In Louisiana, entities that have been ordered to withhold child support must report any lump sum payments they intend to make to individuals at least 15 days in advance. Many different types of lump-sum payments are counted as income for child support purposes. Covered payors include individuals, schools, governmental entities, financial institutions, and private entities.
What types of lump-sum payments must be reported?
Covered payors must report the following types of lump-sum payments at least 15 days in advance of when they are made:
- Bonuses
- Annuities
- Commissions
- Retirement benefits
- Compensation
- Judgments
- Settlements
- Salaries
- Wages
- Interest
- Workers’ compensation benefits
Once the entity has reported the lump sum payment, it must wait for 15 days for a response from the Louisiana Department of Children & Family Services. If the agency does not respond within 15 days, the payment can be issued. Payors can choose to report lump-sum payments through the electronic income withholding system or the child support portal. Financial institutions and insurance companies can use the child support lien network to look up and match any child support liens with the individuals who will receive the intended lump sum payments. These rules help to ensure that the proper income withholding for child support orders issued under the state’s applicable family law occurs.
The various types of lump-sum payments are considered to be income for child support purposes subject to withholding. Covered payors who fail to comply with the law could be subject to penalties. The law is in place to help people who are owed child support arrearages to collect what they are owed and to ensure that people who are ordered to pay child support meet their obligations. Reporting lump-sum payments to DCFS helps with enforcement efforts so that children receive the financial support that they deserve.
