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Public Assistance Budgeting and the New Child Support Distribution Rules

January 16, 2010

Author: Susan C. Antos

On October l, 2009, the rules regarding the distribution of child support arrears to families on public assistance changed. Families who apply for public assistance on or after that date will have child support arrears disbursed directly to them even though they receive  assistance. The arrears of recipients of public assistance who assigned their child support rights to the local social services district before October 1, 2009, will continue to be collected and retained by the local social services district.

Before this change, any arrears collected while a family was on public assistance would go to the county to reimburse the county as reimbursement for public assistance paid. Now the arrears of any family that applies after October 1, 2009, will go to the family and in many cases will count as income to the family, resulting in the reduction of the family’s public assistance grant.  These arrears payments are not subject to the child support pass through and disregard rules because the pass through and disregard rule only apply to the collection of “current support”, which is support which is paid in the month when it is due. 

Whether and how the arrears are budgeted against the public assistance grant will depend upon whether the payment is considered a “recurring arrears payment” or a “non-recurring arrears payment.”

How do you know whether a child support payment is a non- recurring or recurring payment?  Non-recurring payments will primarily be bank account intercepts, tax intercepts and errant occasional payments.  However, it is important to remember that where there are arrears that were assigned to the local district under the old rules, income tax intercepts of those amounts will go to the local district.

Recurring payments are likely to be pursuant to a court order that directs a respondent to pay a particular amount each month as arrears. Payment of arrears will not be considered to be recurring until payments are received two months in a row. The practical result of this is that the first two months of payment will have  no immediate effect on the budget.  For example if a public assistance recipient receives an arrears payment of $60.00 for the month of November 2009 and a $55.00 arrears payment in December of 2009, the arrears will not be applied as income until January 2010.

How is the recurring payment treated as income if the amount varies?  In the above nexample, the income for November and December are added together and divided by 2. The average of these two amounts ($57.50) would be treated as income for the month of January.  If the averaged income exceeds the temporary assistance budget deficit, the case will be closed.

How are non-recurring payments treated? If no payment is received in the month after the first arrears payment is received, the payment will be treated as a lump sum.  This means that if the family has no other resources and is under $2,000.00 it should not affect ongoing public assistance.

How soon will the recipient receive an arrears payment after it is received by the Child Support Enforcement Unit?  According to the Office of Temporary and Disability Assistance, when the local support collection unit receives an arrears payment, it will be disbursed within two days from the end of the month in which the arrears payment is received.

What happens if the family receives arrears payments for a few months and then the amount decreases?  The Temporary Assistance worker must calculate a new budget and issue a supplement.  The supplement must be issued within thirty days of the date that the client notifies the agency of the decrease.  In most cases, the decrease should be picked up in a monthly computer run called the IV-D MR/BA exception list, and in such cases, the worker must issue the supplement by the 20th calendar day after the report was received.

What happens if the family receives arrears payments for a few months and then they stop?  If no arrears are collected, the temporary assistance worker must delete family arrears income from the budget.

What happens if the amount of arrears collection goes up?  The worker must adjust the family arrears income by averaging the last two months whenever there has been an increase or a decrease as child support payments for two months.

What if a person applies after October 1, 2009, but had also been a recipient previously?  This person will have a combination of types of arrears. The ones that accrued before and during the time that the person was on public assistance previously remain assigned to the social services district.

How will the receipt of child support arrears  affect workfare/WEP hours assigned to employable family members?  Districts will have to review and adjust the calculated maximum number of work experience hours for individual assigned to work experience to ensure that the hours assigned to not exceed the maximum number derived from combining the Public assistance grant and food stamp allotment divided by the higher of the state or federal minimum wage. OTDA has programed a tickler into its computer system to remind the worker that hours of participation in Workfare will need to be adjusted.

The new rules are set forth in 09-ADM-19 which was promulgated. by the Office of Temporary and Disability Assistance on November 3, 2009. The Empire Justice Center is interested to know how this new budgeting rule works, particularly whether supplements are timely made and work experience hours are appropriately adjusted.

If your clients encounter difficulties, please contact Susan Antos at the Empire Justice Center, and we will be happy to bring your concerns to the state agency.


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