Electronic Payments
States Working with Private Sector Employers
For several years now, employers have been sending their child support payments electronically to centralized State sites called state disbursement units (SDUs). OCSE promotes these electronic payments for child support because they are cheaper, faster, safer, and more accurate than paper checks. Currently all States except South Carolina have established SDUs for the receipt of both paper checks and electronic payments for child support.
The percentage of payments received electronically varies depending on the State, with the average being about 42%. States that have passed legislation or regulations requiring employers to remit their child support payments electronically (CA, FL, IL, IN, MA, NE, OR, PA, and VA) have seen their percentage of e-payments rise appreciably. Click here for more information on state-specific e-payment requirements.
Conversion to e-payments by employers has been slow because some employers are not familiar with the EFT/EDI ACH credit process though they may be familiar with other kinds of e-payments such as EFT or direct deposit of their employees' paychecks. Another major reason given by employers for not converting to e-payments is that their payroll/accounting software does not support it. To overcome that obstacle, many states have set up web-based payment services for small-to-medium-sized employers. Click here for state-specific online payment services.
More outreach to employers is needed to let them know about the opportunity to save time and money by sending child support payments electronically.
Federal outreach efforts have also focused on software developers and large payroll service providers to encourage them to add e-payments functionality to their payroll software programs. Many large software companies have programmed to support the functionality to enable employers to send child support payments electronically, and others are expected to follow as they upgrade their payroll products. The major payroll service providers are now sending child support payments electronically.
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States Working with Federal Agency Employers
OCSE and the States have worked closely with the Department of Treasury's Financial Management Service (FMS) to promote electronic payments for child support from federal government agencies. At the end of 2006, 95% of federal employees’ child support payments had been converted from paper checks to electronic payments for child support.
For 2009, OCSE and FMS will be concentrating their efforts on helping the Federal benefit agencies convert those benefit/pension payments that have been attached for child support to e-payments: the Social Security Administration (Title II disability and retirement payments), the Office of Personnel Management (Federal retirement benefits), the Railroad Retirement Board, and the Department of Veterans Affairs.
