Here is a brief description about the SETS payment hierarchy so that you can understand how the system applies payments to credit the various ledgers on your account. Incoming payments are allocated on SETS in a predetermined order or hierarchy. This means that monies are applied to the various ledgers in your account in the following order: First, SETS allocates payments until the current monthly obligations are met. SETS then will allocate monies to ordered payments on arrearages, and lastly to processing charge arrearage.
To clarify, all monies received up to the monthly obligation amount will go to the obligee (assuming the obligee isn't receiving OWF benefits). Only then will payments allocate to the monthly processing charge. The confusing part for most people is that in a majority of cases, the monthly obligation is not met every month. According to Ohio statute, an employer can break down the child support pursuant to their pay cycle. If an obligor is paid every two weeks, their employer will not be sending in one-half of the monthly support each payday. It will be slightly less. This is because people who are being paid on a two-week pay cycle have 26 paydays a year, not 24. If one-half of the support were paid every two weeks, that employee would be paying 13 months worth of support in a 12-month calendar year. This, of course, would be in violation of the order.
For obligors being paid on a two-week pay cycle there are two months out of every year when they get three paychecks. When this third paycheck garnishment is received, the current support which has gradually fallen behind over the last five months is caught up, and only then will payments allocate to the monthly processing charge obligation. Remember, the employer is including the processing charge along with every payment, but the payment doesn't allocate to processing charge until the full monthly obligation in any given month has been met. Obligees can, therefore, expect twice a year to receive a third payment that seems "short". This in no way takes money away from the obligee, who receives the full monthly obligation before a payment is allocated to the monthly processing charge.
For people being paid weekly, this same scenario happens four times a year during those four months when they get five payments. If the obligor pays twice a month, or 24 times a year, expect the first payment of the month to be larger than the second, since the system will only be deducting processing charges on that second payment. Orders paid once a month should not have the above mentioned deviations.
Example: Assume an obligor is ordered to pay $100.00 per month in child support, plus the 2% processing charge, for a total of $102.00 per month. The obligor is paid bi-weekly (26 times per year).
$102.00 x 12 = $1,224.00 (the annual obligation) divided by 26 payments per year = $47.07 garnishment per pay period.
In a three-pay month:
1st monthly garnishment of $47.07 allocates to obligee
2nd monthly garnishment of $47.07 allocates to obligee
3rd monthly garnishment of $47.07: $5.86 allocates to obligee for current support, $39.21 allocates to the obligee for child support arrearage, and $2.00 allocates to processing charge.