Child Support Provision in the Deficit Reduction Act of 2005
DATE: March 7, 2006
TO: STATE AND TRIBAL AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT, AND OTHER INTERESTED INDIVIDUALS
SUBJECT: Child Support Provision in the Deficit Reduction Act of 2005 (DRA)
PURPOSE: The purpose of this action transmittal is to inform states and tribes about passage of the DRA of 2005 and its impact on State Child Support Enforcement (IV-D) programs. This AT will explain the child support sections of the DRA of 2005 and attach a copy of those sections of the law.
BACKGROUND: The DRA of 2005, Public Law 109-171, was signed by the President on February 8, 2006. There are 11 sections of the law, in Title VII, Subtitle C, that are relevant to the child support enforcement program established under title IV-D of the Social Security Act (the Act) (42 U.S.C. 651 et seq). In addition, there is a general effective date section of the law in Title VII.
CHILD SUPPORT PROVISIONS OF THE DRA OF 2005
Section 7301. Assignment and Distribution of Child Support.
1. Modification of Assignment of Support Rights. Effective October 1, 2009, section 408(a) (3) of the Act is amended to limit the assignment of support rights as a condition of eligibility for Temporary Assistance to Needy Families (TANF) to the support that accrues during the period that a family receives TANF.
2. Distribution of Support Collections.
Summary of the Overall Effect of the Provisions: A State may elect to continue to distribute collections in TANF and former TANF cases in accordance with section 457(a) and (b) of the Act before they were amended by the DRA of 2005.
a. Effective October 1, 2006, in never assistance cases under section 457(a)(4) of the Act, in which $500 in support has been collected, States must distribute to the family the portion of the amount collected that remains after withholding any $25 annual user fee imposed pursuant to section 454(6)(B)(ii) of the Act.
b. Increasing Child Support Payments to Families and Simplifying Child Support Distribution Rules: Except as otherwise provided, effective October 1, 2009:
i. TANF cases: In accordance with section 457(a)(3)(A) and (B) of the Act, the total amount of support collected and retained by the Federal and State governments may not exceed each entity’s respective share of the amount assigned by the family.
Effective October 1, 2008, under section 457(a) (7) of the Act, a State is not required to pay the Federal share of any excepted portion ($100 for one child or up to $200 for 2 or more children) the State opts to pay to the family and disregard for purposes of determining eligibility and the type of TANF assistance, e.g., payments for basic needs, child care and transportation not related to employment.
ii.Former TANF cases: In accordance with section 457(a) (2) of the Act, a State must pay to the family current support and any excess payments to the extent of support not assigned to the State. If the amount exceeds the amount required to be paid to the family, the State must pay the Federal government its share, pay the State or the family the State’s share, and pay the rest to the family. The total amount retained by the Federal and State government may not exceed each entity’s respective share of the amount assigned by the family.
Effective October 1, 2008, a State is not required to pay the Federal share of any amount that the state opts to pay to the family.
There is a new State plan option at section 454(34) of the Act under which States must indicate whether they are continuing, with respect to former TANF cases, the distribution of arrearages requirements that are currently in effect under section 457(a) (2) (B) of the Act or the State option, described above, to adopt the revised DRA distribution of arrearages provisions.
iii.Never-assistance cases: The State must pay to the family the portion of the collection that remains after withholding the $25 fee in accordance with section 454(6)(B)(ii) of the Act.
iv.Current Support defined: Section 457(c)(5) of the Act is amended to provide that “current support amount means with respect to amounts collected as support on behalf of a family, the amount designated as the monthly support obligation of the noncustodial parent in the order requiring the support or calculated by the State based on the order.”
v.State option to continue or discontinue the pre- and post-1997 assignments: Section 457(b) of the Act is amended to allow a State to opt to continue the pre-1997 and post 1997 assignments or to discontinue the assignments. If the State elects to discontinue either the pre-1997 or the post 1997 assignments or both, the State shall distribute the applicable amounts to the family as if the amounts had never been assigned. The amounts covered by this option are:
1. permanently-assigned arrearages that accrued before October 1, 1997, and/or
2. assigned arrearages for support obligations that accrued before the family first received assistance on or after October 1, 1997, and before October 1, 2009.
3. Federal Income Tax Refund Offset Conforming Change. Effective October 1, 2009, under section 6402(c) of the Internal Revenue Code, the distinction in priority for Federal income tax refund offset between assigned past-due support and unassigned past-due support is removed so that any past-due support certified to the Secretary of the Treasury for offset of Federal income tax refunds becomes the first priority for offset after Federal taxes.
4. Effective Date. In items 1-3 of this section, the effective date is October 1, 2009, except as otherwise provided. However, for the provisions which are effective on October 1, 2009, a State may elect to implement the changes earlier, but in no case earlier than October 1, 2008, and not later than September 30, 2009.
5. Use of Federal Income Tax Refund Intercept Program to Collect Past-Due Child Support on Behalf of Children Who are Not Minors. Effective October 1, 2007, section 464(c) of the Act is amended to allow Federal Income Tax Refund Offset for past-due support owed to any child, whether or not a minor.
6. State Option to Use Statewide Automated System for Administrative Enforcement in Interstate (AEI) Cases. Effective October 1, 2005, section 466(a)(14)(A)(iii) of the Act is amended to provide that, while neither State may consider the case to be transferred to the assisting State’s caseload, the assisting State may establish a corresponding case based on a requesting State’s AEI request for assistance.
Section 7302. Mandatory Review and Adjustment of Child Support Orders for Families Receiving TANF.
Effective October 1, 2007, section 466(a)(10) of the Act is amended to require States to enact laws requiring the use of procedures under which every 3 years (or such shorter cycle as the State may determine), upon the request of either parent or if there is an assignment under title IV-A of the Act, the State shall review and, if appropriate, adjust an order: using guidelines; a cost-of-living adjustment; or automated methods to identify orders to review and adjust, if appropriate.
Section 7303. Decrease in Amount of Child Support Arrearage Triggering Passport Denial.
Effective October 1, 2006, section 452(k) of the Act is amended to reduce
the arrearage amount that triggers a passport denial from $5000 to $2500.
Section 7304. Maintenance of Technical Assistance Funding.
Section 7305. Maintenance of Federal Parent Locator Service Funding.
Effective October 1, 2005, sections 452(j) and 453(o) of the Act are amended to provide that both the 1% set-aside for child support technical assistance and the 2% set-aside for operation of the Federal Parent Locator Service (FPLS) are set at the current year’s amount or the FY2002 amount, whichever is greater. In addition, the 2% FPLS set-aside funds will now remain available until expended.
Section 7306. Information Comparisons with Insurance Data.
Effective October 1, 2005, section 452(l) [should be subparagraph (m)] of the Act, authorizes the Secretary of the U.S. Department of Health and Human Services (HHS) to conduct matches of child support cases with insurers concerning insurance claims, settlements, awards and payments and to furnish information resulting from the matches to IV-D agencies. Under this section, the insurer is protected from liability. If a State opts to receive the federal level match data, the State must reimburse the FPLS for its costs, in accordance with section 453(k) (3) of the Act.
Section 7307. Requirement that State Child Support Enforcement Agencies Seek Medical Support for Children from Either Parent.
Effective October 1, 2005, sections 452(f) and 466(a) (19) of the Act were amended to require States to have in effect laws requiring the use of procedures under which all child support orders in IV-D cases will include a provision for medical support to be provided by either or both parents. Similar requirements apply to State or local governmental group health plans and church plans. The Secretary must enact regulations to require States to enforce such orders, using the National Medical Support Notice (NMSN), against noncustodial parents and/or, at the State’s option, against custodial parents.
Section 452(f) of the Act was amended to include a definition of medical which provides: “For purposes of this part [IV-D], the term ‘medical support’ may include health care coverage, such as coverage under a health insurance plan (including payment of costs of premiums, co-payments, and deductibles) and payment for medical expenses incurred on behalf of the child.”
Section 7308. Reduction of Federal Matching Rate for Laboratory Costs Incurred in Determining Paternity.
Effective October 1, 2006, under section 455(a)(1)(C) of the Act, as amended, Federal reimbursement for the costs of laboratory costs incurred in determining paternity are reduced from 90 percent to 66 percent of State IV-D program expenditures.
Section 7309. Ending Federal Matching of State Spending of Federal Incentive Payments.
Effective October 1, 2007, under section 455(a)(1) of the Act, as amended, no Federal funds will be paid to a State for amounts expended from incentive payments made to the State under section 458 of the Act.
Section 7310. Mandatory Fee for Successful Child Support Collection for a Family That Has Never Received Assistance under a Program Funded under Part IV-A of the Act.
Effective October 1, 2006, section 454(6)(B)(ii) of the Act is amended to require States to impose an annual fee of $25 in each case in which an individual has never received assistance under a program funded under title IV-A of the Act and for whom the State has collected at least $500 of support. The fee must be retained by the State from support collected in excess of the first $500, paid by the applicant, recovered from the absent parent, or paid by the State out of its own funds. If the State pays the fee out of its own funds, the fee shall not be considered an administrative cost for which Federal funding is available and the fee shall be considered program income.
Section 7311. Exception to General Effective Date for State Plans Requiring State Law Amendments.
In the case where the Secretary of HHS determines that State legislation is required to meet any of the requirements imposed by Subtitle C of title VII of the DRA of 2005, the effective date shall be 3 months after the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the preceding sentence, in the case of a State that has a 2-year legislative session, each year of the session shall be considered to be a separate regular session of the State legislature.
Section 7701. Effective Date.
Except as otherwise provided in title VII, Title VII and the amendments made by this title shall take effect as if enacted on October 1, 2005.
The Office of Child Support Enforcement will be issuing regulations, and other guidance as necessary, on the child support-related sections of the DRA of 2005. Sections to be addressed through a proposed regulation include:
• Section 7301(f). Use of Tax Refund Intercept Program to Collect Past-Due Child Support on Behalf of Children Who Are Not Minors,
• Section 7302. Mandatory Review and Adjustment of Child Support Orders,
• Section 7308. Reduction of Federal Matching Rate for Laboratory Costs Incurred in Determining Paternity, and
• Section 7310. Mandatory Fee for Successful Child Support Collection for Family that has Never Received TANF.
The requirements of section 7307, Requirement that State Child Support Enforcement Agencies Seek Medical Support for Children from Either Parent, will be implemented through separate medical support proposed regulations.
EFFECTIVE DATE: March 7, 2006
INQUIRIES: ACF Regional Administrators
Office of Child Support Enforcement