The Financial Management Service (FMS) is working in cooperation with the Department of Health and Human Services (DHHS, also referred to as HHS), Office of Child Support Enforcement (OCSE) to convert federal agencies' court ordered child support payments from checks to electronic funds transfer (EFT) using the Automated Clearing House (ACH) network. Payments targeted for conversion are child support payments directed to State collection entities from cases administered by State child support enforcement agencies.
The child support payments will be processed by EFT using the National Automated Clearing House Association's (NACHA), Cash Concentration or Disbursement (CCD+) corporate payment format with a single 80 character addendum record. The addendum record of the CCD+ format will be structured using the DED (Deduction) Data Segment for child support payments that was developed by NACHA in cooperation with the child support enforcement community.
The Debt Collection Improvement Act of 1996 has made EFT mandatory for certain federal payments, excluding the Internal Revenue Service tax refund payments. In implementing the EFT provision of the DCIA, FMS has been working
with federal Agencies to assist them in identifying the most efficient and least costly processing methods for their payments. Federal agencies that process their payroll on-site through their servicing Regional Financial Center (RFC)
or Federal Reserve Bank are being asked to convert their withholding child support payments from checks to EFT/EDI. The EFT/EDI Child Support Payment Application: Federal Agency Guide provides instructions for federal agencies to process child support payments to State child support collection entities by EFT/EDI through the ACH network.
Background
The FMS has teamed with the HHS, OCSE in implementing the EFT provision of the DCIA of 1996 in conjunction with the Family Support Act which mandate that State CSE agencies develop the capability to accept EFT/EDI transactions from employers. As the federal government's bill payer, the FMS is primarily responsible for the disbursement of payments for all federal agencies, except those agencies/bureaus with disbursement authority, such as the Department of Defense. The Payment Automation Branch of FMS provides instructions and assistance to federal agencies in the implementation of newly developed payment applications, as with the child support payment application.
The HHS, OCSE has the program responsibility for implementation of the Family Support Act, and working with the State CSE agencies to assure that eligible custodial parents receive child support payments from non-custodial parents having income. The Federal Child Support Enforcement Program was first legislated in 1975, under the Section IV-D of the Social Security Act. The Act required state governments to set up their own programs to locate absent parents,
establish paternity and support, enforce support, and collect and distribute child support payments.
The Child Support Enforcement Act was furthered strengthened with the passage of the Family Support Act of 1988, and subsequently the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (P.L. 104-193), signed into law on August 22, 1996.
The key provision of the PRWORA required that all States develop EFT/EDI centralized collection capability by October 1998.
With some exceptions the withholding requirements are:
As of November 1, 1990, all new and adjusted Title IV-D child support orders require immediate income withholding.
As of January 1, 1994, all new non-IV-D support orders also must provide for immediate income withholding.
States will use a standardized order/notice form for notification of income withholding to employers.
The withholding transmission requirements are:
The states must operate automated state-wide child support enforcement management information systems.
The systems must be able to accept withholdings transmitted using EFT technology.
The systems must be able to send and receive interstate child support collections transmitted using EFT technology.
PRWORA (Public Law 104-193) and its implementing legislation does not require employers to send withholdings using EFT/EDI; however states are required to have EFT/EDI collection capability. (Federal employers' EFT payment capability requirements are as established by the EFT Provision of the Debt Management Improvement Act of 1996).
The EFT Provision of the Debt Collection Improvement Act of 1996, and PRWORA of 1996, which established the States' EFT/EDI centralized collections requirements provided the impetus for federal agencies' implementation of EFT/EDI child support payments using the ACH CCD+ format. The child support payments targeted for EFT/EDI are all child support payments that are enforced by a state child support enforcement agency or the child support enforcement agency's designated central disbursement unit (SDU).
EFT/EDI Child Support Payment Processing
Child support payments are processed through the ACH network to the specified electronic address of the child support enforcement agency's designated financial institution. Funds are transferred using primarily the ACH CCD+ format option with a single 80 character addendum record. The ACH CTX format with the multiple addenda capability is an option for those federal agencies and States that have a need for this format and the capability to process and receive the CTX format, respectively.
Agencies processing EFT/EDI child support payments will deliver the appropriate flat file payment format to their servicing FMS RFC. The RFC will edit the file and convert it to the appropriate ACH format. The RFC will then deliver the file to its servicing Federal Reserve Bank (FRB) for further distribution to the child support enforcement agency's financial institution. Non-Treasury Disbursed Offices (NTDO) will deliver an ACH payment file directly to their servicing Federal Reserve Bank (FRB).
The following flowchart illustrates the child support payment processing flow from the point in which the federal agency receives a child support withholding order/notice to the point in which the state child support enforcement agency's financial institution receives the child support payment transaction.
EFT/EDI Child Support Payment Processing Flow
Payment Processing Flow Description
FEDERAL AGENCY receives an Order/Notice to Withhold Income for Child Support from a STATE COURT or a CHILD SUPPORT ENFORCEMENT (CSE) AGENCY. The Order or Notice instructs the employer to withhold child support payments from an employee's salary, and serves as the employer's legal basis for doing so.
FEDERAL AGENCY and CSE AGENCY agree on processing child support payments by EFT/EDI. STATE CSE AGENCY provides special instructions to FEDERAL AGENCY on processing EFT child support payments to the CSE AGENCY, including the payment information (DED Convention) data required in the addendum record. The order or notice will provide the child support enforcement entity's bank account information, case number, FIPS code,and other necessary information for processing EFT/EDI child support payments or directs the employer where to call to obtain the information.
FEDERAL AGENCY contacts the CSE AGENCY that issued the order to determine which of the payment formats its bank is capable of receiving, if not specified in the order.
FEDERAL AGENCY initiates payment to the STATE CSE Agency by submitting a certified payment file and related information (DED addendum) to the agency's servicing TREASURY/FMS RFC.
Note: NON-TREASURY DISBURSED OFFICE submits payment files directly to its servicing FEDERAL RESERVE BANK for processing through the ACH network.
FEDERAL AGENCY payment file is processed by the RFC and the payment file, including the addendum record is delivered to the FEDERAL RESERVE BANK for processing through the ACH network.
FEDERAL RESERVE BANK/ACH network distributes payment file, including the addendum data to the CSE Agency's designated FINANCIAL INSTITUTION.
The FINANCIAL INSTITUTION credits the payment to the CSE Agency's account and processes information/addendum data to the CSE Agency as previously agreed.
Note: The CSE Agency is responsible for crediting the account of the non-custodial parent for which the employer is making the child support payment on behalf of, and forwarding the non-custodial parent's child support payment to the custodial parent within two business days according to the provisions of the child support payment order.
Implementation of EFT/EDI Child Support Payments
The CCD+ and the CTX ACH payment formats are NACHA formats used for the transfer of payment transactions between businesses and government. Federal Agencies are instructed to use the CCD+ format in converting child support payments to EFT/EDI. The majority of federal and state agencies have the capability to process transactions in the CCD+ format. Federal and state child support enforcement agencies with CTX payment capability may elect to use the CTX corporate payment format to process child support payments. Federal agencies with
Electronic Certification System (ECS) capability can use the ECS System menu for ACH Vendor Payments to create EFT/EDI child support payment files.
Treasury Disbursed Offices (TDO)
The format specifications and instructions for processing ACH vendor and miscellaneous payments are available through the federal agency's servicing RFC. The format specifications and instructions should be used in conjunction with the NACHA endorsed Child Support Banking Convention, referred to as the DED (Deduction) Data Segment.
This guide includes Instructions for structuring the addenda record of an agency ACH vendor and miscellaneous payment file for a CCD+ transaction with the DED Segment.
Agencies developing an ACH vendor and miscellaneous payment input file for multiple addenda child support payment transactions or a CTX transaction should contact the FMS, Austin Regional Financial Center, EDI Project Office listed on the Appendix of this Guide for implementation procedures. Further information on processing CTX transactions is on the Web site: www.fms.treas.gov/ctx.
Non-Treasury Disbursed Offices (NTDO)
The agency servicing Federal Reserve Bank (FRB) will provide specific instructions for NTDO format specifications and for the delivery of files. The Child Support Application Banking Convention: A Guide For Employers and Their Financial Institutions, published by NACHA, is an additional source of reference for NTDOs. The Guide provides format information, and instructions to electronically remit child support payments using the CCD+ and CTX formats.
Federal Agencies Using The Electronic Certification System (ECS)
The agency instructions for creating ACH vendor and miscellaneous payments are available in the Data Entry Operator (DEO) Users Manual, which provides instruction on the "ECS Payments Menu, Creating ACH Vendor Payment Schedule" screen. Also see instructions on the DED Segment addendum for child support payments. ECS questions, individual training and installation needs should be coordinated with the agency's servicing RFC.
Implementation Procedures
The conversion of child support payments to EFT/EDI will require staff that will be responsible for knowing each State child support enforcement agency's program requirements. As with check payments, there must be a designated contact person within the agency for EFT/EDI child support payments. The federal agency contact would work directly with the State child support enforcement agency contact in gathering and maintaining current information on the Child
Support Enforcement Program, and the State's EFT/EDI child support payment capability, identifying old/new child support enforcement payments subject to EFT/EDI processing, maintaining current information on the state's financial institution account and electronic address, and the tax identification number (TIN) and FIPS Code or mailing address.
Review the EFT/EDI Child Support Payment Application: Federal Agency Guide, and the ACH Vendor and Miscellaneous Payment (Vendor/Misc) format specifications for creating an agency input payment file for processing CCD+ payments through the ACH Network.
Identify staff requirements and establish a team and primary contact person responsible for converting child support payments from checks to EFT/EDI.
Determine the projected time frame for completing the implementation of EFT/EDI child support payments. Payroll processing Agencies with ACH Vendor and Miscellaneous payment processing capability would require approximately six months to convert their child support payments from checks to EFT/EDI.
Report your implementation plans to Treasury, FMS, by letter, E-mail or simply complete the Federal Agency Implementation/Payment Processing Status Form. Obtain a copy of the EFT/EDI State Contact List, which is also available at the DHHS Web Site. The Contact List provides information on the State child support enforcement agencies, the State EFT contacts, and the States with centralized collection capability for EFT/EDI payments. The State Child Support Enforcement Programs are managed at the federal level by the DHHS. Refer to Appendix for the FMS, and DHHS Program contact information.
Identify the State agencies on the EFT/EDI State Contact List that are receiving child support payments by check from your agency, and have EFT/EDI collection capability for child support payments. The State must have central collection capability, and accept payments using the NACHA endorsed DED Segment Convention. If a State has centralized collection capability for child support payments then there should be one specific location to which the payments (EFT and check ) are directed.
Contact the appropriate child support enforcement agencies by letter (sample letter), or telephone indicating your agency's plans to process child support payments by EFT/EDI. Obtain the state agency's EFT/EDI collection program procedures necessary for making EFT/EDI child support payments to the state agency's collection location, and specific instructions for identifying old/new child support orders subject to EFT/EDI payments. In addition to the state agency's bank account and forwarding electronic address data, the receiving state's FIPS code, and TIN number is necessary for EFT/EDI child support payments.
Determine the DED Segment addendum data elements that are required for each State for which payments will be processed. Agencies have no means of determining for the unforeseen future which states child support payments will be processed. Thus, the program design for the DED Segment mandatory data element fields that are necessary for each state for which payments are currently processed should be determined for every state and territory. The addendum record would therefore be structured to accommodate the mandatory data elements required for every state, and territory.
Develop implementation procedures that will accommodate future plans for converting all court ordered child support payments to EFT/EDI. The PRWORA, also referred to as the Welfare Reform Act of 1996, required all States to develop EFT/EDI centralized collection capability for child support payments enforced by State child support enforcement agencies.
Determine if you will use the ECS or develop a payment file for EFT/EDI child support payments from the ACH vendor/miscellaneous payment file specifications provided by FMS, Regional Operations, Disbursement Management Division (DMD), or your servicing Regional Financial Center (RFC). If you are developing a payment file, contact your servicing RFC for assistance or clarification on the specifications for EFT/EDI child support payments. Refer to the Appendix, of this Guide for specific contact information.
Contact your servicing RFC's Electronic Operations Branch staff to make arrangements to conduct a test of the completed ACH file for child support payments.
Contact at least one State to conduct a prenote file run. Since States' child support payment requirements vary among the states, and to confirm that the payee/payment location is accurate, agencies should conduct a prenote with each state for which payments will be processed.
Notify the State(s) of first "live" payment date, indicating a need for confirmation on the initial payment(s).
Sample Letter to State CSE Agency (Optional)
Date
Dear State Child Support Enforcement Administrator:
The (Agency Name) is converting its court ordered child support payments from checks to Electronic Funds Transfer (EFT) using the Automated Clearing House (ACH) network. We are requesting assistance from your agency in reconciling our old and new withholding orders for child support, and identifying the child support orders that should be processed to your centralized collection location by EFT/EDI. In addition, we will need the State of (State Name) EFT/EDI child support enforcement payment procedures, and financial institution's (FI) information for processing payments through the ACH network to your FI.
The child support payments will be processed in the Cash Concentration and Disbursement (CCD+)/Corporate credit format, using the National Automated Clearing House Association (NACHA) endorsed Child Support Banking Convention, DED (Deduction) Segment data in the single 80 character addendum record. The DED Segment addendum record will contain the mandatory child support payment information specified by your state program.
Please contact (Agency Contact) on (Telephone Number/E-mail address) by(Date)to discuss the program procedures and requirements for receiving EFT/EDI child supports payments processed by Agency Name.
We look forward to working with your State on this important payment application.
Sincerely,
Federal Agency Official Signature
DED Child Support Segment Structure
Element
Comments
Contents
Attributes
Segment Identifier
DED
M
ID
3/3
DED 01
Application Identifier
CS
M
ID
2/2
DED 02
Case Identifier
XXXXXXXXX
M
AN
1/20
DED 03
Pay Date
YYMMDD
M
DT
6/6
DED 04
Payment Amount
$$$$$$$$CC
M
N2
1/10
DED 05
Non-Custodial Parent SSN
XXXXXXXXX
M
AN
9/9
DED 06
Medical Support Identifier
'Y' = YES, 'N' = NO
M
AN
1/1
DED 07
Non-Custodial Parent Name
XXXXXXXXXX
O
AN
1/10
DED 08
Fips Code
XXXXXXX
O
AN
5/7
DED 09
Employment Termination Identifier
'Y' = YES
O
AN
1/1
Federal Agency Instructions
The following are federal agency instructions on the data element fields of the 80 position field length, DED SegmentAddendum Record for child support payments.
DED
DED is the EDI Data Segment Identifier for Deductions, such as Child Support which is a payroll deduction. This is a mandatory (M) field, and should always include DED.
01
Application Identifier: CS is the acronym for child support, the supporting identifier for the DED segment. It is a mandatory, (AN) character data element, and the field length is (2).
02
Case Identifier: The Identifier is assigned to the case by the child support enforcement entity when a child support case is established. The data element field is an (AN) character, mandatory field. The minimum field length is (1) and the maximum length is (20).
03
Pay Date: Date in which the payment is due to the recipient/child support enforcement entity. This date is established by the child support enforcement entity. This is a mandatory data element, containing the numerical date, in the order indicated: (yy) for the last (2) digits of the year, (mm) for the (2) digit month reference, and (dd) for the (2) digit day reference. The field length is (6).
04
Payment Amount: This is the amount of the child support payment. It is a mandatory numeric field, with a minimum of (1) digit(s), and a maximum of (10). The decimal point is implied which means it is not necessary to include the decimal point for amounts less than one dollar. Thus, the dollar amount of one hundred, fifty dollars, and twenty five cents is written as (15025).
05
Non-Custodial Parent Social Security Number(SSN): Provide the social security number of the federal employee on whom's behalf the child support payment is being made by the federal agency. It is the federal employee's unique identifier. This is defined as (AN) characters, mandatory data element, with a field length of (9).
06
Medical Support Indicator: This field is for the federal agency to indicate whether or not the federal employee (or non-custodial parent) has health insurance available at the employee's place of employment. The indicators are: Y=Yes, and N=No. This is defined as (AN) characters, mandatory, (1) character data field.
07
Non-Custodial Parent Name: The name of the employee on whose behalf the Agency is making the CSP. This should include the first seven (7) characters of the employee's last name, followed by the first three (3) characters of the first name. If the last name is less the (7) characters, a comma is used to separate the last character of the last name from the first character of the first name, with no spaces between. It is an optional, (AN) characters, data element, with a minimum field length of (1) and a maximum of (10).
08
FIPS Code: The Federal Information Process Standard (FIPS) code refers to the assigned code of the child support enforcement entity receiving the child support payments. It is an optional, (AN) characters field, with a minimum field length of (5) and a maximum (7). The State CSE entity will provide the Agency with the appropriate FIPS code for this data element field.
09
Employment Termination Indicator: This data element field is used to notify the CSE agency that the employee's employment with the federal agency has terminated. A "Y" is placed in this field to indicate the employee's termination of employment, otherwise it should not be used.
DED Segment Attributes
M: Represents Mandatory, indicating information in the data element field is required.
O: Represents Optional, indicating information in the data element field is optional.
Note: Though the DED Segment data element fields are defined as "mandatory" or "optional," some State CSE agencies may or may not require certain "mandatory" or "optional" data elements in the DED Segment. Thus, it is important that federal agencies contact each State CSE Agency before development of the DED Segment to confirm all data element fields that are necessary in the DED Segment addendum.
ID: This implies that the data element is an EDI standard value from a pre-established list.
AN: Indicates all letters, digits, spaces, and or special characters are acceptable in the data element. Exceptions: the asterisk, and backward slash should not be used as character data within a data element
field.
DT: Defines the EDI standard format for the Date, the last two digits of the numeric year (yy), followed by the two digit numbers for the month(mm), and day(dd) of the Date.
N2: This defines the format for the amount data element field. The decimal is implied
for amounts less than one dollar (represented without the decimal).
Data Element Fields: All data element fields are left justified. Trailing spaces are only used when satisfying a minimum length requirement.
Asterisks (*) are used as separators, and fillers. An asterisk should appear between each data element field, and in each optional data element field for which there is no data to indicate that the defined data
element field is blank.
Backward Slash ( \ ) is used to denote the end of a Segment. There are no spaces between data element fields, and no blank space data element fields. Spaces can appear within a data element, for example: The
Case Identifier data element is an (AN) characters field, with a minimum field length of (1) and a
maximum of (20). This could be written as: 123 AB-## % 1123 (including digits, spaces, alpha letters,
characters).
Note: Federal agency questions concerning the contents of the ACH Vendor and Miscellaneous Payments Detail Record, or the ACH CCD+, 80 position addendum for child support payments may be directed to Faye Allen (faye.allen@fms.treas.gov), Project Management Division, (202) 874-7113 or Lauren Ray ( lauren.ray@fms.treas.gov), Kansas City Financial Center, Customer Assistance Staff, 816-414-2113 (see Appendix).
Comments: Every data element field contains information except the last data element field, DED 09.
The backward slash is placed after the last data element field that contains data, DED 08, and is used to indicate the end of the Segment.
DED*CS*BB1098U*991217*17550*445566779*Y\
Comments: The last three data element fields, DED, 07, 08, and 09 are blank data element fields. Thus, the backward slash is placed after the last character of the last data element field that contains data, DED 06.
Comments: DED 01 - 07 contains data. An asterisk is used to separate the data element field, DED 07, from DED 08. The second asterisk is used to indicate DED 08 is a blank, followed by DED 09, which contains 'Y' for termination of employment. The backward slash is placed after DED 09 to end the Segment.
Appendix
Program Resources
EFT/EDI Child Support Payment Application: Federal Agency Implementation
Web Site:www.fms.treas.gov/csp
Financial Management Service
Payment Operations Division
401 14th Street, S.W.
Washington, DC 20227
San Francisco Financial Center (SFC) Office Symbol: 312 Sandra.Young@fms.treas.gov Telephone: (415) 817-7311
Data Entry Operator (DEO) Users Manual Philadelphia Financial Center Telephone: (215) 516-8034
Child Support Enforcement Program Information DHHS Web Site: www.acf.dhhs.gov/programs/cse/newhire Department of Health and Human Services Administration for Children and Families Office of Information System Management Nancy Benner Nbenner@acf.hhs.gov Telephone: (202) 401-5528 Fax: (202) 401-5558
Child Support Application Banking Convention/ACH Rules
Publications, EDI/Electronic Commerce: http://pubs.nacha.org NACHA- The Electronic Payments Association 13665 Dulles Technology Drive, Suite 300 Herndon, VA 20171 Telephone: (703) 561-1100 Fax: (703) 787-0996
Federal Information Processing Standards (FIPS) Codes www.itl.nist.gov/fipspubs/ Department of Commerce National Institute of Standards and Technology
Information Technology Laboratory Contact: Liz Lennon (301) 975-2832 elizabeth.lennon@nist.gov
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EFT/EDI Child Support Payments
