Indiana Child Support Garnishment Limits, Exemptions and Protections
While child support garnishment in Indiana is taken very seriously, the income of a noncustodial parent is afforded some protections. These protections apply regardless of whether the noncustodial parent has been assigned multiple child support garnishment orders or other types of wage garnishment orders. Indiana garnishment law mandates that a support order be prioritized before any other withholding order, with the exception of an IRS levy. Further, it is against the law for an employer to discriminate against the noncustodial parent on the basis of a support order, and doing so will expose the employer to civil liability to the noncustodial parent.
Garnishment Limits and Exemptions
Indiana follows the guidelines of the Consumer Credit Protection Act (CCPA) in determining income that is subject to protections. To determine this, the employer should look at the employee’s total amount of earnings. “Earnings,” as defined by the CCPA, are any income that is paid or payable for personal services. After subtracting the deductions that are required by law, you are left with the employee’s “disposable earnings.” Legally required deductions are limited to income taxes, Social Security and Medicare taxes, mandatory deductions for state disability or unemployment insurance, mandatory deductions to a state pension system for a public sector employee, and mandatory deductions under the Railroad Retirement Act. The “disposable earnings” figure is then subject to maximum withholding limits. Indiana follows the CCPA’s withholding limits, which are as follows:
- 50% if the employee supports a second family;
- 55% if the employee supports a second family and is more than twelve weeks delinquent on their support payments;
- 60% if the employee does not support a second family;
- 65% if the employee does not support a second family and is not more than twelve weeks delinquent on support payments.
Allocation and Priority
When an employee is assigned two or more orders of support, Indiana withholding limits still apply. To allocate these support payments when there are not enough allowable disposable earnings, allocate each current support payment according to the ratio it holds of the allowable disposable earnings. It is against Indiana law to allot payment so that a current support payment does not get paid at all. If there are arrears owed and any amount of allowable disposable earnings left, allot the arrears in the same fashion.
When an employee subject to a withholding order gets assigned to another type of withholding order, the employer should generally withhold for the support order first, even if the other withholding order was issued prior to the support order. While an order for support should be prioritized over any other state withholding order and any Chapter 13 bankruptcy repayment order issued after October 17, 2005, an IRS levy is a different matter. When an employer receives an IRS levy for an employee subject to a support order, the levy should always be prioritized first. However, the IRS will often accommodate support orders, and the employer should contact them to see if it is possible to do so. If the IRS agrees to accommodate the support order, the employer should make sure to get this in writing. The employer should also alert the court or issuing agency in Indiana about the IRS levy.
Protection from Discrimination
An employer who discharges, refuses to hire, or otherwise discriminates against an employee because of the existence of a support order is liable to the employee in a civil action for not less than $100.