Arizona Child Support Collections and Fees
Any form of income earned is subject to wage garnishment in Arizona. This includes the noncustodial parent’s disposable earnings and any bonuses or lump-sum payments owed to the noncustodial parent. It is extremely important that an employer comply with any order for child support garnishment against one of its employees, as nonpayment will result in accumulated interest on payments owed, as well as damaged credit for the employee. The employer may also be held liable for any refusal to enforce a support order not made in good faith. The following information sets out some of the basics on wage garnishment in Arizona, as well as contact information for the Arizona Office of Child Support.
Income Subject to Withholding for Child Support Garnishment
In Arizona, any form of income is subject to child support garnishment. Income defined as “earnings” by the Consumer Credit Protection Act is protected income, meaning that all deductions required by law are made before withholding child support, and the remaining “disposable earnings” are limited to a maximum percentage of wage garnishment. Arizona defines “earnings” as any form of payment owed to an individual, regardless of the source. This includes, but is not limited to, wages, salaries, commissions, bonuses, workers compensation, disability payments, payment from a retirement program, and any lump-sum payments.
Bonuses and Other Lump-Sum Payments
As the name suggests, a “lump-sum payment” is any payment given out in a “lump-sum,” such as severance pay, sick pay, vacation pay, bonuses, insurance settlements, lawsuit settlements, commissions, stock options, excess proceeds, and retroactive disability proceeds. While an employer is not required to notify the agency about their employee’s lump-sum payment, the agency may garnish the lump-sum payment if it finds out about it. If the agency is aware of the lump-sum payment that is owed to the noncustodial parent, the Arizona Department of Economic Security will issue a Limited Income Withholding Order to the payor of the lump sum.
Termination of Employment
Upon termination of employment, the employer must send a copy of the employee’s order to the Child Support Enforcement Division. The employer must enter on the copy of the order the address of the employee’s new employer, if known. If the employer rehires the employee within 90 days of their termination, it must immediately resume withholding payments from the employee’s wages. If the employee retires and will be receiving money from a retirement program, such as a pension plan, the employer must provide both the Arizona Support Payment Clearinghouse and the court with the address of the retirement program’s administrator.
An employer may deduct $1 per pay period, with a maximum of $4 per month for any fees associated with the execution of the support order. These fees are deducted from the employee’s wages, and not the wage garnishment. However, if the employer is not able to deduct the full amount of the support payment from any paycheck, it is not allowed to deduct administrative fees.
Penalty for Noncompliance
In the absence of good cause, an employer that does not comply with the support order will be held liable for the unpaid amount. The Arizona child support agency may bring an action against the employer, and the employer is subject to attorney’s fees and costs, and may be held in contempt of court.
Arizona State Office of Child Support – Contact Information
Department of Economic Security
Child Support Enforcement Division
P.O. Box 40458
Phoenix, AZ 85067-9917
Phone: (602) 252-4045; (800) 882-4151
Fax: (602) 264-4837