A Federal Support Deduction Notice (FSDN) is one of the collection tools that may be used by the Maintenance Enforcement Program (MEP) when a debtor is in arrears. An FSDN collects funds that will be paid to the debtor from federal sources and, instead, pays them to MEP to satisfy child/spousal support obligations.

Unless special arrangements are made, money sent to MEP through an FSDN is applied to the debtor’s arrears and not to the monthly payment due. For example, if MEP received the debtor’s income tax refund, this would reduce the total arrears owing. The debtor would still be required to make the monthly maintenance payments.

An FSDN can remain in place for a period of five (5) years. The FSDN can be renewed as necessary for additional five-year periods.

For all FSDNs issued on and after September 18, 2009, MEP will be collecting 50 per cent of Employment Insurance benefits, federal training allowances, Old Age Security benefits and Canada Pension Plan benefits. FSDNs issued prior to September 18, 2009, collected 25 per cent of those funds. MEP will continue to collect 100 per cent of income tax refunds and GST rebates.

To lower the amount of Employment Insurance benefit, federal training allowances, Old Age Security and Canada Pension Plan benefits from 50 per cent, debtors must make a payment arrangement with MEP.

If MEP issues an FSDN, the federal government will charge the debtor an administrative fee of $38 a year for five years, for a total of $190 for the five-year period. This fee is collected by the federal government from the portion left over after MEP receives the money it has claimed. If no funds are collected during the term of the FSDN, the fee is not collected. Once the federal government collects funds under the FSDN, the funds are forwarded to MEP. There can be a delay of up to 12 weeks between the time the funds are attached by the federal government and the date they are received by MEP and sent to the creditor.

An FSDN will normally remain in place until the file is up-to-date and reasonable arrangements have been made for any ongoing support. It can take up to 14 days for MEP to initiate the removal of an FSDN.

When an FSDN provides MEP with more funds than are required to satisfy the debtor’s arrears, MEP will refund the extra money to the debtor.