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Final Rule: Optional Use of Current Rate FFP to Distribute Arrearage Collections

AT-81-03

Published: February 10, 1981
Information About:
State/Local Child Support Agencies, Other Public Partners, TANF (IV-A)
Topics:
Case Management, Collections/Distribution/State Disbursement Unit (SDU), Funding, Federal Financial Participation (FFP)
Types:
Policy, Action Transmittals (AT), Regulations

Final Rule Permitting optional use of current rate FFP to distribute arrearage collections

ACTION TRANSMITTAL

OCSE-AT-81-03

February 10, 1981

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

SUBJECT:Final Rule permitting optional use of current rate FFP to distribute arrearage collections

ATTACHMENT:Attached is a final regulation which permits State IV-D agencies to use the current rate of Federal matching in their respective State AFDC programs as the basis for distributing all child support collections, including those arrearage collections used to reimburse past AFDC assistance payments which might have been made at a prior rate of AFDC FFP.

REGULATION REFERENCE: 45 CFR 304.26

EFFECTIVE DATE: January 22, 1981

COMMENTS:Although the attached regulation is published in final form, OCSE will give consideration to comments received on or before March 23, 1981. Comments should be directed to: Acting Director, Office of Child Support Enforcement, 6110 Executive Boulevard, Rockville, Maryland, 20852

INQUIRIES TO: OCSE Regional Representatives

Acting Director

Office of Child Support

Enforcement

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Child Support Enforcement

45 CFR Part 304

Determination of the Federal Share of Collections

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

ACTION: Final Rule with comment period.

SUMMARY: This regulation authorizes State Child Support Enforcement agencies to use the current rate of Federal matching in their respective State AFDC programs as an optional method of determining the amount of each child support collection which may be applied as reimbursement of the Federal government's share of AFDC payments. Existing regulations at 45 CFR 304.26 require that such determinations be made according to the rate of Federal matching in each of the specific assistance payments being reimbursed. This rate of Federal matching is subject to periodic changes. Our present requirements thus create an administrative burden when States use child support collections to reimburse past assistance payments as required by Section 457(bi of the Social Security Act, because these payments have in many cases been made at a prior rate of Federal matching. This new optional procedure will therefore provide significant administrative benefits for States that choose to use it.

DATE: Effective date: January 22, 1981.

Comment Period: Consideration will be given to written comments or suggestions received on or before March 23, 1981. Agencies and organizations are requested to submit their comments in duplicate.

Address: Address comments to: Director, Office of Child Support Enforcement; Department of Health and Human Services; 6110 Executive Blvd., Suite 900; Rockville, Maryland, 20852; Attn; Policy Branch. Comments will be available for public inspection Monday through Friday, 8:30 a.m, to 5:00 p.m., in Room 1010 of the Department's offices at the address above.

FOR FURTHER INFORMATION CONTACT: Eileen Brooks, (301) 443-5350.

SUPPLEMENTARY INFORMATION

Federal Share of Collections

Section 457(b) of the Social Security Act requires that, from the amounts of Child support collected by the State and retained as reimbursement for AFDC payments, the State must reimburse the Federal Government to the extent of its participation in the financing of the assistance payment.Existing regulations at 45 CFR 304.26 require States to distribute collections according to the rate of Federal matching in the specific AFDC payments that the child support collection is used to reimburse. Although the vast majority of the payments being reimbursed are in the current period, under existing OCSE policy States must nevertheless be able to calculate the Federal share of collections which are used to reimburse assistance payments made in the past when different rates of Federal matching in AFDC were in effect. This is an unnecessarily burdensome requirement given the infrequency of occurrence. The requirement is particularly burdensome in jurisdictions which calculate AFDC reimbursement under Section 403(a) of the Social Security Act. The AFDC reimbursement rate in these States may change as often as every month.

Because of the problems associated with existing policy, OCSE has decided to permit States the option of using the rate of Federal financial participation in the State's AFDC program in effect at the time of distribution as the basis for determining the Federal share of collections. Any potential effect on Federal or State shares of collections, due to the slight changes over time in reimbursement rates, is likely to be negligible. States choosing to reimburse the Federal government at current AFDC Federal matching rates will generate savings in both Federal and State administrative costs. The regulation has been given a new title, Determination of Federal Share of Collections, to more accurately reflect its content.

Statutory Authority

The Social Security Act at Section 457(b)(3)(A) requires that, of the amounts of child support collected by the States on behalf of AFDC children in excess of those amounts used to reimburse the current month's assistance payment, 457(b)(1), and those amounts paid to the family, 457(b)(2), the States must retain such excess amounts as reimbursement of prior months' assistance payments, "with appropriate reimbursement of the Federal Government to the extent of its participation in the financing" of the earlier assistance payments. We believe that this statutory language is sufficiently broad to permit OCSE to allow States the option of calculating the Federal share based on the current AFDC FFP rate.

Rulemaking

This amendment to the regulation is being published in final form, the Administrative Procedure Act, 5 U.S.C. 553(b)(B), provides that, if the Department for good cause finds that a notice of proposed rulemaking is unnecessary, impracticable or contrary to the public interest, it may dispense with the notice if it incorporates a brief statement in the final regulations of the reasons for doing so. The Department finds that there is good cause to dispense with public notice and comment with respect to this change because notice and comment prior to its adoption is unnecessary and impracticable for the reasons that follow. Thisamendment will provide the State IV-D agencies with an optional procedure which will simplify the administration of the IV-D program in those States which adopt it. It does not affect the substantive rights of individuals involved in the IV-D program. It places no new requirements upon the States, but rather, by providing an alternative which simplifies requirements that have proven burdensome to many States, it seeks to improve the efficiency of the Child Support Enforcement program. Prompt enactment of this change will allow States which choose this option to immediately realize the benefits of simplified distribution procedures. This change has been advocated by several States which are anxious to implement it as soon as possible.

This regulation is being made effective immediately upon publication because in providing an alternative method to determine the Federal share of collections it relieves a restriction on the way in which collections are distributed. Although the regulation has immediate effect, OCSE will give consideration to public comments received on or before March 23, 1981.

45 CFR Part 304 is amended by revising § 304.26 to read as follows:

§ 304.26 Determination of Federal share of collections.

(a) From the amounts of child support collected by the State and retained as reimbursement for AFDC payments, the State shall reimburse the Federal government to the extent of its participation in the financing of the AFDC payment. In computing the Federal share of child support collections, the State has two options:

(1) The State may use the AFDC FFP rate applicable to the period in which the assistance payment was made as follows: (i) If the State uses the Federal medical assistance percentage under Section 1118 of the Act, this percentage shall be used in computing the Federal share of collections. (ii) If the State uses the computations in section 403(a) of the Act, the Federal share of collections shall be computed using the rate of Federal participation in the financing of:

(A) The individual assistance payment: or

(B) All of the assistance payments in the same month; or

(2) The State may use the current rate of AFDC FFP as follows:

(i) If the State uses the Federal medical assistance percentage under section 1118 of the Act, the percentage applicable at the time of distribution shall be used in computing the Federal share of collections. (ii) If the State uses the computations in section 403(a) of the Act, the average rate of Federal participation in the financing of assistance payments during the immediately preceding quarter shall be used in computing the Federal share of collections.

(b) If an incentive payment is made to a jurisdiction under § 302.52 of this chapter for the enforcement and collection of support obligations, the payment shall be made from the Federal share of collections computed in paragraph (a) of this section.

(Sec. 1102 of the Social Security Act, 49 Stat. 647 (42 U.S.C.1302))

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

Note. The Office of Child Support Enforcement has determined thatthis document does not require preparation of a Regulatory Analysis as prescribed by Executive Order 12044.

Dated: December 22, 1980.

William J. Driver,

Director, Office of Child Support Enforcement

Approved: January 14, 1981,

Patricia Roberts Harris,

Secretary.

[FR Doc. 81-2319 Filed 1-21-81: 8:45 am]

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