Bill 2561

                    Current Status

Bill Number:               2561
Ratification Number:       295
Act Number:                195
Introducing Body:          House
Subject:                        Payment of child support or spousal
                           support obligations

(A195, R295, H2561)

AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 20-7-1315, SO AS TO AUTHORIZE AND PROVIDE THE PROCEDURES FOR THE WITHHOLDING OF VARIOUS TYPES OF INCOME TO SECURE THE PAYMENT OF CHILD SUPPORT OR SPOUSAL SUPPORT OBLIGATIONS, TO AUTHORIZE CIVIL FINES FOR CERTAIN VIOLATIONS, AND TO PROVIDE CERTAIN EXCEPTIONS BY ADDING SECTION 20-7-1316 SO AS TO AUTHORIZE THE RECORDING UNDER CERTAIN CONDITIONS OF AN ARREARAGE IN SUPPORT OBLIGATIONS IN OFFICE OF THE CLERK OF COURT OR REGISTER OF MESNE CONVEYANCES TO HAVE THE SAME FORCE AND EFFECT AS A JUDGMENT, AND TO PROVIDE THAT ANY FEDERAL FUNDS EARNED BY THE CLERKS OF COURT UNDER CONTRACT WITH THE DEPARTMENT OF SOCIAL SERVICES PURSUANT TO TITLE IV-D OF THE SOCIAL SECURITY ACT MUST FIRST BE USED TO PROVIDE ADEQUATE STAFF AND EQUIPMENT TO IMPLEMENT AND OPERATE THE PROVISIONS OF SECTION 20-7-1315.

Be it enacted by the General Assembly of the State of South Carolina:

Definitions

SECTION 1. The 1976 Code is amended by adding:

"Section 20-7-1315. (A) As used in this section:

(1) 'Order for support' means any order of a court which provides for periodic payments of funds for the support of a child or maintenance of a spouse or former spouse and support of a child, whether temporary or final, and includes any order which provides for:

(a) Modification or resumption of support,

(b) Payment of arrearage accrued under a previously existing order, or

(c) Reimbursement of support.

(2) 'Delinquency' means when a support payment owed by an obligor pursuant to an order of support is overdue in an amount equal to at least one month's support obligation.

(3) 'Arrearage' means the total amount of unpaid support obligations.

(4) 'Court' as used in this act means Family Court.

(5) 'Income' means any form of payment to an individual regardless of source including, but not limited to, wages, salary, commission, compensation as an independent contractor, workers' compensation, disability, annuity and retirement benefits, and any other payments made by a person, or an agency or department of the federal, state, or local government provided the income excludes:

(a) Any amounts required by law to be withheld, other than creditor claims, including but not limited to, federal, state, and local taxes, and social security and other retirement deductions, and disability contributions.

(b) Any amounts exempted by federal law.

(c) Public assistance payments.

Any other state or local laws which limit or exempt income or the amount or percentage of income that can be withheld do not apply.

(6) 'Obligor' means an individual who is required to make payments pursuant to order for support.

(7) 'Obligee' means an individual or the individual's assignee who is entitled to receive payments pursuant to an order of support.

(8) 'Payor' means any payor of income to an obligor. For purposes of this section, the South Carolina Employment Security Commission is construed to be an employer of the obligor for any period of time in which unemployment compensation is payable to the obligor.

(B)(1) All orders for support entered or modified on or after October 1, 1985, must contain the obligor's social security number and a provision for income withholding procedures to take effect in the event a delinquency occurs. These orders must be construed to contain this withholding provision even if the provision has been omitted from the written order; provided, the court may order withholding to begin immediately for good cause shown. The court is required to make specified written findings to support immediate withholding.

(2) In the case of each obligor against whom an order for support has been issued or modified prior to October 1, 1985, the order is presumed to contain a provision for income withholding procedures to take effect in the event a delinquency occurs without further amendment to the order or further action by the court.

(3) An obligor may petition the court at any time prior to the occurrence of a delinquency seeking an order for income withholding procedures to begin immediately.

(4) Where the obligor makes payments directly to the obligee pursuant to an order for support and where income withholding procedures take effect, the provisions to pay directly are superseded by the withholding process and the obligor and the payor on behalf of the obligor must during the period of withholding pay this support through the court.

(C)(1) When a delinquency occurs, the clerk of court shall prepare, file, and serve on the obligor a verified notice of delinquency. In cases where the obligor makes payments pursuant to an order for support directly to the obligee and the obligee seeks income withholding, the notice of delinquency must be verified by the obligee and then served on the obligor by the clerk of court as with any other notice of delinquency.

(2) The verified notice of delinquency must be served on the obligor by regular mail addressed to his last known address or place of employment. Upon mailing the notice the clerk

of court shall file a certificate of mailing stating the name and address to which the notice was mailed and the date on which it was mailed. In the event that service cannot be effected as set forth herein, the obligor may be served as prescribed for service in civil actions.

(3) The notice of delinquency shall inform the obligor that a delinquency has occurred and shall recite the monthly support obligations of the obligor pursuant to the order of support, the total amount of the arrearage as of the date of the notice, and the amount of income to be withheld. The notice must clearly state that a notice to withhold will be sent to the obligor's current or subsequent payor, income withholding will begin, and that a judgment lien may be imposed against the obligor's personal or real property in the amount of the arrearage pursuant to Section 20-7-1316, unless the obligor files a petition to stay service in accordance with subsection (D).

(D)(1) The obligor may prevent a notice to withhold from being served on his payor and prevent the recording of the arrearage pursuant to Section 20-7-1316 by filing a petition to stay service with the clerk of court with jurisdiction of the matter within ten days of the date that the notice of delinquency is postmarked; provided, the grounds for granting the petition to stay service are limited to a dispute concerning the identity of the obligor or the existence or amount of the arrearage.

(2) Filing of a petition to stay service within the ten days required under this subsection prohibits the clerk of court from serving the notice to withhold on any payor of the obligor and prohibits the recordation of the arrearage.

(3) Where a petition to stay service has been filed a hearing on the petition must be held within thirty days of its filing. The obligor, obligee, and Department of Social Services, where appropriate, must be notified by the clerk of court of the date, time, and place of the hearing and the court must decide the

matter, notify the obligor, and enter an order granting or denying relief or amending the notice of delinquency within forty-five days of the date the notice of delinquency was mailed to the obligor. If the court finds that a delinquency existed when the notice of delinquency was mailed, the court shall order immediate service of the notice to withhold and the arrearage may be recorded immediately pursuant to Section 20-7-1316. The court shall inform the obligor of the time frame within which withholding is to begin and shall provide the obligor in writing with the information contained in the notice to withhold to be served on the payor with respect to the withholding.

(4) Upon filing an affidavit with the court stating that a petition to stay service was not timely filed because the notice of delinquency was not received and that grounds exist for a petition to stay service as stated in item (1) of this subsection, the obligor is permitted to file a petition to withdraw the notice to withhold, to terminate the withholding procedures, and remove the judgment created by the recording of the arrearage. Income withholding may not, however, be interrupted unless the court enters an order granting the relief sought by the obligor based on the limited grounds for a petition to stay service.

(E) (1) Twenty days following the mailing of the notice of the delinquency to the obligor and where no petition to stay service has been filed, the clerk of court shall serve a notice to withhold on the payor or its agent by regular mail and may record the arrearage pursuant to Section 20-7-1316.

(2) The notice to withhold shall:

(a) Direct any payor to withhold at the obligor's regularly scheduled pay periods, an amount which, over the period of one month, would constitute one month's support obligation plus applicable fees pursuant to this section and costs as provided by Section 20-7-1440;

(b) Direct any payor to withhold an additional amount toward any arrearage until the arrearage is paid in full; provided, that amounts to be withheld under (a) and (b) shall not exceed the limits set forth by the Federal Consumer Credit Protection Act (15 U.S.C. 1673(b));

(c) State the rights, responsibilities, and liabilities of the payor under this section;

(3) The payor shall then deduct the designated amount pursuant to the notice to withhold beginning no later than the next regularly scheduled pay period following the pay period during which the payor was served. Payors need not change their regular payroll pattern and may combine all withheld amounts into one check for a particular clerk of court with an itemized statement showing accounts attributable to each obligor for each obligee. For each instance of withholding of income, the payor is entitled to receive a fee of up to three dollars to be deducted from the income of the obligor in addition to the amounts withheld pursuant to the notice to withhold unless the fee is waived by the payor.

(4) In cases where there is more than one notice to withhold on a single obligor, the payor must comply with the notices by withholding the amounts designated in the notices to the extent possible pursuant to the Federal Consumer Credit Protection Act (15 U.S.C. 1673 (b)). If the payor cannot fully comply with the notices because the amounts to be withheld would exceed the limits under the Federal Consumer Credit Protection Act, the payor shall notify the court in writing as to its reasons for failing to fully comply.

(5) The payor shall promptly pay the amount withheld to the clerk of court, in accordance with the notice to withhold and in accordance with any subsequent notification received from the clerk of court concerning withholding.

(6) Upon the records of the clerk of court reflecting the satisfaction of an arrearage, the clerk of court shall serve upon the payor by regular mail a notice of reduction of withholding. This notice shall inform the payor that the arrearage has been satisfied and to discontinue withholding the additional amount as prescribed in item 2(b) of this subsection. This reduction shall not, however, affect the continued withholding of the amount prescribed in item 2(c) of this subsection.

(7) Within twenty days after the obligor is no longer employed by the payor, the payor shall return a copy of the notice to withhold to the clerk of court, and shall notify the clerk of court in writing of the date the obligor's employment terminated, the date of the obligor's final paycheck, the obligor's home address, and obligor's new employer and address, if known.

(8) Withholding of income from an obligor under this section has priority over any other legal process under state law against the same wages. Payment pursuant to a notice to withhold is a complete defense by the payor against any claims of the obligor or his creditors as to the sum so paid.

(9) No payor may discharge, refuse to hire, or otherwise penalize any obligor because of the duty to withhold income.

(10) The responsibility of a payor who employs an obligor to withhold support from the pay of the obligor ends when the obligor leaves the employ of the payor. If this termination of employment occurs during the middle of a pay period, the final amount required to be withheld must be proportionately reduced in the same percentage that the time worked has to the time of the full pay period.

(F) (1) The clerk of court may suspend income withholding because of inability to deliver the income withheld to the obligee due to the obligee's failure to provide a mailing address or other means of delivery. Upon relocating the obligee and upon meeting the requirements of notice and service pursuant to this section, income withholding must be reinstated.

(2) An obligor may petition the court at any time to terminate income withholding when payments pursuant to a notice to withhold have been made for at least one year, all arrearages have been paid in full, and the court finds that the obligor has demonstrated a continuing ability to pay. For any petition brought under this item the court may order the withdrawal of the notice to withhold and terminate the withholding procedures unless it finds good cause for denying the petition. If the termination is granted and subsequently a delinquency occurs, the clerk of court shall reinstate withholding procedures by complying with all requirements for notice and service pursuant to this section.

(3) The clerk of court shall serve on the payor, by regular mail, a copy of any order entered pursuant to this subsection or subsection (D)(4) that affects the duties of the payor. In the event that service cannot be effected as set forth herein, the payor may be served as prescribed for service in civil actions.

(4) The notice to withhold shall continue to be binding upon the payor until service of any order of the court entered under this subsection or subsection (D)(4) or until notice is served on the payor by the clerk of court that the underlying order is, for other reasons such as expiration of the support obligation, no longer in effect.

(G) (1) An obligee who is receiving income withholding payments under this section shall notify the clerk of court of any change of address within seven days of the change.

(2) An obligee who is a recipient of public aid must send a copy of any notice of delinquency filed pursuant to subsection (C) to the Division of Child Support of the South Carolina Department of Social Services.

(3) An obligor whose income is being withheld or who has been served with a notice of delinquency pursuant to this section shall notify the clerk of court of any new payor within seven days after his employment commences.

(4) Upon receiving any other support payment including, but not limited to, a tax offset under federal or state law or any payment toward an arrearage, the Department of Social Services, within the time permitted by Title IV-D of the Social Security Act, shall provide notice of the payment to the clerk of court.

(5) Any clerk of court which collects, receives, or disburses payment pursuant to an order for support or a notice to withhold shall maintain complete, accurate, and clear records of all payments and their disbursements. Certified copies of payment records maintained by the clerk of court must, without further proof, be admitted into evidence in any legal proceedings under this section.

(6) The Department of Social Services and Office of the Court Administration shall design suggested legal forms for proceeding under this section and Section 20-7-1316 and shall make these forms available to the courts and also informational materials which describe the procedures and remedies set forth herein for distribution to all parties in support actions.

(H) (1) Where a payor wilfully fails to withhold or pay over income pursuant to a notice to withhold, the court upon notice and hearing may enter judgment and direct the issuance of an execution against the payor for the total amount that the payor wilfully failed to withhold; provided, that notwithstanding any other provision of Section 20-7-1315, any payor employing an obligor who receives a notice to withhold concerning that obligor may elect, if he has less than twenty-five employees, to perform this withholding or may elect not to perform this withholding. If this payor/employer elects not to perform this withholding, he is not subject to any court or other sanction, penalty or liability. A payor who wilfully refuses to hire, discharge, or otherwise penalize an obligor as prohibited by subsection (E)(9) is subject to a civil fine not to exceed $500 which may be imposed by the court in its discretion.

(2) If an obligor, obligee, or the Department of Social Services wilfully initiates a false proceeding under this section or wilfully fails to comply with the requirements of this section, punishment for contempt may be imposed.

(I) The rights, remedies, duties, and penalties created by this section are in addition to any other rights, remedies, duties, and penalties otherwise provided by law.

(J) The Office of Court Administration after consultation with the Department of Social Services is authorized to promulgate those regulations necessary to implement the provisions of this section."

Funds must be used

SECTION 2. Notwithstanding existing county funds allocated to the clerks of court, any federal funds earned by the clerks of court under a contract with the Department of Social Services pursuant to Title IV-D of the Social Security Act must first be used by the family court section of the respective offices of the clerks of court to provide adequate staff and equipment to implement and operate the provisions of Section 20-7-1315. Thereafter, excess funds shall revert to the general fund of the county.

Notice must be given

SECTION 3. The 1976 Code is amended by adding:

"Section 20-7-1316. When a delinquency occurs as defined in Section 20-7-1315, the obligor must be given notice pursuant to Section 20-7-1315(C) of the proposed lien. Where no petition to stay service is timely filed or where no relief is granted to the obligor pursuant to Section 20-7-1315(D), the arrearage may be recorded or provided for in Section 20-7-1315(E) in the appropriate index in the office of the Clerk of Court or Register of Mesne Conveyances. Upon recordation the arrearage has the same force and effect as a judgment and it is cumulative to the extent of any and all past due support, until the arrearage is paid in full. The judgment may be recorded in any county in which the obligor resides or in which he owns real property by the filing of a transcript of judgment in that county. A lien imposed pursuant to this section is not dischargeable in bankruptcy."

Time effective

SECTION 4. This act shall take effect upon approval by the Governor.