Timothy F. Rayne, Esquire

On July 7, 2006, Governor Rendell signed into law an amendment to the Domestic Relations Code (Section 4308.1) which makes child support arrears a lien against the proceeds of any claim for bodily injury or death. The law became effective on September 5, 2006. The lien applies to the "net proceeds" of a lump sum settlement, verdict, arbitration award, Workers' Compensation or occupational disease act award. The lien does not apply to structured settlements.

"Net proceeds" is defined as monies in excess of $5,000.00 payable to the plaintiff/claimant after payment of attorney fees, witness fees, court costs, reasonable litigation expenses, unpaid medical expenses, Workers' Compensation liens and public assistance liens. Accordingly, after the enumerated items are paid, the plaintiff/claimant receives the next $5,000.00 and the remaining portion of the proceeds is subject to a child support arrears lien.

In addition to creating the lien, the new law places an affirmative duty on the plaintiff/claimant's attorney to obtain documentation regarding any child support arrears from both the plaintiff/claimant and the Pennsylvania Child Support Enforcement's website (www.childsupport.state.pa.us) within 20 days of the delivery of the Release for the settlement. In the event that there are arrears, the attorney must make payment of any arrears from the "net proceeds." In pro se cases, the insurance company bears the burden of determining whether arrears exist and paying the lien. The payment of arrears must be sent to the Pennsylvania State Collection and Disbursement Unit ("PASCDU") in Harrisburg and the check must contain the plaintiff/claimant's name, social security number and child support case number (PACSES number).

While this law will require personal injury attorneys to take another step before distributing settlement proceeds, it allows the plaintiff/claimant to keep at least $5,000.00 of the proceeds and provides another avenue for child support arrears to be satisfied.

MacElree Harvey
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