In 1996, the Federal government passed the Personal Responsibility and Work Reconciliation Act, requiring each state to create a centralized location to process all child support payments collected by wage assignment, or garnishment. Recently, California implemented the State Disbursement Unit (SDU) to fulfill this requirement. California’s Family Code now requires that all child support payments made via wage assignment, whether managed privately or by the county, be made through the unit.
Prior to the creation of the SDU, when a child support payment was ordered to be made by wage assignment, the employer was served with an order to withhold wages of the payor parent and paid them directly to the parent receiving child support. With the SDU in place, employers are required to send all payments to the unit, who then distributes the money to the receiving parent.
This change may result in a processing delay of one or two days, but the SDU does offer receiving parents the option of direct deposit of payments or electronic payment cards, which are similar to ATM cards, and can be used at ATMs and retail stores. These options will speed the delivery of payments once processed. The SDU also promotes its web and telephone account access as valuable for both paying and receiving parents, as a source for information.
There is potential that the creation of the SDU can impact the amount of child support that custodial parents receive. Under the new system, child support payments will be allocated among all the children of a payor party. Because employers can withhold no more than one-half of a payor parent’s net pay, where there are multiple cases, the payor parent’s income may not be sufficient to pay all orders. Whereas the old system paid receiving parents with the oldest support orders first, the new system allocates the money proportionally among the receiving parents. The net result is that the parent with the earlier support order would receive less support, but the parents with the later support order would receive a share of the withheld wages.
Cases that are filed and enforced by the county’s Child Support Services Department must be paid via wage assignment. For privately filed and enforced support orders, the court can order payment through wage assignment or payment directly from the payor parent. The receiving parent should carefully consider the benefits to each of these options in making their request to the court.