FRIEND OF THE COURT HANDBOOK - SURCHARGE ON OVERDUE SUPPORT
State law requires FOC to charge a surcharge on all support payments that are past due. This is assessed January 1 and July 1 of each year. Surcharge is not interest - however it is calculated as a percentage, and is assessed on the amount of eligible arrearage. The surcharge legislation changed the Support and Parenting Time Enforcement Act (MCL 552.603a), effective January 15, 2004. Here is an overview:
After 2004 the surcharge changed from an 8% annual fixed rate to a variable rate.
The variable surcharge rate is equal to the average interest rate for 5-year US Dept. of Treasury Note plus 1%.
The variable rate is determined January 1 and July 1.
As of July 2004, surcharge is not charged on other surcharges; it does not compound.
One month of current support, due on January 1 and July 1, is not surcharged.
If you make at least 90% of your current charges within the 6 month period you will not be surcharged on your arrearages. This change in the law took place in July, 2005. Once support is no longer charging, this rule is no longer in effect and you are again surcharged on all arrearages.
Any surcharge collected for support due the custodial parent will be paid to that parent. Any amounts due to the State of Michigan will incur a surcharge payable to the State of Michigan.