§ 303.80 - Recovery of direct payments.

(a) Definition. Direct payment means an assigned support payment from an absent parent which is received directly by an AFDC recipient.

(b) Direct payments that must be recovered by the IV-D agency. In States that place the responsibility for recovery of direct payments with the IV-D agency under the State plan option at § 302.31(a)(3)(ii) of this chapter, the IV-D agency must recover all such payments. The only exception is a direct payment retained by the recipient during the period when the sanction for failure to cooperate is in effect, as provided at 45 CFR 232.12(d).

(c) What the IV-D agency must do prior to establishing a repayment agreement with an AFDC recipient. Before establishing a repayment agreement with an AFDC recipient, the IV-D agency must:

(1) Document that the recipient has, in fact, received and retained direct payments, and the amounts;

(2) Provide written notice of intent to recover the payments to the recipient that includes the following:

(i) An explanation of the recipient's responsibility to cooperate by turning over direct payments as a condition of eligibility for AFDC, and the sanction for failure to cooperate as provided at § 232.12(d) of this title;

(ii) A detailed list of the direct payments which have been retained by the recipient, as documented by the IV-D agency, including the dates and amounts of these payments as well as a description of any documentary evidence (such as photocopies of the checks) which the IV-D agency possesses;

(iii) A proposal for a repayment plan between the recipient and the IV-D agency;

(iv) An explanation that repaying retained direct payments to the IV-D agency according to a signed repayment plan which meets the conditions of paragraph (d) below is a condition of cooperation under § 232.12(b)(4) of this title.

(3) Provide the recipient with an opportunity for an informal meeting to clarify the recipient's responsibilities and to resolve any differences regarding repayment of the directly received support by the recipient.

(d) Requirements of the repayment agreement. The repayment agreement between the IV-D agency and the recipient who has received and retained direct payments must be reasonably related to:

(1) The recipient's income and resources including the AFDC grant; and

(2) The total amount of retained support.

(e) Referrals to the IV-A agency for a determination of failure to cooperate. The IV-D agency must refer a case to the IV-A agency with evidence of failure to cooperate if:

(1) The recipient refuses to sign a repayment agreement; or

(2) The recipient enters into a repayment agreement but subsequently fails to make a payment under the terms of the agreement.

(f) Subsequent notification to the IV-A agency as required. If the IV-D agency has referred a case to the IV-A agency with evidence of failure to cooperate for either of the reasons in paragraph (e) of this section the IV-D agency must notify the IV-A agency when either of the following changes in circumstances occurs:

(1) The recipient who refused to enter into a repayment agreement consents to do so and signs the agreement; or

(2) The recipient who defaulted on an agreement begins making regularly scheduled payments according to the agreement. Under this paragraph, a regularly scheduled payment is a payment made in the current month for the amount specified in the initial repayment agreement between the IV-D agency and the recipient. The resumption of regularly scheduled payments cannot be interpreted to mean payment of amounts which were not paid during the period of default, nor amounts which could be categorized as balloon payments or which would be due as a result of an acceleration clause. To recover amounts due from any period of default, the IV-D agency must extend the duration of the repayment agreement.