 |
| OCSE Home . Program Information . News . Publications . Policy . State Links . OCSE Search . Help |
U.S. Department of Health and Human Services
Administration for Children & Families
Office of Child Support Enforcement
PIQ-99-03
TO: IV-D Directors
FROM: David Gray Ross
Commissioner
Office of Child Support Enforcement
RE: Public Policy Supporting Two Parent Families/Compromise of Arrearages
Attached please find PIQ-99-03 clarifying Federal policy regarding compromise of arrearages. This issue has received growing attention in the context of parents who marry or remarry and are faced with payment of large child support arrearage amounts.
It is important that we create policies that encourage the formation of two-parent households. While many single parents are successful in raising children in a single parent household, there is growing evidence that children who grow up in two parent households are less likely to be poor, less likely to become teen parents, less likely to have contact with the criminal justice system, and more likely to graduate from high school.
Currently in most States, even if the parents marry or remarry, families with TANF arrearages are required to make payments to the State as a result of the TANF requirement of assigning child support payments. This can worsen the economic situation for low-income families, thereby reducing their ability to maintain a self-sufficient two-parent household.
States such as Washington and Vermont have taken steps to help such families through their policies regarding arrearages. Washington State statute and administrative rules allow certain child support debts to be forgiven if the custodial parent and the noncustodial parent reunite. The process is managed through a "conference board" proceeding in which child support attorneys and staff review the case to determine whether the support debt creates a hardship. This process has been a useful tool to assist reconciled or remarried parents with financial difficulties. Vermont’s State code allows it to suspend collection of arrears in public assistance cases when the custodial parent and noncustodial parent reunite, if the reunited family has a gross income less than 225 percent of poverty. The State arrears are reduced to a lump sum judgment but that judgment is not enforced if the parents meet the threshold poverty level and remain united.
We encourage States to examine Washington and Vermont’s practices in this regard, and adopt State policies that help to encourage strong family formation.
U.S. Department of Health and Human Services
Administration for Children & Families
Office of Child Support Enforcement
PIQ-99-03
DATE: March 22, 1999
TO: State IV-D Directors
FROM: David Gray Ross
Commissioner
Office of Child Support Enforcement
RE: Compromise of Child Support Arrearages
Question 1: Is there authority for States to accept less than the full payment of assigned child support arrearages?
Response: Yes. A State could accept less than the full payment of arrearages assigned to the State on the same grounds that exist for compromise and settlement of any other judgment in the State.
We articulated this position in PIQ-89-02 issued on February 14, 1989 and later in the preamble to final regulations at 45 CFR 303.106 pertaining to AProcedures to Prohibit Retroactive Modifications of Child Support Arrearages@ which was published in the Federal Register on April 19, 1989 (54 FR 15764). Federal law at section 466(a)(9) of the Social Security Act (the Act) and implementing regulations at 45 CFR 302.70(a)(9) provide that child support is a judgment on and after the date due with the full force, effect and attributes of a judgment of the State, and not subject to retroactive modification. Such support judgments may, however, be compromised or satisfied by specific agreement of the parties on the same grounds as exist for any other judgment in the State. Judgments involving child support arrearages assigned to the State under titles IV-A, IV-E and XIX of the Act, may not be compromised by an agreement between the obligee and obligor unless the State, as assignee, also approves such an agreement. State law may further require that the court or administrative authority must endorse any agreement affecting child support orders to ensure that the best interests of the child are protected.
We encourage caution not to confuse compromising arrearages with the statutory prohibition against retroactive modification of arrearages. The State plan requirement at section 454(20) of the Act requires States to enact laws that implement statutorily required procedures found at section 466 of the Act. Thus States must have laws that provide that child support payments become a judgment by operation of law and prohibit retroactive modification of arrearages. Retroactive modification of arrearages occurs when a court or administrative body takes actions to erase or reduce arrearages that have accrued under a court or administrative order for support. In effect, retroactive modification of arrearages alters the obligor=s obligation without the concurrence of the obligee (or the State assignee) and is expressly prohibited by section 466(a)(9)(C) of the Act and 45 CFR 303.106.
Question 2: Would accepting a reduced payment for assigned child support arrearages violate existing Federal distribution law that requires sharing any assigned child support collections with the Federal government?
Response: No. Federal law does not prohibit State (or private) settlement of a judgment obligation, consistent with State law governing settlement of any other money judgment. While an agreement to compromise or settle the amount owed under the judgment and assigned to the State affects the amount payable for reimbursement to the Federal government, the Federal interest is contingent upon the State=s collection of the debt. The Federal interest does not vest until support is available for distribution. Any amount collected under the judgment must be distributed in accordance with section 457 of the Act.
Some States have given consideration to compromise of arrearages when the custodial parent and the noncustodial parent marry or reunite (if they have been legally separated). For example, Washington State statute and administrative rules allow certain child support debts to be Awritten off@ (RCW 74.20A.220,WAC 388-14-385). The process is managed through a "conference board" proceeding in which a Division of Child Support (DCS) attorney and one or more other DCS staff members review the case to determine whether the support debt creates a hardship. Generally the Conference Board bases the hardship determination on a comparison of the family income to the State needs standard for the family size. This process has been a useful tool to assist reconciled or remarried parents with financial difficulties. DCS is careful not to use this remedy in such a way that it would encourage domestic violence or coercion.
There may be other circumstances that warrant consideration of compromising arrearages in accordance with State law. However, States should use caution not to send a message that obligors can ignore support obligations because of the possibility that the State may eventually accept less than the full amount owed in satisfaction of the debt.
We hope this information will prove helpful.
