Monday, February 21, 2011

How to Calculate Allowable Disposable Income for a Child Support Withholding Order

Child support withholding takes priority over all other types of garnishments and also above employee voluntary deductions.

The Federal Consumer Credit Protection Act (CCPA) sets limits on the maximum amount that can be withhold from an employees pay for child support (CCPA % limit). Maximum withholding allowed if the employee has a second family is 50% of disposable pay, 55% if more than 12 weeks in arrears. Maximum withholding allowed if the employee does not have a second family is 60% of disposable pay, 65% if more than 12 weeks in arrears.

Do not include imputed income in the calculation of the employee's gross pay for purposes of determining disposable earnings for child support.

This article explains the basic calculation to determine the amount available to withhold each pay period in order to satisfy a child support withholding order.

Difficulty: Moderately Easy


1. Subtract from the employee's gross pay all legally required deductions (i.e. taxes). The remainder is disposable pay.

2. Determine the appropriate CCPA % based on the employee's family and arrears status.

3. Multiply disposable pay by the percentage CCPA % in step 2 to determine the Allowable Disposable Income, which is the maximum amount that can be withheld for child support.

The above steps apply when only when there is one child support order. The full amount goes to this one child support order. When multiple child support orders exist, the first child support order gets priority over the remaining orders. If there is enough disposable income available to pay towards the remaining child support orders, then the second oldest order is considered, etc.

The maximum amount that can be withheld from an employees wages is shown in the second paragraph above. It does not matter how many child support orders exist, the maximum amount that can be withheld is determined as shown in this (the second) paragraph.

Always consult appropriate legal counsel in cases where there are multiple support orders for any employee. This should give you (the employer) the best way to handle multiple support orders for employees, especially if an employee has support orders that are from different states.

Some states allow certain types of deductions in determining disposable income, such as union dues, etc. Other states do not allow these deductions. This is why it is important to check with appropriate legal counsel with regard to multiple support orders.

Some states allow employers to calculate the amount of support to be withheld from an employee's paycheck (based on a set percentage of pay - usually about 20%, but this can vary from state to state). Other states dictate the amount to be withheld, whether or not an employee works a full (40-hour) week. Most states require child support to be withheld from bonuses, commissions (if paid separately), etc. In those states where the employer calculates the support to be withheld (based on a percentage of pay), all overtime must be included in the gross pay for the support calculation, as well as any bonuses, or other payments received by the employee.

It is the employee's responsibility to petition the courts for a redetermination of child support when multiple support orders exist, or when a child turns 18 (or graduates from high school). It is the responsibility of the employee to petition the court to stop the child support order when the child reaches the age of 18 (or graduates high school). The employee must submit a copy of the Child Support Stop order to the employer. The courts (or the state) may also send an order stopping the child support. The employer should verify that the support order has been stopped.

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