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How are lump sum vacation, severance, bonus or sick payments treated?
Answer in detail: IC31-16-15-19
Severance pay, accumulated sick pay, vacation pay, accumulated commissions, bonuses, or other lump sum payments; withholding of support arrearages
Sec. 19. (a) If an obligor:
(1) is entitled to net income in the form of:
(A) severance pay;
(B) accumulated sick pay;
(C) vacation pay;
(D) accumulated commissions;
(E) a bonus payment; or
(F) other lump sum payment; and
(2) owes an amount of child support that is in arrears; the income payor shall withhold the amount in arrears or the product computed under subsection (b), whichever is less, up to the maximum permitted under 15 U.S.C. 1673(b).
(b) The income payor shall multiply:
(1) the amount of support the obligor is required to pay each week; by
(2) the number of weeks represented by the lump sum payment.
As added by P.L.1-1997, SEC.8.
Note Bonus Payment's not arrived at by WEEKLY calculation are NOT subject to the maximum permitted pursuant to the consumers credit protection act. See Fisher Body v Klincoln National Bank & Trust Company of Fort Wayne, 563 N.E. 2nd149 (Ind.App,.1990).

Explanation: If the bonus is not calculated by a certain dollar amount times a certain number of weeks, then the entire bonus, minus taxes can be taken for child support up to the amount of the arrearage.


**NOTE** IF THE CASE IS A NIVD CASE, MEANING THAT IT IS NOT A PROSECUTOR CASE, UNLESS THE EMPLOYER RECEIVES A COURT ORDER SPECIFIC TO THAT CASE, NO DEDUCTION OF LUMP SUMS CAN BE MADE DUE TO THE FACT THAT THE STATE OF INDIANA DOES NOT COMPUTE ARREARAGES ON THESE CASES.
 
STATE OF INDIANA - DEPARTMENT OF CHILD SERVICES