How are Child Support Payments Made?

In Texas, most parents agree to have guideline child support deducted from an obligor parent’s paycheck. However, it is within a court’s power to order child support through any of the following methods:

• Periodic payments
• Lump-sum payments
• Annuity purchase
• Setting aside of property to be administered for the support of the child as specified in the order 
• Any combination of the above

Periodic Payments

A periodic payment is a one which takes place at a recurring interval. A parent may elect to pay their ex-spouse at an agreed interval. When possible, all payments should be made through the Office of The Attorney General’s State Disbursement Unit (SDU). Payment through the SDU  ensures that the state has an accurate and current record of all support accounts.

A Lump-Sum Payment

In rare circumstances, parents will agree to a one-time payment that satisfies a child support obligation in its entirety. While financially infeasible for many individuals, lump-sum payments protect from the possibility of future disputes over periodic payments. 

An Annuity Purchase

An annuity purchase allows an obligor parent to fully satisfy his support obligation through a lump-sum payment to a brokerage firm which will disburse periodic payments to a beneficiary. 

The Setting Aside of Property

Upon the entry of a final decree of divorce, a court may set aside a certain property (real or personal) for the sole benefit of a child. 

Support Directly Withheld from a Paycheck

Pursuant to federal law, when a trial court orders income withheld for child support, the trial court must order that these funds be “paid to the state disbursement unit of this state, or if appropriate, the state disbursement unit of another state.” Once a Texas court issues a child support order, an amount may be withheld from an obligor’s disposable earnings. Pursuant to the Texas Family Code Section 158.001: In a proceeding in which periodic payments of child support are ordered, modified, or enforced, the court or the Title IV-D agency (The State of Texas Attorney Generals office) shall order that income is withheld from the disposable earnings of the obligor as provided by this chapter.

Summary

Child support can be paid by any combination of periodic payments, lump-sum payments, annuity purchases, or setting aside of property. You should speak with a licensed attorney to determine which method would work best for you.