On July 7, 2006 Governor Rendell signed into law Act 109 (Senate Bill 1205) which amends the Domestic Relations Act to provide for intercept of monetary awards to satisfy child support liens. This law takes affect on September 7, 2006. The amendment stays payment of any “monetary award” to the extent there exists an overdue support obligation. The procedure outlined provides that before the prevailing party can receive the proceeds of any civil or workers’ compensation award that individual must provide his attorney with information sufficient to search the arrearage status and a written verification of the arrearage status of a child support award. The attorney must then secure the lien report from the child support enforcement system’s website within 20 days of the date of delivery of the release. If arrearages are indicated the attorney must make distribution to the State Distribution Unit from the net proceeds of the award. If the individual is not represented, he must still provide a statement concerning the arrearage status to the insurer or other responsible payor and the insurer or payor must then make payment to the State Distribution Unit. Importantly, if there is a disputed lien the amount in dispute must be placed in escrow with the State Distribution Unit until the dispute is resolved.

This legislation pertains to all “monetary awards” which are further defined as including a lump sum settlement in lieu of, or paid pursuant to, the filing of a civil lawsuit; a civil judgment or arbitration paid for injuries or death pursuant to a property and casualty policy; or paid as an award pursuant to the Workers’ Compensation or Occupational Disease Act. Lump sums paid pursuant to structured settlement annuities are exempt. The settlement, judgement, or award must be pursuant to an action asserted and resolved in Pennsylvania.

In workers’ compensation proceedings the Act further provides that the WC Judge must order payment of overdue support as part of his decision providing an award to a claimant. The Judge is prohibited from entering an award unless he is provided with a statement which details the arrearage status and is provided with information which would allow the Judge to search the arrearage status.

The Act permits the use of private judgment search companies approved by the Department of Welfare in lieu of relying upon the child support enforcement system’s website for information. The fee for the judgment search can be deducted from the beneficiaries’ award. An attorney or an insurer who relies upon information from either the website or an approved private search company to make payment is immune from criminal, civil, or administrative penalties. Additionally, no cause of action is permitted against counsel or an insurer by an individual asserting that he is the obligee of the support award.

Senate Bill 1205 was passed without opposition and promptly signed into law by Governor Rendell. While the intent of the amendment cannot be faulted, we can certainly envision situations not contemplated by this legislation that will require discussion and advice. We would encourage you to contact us if you have any questions pertaining to compliance with Act 109.

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