Collection and Enforcement of Past-Due Child Support Obligations
DATE: June 11, 2010
TO: State Agencies Administering Child Support Enforcement Plans Under Title IV-D of the Social Security Act and Other Interested Individuals
SUBJECT: Collection and Enforcement of Past-Due Child Support Obligations through the Federal Income Tax Refund Offset, Administrative Offset, Passport Denial, Multistate Financial Institution Data Match, and Federal Insurance Match Programs.
ATTACHMENT: Collection and Enforcement of Past-Due Child Support Obligations through the Federal Income Tax Refund Offset, Administrative Offset, Passport Denial, Multistate Financial Institution Data Match, and Federal Insurance Match Programs
SUMMARY: Collection and Enforcement of Past-Due Child Support Obligations through the Federal Income Tax Refund Offset, Administrative Offset, Passport Denial, Multistate Financial Institution Data Match, and Federal Insurance Match Programs.
This updates guidance issued via AT-99-14 dated December 2, 1999.
Background: In 1981, the Federal Income Tax Refund Offset Program was enacted into law (see section 2331, P.L. 97-35). Initially, this program was restricted to public assistance cases and enforced past-due child support obligations by intercepting part or all of a noncustodial parent’s (NCP) federal income tax refund. This program was expanded in 1984 to allow for its use in non-assistance cases.
The Debt Collection Improvement Act (DCIA) of 1996 (P.L. 104-134) was enacted into law on April 26, 1996. The primary purpose of the DCIA is to increase the collection of non-tax debt owed to the federal government. The DCIA contains important provisions for use in the collection of past-due child support obligations.
The DCIA was further strengthened by Executive Order 13019 - Supporting Families: Collecting Delinquent Child Support Obligations, dated September 26, 1998. This executive order allows the Secretary of Treasury, in consultation with the Secretary of Health and Human Services, to develop and implement procedures necessary to collect child support debts by administrative offsets. These procedures appear at 31 CFR 285.1 and 285.3.
Section 370 of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (P.L. 104-193) amended the Social Security Act by adding section 452(k). This section became effective October 1, 1997 and provides for the denial, revocation, and restriction of U.S. passports.
In addition, PRWORA required each state to enact laws enabling IV-D agencies to conduct quarterly data matches with every financial institution that conducts business in their state to identify the financial accounts of NCPs. The Child Support Performance and Incentive Act of 1998 (P.L. 105-200) created the Multistate Financial Institution Data Match to provide multistate financial institutions (MSFIs) the option to coordinate with a single point of contact rather than each state separately. States can, if they choose, grant OCSE the authority to be their agent in dealing with MSFIs.
In February 2006, the Deficit Reduction Act (DRA) of 2005 amended the Social Security Act (the Act) in several sections pertinent to the Federal Income Tax Refund Offset Program and related collection and enforcement programs, including:
Section 7301, Assignment and Distribution of Child Support for Tax Refund Offset —
- Section 7301(f) of the DRA amended section 464 of the Act redefining the term “past-due support” to mean support owed to any child, whether or not a minor, and deletes all references to the term “qualified child.” This means that effective October 1, 2007, states may certify non-TANF cases that were previously not eligible for federal income tax refund offset.
- New state options for distribution of arrearages in former TANF cases under section 457(b) of the Act allowing states to continue or discontinue pre-1997 and post-1997 assignments required a conforming change in section 6402(c) of the Internal Revenue Code removing the distinction in priority for federal income tax refund offset between assigned past-due support and unassigned past-due support. Any past-due support certified for offset becomes the first priority after federal taxes.
- Section 7303 of the DRA amended section 452(k) of the Act lowering the passport denial threshold from $5,000 to $2,500 effective October 1, 2007.
- Section 7306, Information Comparisons with Insurance Data, added section 452(l) (to be redesignated section 452(m) of the Act) authorizing comparisons of information concerning individuals owing past-due child support with information maintained by insurers (or their agents) concerning insurance claims, settlements, awards, and payments.
CONTENTS: This Action Transmittal applies to those cases in which the state has an assignment of support rights under section 408(a)(3) or 471(a)(17) of the Act; is enforcing the child support obligation pursuant to section 454(6) of the Act; or has an assignment of medical support rights under section 1912(a)(1)(A) of the Act.
SUPERSEDED MATERIAL: AT-99-14, December 2, 1999
INQUIRIES TO: OCSE Federal Collections and Enforcement Unit
Office of Child Support Enforcement
cc: ACF/OCSE Regional Program Managers
Tribal IV-D Directors