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Final Rule: Elimination of Double Support Payments

AT-84-03

Published: June 7, 1984
Information About:
State/Local Child Support Agencies
Topics:
Case Management, Collections/Distribution/State Disbursement Unit (SDU)
Types:
Policy, Action Transmittals (AT), Regulations

REGULATION

ACTION TRANSMITTAL

OCSE-AT-84-3

June 7, 1984

TO:STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS

SUBJECT: Elimination of Double Support Payments

REGULATION

REFERENCE: 45 CFR 302.32

These are final regulations implementing section 173 of P.L. 97-248, the Tax Equity and Fiscal Responsibility Act of 1982, that require a State to pay, directly to a family, any child support payments for any month following the first month in which the amount collected is sufficient to cause ineligibility for Aid to Families with Dependent Children.

EFFECTIVE DATE: Effective May 29, 1984, except where the Secretary determines that State legislation is required in order to conform with State plan requirements, in accordance with section 176 P.L. 97-248.

SUPERSEDED MATERIAL: OCSE-AT-83-5, dated February 3, 1983.

INQUIRIES TO: OCSE Regional Representatives.

_________________________

Deputy Director

Office of Child Support Enforcement

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Child Support Enforcement

45 CFR Part 302

Elimination of Double Support Payments

AGENCY: Office of Child Support Enforcement (OCSE), HHS.

ACTION: Final Rule.

SUMMARY: Section 173 of Pub.L. 97-248, the Tax Equity and Fiscal Responsibility Act of 1982, amends section 454(5) of the Social Security Act to require a State to pay directly to a family any child support payments for any month following the first month in which the amount collected is sufficient to cause ineligibility for Aid to Families with Dependent Children (AFDC). This will eliminate the situation which existed prior to the enactment of section 173 of Pub.L. 97-248 in which a family would receive, during the first month of ineligibility, both the support payment which caused AFDC ineligibility and the support payment collected during the first month of ineligibility. To implement section 173, these regulations amend 45 CFR 302.32 to require the State to use the support payment used to determine a family ineligible for AFDC to reimburse itself and the Federal government, in accordance with 45 CFR 302.51 for assistance payments made to the family.

EFFECTIVE DATE: Effective upon publication, except where the Secretary determines that State legislation is required in order to conform the State plan to these requirements. In such an event, the State plan shall not be regarded as failing to comply with these requirements solely by reason of its failure to meet the requirements prior to the end of the first session (whether regular, special, budget or other session) of the State legislature which begins after October 1, 1982, or which began prior to October 1, 1982, and remained in session until at least October 26, 1982. This is in accordance with section 176 of Pub.L. 97-248. Requests for extension of the effective date must be sent to the Regional Representative of the appropriate OCSE Regional Office and a copy of the request to the Secretary, Department of Health and Human Services.

FOR FURTHER INFORMATION CONTACT: Carol Jordan, (301) 443-5350.

SUPPLEMENTARY INFORMATION:

Background

Prior to enactment of section 173 of Pub. L. 97-248, section 454(5) of the Social Security Act (the Act) required IV-D agencies to pay directly to the family the full amount of the child support which was collected and used to determine the family's ineligibility for an assistance payment under the AFDC program. This amount was paid to the family in the first month the family was ineligible for an AFDC payment. In addition, the family is entitled to receive any current support which is paid during the first month of ineligibility.

The following example illustrates a typical situation occurring under the old section 454(5). The IV-A agency makes the January assistance payment to the family. On January 15 the IV-D agency collects a payment equal to the current support obligation for January. The IV-D agency notifies the IV-A agency of the amount of this collection on February 14. The IV-A agency uses the amount of the January support collection to redetermine the family's eligibility for AFDC and on March 7, determines that the amount collected is sufficient to cause ineligibility. The IV-A agency then notifies the family and the IV-D agency that assistance terminates effective March 31. The IV-D agency pays the family the January support collection in April, the first month of ineligibility for AFDC. The IV-D agency also forwards any April support collection to the family as soon as it is received. The family thus receives two child support payments in the first month of ineligibility for AFDC and the State and Federal governments are not reimbursed for the January assistance payment. Another way to describe this situation is that the family receives both the AFDC payment and the child support collection for January.

Statutory Provision

Section 173 of Pub. L. 97-248 amended section 454(5) of the Act to require States to pay directly to the family any support payments for any month following the first month in which the amount collected is sufficient to make the family ineligible for assistance. The effect of this amendment is that the State will use the support payment which caused AFDC ineligibility to reimburse itself and the Federal government for any AFDC payment made to the family. The effective date for this amendment was October 1, 1982.

Regulatory Provisions

These regulations revise 45 CFR 302.32(a) and (b) to implement section 454(5) of the Act as amended by Pub.L. 97-248. Former regulations at § 302.32(b) required the IV-D agency to pay directly to the family any child support payment which was sufficient to make the family ineligible for AFDC. These regulations amend § 302.32(b) by deleting the requirement that the IV-D agency must pay the support which caused ineligibility directly to the family. Instead, they require the IV-D agency to distribute the amount collected pursuant to 45 CFR 302.51. Therefore, the child support which makes the family ineligible will be used by the IV-D agency to reimburse the State and Federal governments for any assistance payment made to the family. Thus, the family would no longer receive two support payments in the first month of ineligibility; the first being the collection which caused the ineligibility and the second being the support collected during the first month of ineligibility. We made a technical change to § 302.32(a) to conform with the revised § 302.32(b).

The changes made by these regulations would have the following effect on the example described earlier under "Background". The IV-A agency terminates assistance effective March 31 based on a support payment collected by the IV-D agency in January and reported to the IV-A agency in February. The State uses the January support collection which caused AFDC ineligibility to reimburse itself and the Federal government for assistance paid to the family and forwards the April (the first month of ineligibility) support collection to the family as soon as it is received. It is essential that the IV-D agency forward the support payment collected during the first month of ineligibility to the family as quickly as possible. Since AFDC will have been terminated, the family may be totally dependent on the support payment to meet its needs. Therefore, we urge States to forward that support payment to the family within 2 days of its receipt, if possible, to ensure continued self-sufficiency and to avoid a return to the public assistance rolls.

Response to Comments

We received two comments in response to the interim final regulations published in the Federal Register on January 20, 1983. Both comments were from State agencies. One State agency submitted a general comment in support of the regulations. The other State agency submitted comments which we are responding to as follows.

Comment: The regulations erroneously assume that the absent parent will make continuous monthly support payments.

Response: We recognize that child support obligations are not always met in a timely and responsible manner. However, these regulations implement section 454(5) of the Act which does not permit a State to pay the child support payment that caused ineligibility to the family in the first month of ineligibility. This payment is retained and used to reimburse the State for the assistance paid in the month that the child support which caused ineligibility was collected. As a result, the family is only entitled to any child support payment received by the IV-D agency in the first month of ineligibility. Therefore, we stress that the IV-D agency should forward the support payment collected during the first month of ineligibility to the family as quickly as possible, since the family may be totally dependent on the support payment to meet its needs. If the family does not receive a support payment in the first month of ineligibility, the family may reapply for AFDC.

Comment: In some States, clients who continue to receive IV-D services would never receive a double payment under the previous regulations. The State paid the family the collection that caused ineligibility in the first month of ineligibility because all child support payments are paid to the local Clerk of Court and forwarded to the IV-D agency in the next month. Therefore, the family would not receive the support due in the initial month of ineligibility until the next month and would only receive one payment, i.e., the collection that caused the ineligibility. These States should be allowed to continue distributing child support payments under the previous regulations.

Response: The commenter is correct that no double payment is made to individuals who continue to receive IV-D services in the first month of ineligibility for AFDC in its example. However, the double payment occurs because the family receives both the child support payment that caused ineligibility and the AFDC payment for the same month. State and Federal governments are not reimbursed for the AFDC payment made in the month the child support payment that caused ineligibility was collected (January, in the example under "Background").

In addition, the situation describe by the commenter occurs only while the client continues to receive IV-D services. There would be a double payment in the first month the child support is paid directly to the family. For example, if the parent ceases receiving IV-D services in March, the family would receive both the child support for February, forwarded to the custodial parent by the IV-D agency in March, and the child support for March, received directly by the custodial parent.

Section 173 of Pub.L. 97-248 amends section 454(5) of the Act and these regulations implement the amended statute. Therefore, there is no authority to use the previous regulations because the statutory basis for the previous regulations has been changed.

Comment: Most States are unable to forward the support payment for the month of ineligibility to the family within two days of its receipt.

Response: The regulations do not require States to forward collections to the family within two days. This time frame is set forth in the preamble as an optimal goal. In States that do not have this capability, it may be possible to make procedural changes to reduce the time it currently takes to forward payments to the family.

Changes to Interim Final Regulations

We have considered the comments submitted and have determined that no changes are necessary to the interim final regulations as a result of comments received. We have made a technical change to delete the word "child" in the title and paragraph (a) of § 302.32. The word "child" was deleted in the December 23, 1982, Federal Register publication (47 FR 57277) of regulations governing collection of support for certain adults and inadvertently included in the January 20 interim final regulations at issue in this document. Therefore, we have corrected the technical error in this document.

Paperwork Reduction Act

These regulations contain no information collection requirements which require Office of Management and Budget approval under the Paperwork Reduction Act of 1980 (Pub.L. 96-511).

Regulatory Burden

Section 1(b) of Executive Order 12291 states that a major rule is one that is likely to result in:

(1) An annual effect on the economy of $100 million or more;

(2) A major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or

(3) Significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets.

The Senate Finance Committee Report 97-494, dated July 12, 1982, estimated that implementation of section 173 of Pub.L. 97-248 would result in Federal savings of $3 million in FY '83 and $4 million in FY '84. In addition to the insignificant annual effect on the economy, elimination of the double payment will not increase costs or prices as described in criterion (2), or result in significant adverse effects on the entities described in criterion (3). Any cost impact is a result of the statutory change.

For these reasons, the Secretary has determined that this document is not a major rule as described by Executive Order 12291, because it does not meet any of the criteria set forth in Section I of the Executive Order. The Secretary also certifies that because these regulations apply to States and will not have a significant economic impact on a substantial number of small entities, they do not require a regulatory flexibility analysis as provided in Pub.L. 96-354, the Regulatory Flexibility Act of 1980.

List of Subjects in 45 CFR Part 302

Child welfare, Grant programs - social programs.

The interim final regulations in § 302.32 published in the Federal Register on January 20, 1983 (48 FR 2540) are adopted as final with the following changes: Remove the word "child" from the title and from paragraph (a). Paragraph (b) is reprinted without change for the convenience of the reader.

§ 302.32 Support payments to the IV-D agency.

The State plan shall provide that:

(a) In any case in which support payments are collected for a recipient of aid under the State's title IV-A plan with respect to whom an assignment under § 232.11 is effective, such payments shall be made to the IV-D agency and shall not be paid directly to the family.

(b) As soon as possible but not later than 30 days after the end of a month the IV-D agency will inform the agency administering the State's title IV-A plan of the amount of the collection which represents payment on the required support obligation for that month as determined in § 302.51(a). Upon being informed of this amount, the IV-A agency will determine if such amount is sufficient to make the family ineligible for an assistance payment pursuant to the State's IV-A plan (See § 232.20 of Chapter II of this title). If such amount is sufficient to make the family ineligible for an assistance payment, the IV-A agency will notify the IV-D agency and the IV-D agency will distribute the amount collected pursuant to § 302.51 of this part. The IV-D agency will notify the family if it will continue to collect and distribute current support payments pursuant to § 302.51(e)(1) of this part.

* * * * *

(Section 1102 of the Social Security Act (42 U.S.C. 1302) and Section 454(5) of the Social Security Act (42 U.S.C. 654(5)

(Catalog of Federal Domestic Assistance Program No. 13.679, Child Support Enforcement Program.)

Dated: April 5, 1984.

Martha A. McSteen,

Director, Office of Child Support Enforcement

Approved: May 1, 1984.

Margaret M. Heckler,

Secretary.

(FR Doc. 84-13721 Filed 5-25-84; 8:45 am)

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