The following questions and answers were generated in response to OCSE-AT-07-05, Instructions for the Assignment and Distribution of Child Support Under Sections 408(a)(3) and 457 of the Social Security Act, and in response to the regional and national DRA distribution trainings held in June, July, and August 2008.
QUESTION 1: Must a State implement the optional provisions contained under the DRA (DRA Distribution in Former-Assistance cases, Pass-Through, Discontinuation of Assignments) by October 1, 2009, or may States implement one or more of the options at a later date?
ANSWER 1: States may choose to implement options available under the DRA at any time on or after October 1, 2008. For example, a State may continue to distribute support according to PRWORA Distribution rules in Former-Assistance cases on October 1, 2009. However, the State retains the option to implement DRA Distribution in Former-Assistance cases on March 1, 2010 or at any other time subsequent to October 1, 2008.
Once a State determines which options to implement it must indicate its selection(s) by submitting State Plan Page 2.4, Collection and Distribution of Support Payments. Please see AT-08-09 (http://transition.acf.hhs.gov/programs/ocsp/resource/notice-of-state-plan-package-renewal-and-revision-of-the-state-plan-preprint), Notice of State Plan Package Renewal and Revision of the Title IV-D State Plan Preprint, for additional details. At any point, a State may change the distribution options it previously implemented. However, when a State changes its distribution policy, a new State plan page must be submitted for approval.
QUESTION 2: How should a State that has chosen to implement DRA Distribution rules in Former-Assistance cases indicate the implementation date for that option on the State Plan Page 2.4 if the implementation date is after October 1, 2009?
ANSWER 2: Item 4 of State Plan Page 2.4, Collection and Distribution of Support Payments, addresses the option to apply DRA Distribution rules in Former-Assistance cases. If a State’s implementation date for this option is after October 1, 2009, the State should write the exact date in the blank provided and cross-out the parenthetical language as shown below:
“The State distributes arrearages in former assistance cases in accordance with sections 454(34) and 457 of the Act as of:
[ ] October 1, 2009;
[ X ] November 1, 2010 (
A date up to a year prior to October 1, 2009);
[ ] NA (the State continues to distribute all collections according to PRWORA distribution, i.e. former section 457(a)(2)(B) of the Act in effect prior to 10/1/09)
DISCONTINUATION OF ASSIGNMENTS
QUESTION 3: If the Unreimbursed Assistance (URA) increases for a Current-Assistance case under a DRA limited-assignment of support rights, so that the URA exceeds the amount of assigned arrearages, may a State “re-assign” arrearages that were previously unassigned up to the amount of the URA? (Please note URA includes assistance paid to the family for more than one period of assistance. Please see AT-07-05 and AT-97-17 for more details on the URA.)
ANSWER 3: No. Unassigned arrearages for prior periods may not be “re-assigned” under assignments executed on or after October 1, 2009 (or up to a year earlier at State option) because the assignment provision in section 408(a)(3) of the Act limits such assignments to “the total amount of assistance so paid to the family, which accrues during the period that the family receives assistance under the [TANF] program.” (Emphasis added.)
QUESTION 4: If a State discontinues post-1997 assignments of Pre-Assistance arrearages (Temporarily or Conditionally-Assigned arrearages), may the State discontinue these assignments in all cases at once, or must the State wait to discontinue these assignments in Current-Assistance cases until the cases become Former-Assistance cases?
Example: State A decides to discontinue post-1997 assignments as of October 1, 2008. Can all Temporarily-Assigned and Conditionally-Assigned arrearages in the State’s caseload be moved to Never-Assigned (or Family) arrearages effective October 1, 2008?
ANSWER 4: The State may discontinue the post-1997 assignments of Pre-Assistance arrearages in all cases at the same time, whether the case type is Current or Former-Assistance. Implementation of the option to discontinue assigned arrears, in which cases and at what times, is governed by State policy.
QUESTION 5: Must a State continue to track the URA if the State chooses to discontinue assignments of all Pre-Assistance arrearages?
ANSWER 5: Yes. Section 408(a)(3) of the Act, effective October 1, 2009 (or up to a year earlier at State option) requires States to limit the assignment of support under TANF to “the total amount of assistance so paid to the family, which accrues during the period that the family receives assistance under the program.” If a State did not track URA, the State would not be able to compare assigned collections to the URA, and might retain more or less assigned support than provided under Federal law.
QUESTION 6: In a Current-Assistance case under a limited assignment, could a State choose to retain collections to satisfy Conditionally-Assigned arrearages (from a PRWORA assignment during a previous period of receipt of TANF) before retaining Permanently-Assigned arrearages to satisfy URA?
ANSWER 6: Yes, but only if the collection is made through Federal Tax Refund Offset (FTRO). Conditionally-Assigned arrearages may continue to exist under the limited assignment, but can only be retained by the State if collected by FTRO. When an FTRO collection is distributed in a Current-Assistance case under a limited assignment, a State may choose whether to distribute the collection to satisfy Conditionally-Assigned or Permanently-Assigned arrearages in that case first. In either order the arrears owed to the State would be paid before arrears owed to the family as required under section 457(a)(1)(A) of the Act. However, a non-FTRO collection in a Current-Assistance case under a limited assignment must be applied to satisfy Permanently-Assigned arrearages before distributing any of the collection to the family to satisfy Conditionally-Assigned arrearages.
QUESTION 7: If a State elects to continue PRWORA Distribution in Former-Assistance cases must the State still maintain an Unassigned During-Assistance (UDA) arrearage bucket for distribution purposes?
ANSWER 7: Yes. Under PRWORA Distribution rules for Former-Assistance cases, the State must distribute collections to satisfy UDA arrearages after all other arrearages have been satisfied. Without a separate UDA arrearage bucket, the State would not be able to follow the PRWORA ordering rules.
FEDERAL TAX REFUND OFFSET
QUESTION 8: May a State implementing DRA Distribution rules in Former-Assistance cases apply FTRO collections to current support in all of a noncustodial parent’s cases, or only in those cases in which the debt has been certified to the IRS?
ANSWER 8: States must distribute FTRO collections only to IV-D cases with past-due support that have been certified for FTRO. Federal regulations at 45 CFR 303.72(h)(6) specify that FTRO collections may only be distributed to “cases that were being enforced by the IV-D agency at the time the advance notice ... was sent.” (Emphasis added). (Note: Advance notices of FTRO are only sent to noncustodial parents whose past-due support will be referred for FTRO (see 45 CFR 303.72(e)).
QUESTION 9: May a State apply FTRO collections to future support?
ANSWER 9: No. Federal regulations regarding excess FTRO collections were not changed by the DRA. See 45 CFR 303.72(h)(4).3
QUESTION 10: Did the DRA change the authority of States to hold FTRO collections in cases where a Federal tax refund is based on a joint return?
ANSWER 10: No. The DRA did not change the Federal statute related to the State option to hold joint return FTRO collections for up to 6 months.4
QUESTION 11: Current-Assistance cases under the DRA limited-assignment may now include both Permanently-Assigned arrearages that accrued during the assistance period and arrearages that belong to the family such as Never-Assigned Pre-Assistance arrearages or unassigned arrearages. May a State hold FTRO collections owed to the family in Current-Assistance cases where a joint return has been filed?
ANSWER 11: Yes. 45 CFR 303.72(h)(5) states that “in cases where the Secretary of the U.S. Treasury, through OCSE, notifies the State that an offset is being made to satisfy non-IV-A past-due support from a refund based on a joint return, the State may delay distribution until notified that the unobligated spouse’s proper share of the refund has been paid or for a period not to exceed six months from notification of offset, whichever is earlier.”
Since Current-Assistance cases may now include unassigned past-due support (i.e., non-IV-A past-due support) some portion of FTRO collections distributed to Current-Assistance cases could be owed to the family. States may hold FTRO collections that will be paid to the family to satisfy Never-Assigned or unassigned arrearages that are owed to the family for up to six months if the State has been notified that a joint return has been filed.
QUESTION 12: If a State chooses DRA Distribution rules in Former-Assistance cases, does the requirement to disburse current support within two days of receipt in the State Disbursement Unit apply to FTRO collections that are being held for up to 6 months?
ANSWER 12: No. Federal regulations at 45 CFR 303.72(h)(5) state that “In cases where the Secretary of the U.S. Treasury, through OCSE, notifies the State that an offset is being made to satisfy non-IV-A past-due support from a refund based on a joint return, the State may delay distribution until notified that the unobligated spouse’s proper share of the refund has been paid or for a period not to exceed six months from notification of offset, whichever is earlier.” Therefore, if an FTRO collection meets the requirements contained under 45 CFR 303.72(h)(5), the State may delay distribution of the collection and the 2-day disbursement rule would not apply.
QUESTION 13: May States exclude FTRO collections from pass-through payments under section 457(a)(7)(B) of the Act?
ANSWER 13: Yes. The implementation of pass-through payments is determined according to Statewide policy. The Act does not specify that pass-through payments must be made from all collections.
QUESTION 14: If a State passes through more than the excepted portion (i.e., up to $100 per month for a family with one child or up to $200 per month for a family with two or more children) in a Current-Assistance case, is the State required to disregard the full amount of the pass-through in determining the amount and type of TANF assistance?
ANSWER 14: No. States are not required to disregard amounts above the excepted portion in determining the amount and type of TANF assistance. States are required to disregard the amount up to the excepted portion for the Federal government to share in the cost of passing through the excepted portion.5 The Federal government will not share the cost of any pass-through payments above the excepted portion in a Current-Assistance case. Amounts paid from the State share of collections above the excepted portion must be disregarded if the State claims such amounts as Maintenance of Effort (MOE). (Please refer to Q&A 17 and 19 of AT-07-05 for more information on MOE).
QUESTION 15: May a State pass through collections of spousal support?
ANSWER 15: If spousal support is assigned to the State under section 408(a)(3) of the Act, the State may apply its pass-through policy to spousal support collections.
QUESTION 16: If a State does not elect to pass through payments in Current-Assistance cases, may the State still implement a pass-through in Former-Assistance cases? If a State does not elect to pass through payments in Current-Assistance cases, may the State implement DRA distribution rules in Former-Assistance cases?
ANSWER 16: The answer to both questions is yes. The optional provisions under the DRA are independent of each other. A State may elect to implement one, more than one, or none of the DRA distribution options.
QUESTION 17: Would the Federal government share in the cost of a State’s pass-through if the State disregards the pass-through in determining the amount and type of assistance for which a child is eligible, when the child’s eligibility is based on the child’s income only (child-only TANF grant)?
ANSWER 17: Yes. As long as the pass-through payment is disregarded for purposes of determining eligibility for the amount and type of assistance provided to the child, and the pass-through payment meets the criteria of an “excepted portion” as defined under the Act and AT-07-05, the Federal government would share in the cost of this pass-through.