DCL-03-23, Update on Federal Agency Payments for Child Support

DEAR COLLEAGUE LETTER

DCL-03-23

ATTACHMENT: Federal Payroll Agency Contacts

DATE: August 1, 2003

TO: ALL STATE IV-D DIRECTORS

RE: Update on Federal Agency Payments for Child Support

Dear Colleague:

There are several Federal government payroll initiatives and changes that you should know about, as they may affect how your state disbursement units (SDUs) collect and disburse child support payments to custodial families.

Federal Agencies Converting to E-Payments for Child Support

OCSE has been working closely with the Department of Treasury’s Financial Management Service (FMS) to promote electronic payments for child support. We are happy to announce that several large Federal agencies will soon convert from paper checks to electronic payments for child support.

• The General Services Administration (GSA), which handles payroll operations for many other Federal agencies, will begin converting to electronic payments (in the CCD+ format) for child support in July 2003.

• The Department of Defense’s (DoD) Defense Finance and Accounting Service (DFAS) will convert the child support payments from its active duty Army, Air Force, and Navy personnel to electronic payments (in the CTX 820 remittance format) beginning October 2003.

• Our own Department of Health and Human Services, which is scheduled to migrate to the DFAS payroll system next year, also plans to convert to electronic payments for child support by December 2003.

• The Department of Interior (DOI), which handles payroll operations for many other Federal agencies, will begin converting electronic payments for child support (in the CTX 820 remittance format) in January 2004.

• The Department of Agriculture’s National Finance Center (NFC), which handles payroll operations for many other Federal agencies, has not yet announced a target date for conversion to electronic payments. Updated information will be provided when available.

OPM Payroll Initiative

The Office of Personnel Management (OPM) has initiated a Federal payroll consolidation effort that will consolidate 22 executive branch payroll-processing agencies into four. The four selected Federal payroll processors are the Department of Agriculture's National Finance Center (NFC), the General Services Administration (GSA), the Defense Finance and Accounting Service (DFAS), and the Department of the Interior's National Business Center (NBC). The payroll consolidation will take place over the next two years.

We know some states are still working to complete programming for the CTX 820 remittance format, and we are working with those states to help them get ready to receive child support payments in this format from Federal agencies.

SSN Removal from Treasury Checks

The Department of the Treasury plans to remove Social Security numbers (SSNs) from paper checks as of January 1, 2004. This will affect both payroll checks and disability benefit checks that have been attached for income withholding. (The one exception is DFAS, which prints its own checks and currently does not plan to remove SSNs from paper checks for child support.) The conversion of Federal payroll agencies to electronic payments will reduce the number of Treasury checks, but there will still be a period of time in which paper checks without SSNs will be sent to SDUs.

Last Four Digits of SSN: Correction

We reported earlier that, in response to concerns from states about an increase in unidentified Treasury checks, child support payments from Federal agency checks would include the last four digits of the noncustodial parent’s SSN to serve as an additional identifier. However, because of concerns about identity theft and Federal legislation pending, which would require the removal of the SSN and its derivatives, Treasury has decided against including those last four SSN digits on Federal checks attached for income withholding. FMS recognizes that some states use the SSN as one of the identifiers and that dropping the SSN may pose problems. In an effort to avoid a profusion of unidentified Treasury checks, OCSE has been working with FMS to ensure that SDUs will still be able to identify Treasury checks for child support. OCSE and FMS are contacting Federal payroll agencies, as well as agencies that attach disability benefits, about including child support case IDs when sending the payroll files to FMS for processing and issuance. (It is important to note that the official IV-D case ID should be used and not a tracking number or other case identifier assigned by some vendor-operated SDUs.)

Enclosed is a list of contacts for the Federal payroll agencies. In addition, OCSE has a publication, Working with Federal Agencies as Employers, which will soon be distributed as an Information Memorandum to all child support offices.

This publication includes a chapter called “Processing U.S. Treasury Checks,” including sections titled “How to Read U.S. Treasury Checks” and “What to Do If You Cannot Identify a Treasury Check.” The publication is available on the OCSE web site at http://www.acf.hhs.gov/programs/cse/pubs/reports/working/index.html.

For questions about the SSN Removal from Treasury child support payments, please contact Sheila Bradley at sbradley@acf.hhs.gov or (202) 260-2785. For questions about electronic payments for child support, please contact Nancy Benner at nbenner@acf.hhs.gov or (202) 401-5528.

Sincerely,

Sherri Z. Heller, Ed.D.

Commissioner

Office of Child Support Enforcement

Enclosure

cc: Regional Program Managers

ACF Regional Administrators