Workers' Compensation
Spring 2022

Child Support & the WCC – HB650: A Solution Everyone Can Agree On

On January 31, 2022, Delegate Benjamin Brooks introduced House Bill 650 – Execution on a Judgment – Child Support Arrearage – Workers’ Compensation (“HB 650”) before the Maryland “for the purposes of specifying a certain percentage of the net recovery by the debtor on a claim for workers’ compensation is subject to execution on a judgment for a child support arrearage.”

F&P principals Albert (“Bert”) B. Randall, Jr., Esq., and John J. Handscomb, Esq., worked closely with Delegate Brooks on this bill from the outset, consulting and advising on both the importance and need for such legislation, and assisted in the crafting and drafting of same.   Additionally, Bert Randall provided written and oral testimony in support of HB 650 before the House Judiciary Committee and House of Delegates and written testimony in support of HB650 to the Maryland Senate.

Pursuant to Delegate Brooks’ testimony before the House Judiciary Committee, the purpose of the HB650 bill is to specify that 25% of the net recovery on a claim for workers’ compensation is subject to execution on a judgment for child support arrearage, as current law does not explicitly state what, if any, indemnity benefits can be attached when a child support order is in place. “HB650 merely offers clarity in an otherwise ambiguous statute in determining which workers’ compensation indemnity benefits can be garnished,” Delegate Brooks’ stated.

Under the Maryland Workers’ Compensation Act, victims of on-the-job injuries are entitled to workers’ compensation benefits to compensate for resulting economic losses, including lost wages (“temporary total disability”) and permanency (loss of future earning capacity owing to impairment caused by an injury that did not heal completely). Compensation benefits are paid by a workers’ compensation insurance company, usually by check, directly to the injured worker.

Child support orders are enforced by garnishing money in the hands of a third party (insurance company) that would otherwise be paid to a deadbeat parent. Under a Memorandum of Understanding between the Workers’ Compensation Commission and child support enforcement, commission data files are mined to identify awards to parents with child support arrearages. Garnishments are then served on the workers’ compensation insurers ordered to pay compensation to these parents.

Subsection 11-504(b)(2) of the Courts and Judicial Proceeding Article prohibits garnishment of “money payable in the event of sickness, accident, injury, or death of any person, including compensation for loss of future earnings. This exemption includes but is not limited to money payable on account of . . ., compromises, insurance, benefits, compensation, and relief.”

Notwithstanding Section b of 11-504, which exempts “compensation” from garnishment, child support authorities routinely attempt to garnish a significant proportion or all of a worker’s compensation benefits, leaving claimants with little or no money to meet the costs of daily living. Circuit courts asked to decide whether Subsection B exempts workers’ compensation benefits from child support garnishment have reached conflicting decisions – meaning child support either received 100% of its ask or nothing.

As currently drafted House Bill 650 amends § 11-504 of the Courts and Judicial Proceedings Article to authorize the Child Support Agency (CSA) to execute a judgment on a claim for personal injury and workers’ compensation benefits. The statute would allow the CSA to collect temporary partial disability, temporary total disability, permanent partial disability, permanent total disability, vocational rehabilitation compensation, and any other indemnity benefits paid to in connection with a Workers’ Compensation Claim, from a noncustodial parent for an arrearage in Child Support.

Passage of House Bill 650 would establish that “twenty-five percent of the net recovery” by a debtor is subject to execution on a judgment for child support arrearage on a claim for personal injury (“accidental injury”) with the Workers’ Compensation Commission. Thus, clarifying an existing ambiguity in Family Law for the Child Support Administration to use this collection source for payment of child support arrearages from noncustodial parents who are awarded indemnity benefits and/or settlements from personal injury through workers’ compensation claims.

The need for this clarification of the existing law is clear. As noted in Bert Randall’s written testimony in support of HB650 before the House Judiciary Committee on February 17, 2022, “As a practitioner that litigates workers’ compensation claims on behalf of Maryland Employers and their insurers, like many of my colleagues, I’ve often been caught in the middle of differing opinion offered by Claimants’ attorney’s and child support enforcement authorities. This results in a legal quagmire with threats of litigation and penalties for non-compliance from both Claimant’s attorneys and enforcement authorities with no easy solution. These disputes create additional litigation, and legal expense and result in judicial inefficiency. This bill solves that issue by clarifying all the types and amounts of benefits that may be withheld for child support.”  Randall continued, “This bill favorably amends the existing statute so that workers’ compensation entitlements are treated with other analogous personal injury recoveries and is consistent with existing state and federal law.”

On March 18, 2022, the House of Delegates unanimously passed HB650 in a 131-0 vote. After a hearing before the Senate held on March 31, 2022, HB650 came out of committee with a favorable report on a 9-1 vote before time ran out in the 2022 Legislative Session for the bill to be returned to the originating chamber for review.   Thus, preventing HB650 from becoming a much-needed new law.

Though HB650 did not make the cut for this most recent Legislative Session, the importance of the bill was signified by support from the Defense Bar, Claimants’ Bar, Chesapeake Employers Insurance Company, and representatives from Child Support Enforcement Agencies. All those in support of the bill plan to resubmit the same for consideration next year and anticipate that it will become law at that time.

Written by associate Kara Parker.