Under provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Congress required the use of a standard withholding process to increase child support collections for all families, promote self sufficiency for low-income families, and reduce the burden on employers. States were also required to establish and maintain a state disbursement unit to receive child support payments from employers and other sources (1) for all IV-D cases and (2) for all non-IV-D cases with support orders initially issued on or after January 1, 1994 payable through income withholding.
This Bench Card (PDF) explains the federal requirements for income withholding and submitting to the state disbursement unit (SDU). Commonly known as an income withholding order or IWO, the standard form approved by the Office of Management and Budget must be used by all entities to direct employers to withhold income for child support payments. The SDU is a centralized collection and disbursement unit for child support payments from employers, income withholders, and others.