CS 807P Notice of Lien-Levy, Other Than Financial Institutions
03/99 Revised 12/05/16 Training Completed 12/19/16
UCA 62A-11-103(7) defines "Income" as
“(8) “Income” means earnings,
compensation, or other payment due to an individual, regardless of source,
whether denominated as wages, salary, commission, bonus, pay, or contract
payment, or denominated as advances on future wages, salary, commission, bonus,
pay, allowances, contract payment, or otherwise, including severance pay, sick
pay, and incentive pay. "Income" includes:
(a) all gain derived from capital assets, labor, or both, including profit gained through sale or conversion of capital assets;
(b) interest and dividends;
(c) periodic payments made under pension or retirement programs or insurance policies of any type;
(d) unemployment compensation benefits;
(e) workers' compensation benefits; and
(f) disability benefits.”
In addition to imposing a lien-levy (attach and seize action) upon the non-custodial parent’s (NCP) assets held in a financial institution, the Office of Recovery Services/Child Support Services (ORS/CSS) is also authorized to lien-levy other types of monies or payments.
UCA 62A-11-304.1 states:
“(1) The office may, without the necessity of initiating an adjudicative proceeding or obtaining an order from any other judicial or administrative tribunal, take the following actions related to the establishment of paternity or the establishment, modification, or enforcement of a support order, and to recognize and enforce the authority of state agencies of other states to take the following actions:
(a) require a child, mother, and alleged father to submit to genetic testing;
(b) subpoena financial or other information needed to establish, modify, or enforce a support order, including:
(i) the name, address, and employer of a person who owes or is owed support that appears on the customer records of public utilities and cable television companies; and
(ii) information held by financial institutions on such things as the assets and liabilities of a person who owes or is owed support;
(c) require a public or private employer to promptly disclose information to the office on the name, address, date of birth, social security number, employment status, compensation, and benefits, including health insurance, of any person employed as an employee or contractor by the employer;
(d) require an insurance organization subject to Title 31A, Insurance Code, or an insurance administrator of a self-insured employer to promptly disclose to the office health insurance information pertaining to an insured or an insured's dependents, if known;
(e) obtain access to information in the records and automated databases of other state and local government agencies, including:
(i) marriage, birth, and divorce records;
(ii) state and local tax and revenue records providing information on such things as residential and mailing addresses, employers, income, and assets;
(iii) real and titled personal property records;
(iv) records concerning occupational and professional licenses and the ownership and control of corporations, partnerships, and other business entities;
(v) employment security records;
(vi) records of agencies administering public assistance programs;
(vii) motor vehicle department records; and
(viii) corrections records;
(f) upon providing notice to the obligor and obligee, direct an obligor or other payor to change the payee to the office if support has been assigned to the office under Section 35A-7-108 or if support is paid through the office pursuant to the Social Security Act, 42 U.S.C. Sec. 654B;
(g) order income withholding in accordance with Part 4, Income Withholding in IV-D Cases;
(h) secure assets to satisfy past-due support by:
(i) intercepting or seizing periodic or lump-sum payments from:
(A) a state or local government agency, including unemployment compensation, workers' compensation, and other benefits; and
(B) judgments, settlements, and lotteries;
(ii) attaching and seizing assets of an obligor held in financial institutions;
(iii) attaching public and private retirement funds, if the obligor presently:
(A) receives periodic payments; or
(B) has the authority to withdraw some or all of the funds; and
(iv) imposing liens against real and personal property in accordance with this section and Section 62A-11-312.5; and
(i) increase monthly payments in accordance with Section 62A-11-320.
(2)(a) When taking action under Subsection (1), the office shall send notice under this Subsection (2)(a) to the person or entity who is required to comply with the action if not a party to a case receiving IV-D services.
(b) The notice described in Subsection (2)(a) shall include:
(i) the authority of the office to take the action;
(ii) the response required by the recipient;
(iii) the opportunity to provide clarifying information to the office under Subsection (2)(c);
(iv) the name and telephone number of a person in the office who can respond to inquiries; and
(v) the protection from criminal and civil liability extended under Subsection (7).
(c) The recipient of a notice sent under this Subsection (2) shall promptly comply with the terms of the notice and may, if the recipient believes the office's request is in error, send clarifying information to the office setting forth the basis for the recipient's belief.
…(5)(a) Unless a court or administrative agency has reduced past-due support to a sum certain judgment, the office shall provide concurrent notice to an obligor in accordance with Section 62A-11-304.4 of:
(i) any action taken pursuant to Subsections (1)(h)(i)(B), (1)(h)(ii), (1)(h)(iii), or Subsection 62A-11-304.5(1)(b) if Subsection (5)(b)(iii) does not apply; and
(ii) the opportunity of the obligor to contest the action and the amount claimed to be past-due by filing a written request for an adjudicative proceeding with the office within 15 days of notice being sent.
(b)(i) Upon receipt of a notice of levy from the office for an action taken pursuant to Subsections (1)(h)(i)(B), (1)(h)(ii), (1)(h)(iii), or Subsection 62A-11-304.5(1)(b), a person in possession of personal property of the obligor shall:
(A) secure the property from unauthorized transfer or disposition as required by Section
(B) surrender the property to the office after 21 days of receiving the notice unless the office has notified the person to release all or part of the property to the obligor.
(ii) Unless released by the office, a notice of levy upon personal property shall be:
(A) valid for 60 days; and
(B) effective against any additional property which the obligor may deposit or transfer into the possession of the person up to the amount of the levy.
(iii) If the property upon which the office imposes a levy is insufficient to satisfy the specified amount of past-due support and the obligor fails to contest that amount under Subsection
(5)(a)(ii), the office may proceed under Subsections (1)(h)(i)(B), (1)(h)(ii), (1)(h)(iii), or
Subsection 62A-11-304.5(1)(b) against additional property of the obligor until the amount specified and the reasonable costs of collection are fully paid.
(c) Except as provided in Subsection (5)(b)(iii), the office may not disburse funds resulting from action requiring notice under Subsection (5)(a)(i) until:
(i) 21 days after notice was sent to the obligor; and
(ii) the obligor, if the obligor contests the action under Subsection (5)(a)(ii), has exhausted the obligor's administrative remedies and, if appealed to a district court, the district court has rendered a final decision.
(d) Before intercepting or seizing any periodic or lump-sum payment under Subsection (1)(h)(i)(A), the office shall:
(i) comply with Subsection 59-10-529(4)(a); and
(ii) include in the notice required by Subsection 59-10-529(4)(a) reference to Subsection (1)(h)(i)(A).
(e) If Subsection (5)(a) or (5)(d) does not apply, an action against the real or personal property of the obligor shall be in accordance with Section 62A-11-312.5.
(6) All information received under this section is subject to Title 63G, Chapter 2, Government Records Access and Management Act.
(7) No employer, financial institution, public utility, cable company, insurance organization, its agent or employee, or related entity may be civilly or criminally liable for providing information to the office or taking any other action requested by the office pursuant to this section.
(8) The actions the office may take under Subsection (1) are in addition to the actions the office may take pursuant to Part 4, Income Withholding in IV-D Cases.”
EXAMPLE: Workers’ Compensation (WC) settlements; unclaimed property; accident or injury settlements; lawsuit settlements; or prizes and lotteries payable to the NCP. CSS is also authorized to lien-levy the NCP’s personal property (liquid, cash, or “paper” assets) that is not in his/her possession, such as cash being held by a jail.
“(1) After receiving notice that a support lien has been filed under this part by the office, no person in possession of any property which may be subject to that lien may pay over, release, sell, transfer, encumber, or convey that property to any person other than the office, unless he first receives:
(a) a release or waiver thereof from the office; or
(b) a court order that orders release of the lien on the basis that the debt does not exist or has been satisfied.
(2) Whenever any such person has in his possession earnings, deposits, accounts, or balances in excess of $100 over the amount of the debt claimed by the office, that person may, without liability under this part, release that excess to the obligor.”
These monies are subject to the CSS lien-levy authority whether the payment is for the NCP or for joint recipients, such as the NCP and a current spouse.
Additionally, U.C.A 62A-11-304.1 (8) states:
“The actions the office may take under Subsection (1) are in addition to the actions the office may take pursuant to Part 4, Income Withholding in IV-D Cases.
The NCP must owe an arrears debt before CSS may initiate a lien-levy action; however, current support due for the month the levy is initiated may be included in the levy. To place a levy on the NCP’s payment, CSS sends a “Notice of Lien-Levy, Other Than Financial Institution” to the insurance company or other payor. The payor is then required to freeze the payment and send the money to CSS after 21 calendar days unless the payor receives a release from CSS or from a court.
Sending a lien-levy to an insurance company or other payor is similar to sending a lien-levy to a financial institution. The same timelines and review process for financial institutions apply to payors of lump sum payments, judgments, settlements, lotteries, unclaimed property, public and private retirement funds, etc.
1. Lien: As defined by the Office of Recovery Services/Child Support Services (ORS/CSS) - A legal filing that establishes a legal claim against property.
2. Levy: As defined by the Office of Recovery Services/Child Support Services (ORS/CSS) – An action to impose or collect by legal authority.
3. Lien-levy: As defined by the Office of Recovery Services/Child Support Services (ORS/CSS) - An administrative action to seize and attach financial assets to satisfy a past-due support obligation.
4. Means-tested income: As defined by the Office of Recovery Services/Child Support Services (ORS/CSS) - Government programs that require the recipient to meet certain income levels to qualify for the benefit. Means‑tested programs include, but are not limited to: IV‑A services, S.S.I., Medicaid, Food Stamps, General Assistance, benefits received under a housing subsidy, or the Job Training Partnership Act (JTPA).
Workers’ Compensation General Information - Overview
Workers’ compensation (WC) is a wage replacement and medical care program for a worker whose injury or illness is work related. Almost all employers are required to have WC insurance. To determine the WC insurance carrier for an employer, call the State of Utah Labor Commission’s Policy Section at (801)530-6842 or (800)530-5090. Some different types of benefits a worker may be eligible for under WC are listed below.
1. Temporary Total Compensation - This benefit is paid to replace lost wages. It is a percent of the worker’s average gross weekly wage.
2. Permanent Partial Impairment Rating (PPI) - This benefit may be paid if the worker sustains a permanent impairment due to a job related injury or illness. It is a partial impairment because the worker is able to return to work. The impairment rating is determined by a doctor.
Permanent Total Disability
Compensation (PPD) - This benefit
may be paid if the worker sustains a permanent disability which is totally
disabling and prevents him/her from returning to any type of work, e.g., loss
of two limbs such as legs, arms, eyes or a combination.
When the NCP has been approved for permanent partial impairment compensation, the NCP may receive the payment in one lump sum, or in a series of payments. NCP may also reach a full settlement (meaning that no future benefits, or only specific benefits as agreed upon would be available) with the insurance carrier for a WC claim.
Unclaimed Property Information – Overview
Accounts with financial institutions/companies that have not had any activity generated or contact with the owner of the account for a designated period of time become unclaimed property. Unclaimed property is often referred to as “abandoned” or “forgotten funds”. Every U.S. state has:
1. Statutes in effect that instruct financial institutions and companies to turn unclaimed property over to the state official; and,
2. A program that attempts to locate the owners of abandoned funds and make the money available to the owner to claim.
In Utah, unclaimed property is turned over to the State Treasurer’s Office, Unclaimed Property Division. You can find unclaimed property in Utah, by conducting a free search on Utah’s official website for unclaimed property, mycash.utah.gov. To find unclaimed property in other states, you may search missingmoney.com. The search must be conducted using the NCP’s name. If the search results in an exact match of the NCP’s name AND the last known address shown, you may send a Notice of Lien-Levy, Other Than Financial Institution to the State Treasurer’s Office, Unclaimed Property Division at PO Box 140530, Salt Lake City, UT 84116.
If the NCP is receiving WC benefits or other compensation (e.g. public or private retirement payments) in a series of payments instead of as a lump sum, initiate income withholding instead of a lien-levy action, if appropriate. Send a “Notice to Withhold Income for Child Support” for up to 65% of the WC.
If the NCP is scheduled to receive a lump sum payment, and the amount of past-due support is 65% or less of the total payment, send a ‘Notice to Withhold Income for Child Support” instead of a lien-levy. You may initiate income withholding AND a lien-levy action if the NCP is receiving a series of payments and a lump-sum settlement, if appropriate. Consult with your manager on a case by case basis to determine the best method for collection/enforcement.
If the NCP has a public or private retirement fund and s/he has the authority to withdraw some or all of the funds, you may attach the funds with a lien-levy.
NOTE: Retirement benefits paid by the Utah State Retirement Office are not subject to lien-levy for delinquent child support. According to UCA 49-11-609, retirement benefits and payments are exempt from the expedited process lien-levy statute, unless the NCP is retired and receiving benefits, and CSS is able to obtain a Qualified Domestic Relations Order (QDRO) from the court.
A lien-levy action may be initiated to seize up to 100% of a non-means-tested lump-sum payment (e.g., an insurance settlement, judgment, lottery winnings, public and/or private retirement fund, unclaimed property, etc.) to pay off 100% of the NCP’s past-due support if the case meets all of the enforcement criteria.
Determine if a lien-levy action
is appropriate. Determine if the case meets the enforcement
criteria. If the case meets the
enforcement criteria, consult with your team manager to determine if it is
appropriate to initiate a lien-levy action for the payment. For example, if the NCP is entitled to a WC
settlement, but the money is for reimbursement of special medical equipment or
rehabilitation services, it may not be appropriate to levy upon the payment.
If the payment is the result of a lawsuit and the lawsuit will take more than 60 calendar days to resolve, consult with the Attorney Generals Office (AGO) prior to sending the lien-levy to the payor.
2. Obtain information about the NCP’s payment. If necessary, verify the NCP’s payment or assets by contacting the payor. Verify that the individual you are investigating is in fact the NCP on the CSS case. Match the name, social security number and address (if known).
a. If the payor does not comply with the request for information, generate a “Subpoena Duces Tecum” and the accompanying affidavit to be signed by the team manager. The payor may charge a research fee for production costs associated with the subpoena. Serve the subpoena on the payor by sheriff, constable, or a CSS process server. If the payor refuses to honor the subpoena, it may be penalized, as follows:
i. $25 for each failure to provide requested information; or,
ii. $500 if the failure to provide requested information is the result of a conspiracy between the entity and the NCP to not supply the information or to supply false or incomplete information.
iii. Consult with the team manager and the AGO to determine if it is appropriate to pursue a penalty against the payor for failure to honor the subpoena.
3. Send the Notice of Lien-Levy and the Concurrent Notice to the NCP by taking the steps listed below.
a. Generate the lien-levy forms packet.
b. Send the lien-levy packet. The packet may be sent to the payor by first-class mail, FAX, or served by constable.
NOTE: If you know the contact name for the payor, send, FAX, or deliver the notice to that person’s attention.
Once the payor receives the Notice of Lien-levy, the payor has the same responsibilities as the financial institutions.
a. Notify the Non-custodial Parent. Mail by first class mail a copy of the forms and the “Written Request for Review - Notice of Lien-Levy” to the NCP. The notice notifies the NCP’s current spouse how s/he may claim his/her portion of the payment.
NOTE: If the payment does not contain sufficient funds to pay the past-due support amount in full, and later you identify other payments belonging to the NCP, generate and send a new Notice of Lien-Levy packet.
b. Document actions. Document all action(s) taken on the case, including the justification for the lien-levy.
Non-custodial Parent’s Options
When the NCP receives the “Concurrent Notice,” a copy of the “Notice of Lien-Levy, Other Than Financial Institution,” and the “Written Request for Review, Lien-levy.” s/he may:
1. Do nothing and allow the levy action to proceed;
2. Request for an administrative review or adjudicative proceeding under UAPA
The NCP (or his/her current spouse or other joint-owner) may request an emergency senior agent review if s/he believes the lien-levy action is creating an immediate and serious financial hardship on his/her household. A request for a hardship review does not need to be in writing. It may be made by a telephone call or office visit.
The senior agent is responsible to gather proof of the hardship from the requestor. Once the documentation is received, the senior agent must immediately conduct an informal review and based on the information received, if appropriate, release all or part of the funds in the account and notify the requestor of the results of your review. The requestor may ask for an additional review, which would be conducted by the local Quality Assurance Specialist (QA)/Children in Care (CIC) Associate Regional Director (ARD).
3. The NCP may take the matter to court.
Unobligated Joint-Recipient Options
The “Concurrent Notice to Non-Custodial Parent of Lien-Levy” notice tells a current spouse or other individual who resides with the NCP how s/he may claim his/her portion of a payment.
Release of Lien-Levy Action
If you have conducted an administrative review or adjudicative proceeding and have determined that releasing all or part of the payment is appropriate, generate the appropriate form:
1. Notice of Partial Release of Funds, Other - select this form when you are releasing part of the funds currently held.
2. Notice of Full Release of Lien-Levy, Other - select this form when you are releasing all of the funds held AND you are also releasing the Notice of Lien-Levy.
Follow up Procedures
Once a notice of Lien-levy has been sent to a payor, they must surrender the payment to CSS after 21 calendar days of receipt of the Notice unless the money has been released all or in part by CSS or by a court order.
1. Disbursing funds. If CSS has receives lien-levy money, a hold was placed on the case, and the money now appears on your Funds Remaining Report, call the Accounting Help Desk to request that the hold be released if:
a. it has been 21 calendar days after a copy of the lien-levy notice and the “Concurrent Notice to Non-Custodial Parent of Lien-Levy” was sent to the NCP (and spouse);
b. the NCP or joint-recipient has had sufficient time to exhaust his/her administrative review and adjudicative proceeding requests; and,
c. the court has rendered a final decision, if the matter was taken to the district court.
The NCP or his/her spouse or another joint-owner should request a review of the lien-levy action within 15 calendar days of the date of the concurrent notice . However, there may time when it is appropriate to allow the review after the 15 day time period; e.g., the NCP can verify s/he was away on business and did not receive notice until after 15 days, a joint-owner does not reside with the NCP an did not receive notice of the lien-levy action from the financial institution, or the joint-owner was notified late.
Attorney’s Fees and Medical Costs
If the NCP is owed money from a payor; e.g., property settlement, insurance settlement, etc. and has retained a private attorney to work on that settlement on his/her behalf, the attorney may first deduct his/her fees (owed by the NCP for the legal work) from the settlement money before the money is sent to CSS in response to an notice. Likewise, if the NCP has medical costs, the insurance company and/or the medical provider may recover their costs before the money is sent to CSS.
The attorney and/or insurance company/medical provider must provide CSS with adequate proof of their claim for fees and/or medical costs (e.g., an itemized billing statement) before they deduct the fees or medical costs from the settlement. CSS may negotiate with the attorney or medical provider concerning their costs and fees, if appropriate.
Apply the lien-levy procedures on an interstate case to the extent possible, the same way you would on an in-state case. If the payor is in Utah, proceed with a lien-levy action even if the NCP lives in another state. If the payor is located in another state, send an interstate referral to the IV-D agency in that state and request that the other state do a lien-levy.