only vehicle available to recover that portion of military retired pay awarded to the former spouse as a division of property.
Award of military retired pay as a division of property. Military retired pay is a statutory entitlement based on years of service, rank, and other factors. It is, therefore, essential to remember that the Employee Retirement Income Security Act (ERISA) does not apply to the division of military retired pay as a division of property in any way, shape, or form. Military retired pay is not a pension plan.
There is no plan administrator. Military retired pay does not "vest" until the member actually retires, which at the earliest is after 20 years of military service. There is no accrued value. In other words, if a member leaves the military before accruing 20 years of service, there is no entitlement to military retired pay. The member must serve at least 20 years in the military to qualify for retirement benefits. The only law that applies to the division of military retired pay as property is the USFSPA. This is an important point to remember and is something most lawyers do not seem to understand.
Unlike ERISA cases, there is no need for a Qualified Domestic Relations Order (QDRO). There is no such thing as a Qualified Military Order. The divorce decree can specify the division of property. The USFSPA statute specifies that a ‘court order’ means a final decree of divorce, dissolution annulment, or legal separation. It also includes a court-ordered, ratified, or approved property settlement incident to such a decree.
The award of a portion of military retired pay should specify the following information:
1. Name, address, and Social Security number of the parties.
2. Dates of marriage, divorce, military service, and retirement.
3. Specific dollar amount or percentage awarded under the USFSPA.
The method used by the parties to determine the specific amount or percentage is not a consideration in the legal review. Please remember that an award of a specific dollar amount will not provide the recipient with cost of living increases. Court orders containing a formula must specifically set forth all elements of the formula. If the formula is not complete the agency cannot honor the court order until the former spouse serves DFAS with a clarifying order.
The USFSPA requires that a division of property be expressed as a specific amount or as a percentage of disposable retired pay. This is the simplest way to ensure the former spouse receives the amount of retired pay agreed to by the parties.
Active reservists. Members of the active reserve present a unique problem in determining military retired pay. A reservist’s military retired pay is based, in part, on the number of reserve points the member accumulates each year. The reservist’s point summary contains the number of accumulated points. This document can be obtained directly from the reservist through a request for production of documents.
The parties can obtain the number of points directly from the reserve centers for each military branch. It may be necessary to serve a subpoena, signed by a judge, to comply with the provisions of the Privacy Act (see "How to Find the Reserve Centers").
Language. Some lawyers struggle with the appropriate language to include in order to divide military retired pay. They then turn to DFAS for instructions. For obvious reasons, DFAS will not pre-approve language for a proposed court order. However, DFAS encourages lawyers to read the law and then contact the agency with any questions about the USFSPA. It is useful for the lawyer to have read the statute and enabling regulation prior to contacting DFAS. The agency lawyers do not represent either party to the divorce action and will not provide legal advice.
Direct payments. To obtain direct payment regarding a division of property from DFAS, the parties must be married for ten years, during which the member accrued ten years of creditable service. This is often referred to as the 10/10 rule. There is no such requirement for support payments. If the parties do not meet the 10/10 rule there is no authority, under the USFSPA, for direct payments of a division of military retired pay.
The USFSPA also contains specific jurisdictional requirements that must be met to qualify for direct payments under the statute. These requirements are separate from and in addition to any state or local rules. Under the USFSPA, the court must have jurisdiction over the member by reason of the member’s residence, other than because of military assignment in the territorial jurisdiction of the court, the member’s domicile or the member’s consent to the court’s jurisdiction. The court order must meet these jurisdictional requirements in order for the former spouse to receive direct payments under the USFSPA. These jurisdictional requirements are set forth at 10 U.S.C. 1408(c)(4).
Access to information. The service member has access to all the information needed to arrive at either a specific amount or a percentage of disposable retired pay. This information permits the parties to establish the actual award rather than using either a formula or a hypothetical retired pay calculation. Hypothetical retired pay calculations are currently permitted under a proposed rule. That rule has not been finalized.
Disability payments. One confusing area is related to a retiree’s receipt of disability payments from the Veterans Administration (VA). These VA payments reduce the amount of military retired pay, and consequently may reduce the amount of benefits payable to the former spouse under the USFSPA. In some cases, the member can receive a 100 percent VA Waiver. This results in the member receiving no military retired pay. In that situation, the former spouse will also receive no payments since the member is no longer receiving military retired pay.
For More Information
The Defense Finance and Accounting Service website (www.dfas.mil) contains additional information on the collection of support, payments under the USFSPA, and garnishments for commercial debt. The DFAS e-mail address is: DfasLane@Cleveland.Dfas.Mil\. The customer service telephone number for Garnishment Operations is 216/522-5301. CL
1. 5 C.F.R. §§ 581.103, 104, and 105 (1998).
2. 15 U.S.C. § 1673 (1978).
3. P.L. 104-193 (1996).
4. § 314(a)(2)(D)(IV) (1996).
5. 42 U.S.C. § 659 (1997).
6. 42 U.S.C. § 665 (1982).
7. 32 C.F.R. § 54 (1982).
8. 10 U.S.C. § 1408 (1997).
9. 453 U.S. 210 (1981).
10. 32 C.F.R. § 63 (1998)