1. What is DOR's authority to assess interest and penalty on past-due child support?
  2. What are the interest and penalty rates assessed on past-due support?
  3. If the interest rate decreased from 1% to 0.5% on July 1, 2010, does that mean that interest assessed before July 1, 2010 will be reduced?
  4. When does DOR charge interest and penalty?
  5. How does DOR charge interest and penalty if I have more than one child support case?
  6. Does DOR charge interest and penalty on the total amount of past-due support that I owe or only on the amount that I don't pay each month?
  7. Will I be charged interest and penalty if I make regular payments?
  8. Other than the payment exclusion, are there any other ways I can avoid interest and penalty charges?
  9. If DOR collects money through an enforcement action, such as a bank levy or state tax refund intercept, does that count toward my required monthly payment?
  10. I requested an administrative review because I disagree with the amount of past-due support DOR says I owe. If the amount of past-due support is adjusted as a result of the review, will the interest and penalty also be adjusted?
  11. I made the total required monthly payment to prevent charges of interest and penalty last month, but DOR intercepted my insurance settlement and seized my bank account. Why did DOR take this action if I paid enough to prevent interest and penalty charges?
  12. Is there anything I can do about the interest and penalty I already owe?

1. What is DOR's authority to assess interest and penalty on past-due child support?
DOR's interest and penalty regulation, 830 CMR 119A.6.1 gives DOR the authority to assess interest and penalty on past-due child support. The current version of the regulation took effect on July 1, 2010.

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2. What are the interest and penalty rates assessed on past-due support?
As of July 1, 2010, DOR assesses interest at a rate of 0.5% per month and penalty at a rate of 0.5% per month. Previously, DOR used a monthly interest rate of 1%. The monthly penalty rate has always been 0.5%. From January 1, 1999 until June 30, 2003, DOR calculated interest (at 1.0%) and penalty (at 0.5%) monthly, but made a yearly assessment.

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3. If the interest rate decreased from 1% to 0.5% on July 1, 2010, does that mean that interest assessed before July 1, 2010 will be reduced?
No, the change in the interest rate applies from July, 2010 forward. It has no effect on interest charged prior to July 1, 2010.

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4. When does DOR charge interest and penalty?
DOR charges interest and penalty on the last day of each month in any case in which you owe more than $500 in past-due support unless you have made the required minimum payment. The minimum payment is explained in Question 7.

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5. How does DOR charge interest and penalty if I have more than one child support case?
If you have more than one child support case, we look at each case separately to see if interest and penalty should be charged. It is possible for you to be charged interest and penalty in one case, but not another.

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6. Does DOR charge interest and penalty on the total amount of past-due support that I owe or only on the amount that I don't pay each month?
Interest and penalty are charged on the total amount of past-due support owed on the last day of the month in each case. This includes any support that was due that month but not paid. We never charge interest or penalty on interest or penalty that was charged in prior months.

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7. Will I be charged interest and penalty if I make regular payments?
 

You will be excluded from assessment of interest and penalty in any month in which you pay the minimum required monthly payment. If your case has a current support order, the minimum required payment is the total amount of current support due for that month.

 

Example: You have a current support order to pay $100 per week. If there are four Fridays in the month, you must pay $400 (4 x $100 per week) to prevent interest and penalty from being charged. If there are five Fridays, you must pay $500.

If there is no current support order but you still owe arrears, you must pay the same amount as when there was a current support order unless the court has ordered a specific amount to be paid towards arrears, in which case you must pay the amount specified by the court.

 

Example: There is no current support order, but you owe past-due support. The amount of the last current support order was $200 per week. If there are four Fridays in the month, you must pay $800 to prevent interest and penalty from being charged. If there are five Fridays, you must pay $1,000.

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8. Other than the payment exclusion, are there any other ways I can avoid interest and penalty charges?
The interest and penalty regulation, 830 CMR 119A.6.1, provides a list of exemptions from interest and penalty charges. The chart below lists each exemption, what documentation you must provide, and the length of the exemption period. If you believe that you qualify for an exemption, you must notify DOR and provide the required documentation. In some circumstances, you must notify DOR periodically to show you qualify for renewal of the exemption. If you do not provide updated documentation, we will start to charge interest and penalty when the exemption expires. In addition, DOR will assess interest and penalty retroactively for any time period where we had entered a exemption but later determined you did not qualify



You may be exempt if:

You must provide:

Exemption expires:

You receive SSI, TANF, EAEDC, state veterans' benefits or other needs-based cash benefits.

A copy of your benefits award letter.

1 year from date you provide proof to DOR or the date the benefits stop, whichever is earlier. You can apply for an extension of the exemption each year you receive benefits.

You have a medical disability that prevents you from working and are not financially able to pay your support order. If you receive SSDI, VA or other disability benefits, you may be exempt if DOR is receiving payments, but the amount is not enough to meet the required minimum payment.

 

A letter from your physician describing your disability and a completed Statement of Financial Condition doc format of FinancialCondition.doc
.

1 year from date you provide proof to DOR or the date you are no longer disabled, whichever is earlier. You can apply for an extension of the exemption each year you are disabled.

You live with the minor child for whom you owe past-due support and the court terminated your current support order.

Court order awarding you physical custody; records indicating the child's residential address or the other parent's written statement that you live together with the child; AND a copy of the court order terminating current support.

When the child no longer resides with you or date of the youngest child's emancipation, whichever is earlier.

You are not working, but are actively seeking employment or a workers' compensation insurer or state unemployment assistance agency is remitting payments to DOR, but the amount is not enough to meet the required minimum payment.

Proof of enrollment in a job training or seek work program or documentation as to amount of unemployment or workers' compensation you receive.

1 year from date you provide proof to DOR or the date new employment begins, whichever is earlier. You can apply for one extension if you continue to be unemployed.

You are hospitalized in a nursing home, long-term care facility, rehabilitation facility or other similar facility and you are not otherwise financially able to pay your child support order.

Letter from your doctor or the institution and a completed Statement of Financial Condition doc format of FinancialCondition.doc
.

When you are no longer in the facility or date you become financially able to pay support, whichever is earlier.

You are incarcerated, but are participating in a counseling, job training or self-improvement program approved by DOR.

Documentation from your correctional facility showing participation in or completion of a program, such as GED courses, responsible parenthood, AA, job training, etc.

1 year from date you began to participate in the program or the date of release or parole, whichever is earlier. You can apply for an extension of the exemption each year you participate in a program.

You are on active duty in the U.S. armed forces and child support is withheld from you pay, but the amount is not enough to meet the minimum payment exclusion.

Documentation showing you have been or are about to be deployed on active duty.

1 year from date of deployment or date of discharge, whichever is earlier. You can apply for an extension each year you are deployed.

You filed a complaint for modification of your current support order and the order was reduced, suspended or terminated.

Copy of court order.

Exemption begins on the date DOR or the other parent was served with a copy of your complaint and ends on date of order

You are under severe financial hardship, as determined by DOR.

Statement of Financial Condition doc format of FinancialCondition.doc
and proof of extreme hardship.

1 year from date DOR approves hardship or when hardship no longer exists. You can apply for an extension each year the hardship exists.

.

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9. If DOR collects money through an enforcement action, such as a bank levy or state tax refund intercept, does that count toward my required monthly payment?
Any payment that equals or exceeds the required monthly payment will prevent charges of interest and penalty, even if the payment was the result of an enforcement action. DOR puts some enforcement payments on hold after collection to allow time for the parent to ask for an administrative review. An enforcement payment will count toward the required monthly payment for interest and penalty purposes, only in the month we received the payment.

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10. I requested an administrative review because I disagree with the amount of past-due support DOR says I owe. If the amount of past-due support is adjusted as a result of the review, will the interest and penalty also be adjusted?
Yes. If DOR makes an adjustment in the amount of past-due support as a result of the administrative review, we will recalculate the interest and penalty that was assessed. This happens whether DOR adjusts the amount of past-due support upward or downward.

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11. I made the total required monthly payment to prevent charges of interest and penalty last month, but DOR intercepted my insurance settlement and seized my bank account. Why did DOR take this action if I paid enough to prevent interest and penalty charges?
Even if you make the minimum monthly payment required to prevent interest and penalty charges, DOR can still use other enforcement actions to collect the full amount of the past-due support (arrears) that you owe. DOR will continue to use all available means to collect past-due support in full.

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12. Is there anything I can do about the interest and penalty I already owe?
Yes. DOR may waive all interest and penalty owed to the Commonwealth if you voluntarily pay the total amount of past-due support owed to the Commonwealth and the other parent and the total interest owed to the other parent. If you have more than one case, DOR will not waive any interest and penalty unless you voluntarily pay the total past-due support owed to the Commonwealth and all of the other parents and the total interest owed to all of the other parents.

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Revised October 2010