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Instructions for the Distribution of Child Support Under Section 457 of the Social Security Act

AT-97-17

Published: October 21, 1997
Information About:
Other Public Partners, Foster Care (IV-E), TANF (IV-A), State/Local Child Support Agencies
Types:
Policy, Action Transmittals (AT)
Tags:
Pass-through/Family Distribution, Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), Collection & Enforcement Systems

ACTION TRANSMITTAL

OCSE-AT-97-17
October 21, 1997

TO: STATE AGENCIES ADMINISTERING A CHILD SUPPORT ENFORCEMENT PROGRAM APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT.

SUBJECT: Instructions for the distribution of child support under section 457 of the Social Security Act (the Act)

ATTACHMENT: Subject instructions

BACKGROUND: Effective October 1, 1996, section 302 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), P.L. 104-193, revised section 457 of the Act, which governs the distribution of any support collected under the Child Support Enforcement Program under title IV-D of the Act. Section 103 of PRWORA revises title IV-A of the Act, in part, by replacing the assignment of rights provisions in former section 402(a)(26) of the Act, effective July 1, 1997, with new assignment of rights requirements in section 408(a)(3) of the Act.

Regulations at 45 CFR 232.11, 302.51, 302.52 and 303.72 address assignment of rights to support as a condition of eligibility of assistance under title IV-A of the Act and distribution of support collections under title IV-D of the Act. 45 CFR 232.20 and 302.32 provide for the treatment of child support by the title IV-A and IV-D agencies. To the extent that these regulations are inconsistent with the new statute, they are superseded by the new statutory requirements. Section 302.51(b) in its entirety is clearly inconsistent with the new section 457 of the Act, and therefore is no longer in effect, because it was based on the prior version of section 457. Existing regulations will be revised to delete any inconsistent requirements.

The Balanced Budget Act of 1997 (the BBA), P. L. 105- 33, signed August 5, 1997, contained technical amendments to sections 408(a)(3) and 457 of the Act. Section 5532 of the BBA added section 457(a)(6) to give States the option of implementing distribution changes under section 457 which apply to former assistance cases in one step, effective October 1, 1998, and includes other minor technical corrections.

In addition, section 5547 of the BBA reinstates distribution requirements in former section 457 governing title IV-E foster care cases. Section 5549 of the BBA amends section 454B to define the date of collection as the date of receipt by the State disbursement unit (SDU), except that if current support is withheld by an employer in the month when due and is received by the SDU in a month other than the month when due, the date of withholding may be deemed to be the date of collection, at the option of the State.

Finally, section 5557 of the BBA provides that the amendments are effective as if included in the enactment of PRWORA.

CONTENTS: This action transmittal promulgates procedures and gives examples relating to the provisions of section 457 of the Act for the distribution of child support collections. Some procedures prescribed herein relate to the associated policies in 45 CFR 302.32 and those sections of 45 CFR 302.51 which are not superseded by the revised section 457 of the Act.

The Action Transmittal addresses changes to section 457 made as part of the technical amendments to title IV-D in the BBA. However, further guidance will be issued with respect to the option allowed under the section 5532 of the BBA for States to implement changes to distribution in former assistance cases on October 1, 1998, rather than in two phases as required under section 457 as originally enacted under PRWORA. At that time, we will also address additional questions that arise subsequent to publication of the Action Transmittal.

APPLICABILITY: This action transmittal describes in detail the procedures relating to the collection and distribution of child support under title IV-D of the Social Security Act. The procedures are applicable only for collections of child support which are made pursuant to an approved State plan for child support enforcement under title IV-D.

SUPERSEDED MATERIAL: OCSE-AT-76-05, dated March 11, 1976

RELATED REFERENCES: TANF-ACF-PA-97-1, dated January 31, 1997

INQUIRIES TO: Regional Administrators, ACF/OCSE

David Gray Ross/s/
Deputy Director
Office of Child Support Enforcement

TABLE OF CONTENTS
 

............................................................................................................................Page

Distribution Requirements

I. Determination of the required monthly child support obligation...............................6
a. Child support obligation document
b. Frequencies other than monthly
c. Voluntary payments
d. Rounding to whole dollar amounts
e. Date of collection
f. Future payments
g. Gap payments
h. Assigned medical support collections

II. Reporting collections to the IV-A agency in current assistance cases...........................................................................9

III. Definitions.........................................................................9

IV. Assignment of support rights.................................11

V. Distribution of collections through Federal income tax refund offset...................................................13

VI. Distribution of collections (except for Federal income tax refund offsets).............................................14

VII. Hold harmless provision...................................18

VIII.Distribution of collections in title IV-E foster care cases................................................18

Questions and Answers

Assignment of rights to support................................19

Distribution in current assistance cases.......................19

Federal share of collections...................................24

Existing regulations at 45 CFR 302.51 and 302.52 former section 457 of the Act............................................24

Federal and State income tax refund offset and Federal Administrative Offset.............................................25

Distribution of Arrearages in former assistance cases..........27

Gap payments...................................................28

Future payments................................................30

Federal reporting requirements.................................31

Other questions................................................31

Systems-related questions......................................32

Appendix: Case Scenarios

INSTRUCTIONS FOR THE DISTRIBUTION OF CHILD SUPPORT COLLECTIONS PURSUANT TO AN APPROVED IV-D STATE PLAN

I. Determination of the required monthly child support obligation

(a)Child Support Obligation Document Before any distribution of amounts of child support collected can be made, an amount which represents the required child support obligation for one month must be determined. In all cases, the amount must be ascertained from the document which established the support obligation -- a court or administrative order or other legal process established under State law. See 45 CFR 302.50 and 302.56. In most cases, the amount is taken directly from the support order. For example, if a support order states that the noncustodial parent shall pay $500 per month in child support, $500 is the amount which represents the required monthly child support obligation.

(b) Frequencies other than Monthly Child support payments are often ordered to be paid in frequencies other than monthly and must be converted to an amount which represents the required monthly child support obligation. If the State has an existing system for such conversions, such a system may be used or, as an alternative, the State may use one of the following conversion systems:

Example 1

If the support obligation is to be paid weekly, such as $20 per week, multiply by 4.345 to get the required monthly child support obligation. Some States have existing systems which use 4-1/3 as the multiplier; 4- 1/3 is also acceptable, but slightly less accurate.

$20 x 4.345 = $86.90 per month

Example 2

If the support obligation requires a weekly payment of $20 each Monday and there are 4 Mondays in a month, the current monthly obligation equals $80. However, in months in which there are 5 Mondays, the current monthly obligation equals $100.

$20 x 4 Mondays = $80 for the month
$20 x 5 Mondays = $100 for the month
 

Similarly, if the support obligation requires bi-weekly (every 2 weeks) payments, there will be some months in which 3 payments are due to satisfy the current monthly obligation. If the order requires a bi-weekly payment of $100 and there are two charge days in the month, the current monthly obligation equals $200. However, if there are three charge days in the month, the current monthly obligation will equal $300.

$100 x 2 = $200 for the month
$100 x 3 = $300 for the month

Example 3

If the support obligation is to be paid every two weeks, such as $25 every two weeks, multiply by 2.173 (2 1/6 is also acceptable) to get the required monthly child support obligation.

$25 x 2.173 = $54.33 per month
 

Example 4

If the amount is to be paid in some other frequency, such as $10 every 8 days, the conversion can be made by expressing the order or agreement in days, multiplying by 365, and dividing by 12.

$10 x 365 days = $38.02 per month
8 days 12 months

The conversion can also be made by multiplying the amount required by the number of payments required in a year and dividing by 12.

(c) Voluntary payments. In the absence of a support order, any amounts received as voluntary payments shall be treated as the obligation for the current month in which they were received. (see PIQ-81-9)

(d)Rounding to Whole Dollar Amounts Once the required monthly child support obligation has been determined, the amount may, at the discretion of the IV-D agency, be rounded to a whole dollar amount. The amount computed to be paid to the family, retained by the State, or reimbursed to the Federal Government may also be rounded. See 45 CFR 302.51(a)(2).

(e)Date of Collection The date of collection for amounts collected and distributed under title IV-D of the Act is the date of receipt by the State disbursement unit established under section 454B of the Act, except that if current support is withheld by an employer in the month when due and is received by the State disbursement unit in a month other than the month when due, the date of withholding may be deemed to be the date of collection.

(f)Future payments. Under 45 CFR 302.51(c), if, in a current assistance case, an amount collected as support represents payment on the required support obligation for future months, the amount shall be applied to such future months. However, no such amounts shall be applied to future months unless amounts have been collected which fully satisfy the support obligation assigned under section 408(a)(3) of the Act for the current month and all past months.

Example 5

Assume there are no arrearages in a current assistance case and the required monthly child support obligation is $400. If more than $400 is received and designated by the payer as a future payment, the excess should be applied to such future month. If there is no such designation, a State may determine if a payment represents a future payment.

(g) Gap payments under section 457(e) of the Act and former 402(a)(28) of the Act.

Former section 402(a)(28) of the Act provided for the payment to the family of child support collected by the State as a protection against reduction in the total income available to a family in a month. This section only applied to those States whose State title IV-A plan, in July, 1975, permitted a portion of the monthly child support payment after application of appropriate disregards to be retained by a family receiving AFDC without causing a dollar-for-dollar reduction in the AFDC payment made to the family.

Under section 457(e) of the Act, at State option, section 457 of the Act does not apply to any amount collected on behalf of a family as support by the State (and paid to the family in addition to the amount of assistance otherwise payable to the family) if such amount would have been paid to the family by the State under section 402(a)(28) of the Act, as in effect and applied on August 21, 1996.

(h) Assigned medical support collections.

Any amounts collected by the IV-D agency which represent specific dollar amounts designated in the support order for medical purposes that have been assigned to the State under 42 CFR 433.146 shall be forwarded to the Medicaid agency for distribution under 42 CFR 433.154. See 45 CFR 302.51(e)(1).

When a family ceases receiving assistance under the State's title XIX (Medicaid) plan, the assignment of medical support rights under section 1912 of the Act terminates, except for the amount of any unpaid medical support obligation that has accrued under such assignment. The IV-D agency shall attempt to collect any unpaid specific dollar amounts designated in the support order for medical support purposes. Under this requirement, any medical support collection made by the IV-D agency shall be forwarded to the Medicaid agency for distribution under 42 CFR 433.154. See 45 CFR 302.51(e)(2).

II. Reporting collections to IV-A agency in current assistance cases.

(a) In accordance with 45 CFR 302.32(b), the IV-D agency must inform the State's IV-A agency of the amount of the collections which represents payment on the required support obligation for the month as determined in section 302.51(a) within 10 working days of the end of the month in which the support is received by the IV-D agency responsible for final distribution. This amount is not necessarily the total amount of the collection; it is only that portion of the collection which represents payment on the support obligation for that month.

(b) Method of Informing. There is no mandated standard procedure for the IV-D agency to inform the State IV-A agency. The State may adopt any procedure it finds best fits both agencies' individual requirements so long as the IV-A agency can easily use the information and properly determine eligibility based upon the amounts collected which represent payment on the child support obligation for the current month.

III. Definitions used in this Action Transmittal.

As used in this document:

(a) ASSISTANCE.--The term `assistance from the State' means assistance under the State program funded under title IV-A of the Act (see also TANF-ACF-PA-97-1, dated January 31, 1997) or under the State plan approved under title IV-A (as in effect on August 21, 1996).

(b) FEDERAL SHARE.--The term `Federal share' means that portion of the amount collected resulting from the application of the Federal medical assistance percentage in effect for the fiscal year in which the amount is distributed.

(c) FEDERAL MEDICAL ASSISTANCE PERCENTAGE.--The term `Federal medical assistance percentage' means--

(1) 75 percent, in the case of Puerto Rico, the Virgin Islands, Guam, and American Samoa; or

(2) the Federal medical assistance percentage (as defined in section 1905(b) of the Act, as such section was in effect on September 30, 1995) in the case of any other State.

(d) STATE SHARE.--The term `State share' means 100 percent of the amount collected which does not exceed the cumulative unreimbursed assistance, minus the Federal share.

(e) CURRENT ASSISTANCE CASE. -- The term "current assistance case" means any IV-D case which is currently receiving assistance.

(f) FORMER ASSISTANCE CASE. -- The term "former assistance case" means any IV-D case which formerly received assistance.

(g) NEVER-ASSISTANCE CASE. -- The term "never-assistance case" means any IV-D case which has never received assistance.

(h) PERMANENTLY-ASSIGNED ARREARAGES.--The term "permanently-assigned arrearages" means those arrearages which do not exceed the cumulative amount of unreimbursed assistance paid to the family as of the date the family leaves the assistance rolls: (1) which are or were assigned under an assignment of support rights in effect on September 30, 1997, and (2) which accrued under an assignment entered into on or after October 1, 1997, while a family is receiving assistance.

(i) TEMPORARILY-ASSIGNED ARREARAGES -- The term "temporarily-assigned arrearages" means those arrearages which do not exceed the cumulative amount of unreimbursed assistance paid to the family as of the date the family leaves the assistance rolls, which accrued prior to the family receiving assistance and which were assigned to the State after September 30, 1997. These arrearages are not permanently assigned and the temporary assignment will expire when the family leaves the assistance program or on October 1, 2000, whichever date is later.

(j) CONDITIONALLY-ASSIGNED ARREARAGES -- The term "conditionally-assigned arrearages" means those arrearages which do not exceed the cumulative amount of unreimbursed assistance paid to the family as of the date the family leaves the assistance rolls and which are owed to the family unless they are collected through Federal income tax refund offset. They are arrearages which were temporarily assigned to the State and became conditionally assigned to the State when the temporary assignment expired. If a conditionally- assigned arrearage is collected through a Federal income tax refund offset, the collection is retained by the State to reimburse the State and the Federal government up to the cumulative amount of unreimbursed assistance paid to the family. Collections of conditionally-assigned arrearages by any other enforcement mechanism are paid to the family.

(k) NEVER-ASSIGNED ARREARAGES -- The term "never-assigned arrearages" means all arrearages in never-assistance cases, and, in former assistance cases, means those arrearages that accrue after the family's most recent period of assistance ends.

(l) UNASSIGNED DURING-ASSISTANCE ARREARAGES -- The term "unassigned during-assistance arrearages" means all previously-assigned arrearages which exceed the cumulative amount of unreimbursed assistance when the family leaves the assistance program and which accrued during the receipt of assistance.

(m) UNASSIGNED PRE-ASSISTANCE ARREARAGES: -- The term "unassigned pre-assistance arrearages" means all previously-assigned arrearages which exceed the cumulative amount of unreimbursed assistance when the family leaves the assistance program and which accrued prior to the receipt of assistance.

(n) UNREIMBURSED ASSISTANCE. -- The term "unreimbursed assistance" means the cumulative amount of assistance paid to a family for all months which has not been repaid by assigned support collections. The total amount of unreimbursed assistance a State may recover through the IV-D program is limited by the total amount of the assigned support obligation.

IV. Assignment of support rights under sec. 408(a)(3) of the Act

(a) In General.--As a condition of eligibility for assistance under title IV-A of the Act, a member of a family must assign to the State any rights a family member may have (on behalf of the family member or of any other person for whom the family member has applied for or is receiving such assistance) to support from any other person, not exceeding the total amount of assistance paid to the family, which accrue (or have accrued) before the date the family leaves the program.

All support collected pursuant to such assignment while the family is currently receiving IV-A assistance will be retained to reimburse the cumulative amount of assistance which has been paid to the family, unless a State opts to pay all or a portion of the collection to the family.

After the family leaves the IV-A assistance program, accrued arrearages remain assigned in accordance with the following rules:

(1) For an assignment entered into prior to October 1, 1997, the applicant assigns to the State all rights to support which have previously accrued and which will accrue prior to the family leaving assistance.

(2) For an assignment entered into on or after October 1, 1997, and before October 1, 2000, --

(A) with respect to collections by Federal income tax refund offset, the applicant assigns to the State all rights to support which have previously accrued and which will accrue prior to the family leaving assistance.

(B) with respect to collections by other than Federal income tax refund offset,

(I) the applicant assigns to the State all rights to support which will accrue while the family is receiving assistance; and

(II) the applicant temporarily assigns to the State all rights to support which accrued prior to the family receiving assistance, until October 1, 2000, or such time that the family leaves assistance, whichever date is later.

(3) For an assignment entered into on or after October 1, 2000, --

(A) with respect to collections by Federal income tax refund offset, the applicant assigns to the State rights to support which have previously accrued and which will accrue prior to the family leaving assistance.

(B) with respect to collection by other than Federal income tax refund offset,

(I) the applicant assigns to the State all rights to support which will accrue while the family is receiving assistance; and

(II) the applicant temporarily assigns to the State all rights to support which accrued prior to the family receiving assistance, until the family leaves assistance.

(4) If a State elects to implement on October 1, 1998, distribution requirements for former assistance cases that would otherwise be effective October 1, 2000,

(A) For an assignment entered into prior to October 1, 1998, the assignment rules under section (IV)(a)(1) of the Action Transmittal apply.

(B) For an assignment entered into on or after October 1, 1998, the assignment rules under section (IV)(a)(3) of this Action Transmittal apply.

(b) Limitations

(1) A State may not require, as a condition of providing assistance to any family, that a member of the family assign to the State any rights to support described in paragraph (a) which will accrue after the date the family leaves the program.

(2) The cumulative amount of assigned arrearages in former assistance cases may not exceed the cumulative amount of unreimbursed assistance paid to the family under all assignments.

V. Distribution of collections through Federal income tax refund offset under section 457(a)(2)(B)(iv) of the Act

(a) General rule. Notwithstanding any other provision of section 457 of the Act, any amount of support collected pursuant to section 464 of the Act shall be retained by the State to the extent past-due support has been assigned to the State as a condition of receiving assistance from the State, up to the amount necessary to reimburse the State for cumulative amounts paid to the family as assistance by the State.

The State shall pay to the Federal Government the Federal share of the amounts so retained.

To the extent the amount collected pursuant to section 464 of the Act exceeds the amount required to be retained, the State shall pay the excess to the family.

(b) Current Assistance Cases. Support collections through Federal income tax refund offsets in current assistance cases are retained by the State up to the cumulative amount of unreimbursed assistance paid to the family. The Federal statute does not specify the order in which collections are applied to satisfy assigned arrearages. The State must have procedures which specify the order in which assigned arrearages will be satisfied. Collections over and above the cumulative amount of unreimbursed assistance are paid to the family.

(c) Former Assistance Cases. Support collections made through Federal income tax refund offsets in former assistance cases must first be applied to assigned arrearages. This includes temporarily-assigned and conditionally-assigned arrearages, as defined. These collections must be retained by the State up to the cumulative amount of unreimbursed assistance paid to the family. The Federal statute does not specify the order in which collections are applied to satisfy assigned arrearages. The State must have procedures which specify the order in which assigned arrearages will be satisfied. Collections over and above the cumulative amount of unreimbursed assistance are paid to the family.

(d) Never-assistance Cases. Support collections through Federal income tax refund offsets in never-assistance cases are paid to the family.

VI. Distribution of collections (except for Federal income tax refund offsets)

(a) In General.

In accordance with 45 CFR 302.51(a)(1), for purposes of distribution in a IV-D case, amounts collected, except for amounts collected through Federal income tax refund offset, must be treated first as payment on the required support obligation for the month in which the support was collected and if any amounts are collected which are in excess of such amount, these excess amounts shall be treated as amounts which represent payment on the required support obligation for previous months.

The requirement to apply collections first to satisfy the current support obligation is critical in all IV-D cases to ensure that payment records are consistent in interstate cases, regardless of whether the amount applied to current support is paid to the family (as in a former assistance case) or retained by the State to reimburse unreimbursed assistance in a current assistance case.

(b) Current Assistance Cases.

The State shall (not exceeding the cumulative amount of unreimbursed assistance paid to the family):

(1) First, pay to the Federal Government the Federal share of the entire amount collected;

(2) Second, retain, or distribute to the family, the State share of the amount collected; and

(3) Third, reduce the cumulative amount of unreimbursed assistance by the total amount collected and disbursed under (1) and (2), and distribute collections exceeding the cumulative amount of unreimbursed assistance to the family.

The Federal statute does not specify the order in which collections are applied to satisfy assigned arrearages in current assistance cases. The State must have procedures which specify the order in which assigned arrearages will be satisfied.

(c) Former Assistance Cases.

(1) For collections made prior to October 1, 1997 (other than through Federal income tax refund offset), the State must:

(A) First, distribute the amount collected to satisfy the current monthly support obligation and pay that amount to the family.

(B) Second, distribute any amount above the current monthly support obligation to satisfy arrearages owed to the family or assigned to the State (see 45 CFR 302.32(f)(ii). The Federal statute does not specify the order in which collections are applied to satisfy arrearages. The State must have procedures which specify the order in which assigned arrearages will be satisfied. If the State distributes any amount to assigned arrearages, the State must pay to the Federal Government the Federal share of the amount so collected and must retain the State share of the amount so collected. The State must retain the State share of the amount so collected, with one exception. The State may retain or pay to the family the State share of collections applied to arrearages which accrued while the family was receiving assistance after October 1, 1996, in accordance with section 457(a)(1) and (2)(B)(iii) of the Act and section VI(b)(2) of this Action Transmittal.

(2) For collections made on or after October 1, 1997 and before October 1, 2000, or earlier at State option, (other than collections through Federal income tax refund offset), the State must:

(A) First, distribute the amount collected to satisfy the current monthly support obligation and pay that amount to the family;

(B) Second, distribute any amount above the current monthly support obligation to satisfy never-assigned arrearages and pay that amount to the family;

(C) Third, distribute any amount above amounts distributed in (A) and (B) to satisfy arrearages owed to the family or assigned to the State (see 45 CFR 302.32(f)(ii). The Federal statute does not specify the order in which collections are applied to satisfy arrearages. The State must have procedures which specify the order in which assigned arrearages will be satisfied. If the State distributes any amount to assigned arrearages, the State must pay to the Federal Government the Federal share of the amount so collected. The State must retain the State share of the amount so collected, with one exception. The State may retain or pay to the family the State share of collections applied to arrearages which accrued while the family was receiving assistance after October 1, 1996, in accordance with section 457(a)(1) and (2)(B)(iii) of the Act and section VI(b)(2) of this Action Transmittal.

(3) For collections made on or after October 1, 2000, or earlier at State option (other than collections through Federal income tax refund offset), the State must:

(A) First, distribute the amount collected to satisfy the current monthly support obligation and pay that amount to the family;

(B) Second, distribute any amount above the current monthly support obligation to satisfy never-assigned arrearages and pay that amount to the family;

(C) Third, distribute any amount above amounts distributed in (A) and (B) to satisfy unassigned pre- assistance arrearages and conditionally-assigned arrearages and pay that amount to the family. The Federal statute does not specify the order in which collections are applied to satisfy these arrearages. The State must have procedures which specify the order in which assigned arrearages will be satisfied. If there are unassigned, previously permanently-assigned arrearages which were assigned under former section 402(a)(26) of the Act and the State cannot determine whether they were pre-assistance or during-assistance arrearages, those unassigned arrearages must be paid to the family.

(D) Fourth, distribute any amount above amounts distributed in (A), (B) and (C) to satisfy permanently-assigned arrearages. The State must pay the Federal Government the Federal share of the amount so collected. The State must retain the State share of the amount so collected with one exception. The State may retain or pay to the family the State share of collections applied to arrearages which accrued while the family was receiving assistance after October 1, 1996, in accordance with section 457(a)(1) and (2)(B)(iii) of the Act, and section VI(b)(2) of this Action Transmittal.

(E) Fifth, reduce the cumulative amount of unreimbursed assistance by the total amount distributed under (D), distribute collections exceeding the cumulative amount of unreimbursed assistance to satisfy unassigned during-assistance arrearages and pay those amounts to the family.

(d) State option for October 1, 1998 effective date for distribution rules in former assistance cases

(1) Notwithstanding any other requirement for distribution of collections in IV-D cases, a State may elect to apply on and after October 1, 1998, the distribution rules that would be effective in former assistance cases for collections made on or after October 1, 2000. These rules are set forth in section VI(c)(3) above.

(2) If a State elects the option described in section (d)(1) above, the requirements of section 457 (other than section 457(b)(1)) of the Act, as in effect and applied on August 21, 1996), shall apply to amounts collected before October 1, 1998. These rules are set forth in section VI(c)(1) above.

(3) A State must indicate which effective dates will apply in the State by submittal of the appropriate State plan preprint page.

(e) Never-assistance Cases. All support collections in never-assistance cases must be paid to the family.

VII. Hold harmless provision under section 457(d) of the Act

(a) General rule. If the amounts collected which could be retained by the State in the fiscal year (to the extent necessary to reimburse the State for amounts paid to families as assistance by the State) are less than the State share of the amounts collected in fiscal year 1995 (determined in accordance with section 457 as in effect on August 21, 1996), the State share for the fiscal year shall be an amount equal to the State share in fiscal year 1995. Amounts collected which could be retained by the State are those collections that would be retained by the State if the State retained the entire amount of the State share of collections (rather than paying any of the State share to the assistance family) and the State implements each provision of section 457 on the date specified in the statute (rather than earlier, as allowed by the statute.)

(b) Gap payment States. For purposes of (a), the State share of any gap payments to the family shall be considered amounts which could be retained by the State if such payments were reported by the State as part of the State share of amounts collected in fiscal year 1995.

VIII.Distribution of collections in title IV-E foster care cases

Notwithstanding the preceding provisions in this Action Transmittal, amounts collected as support in a title IV-E foster care cases must be distributed in accordance with 45 CFR 302.52.

ASSIGNMENT OF RIGHTS TO SUPPORT

QUESTION 1: Does the assignment under section 408(a)(3) of the Act cover a child who is receiving Supplemental Security Income (SSI)?

ANSWER 1: Whether or not the assignment covers a child receiving SSI depends upon whether the child is included in the State's definition of an assistance unit.

DISTRIBUTION IN CURRENT ASSISTANCE CASES, INCLUDING $50 PASS-THROUGH AND DISREGARD

QUESTION 2: Are States required to continue to pass through to families receiving assistance the first $50 of support collected after September 30, 1996?

ANSWER 2: Under title I of PRWORA, if a State chose not to implement Temporary Assistance to Needy Families sooner, it had to continue to disregard for AFDC eligibility purposes until July 1, 1997, the first $50 of any child support passed through to a family receiving assistance. However, under title III of the law, effective on or after October 1, 1996, States are not required to pass any child support collections through to families receiving assistance. Rather, States must pay the Federal government its share of the entire child support collection. The State may retain, or pass through to the family, the State's share of the collection. The Federal mandate to pass through to the family the first $50 of support collected was eliminated after September 30, 1996. If the State provides no >pass-through, there is nothing to disregard. Any support passed- through, whether required by State law or by State option, must come entirely from the State's share of the collection.

QUESTION 3: Were States required, until June 30, 1997, to disregard the first $50 of any support passed-through to a family receiving assistance?

ANSWER 3: The disregard of the first $50 of any support passed through to a family receiving assistance was mandatory through June 30, 1997, in any State that did not implement TANF until July 1, 1997, in accordance with title IV-A of the Act, as in effect prior to enactment of PRWORA.

QUESTION 4: Do any IV-D regulations or requirements apply to a State which continues paying the former "$50 pass-through" to TANF recipients entirely out of State funds?

ANSWER 4: Yes. Any amount collected on behalf of a family as support by a State pursuant to a State IV-D plan must be distributed in accordance with section 457 of the Act, as revised by section 302 of PRWORA, and in accordance with any aspect of 45 CFR 302.51 which is not inconsistent with the revised section 457.

QUESTION 5: Is there a State option allowed under PRWORA for the State to continue passing the $50 (or even a higher amount at State option) through to the current TANF recipient and disregarding this amount in calculating the grant amount for the recipient?

ANSWER 5: Under section 457(a)(1) of the Act, as revised by section 302 of PRWORA, States may continue to distribute ("pass- through") any portion of the State share of the amount collected on behalf of a family receiving assistance under title IV-A of the Act, after first paying the Federal government the Federal share of the amount collected. For eligibility purposes, the State TANF program may choose to disregard all or a part of the child support distributed to the family under 167457(a)(1)(B).

QUESTION 6: The $50 pass-through mandate was eliminated effective October 1, 1996. Sometimes employers do not send child support payments made through wage withholding in a timely manner. As a result, the collections must be distributed based on the date the wages were withheld rather than the date received by the IV-D agency. How should the IV-A and IV-D agencies handle retroactive pass-through payments?

ANSWER 6: States were required to pass-through, and disregard, in assistance cases, the first $50 of support collected through wage or income withholding in the month when due prior to October 1, 1996, in accordance with 45 CFR 302.51(a)(4), under which the date of collection for distribution purposes is the date the wages or other income are withheld to meet the support obligation. If an employer withheld child support in the month the support was due (in months prior to October 1996) and subsequently paid that support to the IV-D agency in a later month (even after October 1996), the $50 pass-through must be credited for the period in which the withholding actually occurred.

With respect to collections made before October 1, 1996, but received by the IV-D agency, and distributed after October 1, 1996, the Federal government will continue to share in the cost of the $50 pass-through payment.

(Please note that section 5549 of the BBA amends section 454B to define the date of collection as the date of receipt by the State disbursement unit (SDU), except that if current support is withheld by an employer in the month when due and is received by the SDU in a month other than the month when due, the date of withholding may be deemed to be the date of collection, at the option of the State. See Q&A 21.)

QUESTION 7: How long should States continue the $50 pass-through for support withheld or collected prior to October 1, 1996 but actually received or disbursed after October 1, 1996?

ANSWER 7: There is no Federal limit on the time period during which a State must continue the $50 pass-through for support withheld or collected prior to October 1, 1996, but actually received or disbursed after that date. States must distribute any amount received after October 1, 1996, but withheld or collected prior to October 1, 1996, under the requirements that applied to the timeframe in which the support was withheld or collected. For example, if, in an AFDC case, support was withheld in September of 1996 and sent by the employer to the State but received by the State in October, the State must pass- through to the family the first $50 of support collected. New distribution requirements effective October 1, 1996, only apply to support collected as of that date forward.

QUESTION 8: Will the Federal government share in the cost of NAME="E7E1"> necessary modifications to a State's automated system necessary to conform distribution to the new requirements under section 457 of the Act?

ANSWER 8: Yes.

QUESTION 9: States are no longer required to pay the $50 pass- through payment after October 1, 1996. However, if they choose to continue to do so, are they still required to pay the pass- through out of current collections only?

ANSWER 9: No, States may pass through any or all of the State share of collections in current assistance cases. Section 457(a) allows States to pay all or a portion of the State share of either current or arrearage collections to the family.

QUESTION 10: If the State does not retain the State share of the collection and opts to pay all or a portion of its share to the family, must the unreimbursed assistance be reduced by the amount paid to the family?

ANSWER 10: Yes. Under section VI(b)(3) of this Action Transmittal, in a current assistance case, any amount collected, including any amount paid to the family from the State share must reduce the cumulative amount of unreimbursed assistance.

QUESTION 11: If States use funds other than child support collections to make payments to families in current assistance cases, can the programming and processing of these payments be charged as a IV-D expenditure?

ANSWER 11: No.

QUESTION 12: In a current assistance case, if a State chooses to pay the family more than the State share of the collection, how are such payments to be treated for IV-D program purposes? For example, if the benefit for the month is $40, unreimbursed assistance is $500, and the collection is $200 with a 70% Federal Medical Assistance Percentage (FMAP), the Federal share of the collection would be $140 and the State share would be $60. If the State wanted to pay the family $160, how would they account for the $100 ($160-$60) that was more than the State share?

ANSWER 12: The $100 in the example which is not part of the State share cannot be considered a distribution or disbursement of child support under the title IV-D program.

QUESTION 13: In current assistance cases with permanently- assigned arrearages and temporarily-assigned arrears, may a State apply collections to satisfy temporarily-assigned arrearages before permanently-assigned arrearages?

ANSWER 13: The Federal statute does not specify the order in which assigned arrearages must be satisfied in a current assistance case. It is, therefore, a question of interpretation of applicable State law and procedures.

QUESTION 14: Are States allowed to perform distribution at the child level when the child is included in the family assistance unit, by splitting or pro-rating the family's grant or assistance payment amount on a per-child basis and applying the collections to the unreimbursed assistance balances attributable to each child's portion of the family's grant?

ANSWER 14: No. As a condition of eligibility for assistance under title IV-A of the Act, a member of a family must assign to the State any rights a family member may have (on behalf of the family member or of any other person for whom the family member has applied for or is receiving assistance) to support from any other person, which accrue (or have accrued) before the date the family leaves the program. Therefore, in current or former assistance cases, States may not use child-level accounting by splitting or pro-rating the family grant amount on a per-child basis when the child is (or was) included in the family unit and must continue to apply collections to the cumulative amount of unreimbursed assistance balances based on the total monthly family grant amount.

QUESTION 15: In a current assistance case, is the amount of support which the State may retain under the assignment limited to the amount of the grant for the month? For example, in a current assistance case, the support obligation for the month is $400, the grant is only $250, but there is unreimbursed assistance of $500. If the State collects the full amount of current support owed for the month, is the amount of assigned support which it should retain $250 or $400?

ANSWER 15: The assigned support retained by the State is $400. When an individual applies for or receives assistance under the TANF program, he or she assigns ANY rights to support he or she may have, and ANY rights to support on behalf of any other individual for whom assistance is being sought or paid. If the entire support obligation for the month is collected and it exceeds the current month's assistance payment, the State must retain the excess to apply toward unreimbursed assistance, unless it elects to pay to the family all or a portion of the State share of the collection. Former section 457(b)(3), which required that monthly support amounts in excess of the amount of assistance paid to the family for the month be paid to the family, is no longer in effect.

QUESTION 16: In a current assistance case, no collection is made in a month, the obligation for the month is $400, there is a $250 assistance payment for the month but there is no other unreimbursed assistance. Is the entire $400 obligation assigned?

ANSWER 16: The entire $400 is assigned. However, the amount of assigned support collected and retained may not exceed the cumulative amount of unreimbursed assistance. If the family leaves the assistance rolls at that point, $250 remains permanently assigned and the $150 becomes unassigned during- assistance arrearages.

QUESTION 17: In a current assistance case, may a State pursue only the amount of the obligation for each particular month? For example, if the noncustodial parent's support obligation for the month is $200, the grant for that same month is $450, and no payment is made, may a State calculate the unreimbursed assistance for the month as the amount of the support obligation for the month, and increase the cumulative unreimbursed assistance balance by only the $200 obligation?

ANSWER 17: No. The unreimbursed assistance for the month is the amount of assistance paid to the family, not the amount of the assigned monthly support obligation amount. The cumulative amount of unreimbursed assistance a State may recover under the IV-D program, however, is limited to the total amount of the assigned support obligation.

QUESTION 18: If, in a current assistance case, at the time a support order is established the order includes a lump sum amount of support for prior periods, is that amount considered to have accrued for distribution purposes during the prior periods or at the time the order is entered? The response to this question affects distribution of the lump sum amount at the time it is collected.

ANSWER 18: Section 457 does not directly address the question of date of accrual of retroactive support awards. Therefore, it is a matter for the State to determine pursuant to its law and the terms of the support order.

FEDERAL SHARE OF COLLECTIONS

QUESTION 19: Is the Federal share of a child support collection in a current assistance case limited by the amount of assistance paid to the family in the month of collection or by the cumulative amount of unreimbursed assistance?

ANSWER 19: Distribution requirements in current assistance cases under section 457(a)(1) of the Act do not distinguish between current support collections and arrearage collections. The Federal share of assigned support is calculated on the total payment collected in the month, limited by the cumulative amount of unreimbursed assistance. Example: In a current assistance case, a collection is received in the amount of $500. The assistance payment is $300. There are assigned arrearages and cumulative unreimbursed assistance in excess of $500. The FMAP rate is 50%. The Federal share is $250, and the State share is $250. The State may retain, or pay to the family, at State option, the State's share of the collection.

QUESTION 20: Does the State have to maintain the amount of the Federal and State share of each collection and show which payments to the family were paid out of the State's share of the collection at the case level?

ANSWER 20: The State needs to keep a record of the amount of each collection that COULD have been retained to reimburse assistance. Since the FMAP is applied to this amount to determine the Federal share, it could easily be computed if needed. This amount could be summarized for reporting purposes to simplify the computation of the Federal share of total collections. The amount of payments to the family, as always, would need to be maintained at the case level.

EXISTING REGULATIONS AT 45 CFR 302.51 AND 302.52
AND FORMER SECTION 457

QUESTION 21: Are States required to distribute child support collected on or after October 1, 1996 according to the date of collection rules at 45 CFR 302.51(a)(4)?

ANSWER 21: States must continue to use the date of collection as defined in 45 CFR 302.51(a)(4) until there is a State Disbursement Unit in the State which meets the requirements of section 454B of the Act. Section 5549 of the BBA amended Federal requirements at section 454B(c) of the Act governing State disbursement units (SDUs) to redefine the date of collection as the date of receipt by the State disbursement unit. However, if current support is withheld by an employer in the month when due and is received by the SDU in a month other than the month when due, the date of withholding may be deemed to be the date of collection at the option of the State. SDU requirements are effective October 1, 1998, unless the State qualifies for the one-year delay to continue to process the receipt of child support payments through local courts.

QUESTION 22: Are States required to distribute future payments made on or after October 1, 1996, in accordance with 45 CFR 302.51(c)?

ANSWER 22: Yes. See section I(f) of this Action Transmittal.

QUESTION 23: Are States required to distribute collections in title IV-E foster care cases in accordance with 45 CFR 302.52?

ANSWER 23: Yes. Section 5547 of the BBA revised section 457 by reinstating the distribution rules for collections in title IV-E foster care cases which were contained in former section 457. 45 CFR 302.52 implemented former section 457 requirements for distribution of collections in title IV-E foster care cases and therefore is consistent with the new section 457(f) of the Act.

QUESTION 24: In a current assistance case, when the support collected for the current month exceeds the amount of assistance paid to the family for the month, must the difference be paid to the family, as required by former section 457(b)(3) of the Act, or be retained by the State to satisfy the cumulative amount of unreimbursed assistance?

ANSWER 24: Former section 457(b)(3) of the Act no longer exists. Effective October 1, 1996, in the case of a family currently receiving assistance from the State, the State must, not exceeding the cumulative amount of assistance paid to the family, (1) pay to the Federal Government the Federal share of the total amount collected; and (2) retain, or distribute to the family, the State share of the total amount collected.

FEDERAL AND STATE INCOME TAX REFUND OFFSET AND FEDERAL ADMINISTRATIVE OFFSET

QUESTION 25: Section 457(a)(2)(B)(iv) of the Act requires that, to the extent an amount collected through Federal income tax refund offset exceeds the amount retained to satisfy assigned support, the State shall distribute the excess to the family. There are instances under which Federal income tax refund offset amounts must be returned to the obligor or his or her current spouse (e.g., if the amount was offset from a joint return or if the amount offset exceeded the amount owed at the time of offset.) Are States now precluded from distributing offset amounts to obligors or their current spouses?

ANSWER 25: No. Sections 464(a)(3)(C) and (D) of the Act, which govern Federal income tax refund offsets based on joint returns and the treatment of amounts collected by offset which exceed the amount owed at the time of offset, respectively, remain in effect.

QUESTION 26: Could a State certify the cumulative amount of unreimbursed assistance for Federal income tax refund offset?

ANSWER 26: No. Section 464 of the Act specifies the criteria for the collection of past-due support from Federal income tax refunds. Section 464 limits amounts which may be submitted for offset to past-due support, as defined in section 464(c) to "...the amount of a delinquency determined under a court order, or an order of an administrative process established under State law, for the support and maintenance of a child...".

QUESTION 27: Under the new distribution requirements in section 457, are collections through State tax refund offset distributed in the same manner as collections through Federal income tax refund offset under section 457(a)(2)(B)(iv) of the Act?

ANSWER 27: No. Only collections through Federal income tax refund offset are distributed under section 457(a)(2)(B)(iv). Collections received through State income tax refund offset must be distributed as other collections (other than Federal income tax refund offsets) are distributed under section 457 of the Act. (See section VI of this Action Transmittal.)

QUESTION 28: Under the new distribution requirements in section 457, are collections through the Department of the Treasury administrative offset process under the Debt Collection Improvement Act of 1996 distributed in the same manner as collections through Federal income tax refund intercept under section 457(a)(2)(B)(iv) of the Act?

ANSWER 28: No. Only collections through Federal income tax refund intercept are distributed first to satisfy arrearages under section 457(a)(2)(B)(iv). Collections received through Federal administrative offset of other Federal payments (other than Federal income tax refund intercepts) under the Debt Collection Improvement Act of 1996 must be distributed in accordance with the rules that apply to all other collections under section 457 of the Act. (See section VI of this Action Transmittal.)

QUESTION 29: May State income tax refund intercepts be distributed in the same manner as Federal income tax refund intercepts if provided under State law?

ANSWER 29: No.

DISTRIBUTION OF ARREARAGES IN FORMER ASSISTANCE CASES

QUESTION 30: In former assistance cases, does the distribution scheme outlined under section 457(a)(2)(B)(ii)(II) of the Act only pertain to arrearages that accrue after October 1, 2000 OR do States need to distribute the arrearage balance owed as of September 30, 1999 in the manner required during the period the arrearages accrued?

ANSWER 30: After applying the collection to the current month's support obligation and the never-assigned arrearages, under section 457(a)(2)(B)(ii)(II) of the Act, as added by section 302 of PRWORA, States must distribute remaining collections made on or after October 1, 2000 to the family to satisfy:

(1) any unassigned pre-assistance arrearages and conditionally- assigned arrearages which accrued after September 30, 1997, (and, any unassigned previously permanently-assigned arrearages that accrued under section 426(a)(26) of the Act which the State cannot distinguish between pre-assistance or during-assistance arrearages),

(2) then any remaining amount to permanently-assigned arrearages to the extent necessary to reimburse the cumulative amounts paid to the family as assistance by the State, and

(3) finally, any remaining amount to the family to satisfy any unassigned during-assistance arrearages.

This distribution scheme pertains to any arrearages collected on or after October 1, 2000, not just to arrearages that accrue on or after October 1, 2000. Therefore, States may not distribute the arrearage balance owed as of September 30, 1999 in the manner required during the period the arrearages accrued, unless such arrearages are collected prior to October 1, 2000.

QUESTION 31: Is a State permitted to implement some or all of the distribution changes earlier than the specified implementation dates noted in the legislation?

ANSWER 31: Section 457 of the Act allows States to implement some or all of the distribution changes earlier than mandated. However, if the State elects to implement any distribution change earlier than required by section 457 of the Act (for example, as permitted under section 457(a)(6) of the Act), any amount of support collected which "could have been retained" had the State not implemented the distribution provisions earlier than required, will be counted for purposes of the "hold harmless" provision in section 457(d) of the Act.

QUESTION 32: Do support obligations which accrue under an assignment in effect on September 30, 1997, remain permanently assigned to the State through September 30, 1997, or through the last date of assistance?

ANSWER 32: Any support obligation that accrues through the last date of assistance under an assignment in effect on September 30, 1997, remains permanently assigned to the State in an amount not exceeding the cumulative amount of unreimbursed assistance as of the last date of assistance paid under that assignment.

QUESTION 33: In a former assistance case, may a State apply collections to conditionally-assigned arrearages that accrued before the family went on assistance before applying collections to permanently-assigned arrearages?

ANSWER 33: States have the option to implement the October 1, 2000 distribution rules which apply to former assistance cases early and, therefore, a State may opt to apply collections to never-assigned and conditionally-assigned arrearages first if they choose to do so prior to October 1, 2000. However, effective October 1, 2000, in a former assistance case, after paying current support, States must apply collections to conditionally-assigned arrearages before applying any collections to satisfy permanently-assigned arrearages, unless the collection is the result of a Federal income tax refund offset.

GAP PAYMENTS

QUESTION 34: What is a "gap payment" State?

ANSWER 34: A "gap payment" State is a State that elected in 1975, to provide AFDC families protection against a decrease in grants because of the payment of support directly to the State. Former section 402(a)(28) of the Act provides for the payment to the family of child support collected by the State as a protection against a reduction in the total income available to the family in a month. This section applies to those States whose State title IV-A plan, in July, 1975, permitted a portion of the monthly child support payment after application of appropriate disregards to be retained by a family receiving AFDC without causing a dollar-for-dollar reduction in the AFDC payment made to the family.

QUESTION 35: For States making gap payments, will Federal funds continue to be available once a State implements TANF? What will be the source of the Federal funds, if available?

ANSWER 35: Section 457(e) of the Act, as added by section 302 of PRWORA, allows States to continue to make gap payments if they were making such payments to families receiving assistance prior to August 22, 1996. The Federal government will continue to share in the cost of such payments, made in addition to the amount of assistance otherwise payable to the family, once the State implements the TANF program. Since gap payments are made from support collections in assistance cases, the portion of the support collection paid to the family to fill the gap between the need standard and assistance payment level is the source of the Federal contribution to the gap payment. Any collections in such cases in excess of the amount of the gap payment must be distributed in accordance with section 457(a)(1), with the Federal government receiving its share of the collection.

QUESTION 36: Does section 457(e) allow a State to retain the Federal share of child support collections and pay it to a family that receives assistance under TANF?

ANSWER 36: Under section 457(e) of the Act, as added by section 302 of PRWORA, a State which made gap payments under former section 402(a)(28) of the Act before the date of enactment of PRWORA may continue to make such gap payments. The new distribution requirements of section 457 do not apply to the amount of the gap payment but do apply to any other amount collected. For example, assume a "gap State" elects to continue to "fill the gap" using child support collections as permitted by new section 457(e) of the Act. Assume that the child support collection is $250 and that the "gap" payment is calculated to be $100. In this case, $100 of the $250 collection is paid to the family as a "gap" payment. While the distribution rules are inapplicable to the $100 of the child support collection used to fill the gap (based on the section 457(e) exception), the State must follow the distribution rules with respect to the remaining sum of the collection ($150). As required by section 457(a)(1)(A), the Federal share is deducted first, and then the State may retain, or distribute to the family, the State share of the amount collected, as specified in section 457(a)(1)(B).

QUESTION 37: May the state make adjustments to the maximum amount of the "gap" payment?

ANSWER 37: While a State may make adjustments to the maximum amount of the gap payment, distribution rules are waived only with respect to a gap payment at the same level as a gap payment made under section 402(a)(28) as in effect on August 21, 1996. If a State raises the maximum amount of the gap payment, any additional payment to the family would be subject to section 457(a)(1) of the Act and may be made only from the State share of any collection in excess of the exempted gap payment level, after having paid the Federal share of any excess amount collected.

QUESTION 38: Does the last sentence in section 457(e) have any effect on the State's option to continue using child support collections to make the "gap" payment?

ANSWER 38: Under the last sentence in section 457(e) of the Act, as added by section 302 of PRWORA, for purposes of the hold harmless provision in section 457(d), the State share of the gap payment to the assistance family will be considered an amount that could be retained by the State if the gap payments were reported by the State as part of the State share of amounts collected in FY 1995. This requirement does not affect the State's option to continue to make gap payments, but would result in counting the State share of gap payments as part of the State share of collections for a given year if the State counted gap payments as part of the State share in FY 1995. The result could impact the amount of the State share of collections for the current fiscal year.

QUESTION 39: If my State has not been a "gap payment" State, can it become one?

ANSWER 39: No.

QUESTION 40: Are Federal income tax refund offset collections included in the gap payment calculation?

ANSWER 40: Under 45 CFR 232.21(a), Federal income tax refund offset collections are excluded from the definition of arrearages that may be used to fill the gap in gap payment States. This requirement remains in effect for States which elect, under section 457(e) of the Act, to continue gap payments under former 402(a)(28) of the Act, with one exception. In gap payment States in the 1st Circuit, Federal income tax refund offset collections may be used to fill the gap, as a result of the decision in Doucette v. Ives, 947 F.2d 21 (1st Cir. 1991).

FUTURE PAYMENTS

QUESTION 41: Must States hold future payments received in former or never-assistance cases until they are due?

ANSWER 41: No. Section 45 CFR 302.51(c) applies only to current assistance cases in which there is an assignment of support rights to the State as a condition of receiving assistance. States may retain until the due date, or immediately pay to the family, future payments in former or never-assistance cases, in accordance with State law.

QUESTION 42: If there are multiple obligors in a single assistance case, may amounts collected as support which represent payment on the required support obligation for future months be held and applied to such future months or must they be used to reimburse any existing unreimbursed assistance paid to the family?

ANSWER 42: Section 302.51(c) indicates that no amounts shall be applied to future months unless amounts have been collected which fully satisfy the support obligation assigned under section 408(a)(3) of the Act for the current and all past months. If there are no assigned arrearages for that obligor, the amount collected represents future support and may not be retained to satisfy any existing unreimbursed assistance.

FEDERAL REPORTING REQUIREMENTS
 

QUESTION 43: Will the OCSE reports be revised to reflect the new distribution requirements under section 457 of the Act?

ANSWER 43: Reporting forms will be revised by the Fall of 1997. A Definitions Workgroup was established to continue the work of the Performance Measures and Incentives Workgroups and used the progress in revising current reports of these Workgroups and under the Measuring Excellence Through Statistics (METS) Initiative as a starting point.

OTHER QUESTIONS

QUESTION 44: May a State retain assigned support up to the total amount of unreimbursed assistance, including assistance provided to a family under the TANF program in a form other than cash, e.g., child care or work subsidies or vouchers?

ANSWER 44: Under section 457 of the Act, the amount of assigned support that may be retained by a State is limited to the cumulative amount of unreimbursed assistance paid to the family. TANF-ACF-PA-97-1, dated January 31, 1997, defines "assistance" as every form of support provided to families under the Temporary Assistance to Needy Families program except for the following:

1) services that have no direct monetary value to an individual family and that do not involve implicit or explicit income support, such as counseling, case management, peer support and employment services that do not involve subsidies or other forms of income support; and

2) one-time, short-term assistance (e.g., automobile repair to retain employment and avoid welfare receipt and appliance repair to maintain living arrangements).

QUESTION 45: If a Judge orders a noncustodial parent to make a payment on arrearages, does this allow the IV-D agency to apply the entire amount paid to the noncustodial parent's arrearages, without applying any amount to current support paid to the family?

ANSWER 45: No. Any amount collected under the IV-D program must be distributed in accordance with section 457 of the Act, 45 CFR 302.51(a)(1) and this Action Transmittal. Under 45 CFR 302.51(a)(1), amounts collected, except for amounts collected through Federal income tax refund offset, must be treated first as payment on the required support obligation for the month in which the support was collected and if any amounts are collected which are in excess of such amount, these excess amounts shall be treated as amounts which represent payment on the required support obligation for previous months.

QUESTION 46: In a current assistance case, may a State wait until the end of the month to calculate the cumulative amount of unreimbursed assistance, and issue any payment of excess support to the household within 15 days of the end of the month? How will the 2-day distribution rule effective in October 1998 affect this?

ANSWER 46: Federal regulations at 45 CFR 302.32(f) governing timeframes for distribution of collections in IV-D cases remain in effect until the October 1, 1998 effective date of the requirement under section 454B(c) of the Act that the State disbursement unit disburse amounts payable under section 457(a) of the Act within 2 business days after receipt from the employer or other source of periodic income. Questions relating to the timing of disbursements by the State Disbursement Unit will be answered under a separate Action Transmittal on State Disbursement Unit requirements.

SYSTEMS-RELATED QUESTIONS

QUESTION 47: What are OCSE's plans for issuing revisions to the Federal test deck to incorporate PRWORA changes? Will there be more than one revision, taking into account the staggered distribution requirements?

ANSWER 47: OCSE plans to issue a revised distribution test deck which reflects PRWORA changes by the end of calendar year 1997. The revised test deck will address all of the distribution changes in PRWORA.

QUESTION 48: Section 454(24)(B) of the Act requires that States' automated systems meet PRWORA requirements by October 1, 2000. However, many of the individual requirements of PRWORA have earlier implementation deadlines, and they will often depend on systems support. Must States meet the implementation dates for individual program requirements or may a State delay full compliance with all requirements until October 1, 2000 when State systems must be operational?

ANSWER 48: The statute requires each State to have a Statewide computerized support enforcement system that meets all IV-D PRWORA requirements no later than October 1, 2000. The State is encouraged to automate PRWORA requirements sooner so that systems support is available when a PRWORA requirement becomes effective. The State can only rely upon the October 1, 2000 date as the implementation date for having a Statewide system as discussed above. The State must meet the specific effective date for each PRWORA requirement.

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