The welfare reform bill contains sweeping revisions of the federal
child support statute and restructures the administration of child
support into centralized collections and disbursement and nationwide
registries. The major points include:
Operation of Child Support Systems (IV-D). To receive the TANF
block grant, states must operate a IV-D child support program and
provide assistance to each child, resident or non-resident, who is
either receiving or formerly received IV-A assistance, receiving
IV-E assistance or Medicaid, or applying for IV-D services.
Assignment and Cooperation. Applicants for and recipients of
IV-A/TANF and Medicaid must assign support rights, including distribution,
to the state and cooperate in good faith by providing the father’s name,
subject to good cause and other exceptions. States may require additional
information and must define these exceptions, taking into account the best
interest of the child. If an person fails to cooperate in establishing
paternity or modifying or enforcing a child support order and does not
qualify for good cause or another exception established by the state,
the state must deduct a minimum of 25 percent from a family’s cash
assistance grant or may deny the entire amount of cash assistance
to the family.
Penalties on States for Failure to Enforce Cooperation.
States that do not enforce noncooperation sanctions will be penalized
for up to 5 percent of the TANF block grant in the next fiscal year.
Distribution of Collections (IV-E and IV-A/TANF). States may
either retain the state share or distribute it to recipients. The
federal share must be based on the Medicaid rate in effect on
September 30, 1996. States currently using fill-the-gap budgeting may
continue at their option. The state must distribute support in accord
with any cooperative agreement between the state and the Native American
tribe for families receiving assistance from a tribe.
Distribution of Arrears. Retains current law for support accrued
and collected for IV-A and IV-E before October 1, 1997. Requires states
to distribute post-assistance arrears collected after October 1, 1997,
to the family before state arrears are reimbursed. Retains current law
for preassistance arrears collected before October 1, 2000. Requires
distribution of preassistance arrears collected after October 1, 2000,
to the family. States are required to distribute to the family first
in the post-assistance period, then the preassistance period, and then
to the assistance period. States are authorized to apply federal tax
ffset proceeds to the state arrears first.
$50 Disregard. The act repeals federal law requiring a disregard
of the first $50 of any child support payments each month for a family
receiving cash assistance. States may continue to disregard support
distributed to the family, but the federal government will no longer
share in the cost to the states. The effective date is July 1, 1997,
or six months from the date that HHS receives a state’s plan.
Grandparent Liability. State option to enforce support orders
against the parents of a minor, noncustodial parent if the custodial
parent is receiving TANF/IV-A.
Privacy Protection. By October 1, 1997, all states must have
safeguards to restrict information about the whereabouts of one party
to another party if a protective order has been entered or if release
of the information may result in physical or emotional harm to a party.
States must also safeguard information about the establishment of
paternity or the establishment or enforcement of a support order.
Current State Automated Systems. The system requirements deadline,
required by the Family Support Act of 1988, is extended to October 1,
1997; and the 90 percent enhanced match for these systems is extended
for two years, based on the amount approved in the state’s advanced
planning document submitted on or before September 30, 1995.
New State Automated Systems/Case Registries. The deadline for new
system requirements, after the 1988 requirements, is October 1, 2000, and
will be automatically extended by one day for every day regulations are
issued late. The regulations are due two years after the enactment of the
act, or on October 1, 1998. The system must transmit withholding orders to
employers, monitor payment defaults, and use automatic enforcement
procedures. It must include a central case registry or linked local
registry for IV-D cases; all support orders established or modified
in the state after October 1, 1998; and payment records.
Federal Case Registry of Support Orders. The national case
registry is established as part of the Federal Parent Locator Service
(FPLS). All states must send abstracts to and match data with the federal
case registry.
State Centralized Collection and Disbursement Unit. States are
required to operate an automated centralized unit to collect and disburse
support payments by October 1, 1998. A state may use linked local units
if it will not cost more or take more time to establish or operate.
States that process payments through the local courts may continue
through September 30, 1999. Payments must be processed for IV-D cases,
interstate IV-D cases, non-IV-D orders initially issued on or after
January 1994 and subject to immediate withholding, and non-IV-D orders
issued or modified before October 1, 1996, and subject to withholding
if arrearages occur. The state disbursement unit shall not be required
to convert and maintain in automated form records of payments kept before
October 1, 1996.
State Directory of New Hires. Required by October 1, 1997.
States that have already implemented the directory must conform to
federal requirements by October 1, 1998, but must report to FPLS by
October 1, 1997. States must conduct data matches between the case
registry and new hire directory by May 1, 1998. Employers must report
new hires within 20 days after the hire or first pay. Employers have the
option of using the W-4 form or an equivalent. States may establish an
earlier reporting deadline for employers. Multistate employers may report
to one state. State option to set employer penalties of less than $25
($500 for a conspiracy).
Deadlines for information
- Within five days of receipt, states must enter new hires.
- Within three days of entry to the state directory, states must
transmit data to the national directory.
- Within two days of entry to the state directory, states must send a
withholding notice to the employer.
A state or local IV-D agency may disclose wage information to contractors.
National Directory of New Hires. By October 1, 1997, a National
Directory of New Hires is established as part of the FPLS. Federal
employers report to the National Directory of New Hires.
Federal Parent Locator Service. FPLS is expanded to include a
National Directory of New Hires by October 1, 1997, and a Federal Case
Registry of Support Orders by October 1, 1998. FPLS much match data
between the New Hire and Case Registry every two days and report matches
to states within two days. Noncustodial parents do not have direct access,
only through IV-D agency or courts; and if a state notifies HHS of
reasonable evidence of domestic violence or child abuse, no information
will be disclosed. New locate authority includes establishing parentage;
setting, modifying, and enforcing support orders; and enforcing child
custody and visitation orders.
Income Withholding. States must transmit withholding orders to
employers within two days and may use electronic means. Employers have
seven business days after payday to send withholding to the state
disbursement unit. States must process both IV-D and non-IV-D withholdings
through the disbursement unit but need only send withholding orders in
IV-D cases. Employer's principle place of employment determines which
state law the employer must comply with in responding to an employee’s
withholding notice. All non-IV-D orders issued or modified before
October 1, 1996, are subject to standard withholding procedures if an
arrearage occurs without a new hearing, unless the income is subject to
immediate withholding.
Paternity Establishment. The paternity establishment percentage
(PEP) is increased from 75 percent to 90 percent. States between
75 percent and 89 percent must improve 2 percent to avoid sanctions.
States can use either a IV-D or statewide PEP calculation. HHS must
develop minimum requirements for states to use in their paternity
acknowledgment affidavits rather than develop an affidavit for all
states to use. State birth record agencies must offer paternity services
and must file paternity orders and acknowledgments. States must publicize
procedures for paternity acknowledgment. An acknowledgment becomes a
legal finding of paternity in 60 days unless challenged. After 60 days,
limited challenges are permitted on the basis of fraud, duress, or
mistake of fact. States must develop and use an affidavit meeting minimum
national standards developed by HHS. Full faith and credit must be given
to other state affidavits.
Birth Certificates. The father’s name can only be on the birth
certificate if both parents sign an acknowledgment of paternity or
pursuant to an order. States must give oral and written notice to the
parents prior to signature.
New IV-D Agency Authority. The state IV-D agency must have the
authority to
- order genetic tests;
- subpoena financial and other information to establish, modify, or
enforce a support order--and impose penalties for noncompliance;
- require all employers to provide information on employment,
compensation, and benefits of any employee; and
- obtain records including vital statistics, taxes, personal property,
occupational and professional licenses, employment security, and those of
the department of motor vehicles, public assistance, and corrections.
Contested Paternity Establishment Procedures. States must pay for
state-ordered tests, subject to recoupment from the father. States must
admit accredited genetic tests into evidence without foundation and may
limit objections to test results to a specific number of days after
receipt of results. Medical and testing bills also must be admissible
without a foundation and are prima facie evidence. States must create a
rebuttable presumption of paternity upon genetic tests indicating a
threshold probability of paternity. States may make this a conclusive
presumption at their option. The putative father may initiate a paternity
action, but he has no right to a jury trial.
Technical Assistance. HHS will use 1 percent of the federal
share of child support collections effective October 1, 1996, to
provide technical assistance to states.
Simplified Process for Review and Adjustment. State reviews of
both public assistance and nonpublic assistance child support cases are
optional unless they are requested by the parents.
Work Requirements for Parents Owing Past-Due Child Support.
The final bill continues to include language clarifying that
administrative processes may be used to issue orders to pay past-due
support according to a plan or for participating in work activities.
Child Support and Native American Tribes. States can enter into
cooperative agreements with tribes. HHS may make direct federal payments
to tribes with approved IV-D plans. These payments would not count against
a state IV-D agency’s federal funding.
Food Stamps and Child Support Cooperation. States have the option
to require custodial parents to cooperate with establishing paternity and
in obtaining support in order to receive food stamp benefits, with a
good-cause exemption. States also have the option to require noncustodial
parents to cooperate with the child support program to establish paternity
and provide support for the child as a condition of receiving food stamp
benefits, with the secretary of agriculture, in consultation with the
secretary of HHS, developing guidelines on what constitutes a refusal
to cooperate. States have an option to disqualify noncustodial parents
with arrearages from receiving food stamp benefits during any period the
person has an unpaid liability. States may not disqualify noncustodial
parents from receiving food stamps if a court is allowing the person to
delay payment or if the person is complying with a court or state IV-D
agency payment plan.
Denial of Passports. By October 1, 1997, cases with a $5,000
arrearage are subject to passport revocation.
Medical Support Orders. ERISA definition of medical support
orders must include administrative orders as of date of enactment.
The date for plan amendments for ERISA is January 1, 1997. All IV-D
orders must include health care coverage. Notice to the new employer
is sufficient to enroll the child in the absent parent’s health plan,
unless it is contested.
Grants for Access and Visitation. The first year in which
grants for access and visitation projects are allowed is FY 1997.
Uniform Interstate Family Support Act (UIFSA). States must adopt
UIFSA, as amended to require employers to follow the procedural laws of
the state where the employee works, by January 1, 1998. States must
accord full faith and credit to out-of-state orders and liens. For
interstate cases, federal income withholding, liens, and subpoena
forms must be used.
Other Interstate Issues. States may electronically request
interstate enforcement without transferring the case. States have
five days to respond to an interstate request for enforcement and
maintain records. States must accept requests from reciprocating
foreign countries, as defined by the secretary of state.
Statewide Jurisdiction. All paternity and support proceedings must
exert statewide jurisdiction over the parties and transfer the case
between local jurisdictions.
Review and Adjustment. States must review and adjust support
orders at least every three years or based upon substantial change in
circumstances
- upon the request of either parent or
- if there is a IV-A assignment upon the request of either parent or the
IV-D agency.
States may either review and adjust orders on a case-by-case basis; apply
a cost-of-living adjustment, with an opportunity for review; or conduct
automated reviews. States must notify their IV-D caseload of their right
to review at least every three years.
Authority to Suspend Licenses. States must have in effect laws that
establish authority to withhold, suspend, or restrict driver’s,
professional, occupational, and recreational licenses of people who
owe over-due support or fail, after notification, to comply with subpoenas
or warrants. The statute references the use of these laws in appropriate
cases.
Other Enforcement Procedures
- States must record Social Security numbers on
- driver’s, professional, occupational, and marriage applications;
- divorce decrees;
- paternity and support orders; and
- death certificates.
- Pursuant to an administrative subpoena, states must obtain access
to the records of cable companies, utilities, and financial institutions.
- States must report arrearages to credit bureaus. Credit bureaus must
furnish reports to IV-D agencies.
- States must
- seize lump sums from workers’ and unemployment compensation,
lotteries, judgments, and settlements;
- attach assets in financial institutions and retirement funds;
- force the sale of property; and
- impose liens, which must arise by operation of law.
- States are required to give full faith and credit to liens that
arise in another state. The new state's procedural rules must be followed,
except that the rules may not require judicial notice or hearing prior to
enforcement of a lien.
Other Effective Dates
- HHS, after consulting with state IV-D directors, must issue forms for
states to use for collecting child support through income withholding,
imposing liens, and issuing administrative subpoenas by October 1, 1996.
- States must begin using the forms by March 1, 1997.
- In consultation with IV-D directors, HHS must develop a new
revenue-neutral, performance-based incentive system to replace the current
IV-D incentive system for funding by March 1, 1996.
- The effective date for implementing the new incentive adjustments
formula is October 1, 1999.
- Where state laws or state plans must be amended, the effective date,
unless otherwise mentioned, is October 1, 1996, for state plans, or the
first day of the first quarter after the close of the first regular
legislative session after enactment for state laws. There is additional
time for state constitutional amendments, if needed.
Data Collection and Reporting. HHS must establish uniform data
definitions and, effective October 1, 1997, collect data on current
support and arrearages, unpaid support, former Medicaid cases, and the
number of TANF/IV-A cases that became ineligible due to received child
support.
Audit. Twelve months or more after enactment, HHS will audit
state data quality and financial management every three years.
