Collection Of Overdue Support From Monetary Awards / Settlements

Posted in Workers' Compensation

23 Pa. C.S.A. § 4308.1 amended the Domestic Relations Code by permitting the Department of Welfare to intercept overdue child support from lump sum monetary awards or settlements paid by insurers and worker’s compensation.  This law makes overdue child support a lien by operation of law against the net proceeds of any monetary award exceeding $5,000.00.  There is reduction to account for attorney’s fees and proportionate share of cost.

The law broadly defines “monetary awards” and applies with equal force to ANY civil claim asserted in and resolved in Pennsylvania, ANY settlement obtained before a lawsuit and ANY settlement of a lawsuit resulting from any claim for bodily injury, death or paid as an award under worker’s compensation or occupational disease. The law requires the attorney handling the claim to provide a statement including client’s name, address, date of birth, social security number and the amount of support owed or a statement that no support is owed.  This information is then used by either the attorney or insurance company to search through the Child Support Section of the DPW Website.

As a practical matter, I ask for this information in the initial interview and explain that overdue support must be paid back.  In the few situations where I have a client who has overdue support, I will compare the amount found with the client’s understanding of the amount.  If there is a dispute as the amount and it is before settlement, I will instruct my client to resolve the dispute otherwise I will pay the amount listed on the website.  If there is a dispute, this law requires the WHOLE amount to be placed in escrow with the Pennsylvania State Collection and Disbursement Unit (PASCDU) until the dispute is resolved.