Child-support deductions from unemployment benefits under legal process

U.S. Department of Labor
Employment and Training Administration
Washington, D.C. 20210
Classification: UI
Correspondence symbol: TEUL
Issue date: July 21, 1997
Rescissions: None
Expiration date: Continuing
Directive: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 37-96, Change 1
To: ALL STATE EMPLOYMENT SECURITY AGENCIES
From: GRACE A. KILBANE, Director, Unemployment Insurance Service
Subject: The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 - Deduction of Child Support Obligations from Unemployment Compensation through Legal Process

1. Purpose. To advise States of an amendment to the definition of legal process made to Federal law by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

2. References. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193); the Social Security Act (SSA); and Unemployment Insurance Program Letter (UIPL) No. 37-96.

3. Background. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), popularly known as the "welfare reform" bill, made several changes which affect the unemployment compensation (UC) program. The purpose of this UIPL is to provide information on one of these changes which was not discussed in the Department's previous issuance on PRWORA, UIPL 37-96. This change relates to the definition of "legal process" used for purposes of intercepting child support obligations from UC.

   Legal Process. The child support intercept requirement for UC is found at Section 303(e)(2)(A)(iii)(III), SSA. It requires States, as a condition for UC administrative grants, to deduct and withhold child support obligations from any UC otherwise payable to an individual if the obligation is "required to be so deducted and withheld from such unemployment compensation through legal process (as defined in section 462(e))," SSA. This definition of legal process was repealed by Section 362(b)(1), PRWORA. Although a new definition of legal process was added to the SSA, the UC intercept provisions were not amended to reference this new definition.

   The new definition of legal process is found at Section 459(i)(5), SSA, as amended by Section 362(a), PRWORA. It is substantially similar to the old definition. However, whereas the old definition included only courts of competent jurisdiction, the new definition is expanded to include administrative agencies of competent jurisdiction. Thus, a writ, order, summons, or other similar process in the nature of garnishment which is issued by an administrative agency of competent jurisdiction is now included in the definition of legal process.

   Under the repealed Section 462(e), the definition of legal process applied to Section 459. In contrast, the new definition is itself contained in Section 459. In the Department's view, the shifting of the definition from Section 462 to Section 459 is merely technical. Further, the child support intercept provision must be effectuated. Therefore, although the child support intercept provision was not amended to reference the new definition, the Department interprets it as requiring that States deduct and withhold UC in accordance with the new definition of legal process. This interpretation gives effect to one of the purposes of the PRWORA - to strengthen child support enforcement mechanisms.

   States should be aware that any additional costs incurred by the State UC agency in administering this new definition must be reimbursed by the appropriate State or local child support enforcement agency as required by Section 303(e)(2)(C), SSA.

4. Action. States will need to determine whether amendment to State law is necessary.

5. Inquiries. Please direct inquiries to the appropriate Regional Office.