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Treatment of Interest Earned from non-AFDC Child Support Collections

AT-90-08

Published: August 29, 1990
Information About:
State/Local Child Support Agencies
Topics:
Funding, Cost Recovery, Federal Financial Participation (FFP)
Types:
Policy, Action Transmittals (AT)
Tags:
Interest, Program Income, User Fees

ACTION TRANSMITTAL

OCSE-AT-90-08

August 29, 1990

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

SUBJECT:Treatment of Interest Earned From Non-AFDC Child Support Collections

BACKGROUND:Under Section 2333 of Public Law 97-35, effective October 1, 1981, Section 455(a) of the Social Security Act was amended to require that States exclude from their reported expenditures "an amount equal to the total of any fees collected or other income resulting from services provided under the plan approved under this part."

OCSE issued Action Transmittal OCSE-AT-82-08 on September 3, 1982, providing instructions on the implementation of these changes.

In response to questions that have arisen since the publication of this Action Transmittal, it has been determined that information it included concerning program income was incomplete insofar as it related to the treatment of interest earned from non-AFDC collections.

INSTRUCTION:Page 2 of OCSE-AT-82-08 contains a paragraph entitled "Treatment of Program Income," which includes the following three sentences:

Under the revised section 455(a) of the Act, in addition to excluding fees and recovered costs from expenditures, State IV-D agencies must also exclude from their quarterly expenditure claims for FFP an amount equal to all income resulting from services provided under the IV-D State plan. This requirement applies to income related to both AFDC and non-AFDC cases. Under this provision, States must reduce their expenditures by the total interest earned on collections made under the IV-D State plan and by any other income earned from activities under the plan.

To provide complete instructions concerning the treatment of income earned from non-AFDC collections, these sentences are replaced by the following:

Under the revised section 455(a) of the Act, in addition to excluding fees and recovered costs from expenditures, State IV-D agencies must also exclude from their quarterly expenditure claims for FFP an amount equal to all income resulting from services provided and any other activities under the IV-D State plan. This requirement applies to income related to both AFDC and non-AFDC cases.

Under this provision, States must reduce their expenditures by the total interest earned on AFDC collections made under the IV-D State plan. Interest earned on non-AFDC collections under the IV-D State plan should be distributed to the non-AFDC family. If, for some reason, this action is not performed, this interest must similarly be treated as program income and used to reduce the State's program expenditure claims for FFP.

SUPERSEDED MATERIAL:Portion of OCSE-AT-82-08, dated September 3, 1982, cited above

EFFECTIVE DATE:Immediately.

INQUIRIES TO:OCSE Regional Representatives

______________________________

Jo Anne B. Barnhart

Director

Office of Child Support

Enforcement