EFT/EDI Child Support Payments

Teleconference

Minutes from the Federal/State Agencies EFT/EDI Child Support Payments Project Teleconference, July 19, 2006

Participants:

The following states/regions participated in the teleconference: AL, AZ, CA, CO, DC, FL, HI, IA, ID, KS, MI, MS, MT, NE, NH, NV, OH, OK, OR, PA, RI, UT, VA, WA, WV, and ACF Region VII

The bi-monthly Federal Agency/State EFT/EDI Child Support Payments Project teleconference meeting was held on Wednesday, July 19 at 2 p.m., ET. Nancy Benner of OCSE facilitated the call in the absence of Lovenia Murray of FMS and reminded participants to register in advance for each teleconference at FMS's web site at http://fms.treas.gov/csp/confcall/index.html.

Federal agency updates:

Ninety-five percent of the targeted payroll agencies' child support payments (deducted from employees' salary payments) have been converted from checks to EFT/EDI payments.

The Department of State (DOS) : DOS's payroll is migrating to the National Finance Center, which will convert DOS's child support payments to e-payments.

Defense Finance and Accounting Service (DFAS): DFAS will take over payroll for the following federal agencies: Environmental Protection Agency (178 garnishments); Department of Veterans Affairs (employees only) - pilot with Austin, TX field office to begin 8/20/06; second pilot as of 8/18/2007; other field offices beginning 10/21/07 and continuing through April 2008; Broadcast Board of Governors (2/18/07 - 25 garnishments).

Department of Veterans Affairs (VA): VA disability payments, including those attached for child support will continue to be sent by the VA, but they will be converted to electronic payments. The conversion date has not been determined.

Social Security Administration (SSA): SSA has implemented its Court Order Garnishment System (COGS) and is testing for electronic payments with IL. New orders (attaching benefit payments for child support) will be the first to be converted to e-payments.

Railroad Retirement Board (RRB): RRB hopes to begin sending electronic payments for child support (withheld from benefit payments) by September 2006.

California's State Disbursement Unit (SDU) Implementation

Kathie LaLonde of the California Department of Child Support Services gave an update on implementation of California's new state disbursement unit (SDU). All county payments are now being processed at the Sacramento (centralized) location. Disbursement of all IV-D payments to custodial parents is now being made from Sacramento rather than from the counties. The first notice of redirection has been sent to employers, non-custodial parents, and custodial parents. Employers with non IV-D orders have been asked to contact the CA SDU to provide wage assignment information on their non IV-D employees. Employers interested in converting to e-payments for child support are instructed to complete an enrollment form at the CA SDU web site. Rick Barto is coordinating the redirection of interstate payments (including interstate payments sent electronically) and has been contacting the affected states. He has received information from 39. An initial pilot with Washington State for electronic interstate payments is planned.

Nebraska's State Disbursement Unit (NE SDU) Hack-in Incident

Troy Reimers of the NE State Treasurer's Office, which has responsibility for the SDU, gave a report on the recent hack-in incident, which occurred on June 28. The hack-in was to a back-up server that does not house any personal client information. It is one of 15 servers maintained by the Treasurer's Office. A third party contractor has been hired to perform an external and internal scan of the Treasurer's network as well as other state agencies to search for viruses or other evidence of malfeasance. Presently there is no evidence that the Nebraska Child Support Payment Center's database records have been compromised.

New application identifier for unemployment insurance payments attached for child support

If your state would like to have a separate application identifier (in the DED Child Support Addendum Segment) for payments from unemployment insurance benefits ("UI" is proposed), please contact Nancy Benner at Nancy.Benner@acf.hhs.gov.

Report from Virginia (VA) SDU

Cheryl Parker of the VA SDU reported that they are now sending some international child support payments electronically through their bank, which created a way to send a low volume of payments inexpensively (VA's monthly cost is $30). Currently the VA SDU is sending payments to Canada, the United Kingdom, Germany, and the Netherlands and expects soon to send payments to Mexico and other Central and South American nations. The ability to send international child support payments help reduces the high cost of converting paper checks to a foreign currency. For more information, contact Cheryl Parker at (804) 726-7277 or cheryl.parker@dss.virginia.gov.

Other SDU business: Online banking to pay child support

A representative from Nevada reported receiving payments from non-custodial parents through on-line bankers that were eventually returned for insufficient funds. A representative from the CA SDU reported that if the non-custodial parent's (NCP) payment "bounces," he/she is not allowed to use that payment mechanism again. A representative from Nebraska described a pilot program that the NE SDU has for online bill paying:

NCP's who go online with their personal banks and utilize bill pay can have these items returned for insufficient funds just the same as if they personally wrote the check. The reason for this is that their bank doesn't send an electronic payment but rather sends a check on behalf of the NCP. By the time the item is presented to the issuing bank; the funds may have been drawn down to a point where there are no longer sufficient funds to cover the child support payment. Nebraska is working on a means to prevent it if the NCP's bank participates in a certain (nationwide) credit card vendor's program. Nebraska is testing with this credit card vendor, running a pilot project with their own depository bank, the First National of Omaha (FNO).

The program allows First National of Omaha customers to go to their online banking site (FNO's) and issue a bill payment transaction for child support. Rather than issue a check for this item and mail it to the Nebraska Child Support Payment Center (NCSPC); FNO converts the item to a credit card transaction, and the money is sent electronically to the NCSPC bank account. This happens after being processed through the credit card vendor's network and meeting the requirements the vendor has set up on these types of payments. Once the NE SDU has worked out the kinks; NCSPC will become a public biller, and all the other banks across the US that utilize the same credit card vendor will begin to send their customers' online bill payments electronically rather than by bill pay check. The additional advantages are that the payment is guaranteed by the credit card vendor. There is still the risk of a charge back similar to a credit card charge back; but the burden to prove fraud is placed upon the customer and the issuing bank.

Next federal agency/state EFT/EDI teleconference:

The next EFT/EDI teleconference is scheduled for September 20th, 2006 at 2:00 p.m. ET. States are reminded to register for the teleconference at http://fms.treas.gov/csp/confcall/index.html to ensure enough lines are allocated.