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OTDA Changes Protect Exempt Benefits

September 11, 2012

The Office of Temporary and Disability Assistance (OTDA) has altered its  Property Execution (PEX) system to prevent the seizure of bank accounts when the respondent is a recipient of Title II or Title XIV benefits.  The changes were effective on July 15, 2012.  They are a result of complaints that financial institutions restrained accounts and paid over exempt benefits deposited either by the support obligor or through electronic deposit.  Federal law prohibits attachment of such benefits under 42 USC §407(a).  And federal regulations specify that Title XVI/SSI benefits are not subject to garnishment for child support. 5 C.F.R. §581.104(j).

The revised procedures and notices now include a claim form that recipients may use if their funds are restrained.  Specific language was added to the notice and execution to direct the financial institutions not to restrain or execute on exempt funds.  Now, when data matches with SSA show support obligors are receiving exempt Social Security benefits, system edits will prevent OTDA from building a property execution record.  The system will automatically terminate the property execution.

The process is also being modified to prevent a new restraining notice from being issued until one year has passed since the previous notice was issued.

OTDA’s “Dear Commissioner” letter disseminating these instructions is available as DAP #550. The  letter is a bit confusing as to whether both Title II and Title XVI/SSI benefits are protected under this new directive.  Kevin Boyle, the author of the letter and head of the NYS Child Support Enforcement Bureau, has confirmed that the language on page two, which refers to both Title II and Title XVI, is controlling.  Thanks to Susan Antos of the Empire Justice Center for her help in obtaining this clarification.


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