Current Illinois law refers to “income withholding notice.” Yet Federal law uses the acronym IWO (Income Withholding Order) referring both to notices and orders although Illinois does not require a judge’s signature. Illinois law also states that the IWO form must provide all the rights and duties of employers. Indeed it provides that the form must, among other things:
in bold face type, the size of which equals the largest type on the notice, state the duties of the payor and the fines and penalties for failure to withhold and pay over income and for discharging, disciplining, refusing to hire, or otherwise penalizing the obligor because of the duty to withhold and pay over income under this Section. 750 ILCS 28/20(c)(7).
The major changed occurred August 31, 2017, when the Federal OMB approved the new IWO. It was published by the Federal OCSE through Action Transmittal AT-17-09 . There were no major substance changes but multiple format and language additions. This form must be used. Any old IWO form is to be rejected by employers.
The Supreme Court has set out for approval an draft Income Withholding form. The proposed form is the same as the Federal outdated IWO form which likely occurred due to the fact that the Federal form had missed its “expiration” date of July 1st and was not available until August 31st per below. The draft form does not yet contain the Illinois laws as required.
The changes to Illinois law regarding Income Withholding forms is yet one more area where child support in Illinois had a triple witching “hour” on midnight June 30, 2017 starting with the effective date of the income shares legislation:
- Income Shares Effective Date: Pub. Act 100-15 (on June 30, 2017, effective July 1, 2017) is now the law in Illinois (income shares), thus, necessitating further changes to our income withholding forms.
- Federal Withholding Notice “Expired”: The previous income withholding form (the one that is subject to commentary on the Supreme Court’s cite and in our materials for the Columbus Day seminar) is officially outdated.
- New Potential Penalties for Failure to Withhold: Illinois family lawyers seeking to enforce child support should also be aware of new provisions added to the Income Withholding for Support Act: 750 ILCS 28/50.5. It is titled, “Administrative fines imposed by the Department of Healthcare and Family Services.”
Federal Withholding Notice Updated August 31, 2017: With the new Federal form available it goes to the importance of getting the proposed uniform form updated, corrected and approved as soon as possible, incorporating the required penalties, etc. For those seeking a valid Illinois withholding notice, consistent with the Federal mandates and the Illinois mandates, see: https://www.illinoislegalaid.org/sites/default/files/legal_content/file_form_content/iwo_illinois_2020.pdf
Accordingly, the form currently being used for income withholding notices in most counties, as well as the one posted on the Supreme Court’s website for comment, etc., is no longer consistent with Illinois law. All Illinois lawyers should be aware of this.
Potential Penalties for Failure to Withhold: A new Illinois law creates a duty on employers which went into effect July 1, 2017 (discussed further below). This was the result of the legislature largely gutting the previous law regarding penalties upon employers who fail to withhold and the attendant problems for DHFS in IV-D type cases, etc. The new legislation providing for an enhanced remedy available to DHFS that provides:
(a) The administrative fines provided for under this Section are in addition to any existing fines or penalties against a payor provided for in other Sections of this Act and do not affect who would be entitled to receive those existing fines and penalties. In addition to any fines or penalties provided for in this Act, when a payor wilfully fails, after receiving 2 reminders from the Department of Healthcare and Family Services, to withhold or pay over income pursuant to a properly served income withholding notice or otherwise fails to comply with any duties imposed by this Act, the Department may impose a fine upon the payor not to exceed $1,000 per payroll period. The fine shall be payable to the Department of Healthcare and Family Services and may be used to defray the costs incurred by the Department in the collection of the past-due support and penalties provided for in this Act. The Department of Healthcare and Family Services shall place the fines collected into a special fund created to implement the purposes of this Section and the fines shall be utilized for the purposes provided for in this Section. After deducting the costs incurred by the Department of Healthcare and Family Services in the collection of the past-due support and penalties provided for in this Act, the remainder of the fines collected under this Section shall be distributed proportionally to the counties based on their population. The counties shall use these funds to assist low income families in defraying the costs associated with seeking parenting time.
(b) The Department of Healthcare and Family Services may collect the fine through administrative liens and levies on the real and personal property of the payor as provided in Sections 10-25 and 10-25.5 of the Illinois Public Aid Code.
(c) The payor may contest the fine as provided in Sections 10-25 and 10-25.5 of the Illinois Public Aid Code. ***
Side Note SDU Not Accepting Withholding of Maintenance Alone: The State of Illinois in conjunction with the Illinois State Disbursement Unit finally printed confirmation that the SDU is not to withhold maintenance alone. Since an employer can only be required to send payments to the SDU, an employer cannot be sent an IWO to withhold for maintenance only — in compliance with these requirements. The text is as follows and listed in the Employer FAQ section
MAINTENANCE ONLY PAYMENTS
The purpose of the State Disbursement Unit is to process and record child support payments.
Maintenance payments in conjunction with child support orders can be processed through the SDU.
When the SDU becomes aware of a maintenance only payment or anything other than a child support payment (i.e. attorney’s fees) the SDU is required to return the payment to the sender.
(See 750 ILCS 5/507.1 http://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=075000050K507.1)
Gunnar J. Gitlin
Gitlin Law Firm, P.C.
Woodstock, IL 60098