by Grace Ogburn

The Situation

Congratulations! You have successfully obtained a monthly child support order for $2,000 from an active military service-member (obligor). In fact, the obligor receives both a base pay and a significant basic allowance for housing. In addition, the court orders support retroactively and finds the obligor owes $5,000 in arrears. The arrears are ordered to be paid at a rate of $100 per month. You prepare an Income Withholding Order based on the Court Order and serve the correct military entity, Defense Finance and Accounting Services (DFAS).¹ A job well done!

The Problem

Two months later, your client informs you that the Income Withholding Order is only intercepting part of the child support ordered and none of the arrears (meaning additional arrears are accruing). You send DFAS a letter and receive their response wherein they inform you that they are intercepting the obligor’s disposable income at the maximum percentage allowed under federal law. You review their figures and realize DFAS’s calculations do not include the obligor’s basic housing allowance which is a significant part of obligor’s pay and which the court included as non-taxable income. How is this possible?

Did the Court Properly Include the Obligor’s Basic Housing Allowance in the Support Calculation?

In In re Marriage of Stanton, 190 Cal. App. 4th 547 (2010), the California Court of Appeal decided the question: “Does the federal preemption doctrine prohibit the inclusion of military allowances for housing and food in a party’s gross income for purposes of calculating child and spousal support, since under federal law such allowances are not taxable or subject to wage garnishment?”

The Stantoncourt concluded: “The [preemption] doctrine is inapplicable, as under United States Supreme Court authority, family law support matters are within the province of state law unless ‘Congress has “positively required by direct enactment” that state law be pre-empted.’” Id. at 551 (citation omitted).

In Stanton, the military obligor appealed the trial court’s support order on the grounds that the court erred by including his basic allowances for housing and subsistence² and argued that the court violated the federal preemption doctrine since federal law exempts military allowances from the definition of income for federal tax purposes, and they are not subject to wage garnishment for support arrears. Id. at 552-53.

The Stanton court disagreed with Mr. Stanton and held that the federal preemption is inapplicable to military allowances such as basic allowance for housing and subsistence. The court found that “inclusion of such allowances does not do major damage to a clear and substantial federal interest. Further, the court found that the Department of Defense by regulation and otherwise encourages members of the armed forces to fulfil their family commitments.” Id. at 560-61.

Why Does DFAS Exclude the Basic Allowances When Calculating Disposable Income?

In the case of the military payor, the “employer” is the United States government. Under 42 U.S.C. section 659, the United States has consented to accepting state income withholding orders, garnishments, and similar enforcement mechanisms for enforcing child support and alimony obligations. Subsection (h) of 42 U.S.C. section 659 sets forth what forms of income the United States will and will not consider as available for garnishment. Among the list of income included is base pay; and income excluded are basic allowances for housing and subsistence.

DFAS is therefore applying federal law pursuant to 42 U.S.C. section 659 to ascertain “disposable income” and the Federal Consumer Credit Protection Act³ in determining the maximum percentage limits allowed under federal law to derive at the amount it will intercept pursuant to an Income Withholding Order.

How does the practitioner bridge this gap between the valid state court support order and the amount being intercepted pursuant to the Income Withholding Order?

An Officer and a Gentleman

Mark Sullivan has authored an extremely helpful handbook recommended for reviewing the unique legal issues one faces when dealing with family law issues and the military. Sullivan indicates that:

Article 133 of the Uniform Code of Military Justice provides that it is a criminal offense for an officer to engage in conduct unbecoming an officer and a gentleman. For enlisted personnel and officers, Article 134 makes it a crime for any member of the armed forces to dishonorably fail to pay a just debt that has become due and payable . . . .

Mark E. Sullivan, The Military Divorce Handbook: A Practical Guide to Representing Military Personnel and Their Families § 4.01 (2d ed. 2011).

Utilizing the above military articles, the practitioner could first attempt to reach an agreement with the obligor or opposing counsel by reminding them of the United States military policy and code of conduct regarding paying one’s debts. Assuming the obligor is willing to agree, there is a mechanism where DFAS will transfer a specific amount of the obligor’s earning to pay creditors by way of a “voluntary allotment.” DFAS’s website at https://www.dfas.mil includes information on the rules pertaining to a military “voluntary allotment” and how the service member can put one in place. It is extremely important to thoroughly read all of the laws and rules regarding an allotment to ensure its viability in your specific case.

The downside to a voluntary allotment is that, since it is voluntarily, the obligor has the power to terminate the allotment at will.

Involuntary Allotment

For those instances where the obligor remains unfazed by the demands for compliance, Sullivan’s handbook discusses the process which may be brought against active duty members for enforcement of child/spousal support by an “Involuntary Allotment.” Mark E. Sullivan, supra at § 4.17. A request for this allotment must meet, at a minimum, the following: (1) the support obligation must have been established by a court or an administrative order; (2) the support obligation may provide for either child support or child/spousal support; and (3) an arrearage equal to two months support must exist. 42 U.S.C. § 665⁴; 32 C.F.R. § 54. It is important to thoroughly read all of the laws and rules regarding an involuntary allotment to ensure the facts of your case line up with the statute and rules.

In those cases in which the obligor is refusing to voluntarily pay support, I challenge you to argue for an involuntary allotment of the obligor’s income that is unreachable by the Income Withholding Order.⁵ This device would not stall the case from moving forward on other issues (which occurs when a contempt is filed), is more cost-effective than a contempt hearing, and would swiftly bridge the gap that exists when utilizing only an Income Withholding Order.

ENDNOTES

1. (1) DFAS processes payroll for all branches of the U.S. Department of Defense (DoD). The U.S. Coast Guard is within the U.S. Department of Homeland Security and not part of DoD; it therefore has its own payroll-processing center.
2. (2) Mr. Stanton’s pay stub showed he had monthly base pay of $3,995.40, basic allowance for housing (BAH) of $2,159.00, basic allowance for subsistence (BAS) of $323.87, and special duty pay of $300.00.
3. (3) The Federal Consumer Credit Protection Act, 15 U.S.C. § 1673(b), limits garnishment of wages for support to 50% of the payor’s “disposable income” (if the payor has a second family he or she supports); otherwise, the limit is 60%. These limits are increased to 55% and 65% respectively where arrears of support are greater than twelve weeks.
4. (4) 42 U.S.C. section 665 (a)(1) provides in pertinent part: “In any case in which child support payments or child and spousal support payments are owed by a member of one of the uniformed services (as defined in section 101(3) of title 37) on active duty, such member shall be required to make allotments from his pay and allowances (under chapter 13 of title 37) as payment of such support, when he has failed to make periodic payments under a support order that meets the criteria specified in section 1673(b)(1)(A) of title 15 and the resulting delinquency in such payments is in a total amount equal to the support payable for two months or longer.”
5. (5) After discovering the process of an “Involuntary Allotment,” the author set a hearing to request the court order an Involuntary Allotment. However, the court did not decide the issue since the matter settled with the obligor agreeing to a Voluntary Allotment.

Grace Ogburn practices family law at Ogburn Law Office and can be reached at gogburn@earthlink.net.