Reduction in Penalty for States Failing to Meet Statewide Automated Systems Deadline


Publication Date: June 2, 1999

Transmittal No. OCSE-AT-99-08

Date: June 2, 1999


SUBJECT: Reduction of the Alternative Penalty for States That Fail to Meet the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) Statewide Automated Systems Deadline


  • Pub. L. 105-306, The Noncitizen Benefit Clarification and Other Technical Amendments Act of 1998
  • Pub. L. 105-200, The Child Support Performance and Incentive Act of 1998 (CSPIA)
  • Sections 454(24)(B), 455, and 458A of the Social Security Act (the Act), as amended
  • OCSE AT-98-22, "Alternative Penalty for States Which Fail to Implement Statewide Automated Systems by the Deadlines Stipulated in Section 454(24) of the Social Security Act," dated July 31, 1998

PURPOSE: To inform States of the availability of a reduction to the alternative system penalty as provided through the amendment of Section 455(a)(4)(C) of the Social Security Act by Section 4(a)(1) of Pub. L. 105-306. This new law provides that alternative system penalties applied to States that fail to meet PRWORA systems requirements (i.e., section 454(24)(B) of the Act) shall be reduced by twenty percent for each maximum score a State receives for a fiscal year for each of the five performance measures described in section 458A(b)(4) of the Social Security Act. (The CSPIA created five performance measures to be used in computing State incentive payments.)

The process for requesting an alternative system penalty and the requirements that must be met for approval of the alternative system penalty, as outlined in OCSE AT-98-22, remain in place.

BACKGROUND: As explained in OCSE AT-98-22, having in place automated child support enforcement systems which meet statutory requirements is a child support enforcement (title IV-D) State plan requirement. The Secretary of HHS must disapprove the plans of States which fail to have such systems in place by the dates specified in section 454(24).

However, in lieu of the disapproval of a IV-D State plan, the CSPIA provided for alternative penalties associated with a State's failure to meet the systems deadlines in section 454(24) of the Act. Several States have already applied for and received the alternative penalty for failure to meet Family Support Act (FSA) systems requirements (section 424(24)(A) of the Act) following the process and requirements of OCSE AT-98-22. As noted in OCSE AT-98-22, the same process and requirements will apply to alternative penalties for failure to meet PRWORA systems requirements.

Reduction of PRWORA Alternative Penalty For States Receiving Maximum Scores for Performance Measures

The statute at section 458A(e) of the Act requires that OCSE issue regulations governing the calculation of incentive payments. The amount of incentive payments a State receives is based on the score it receives on each of five performance measures. OCSE will be issuing a Notice of Proposed Rulemaking in the near future.

For each performance measure for which a State, subject to an alternative penalty for a fiscal year, receives a maximum score for that same fiscal year, the alternative penalty will be reduced by twenty percent.

For example, a State's alternative penalty for FY 2000 is $4,000,000. The State receives a maximum score for 3 of the 5 performance measures for FY 2000. The State's penalty is reduced by 60 percent, i.e., by $2,400,000, and is $1,600,000 (1).

As OCSE AT 98-22 noted however, this penalty could be further reduced. In the year that the State comes into compliance, 90 percent of the applicable alternative penalty for that year will be forgiven. Thus, if this same State came into compliance with the PRWORA systems requirements by September 30, 2001, $1,440,000, or 90 percent of the penalty of $1,600,000, would be returned to the State in the following fiscal year (i.e., FY 2001).

INQUIRIES: Inquiries may be directed to: ACF Regional Administrators, or Robin Rushton, Director, Division of Child Support Information Systems, Office of Automation and Special Projects, OCSE, at (202) 690-1244.


David Gray Ross
Office of Child Support Enforcement

1 By the time a final decision on a State's final scores are made, OCSE may have imposed the penalty (as explained in OCSE AT-98-22) through the issuance of a negative grant award in the amount of $4,000,000. OCSE will return to the State $2,400,000 for receiving the maximum scores for 3 measures within 2 weeks after a final decision has been made regarding the State's revised penalty.

Current as of: