Legal Information

State Distribution Unit

Federal law requires states have a single statewide automated child support system, including a single location for processing all child support collections and payments. States that fail to maintain a single statewide system are subject to federal penalties.

In compliance with federal requirements, the California Department of Child Support Services (DCSS) implemented a central site for payment processing called the State Disbursement Unit (SDU).

The SDU is responsible for collection and disbursement of all child support payments currently processed through the state, plus all wage assignment payments for private child support orders not being enforced by local child support agencies. The system provides enhanced services to families receiving support and to parents making support payments, as well as employers. Children and families enjoy several benefits, such as:
  • Direct deposit services is available for families receiving support payments.
  • Families may receive support dollars through electronic payment cards, similar to ATM or debit cards, which can be used at ATM machines as well as retail outlets
  • Parents who make support payments are able to access accounts on-line, make payments using credit cards over a secure internet connection and set up electronic payment transfers from a checking or savings account
  • Web and toll free call center access to information

Employers are able to electronically transfer payments for wage withholding directly to the state and have access to an electronic help desk.

FTB Asset Withholding

Revenue and Taxation Code 19271.6 was amended to require that all child support enforcement cases with a past due support balance be reported for financial institution data match. A case must continue to be reported to this franchise tax board program until the balance is paid in full, regardless of whether the local child support agency has a wage withholding in place.

There are only a few limited exceptions to mandated reporting by the local agency:
  • The paying parent has filed bankruptcy
  • The paying parent is receiving supplemental security income (SSI)
  • The paying parent is deceased
  • The case is being enforced by another responding state
Per this change the first $3,500 in assets is exempt for any paying parent that is considered in compliance with their support obligation. The local child support agencies will report an obligation as compliant for every month the amount of support received towards the past due amount is equal to the amount owed by the court order, the amount payable according to the terms of a served wage withholding order, or the amount withheld is equal to 50% of the paying parents after tax deduction wages.