Implementation of the "Hold Harmless" Provision to the State Share of Child Support Collections
Hold Harmless Provision Applicable to State Share of Child Support Collections
Office of Child Support Enforcement
March 20, 1998
TO: STATE AGENCIES ADMINISTERING A CHILD SUPPORT ENFORCEMENT PROGRAM UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED ORGANIZATIONS, AGENCIES AND INDIVIDUALS.
SUBJECT:Implementation of the "Hold Harmless" Provision Applicable to the State Share of Child Support Collections
BACKGROUND:Under the "hold harmless" provision of Section 457(d) of the Social Security Act, as amended by Public Law 104-193, the "Personal Responsibility and Work Opportunity Act of 1996" (PRWORA), the State share of collections retained by each State in any fiscal year will be equal to the similar amount it retained in fiscal year 1995.
ADJUSTMENTS: Following the end of each fiscal year, the Office of Child Support Enforcement (OCSE) will compare each State's share of child support collections for that year (using the information reported on its quarterly collection reports) to the State share reported for fiscal year 1995. If the current year State share is greater than the 1995 State share, no further action will be necessary. If the 1995 State share is greater than the current year State share, a title IV-D "hold harmless" grant award will be issued to the State for the difference (subject to the "Limitations" discussed below).
OCSE anticipates that this comparison will be made within six months of the end of each fiscal year to permit States sufficient opportunity to revise their quarterly collection reports. To make this comparison, OCSE will use the fiscal year 1995 data found in the most recently published Annual Report to Congress. (For example, for the adjustment following fiscal year 1997, the 1995 State share of collections is found in Table 11 of the "Twentieth Annual Report to Congress for the period ending September 30, 1995.")
LIMITATIONS: The funds for the State's "hold harmless" grant awards are derived from the remaining net Federal share of child support collections attributable to that State at the end of a fiscal year, as adjusted by the quarterly incentive payments and annual incentive payment adjusting award. If, for any State, the remaining amount of the net Federal share of collections for a fiscal year is less than the amount needed for the full hold harmless grant award for that year, the hold harmless award will be limited to the remaining amount of the net Federal share of collections attributable to that State.
ACTION REQUIRED: All the information needed to make the hold harmless comparison is included in the existing quarterly collection report. No additional financial reporting or other action is required by the States. Necessary revisions to any quarterly reports must be submitted no later than January 15 following the end of the fiscal year.
EFFECTIVE DATE: The "hold harmless" provision was effective beginning in fiscal year 1997, for collections distributed on or after October 1, 1996.
INQUIRIES: Inquiries should be directed to the appropriate ACF Regional Administrator.
Robert Harris for
David Gray Ross
Office of Child Support
Elizabeth M. James
Deputy Assistant Secretary