[Federal Register Volume 61, Number 202 (Thursday, October 17, 1996)]
[Rules and Regulations]
[Pages 54282-54292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26068]
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DEPARTMENT OF AGRICULTURE
7 CFR Parts 271, 272, 273, and 275
[Amendment No. 362]
RIN 0584-AB58
Food Stamp Program; Child Support Deduction
AGENCY: Food and Consumer Service, USDA.
ACTION: Final rule.
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SUMMARY: This rule implements a provision of the 1993 Mickey Leland
Childhood Hunger Relief Act establishing a deduction for households
that make legally obligated child support payments to or for a
nonhousehold member. The provision results in increased benefits for
households that pay child support, thereby enabling more parents to
meet their legal obligation. A proposed rule was published December 8,
1994.
DATES: The provisions of this rule are effective December 16, 1996.
FOR FURTHER INFORMATION CONTACT: Margaret Werts Batko, Assistant Branch
Chief, Certification Policy Branch, Program Development Division, Food
and Consumer Service, USDA, 3101 Park Center Drive, Alexandria,
Virginia, 22302, or (703) 305-2516.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be significant and was reviewed by
the Office of Management and Budget in conformance with Executive Order
12866.
Executive Order 12372
The Food Stamp Program is listed in the Catalog of Federal Domestic
Assistance under No. 10.551. For the reasons set forth in the final
rule in 7 CFR 3015, Subpart V and related Notice (48 FR 29115), this
Program is excluded from the scope of Executive Order 12372 which
requires intergovernmental consultation with State and local officials.
Regulatory Flexibility Act
This rule has been reviewed with regard to the requirements of the
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Ellen Haas,
Under Secretary for Food, Nutrition, and Consumer Services, has
certified that this rule will not have a significant economic impact on
a substantial number of small entities. State and local welfare
agencies will be the most affected to the extent that they administer
the Program.
Paperwork Reduction Act
This final rule contains information collection requirements
subject to review by the Office of Management and Budget (OMB) under
the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The reporting and
recordkeeping burden associated with the application, certification,
and continued eligibility of food stamp applicants is approved under
OMB No. 0584-0064.
To receive the child support deduction authorized by 7 CFR 273.9(d)
of this rule, households must report the child support obligation and
amounts paid on the application form and provide verification. The
methodology used to determine the current burden estimates for all
applications assumes that every applicant will complete every line item
on the application form. The model food stamp application and the model
application worksheet were revised in 1995 to include a line for the
child support deduction and the associated burden is included in the
current burden estimate of .2290 hours per response. Therefore, the
amendment to 7 CFR 273.9(d) made by this rule to add a child support
deduction does not alter the current burden estimate.
Section 273.12(a) of this rule requires that households report
changes in the legal obligation to pay child support during the
certification period; changes in the amount of child support paid must
be reported when the household applies for recertification. The rule
allows State agencies to require households to report child support
information monthly or quarterly. Section 273.10(f) provides that
households that are not required to report the amount of child support
paid during the certification period on a monthly or quarterly report
shall be certified for no more than 6 months. State agencies that
currently require
[[Page 54283]]
monthly reporting by some categories of households may require monthly
reporting households entitled to the child support deduction to report
changes in child support on that report. This option does not alter the
current burden estimate for the monthly report form of .1617 hours per
response because these households are already included in the number of
households used to determine household burden associated with the
monthly report form.
State agencies that do not use monthly reporting to obtain
information about child support payments may require households to
report child support information quarterly. State agencies may use the
change report form currently used for reporting other changes or may
develop a separate report form. The change report form will also be
used for households that do not report monthly or quarterly to report
changes in the child support obligation. The current estimate of burden
hours assumes that every household will submit at least one change
report form during its certification period. Therefore, the estimated
number of reports received is related to the length of a household's
certification period. Under this rule, some households would be
recertified or submit a quarterly report in lieu of a change report.
The current burden estimate for the change report form already takes
into account the variations in the length of certification periods.
Therefore, the requirement to report certain changes in child support
is not expected to alter the current burden estimate of .1617 hours per
response for the change report form.
Comments. Comments are invited on: (a) whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (b) the accuracy of the agency's estimate of
the burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (c) ways to enhance
the quality, utility and clarity of the information to be collected;
and (d) ways to minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology. Comments may be
sent to Wendy Taylor, OIRM, Room 404-W, Office of Management and
Budget, Paperwork Reduction Project (OMB No. 0584-0064), Washington,
D.C. 20503 and Department of Agriculture, Clearance Officer, OIRM, AG
Box 7630, Washington, D.C. 20250. Comments and recommendations on the
proposed information collection must be received by December 16, 1996.
Executive Order 12778
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform. This rule is intended to have preemptive effect with
respect to any State or local laws, regulations or policies which
conflict with its provisions or which would otherwise impede its full
implementation. This rule is not intended to have retroactive effect
unless so specified in the Dates paragraph of this preamble. Prior to
any judicial challenge to the provisions of this rule or the
application of its provisions, all applicable administrative procedures
must be exhausted.
Regulatory Impact Analysis
Need for Action
This action is required as a result of the Mickey Leland Childhood
Hunger Relief Act which amends the Food Stamp Act of 1977, as amended,
to establish a child support deduction for households that pay legally
obligated child support to a nonhousehold member.
Benefits
The child support deduction will increase the number of potentially
eligible food stamp recipients and will increase the benefit level of
households eligible for the deduction.
Costs
It is estimated that this action will increase the cost of the Food
Stamp Program by $125 million in Fiscal Year 1996; $130 million in
Fiscal Year 1997; and $145 million in Fiscal Year 1998.
Background
On December 8, 1994, we published a proposed rule at 59 FR 63265 to
implement section 13921 of the Mickey Leland Childhood Hunger Relief
Act, Chapter 3, Title XIII, Omnibus Budget Reconciliation Act of 1993,
Pub. L. 103-66, enacted August 10, 1993, (Leland Act), which amends
section 5(e) of the Food Stamp Act to add a deduction for legally
obligated child support payments made by a household member to or for a
nonhousehold member.
We accepted comments through February 6, 1995, and received letters
from 27 commenters, including State and local welfare agencies, State
child support enforcement (CSE) agencies, and State employees. We are
not addressing comments that are technical or beyond the scope of this
rulemaking or comments on the requirement to establish a deduction. The
requirement to establish a deduction is mandated by statute and is not
subject to comment. All other comments are addressed below.
1. Allowable Deductions
A. Legal obligation. We proposed to add a new paragraph to 7 CFR
273.9(d) to provide that households would be eligible for a deduction
for child support paid by a household member to or for a nonhousehold
member, provided the household member was legally obligated to pay
child support. Section 273.2(f)(10)(xii) of the proposed rule provided
that a legal obligation entitling a payor to the deduction could be
established by a court or administrative order or a legally enforceable
separation agreement. Alimony payments would not be deductible.
Comments
Three of the seven comments on this provision supported the
proposal. Two commenters suggested that payments be allowed even if
they are not legally obligated and another indicated that a deduction
should be allowed for the full amount paid even if the payment exceeds
the amount the household member is legally obligated to pay. Commenters
also requested clarification of the terms ``legally enforceable
separation agreement'' and ``administrative process'' as an alternative
to a court order.
Response
The Leland Act allows a deduction only for ``legally obligated''
child support; therefore, we are unable to allow a deduction for
amounts the household member is not legally obligated to pay. State
agencies may determine what constitutes a legal obligation to pay child
support under State law. As used in the proposed rule, a ``legally
enforceable separation agreement'' is a contract between the parties
that would be enforceable through court action. State agencies may
apply State law to determine what is an enforceable contract. The term
``administrative process'' refers to the process authorized by State
law for establishing an obligation to pay child support and determining
the amount of child support. We believe the term ``legally obligated
child support payments'' is consistent with the legislation and
sufficiently broad to allow application of State law and procedures. As
indicated below in the discussion of verification requirements, we are
not including in this final rule
[[Page 54284]]
the proposed examples of a legal obligation.
The proposed rule would have provided in Sec. 273.9(d)(7) that a
deduction be allowed for child support payments paid by a household
member ``to or for a nonhousehold member. * * *'' Subsequent to
publication of the proposed rule, it came to our attention that an
obligation to pay child support may continue even if the child or the
child and other parent are in the same household as the individual
paying the child support. This may occur, for example, if the child
moves back and forth between parents or if the payor has a continuing
obligation to make arrearage payments to the State Child Support
Enforcement (CSE) agency after the family is reunited.
The regulation as proposed would not have prohibited allowing the
deduction when a legally obligated child support payment was made to an
individual or agency outside the household even if the child for whom
the support was paid was a household member. Therefore, we believe
there is no need to revise the proposed language. No deduction would be
allowed, of course, if a child support payment is made to a household
member.
B. Vendor payments. The proposed rule provided in new
Sec. 273.9(d)(7) that payments a noncustodial parent makes to a third
party (such as a landlord or utility company) on behalf of the
nonhousehold member (vendor payments) would be included in the
deduction. Also, the rule proposed that legally obligated vendor
payments made by the noncustodial parent to obtain health insurance for
the child would be deductible.
Comments
Eight commenters addressed vendor payments and several had
questions regarding how the allowable portion of the noncustodial
parent's health insurance premium would be determined. One commenter
recommended that a deduction be allowed for any vendor payment made by
a noncustodial parent on behalf of a nonhousehold member. A State
agency asked whether a deduction is allowed when the noncustodial
parent pays a landlord but the method of payment (whether the payment
is to be made directly to or for the nonhousehold member or indirectly
as a vendor payment) is not specified in the court order or separation
agreement. Other commenters recommended that vendor payments for
clothes or groceries not be deductible. Some commenters recommended
that vendor payments paid in lieu of alimony or spousal support be
allowed as a deduction, while other commenters believed these payments
should not be deductible. Other commenters were concerned that the
types of payments considered to be child support would be different for
food stamp and CSE purposes.
Response
We are not providing detailed requirements for determining the
amount of the allowable health insurance premium because this may vary
with the type of coverage and the nature of the obligation. We believe
State agencies are in a better position to work out a method that is
reasonable and not overly burdensome. Employers or insurers could be
contacted for information regarding the best proration method.
The household member may make vendor payments for various expenses
of the nonhousehold member, but unless the household member is legally
obligated to pay the expense, the payments are not deductible. A
legally obligated payment is deductible whether it is made as a vendor
payment or as a direct payment to or for the nonhousehold member.
Absence of designation of a method of payment (directly to the
household or indirectly to a provider) in the court order or separation
agreement does not prevent the payment from being deductible as long as
it can be verified. We are unable to allow vendor payments obligated
under an alimony or spousal support order because the Leland Act limits
the deduction to child support payments.
Child support is generally paid through a court or State child
support enforcement agency or directly to the household containing the
child. We consulted with the Office of Child Support Enforcement of the
U.S. Department of Health and Human Services in developing both the
proposed rule and this final rule. Unlike the Food Stamp Program, CSE
does not earmark payments made toward various aspects of a child
support obligation, but instead reflects the total child support paid.
A household member may be required to pay rent or medical expenses on
behalf of a nonhousehold member, for example, but the amount would be
included in the total amount the household member is ordered to pay
instead of being itemized in the CSE record. Therefore, the payments
shown in the CSE record may not match those reported and verified by
the household.
Despite potential inconsistencies between CSE records and food
stamp records of child support payments, we believe households should
be allowed a deduction for child support paid by vendor payments. We
believe the intent of Congress is to allow vendor payments if the
household member has a legal obligation to pay them. As reported in the
preamble to the proposed rule at 59 FR 63266, the legislative history
of the Leland Act states: ``Since the purpose of this amendment is to
encourage absent parents to live up to the full extent of their child
support obligations, the value of legally binding child support that is
provided in-kind, such as payments of rent directly to the landlord,
would also be eligible for this deduction.'' See 114 Congressional
Record S10726, August 6, 1993.
To satisfy the requirement that the deduction be allowed only for
legally obligated child support and the desire of Congress to include
vendor payments as allowable deductions, we are clarifying in this rule
that any legally obligated payments made, whether directly to or for
the nonhousehold member or indirectly as a vendor payment, are
deductible. We are not adopting the examples of vendor payments
included in the proposed rule (health insurance payments and payments
to utility providers or landlords) because they are discussed in the
preamble and are not needed in the final rule.
The proposed rule included references to verification and reporting
requirements in new Sec. 273.9(d)(7). Since these requirements are
contained in other sections of current regulations, we are removing any
reference to verification and reporting requirements from
Sec. 273.9(d)(7) in the final rule.
The proposed requirement to allow a deduction for legally obligated
child support payments made to third parties is adopted as final at
Sec. 273.9(d)(7), with clarifications and removal of unnecessary
language.
C. Arrearages. The proposed rule provided in new Sec. 273.9(d)(7)
that households with at least a 3-month record of child support
payments would be eligible for a deduction for amounts paid toward
child support arrearages in addition to the current month's obligation.
Households with less than a 3-month record would not be allowed a
deduction for arrearages, or back payments.
Comments
Seven State agencies commented on this provision. Three supported
the proposal to allow a deduction for back payments and felt that a
deduction should be allowed even if the household had no payment
record. Three State agencies were concerned that allowing a deduction
for arrearages would result in a double deduction. They indicated that
allowing a deduction for arrearages
[[Page 54285]]
could skew an average and would make estimating future arrearage
payments difficult. One State agency asked if arrearages could be
averaged into the prospective obligation even when the court order did
not address the arrearage. Another State agency felt that the total
amount of the monthly deduction should be no more than the amount of
the current obligation on a monthly basis.
One commenter suggested that if wages are being garnished for child
support, the full amount should be allowed even if it includes
arrearages and the household does not have a payment history yet
because garnishment assures that it will be paid. Three commenters
asked how one-time collections of past-due child support, such as tax
refund intercepts, would be handled in estimating the deduction.
Response
The Leland Act and its legislative history require that arrearage
payments be allowed in calculating a household's child support
deduction. The Leland Act specifies that a deduction is to be allowed
for payments ``made.'' The legislative history at 114 Congressional
Record S10725 indicates that the intent of the provision is to
encourage the payment of child support: ``Now these payments are
counted as income to the family that pays them and to the family that
receives them. This is not only unfair, it is a disincentive for absent
fathers to pay child support. We must remove current disincentives for
absent parents to take responsibility for their children.* * *'' The
Conference Report (House Report No. 213, 103d Congress, 1st Session,
1993, p. 925) states: ``The managers do not intend for this procedure
[averaging and retrospective budgeting] to deny a household a deduction
for any child support actually paid.* * *'' Income used to pay child
support for a child in another household depletes available income for
support of the payor's household. The child support order or separation
agreement need not require payment of arrearages since the initial
obligation to pay already exists in the order or agreement; nor is a
payment schedule necessary for the deduction to be allowed. The food
stamp State agency may, however, work with the CSE agency and the
household to establish such a schedule as the basis for anticipating
the amount of deduction.
We recognize that anticipating the amount of future arrearage
payments will be difficult. That is why the proposed rule did not allow
a deduction for arrearages to households without a payment history.
However, we realize that this makes administration of the provision
more complex. The intent of Congress was to minimize burdens on State
agencies and households. Therefore, we have decided to allow a
deduction for arrearages even for households without a payment history.
State agencies will be able to anticipate the likelihood of future
payments based on the household's available income. State agencies also
have the option of budgeting the child support deduction
retrospectively while budgeting other circumstances prospectively.
Verification of payments received could be obtained, if necessary, from
the payee. In addition, child support arrearages are collected through
garnishment of wages or unemployment benefits in some cases, and
verification of the garnishment will be readily available. As stated
above, the deduction is intended for payments ``made.'' In the case of
arrearages where no payment history has been established, the State
agency should exercise additional caution when budgeting for the
deduction. If the eligibility worker has no basis for expecting future
payments toward arrearages, or no basis for expecting payments to equal
those estimated by the applicant, no arrearage amount should be
included in an average used to project the deduction for the
certification period. Provisions for reducing the likelihood that
households will receive an inappropriate deduction are described with
the budgeting and reporting requirements below.
No amount would be budgeted based on amounts collected through tax
intercept. Unlike child support paid through garnishments from current
income, child support collected through tax intercept is taken from a
lump sum payment. The intent of the child support deduction is to make
it possible for households to pay child support out of available
income. We believe it would be inconsistent with this intent to allow a
deduction for amounts collected through tax intercept.
The proposed provision in new Sec. 273.9(d)(7) to allow a deduction
for arrearage payments is adopted with a change to remove the
requirement that households must have a payment history to receive the
deduction.
2. Verification
A. Household verification. The proposed rule would have added a new
mandatory verification requirement to the regulations at 7 CFR
273.2(f)(1). The proposed rule provided that the State agency would
verify the household's legal obligation to pay child support, the
amount of the obligation, and the monthly amount of child support paid.
The household would be responsible for providing verification of the
legal obligation, the obligated amount, and the amount paid. According
to the proposed rule, the State agency would be required to accept
documentation verifying a household's actual payment, such as canceled
checks, wage withholding statements, verification of withholding from
unemployment compensation, and statements from the custodial parent
regarding direct payments or vendor payments the household member pays
or expects to pay. The proposed rule provided that documents
establishing an obligation to pay would not be accepted as verification
of the household's actual monthly child support payments. The proposed
rule would also have amended 7 CFR 273.2(f)(8) to require verification
at recertification of the amount of legally obligated child support a
household member pays to a nonhousehold member.
Comments
We received comments from five commenters relating to various
aspects of the household verification requirements and three comments
concerning possible disputes between payees and payors. One State
agency agreed with the proposal to require that both the legal
obligation and actual amount paid be verified. Another State agency
thought there was an inconsistency between the provision in proposed
Sec. 273.9(d)(7) that no deduction be allowed if the household fails or
refuses to obtain necessary verification and the proposed requirement
in new Sec. 273.2(f)(1)(xii) establishing the State agency's
responsibility for verifying entitlement to the deduction and the
amount. A State agency indicated that the responsibility for
verification rests with the payor, with appropriate help from the
worker. Another commenter asked what kind of verification should be
accepted in new cases. One commenter indicated that the rule provided a
clear definition of acceptable verification for a legal obligation to
pay child support but not for a legally enforceable separation
agreement. Another indicated that any amount collected by CSE
establishes that it was legally obligated.
One of the commenters indicated that many noncustodial parents do
not keep good records and rely on the CSE agency to provide a record of
child support payments. Another suggested that food stamp applicants
without CSE cases who want the deduction should be required to open a
CSE case. Making
[[Page 54286]]
payments through CSE would facilitate verification.
Several commenters raised the issue of possible disputes between
the custodial and noncustodial parents regarding the amount of child
support received and paid if both parents are members of food stamp
households. One State agency wanted to know if the State agency is
obligated to compare the amount reported as child support income by the
payee household with the amount claimed as a deduction by the payor
household and to adjust the figures if the amounts differ. Commenters
were concerned about how disputes would be resolved, and one suggested
that no deduction be allowed if the amount of child support paid is
disputed.
Response
We are modifying the proposed requirement to verify child support
information to remove unnecessary language concerning the household's
responsibility to provide verification and the types of acceptable
documentation. Verification requirements, including the State agency's
obligation to assist the household, the sources of verification and
responsibility for providing verification are already included in the
regulations at 7 CFR 273.2(f) (4) and (5). If no verification is
available because a household member has recently become responsible
for paying child support, the State agency shall anticipate the amount
to be budgeted initially based on verification of the amount of the
obligation and the amount the household member expects to pay monthly.
(Requirements for budgeting and reporting changes are discussed later
in this preamble.)
We agree with the commenter that the existence of a CSE case makes
it easier to verify that child support is or is not being paid, and we
would support State agency measures to encourage households to use CSE
child support services. However, we have no authority to require that
they do so. Services are available to any individual who is not
otherwise eligible as a recipient of Aid to Families with Dependent
Children (AFDC) and/or Medicaid. We believe the resolution of
differences regarding claims of child support paid or received is best
left to State agencies to address. If State agencies encourage payor
households to use canceled checks, money order receipts, or receipts
signed by the custodial parent as verification of payment, there should
be few occasions when the verification is questionable. Also, although
the household is the primary source for verification, the State agency
may also obtain verification from CSE records, courts, or other
sources.
State agencies may, but are not required to compare the payee and
payor records when both are food stamp households. We are not imposing
a requirement on State agencies to compare payor and payee files each
month because the payment and income amounts reflected legitimately may
not match. This could occur, for example, if the cases are on different
reporting and budgeting systems, vendor payments are involved, or
averaging is used.
The proposal to add a mandatory verification requirement for the
child support deduction to 7 CFR 273.2(f)(1)(xii) is adopted as final
with clarification and removal of unnecessary language. Because of
changes in the final rule regarding the reporting requirements for
child support, we are revising the requirement at 7 CFR
273.2(f)(8)(i)(A) for verifying the amount of legally obligated child
support at recertification to require verification of changes in the
legal obligation, including the amount of the obligation, and the
amount of child support the household pays. We are also adding a
sentence to provide that reportedly unchanged information shall be
verified only if the information is incomplete, inaccurate,
inconsistent or outdated.
B. Matching requirements. Also included in Sec. 273.2(f)(1)(xii) of
the proposed rule was a requirement that the State agency enter into
agreements with CSE agencies to obtain data regarding the child support
obligation and the household's payment record from CSE automated data
files before recertification or, for households certified for 3 months
or fewer, prior to alternate recertifications. The match with the
records of food stamp recipients receiving a child support deduction
was intended to provide a record of child support paid or to identify
cases in which no payments were recorded. The State agency would then
have this information available for use at recertification. The
proposed rule at 7 CFR 273.2(b)(2) also would have required State
agencies to notify households on the application that child support
information may be verified with CSE agencies or courts.
Comments
The proposed matching requirement generated more comments than any
other, and only two commenters found the proposal reasonable. Fourteen
commenters expressed concern about this requirement. State and county
welfare offices and CSE agencies objected to the requirement on the
grounds that (1) a match, particularly an interstate match, would not
be cost-effective, (2) CSE systems do not contain all the required
information on all cases, (3) resolving discrepancies between
information provided by the household and that obtained from CSE
records would be burdensome, (4) the match is unnecessary because
adequate verification is available from households and other sources,
and (5) CSE automated data systems are being implemented now and
modifications cannot be made at this time. Commenters suggested that
on-line access to CSE records for advance verification would be
preferable to a post-certification match. They requested that the match
requirement be eliminated, be made optional, or be delayed until
implementation of CSE automated data systems is completed.
In addition to concerns expressed about the matching requirement,
some State agencies had specific questions about its application. Two
commenters questioned the necessity of notification to applicants that
child support information would be checked through computer matching
with CSE. One commenter asked what action the State agency would be
required to take if a CSE match showed a change greater than $50 in
child support paid. Another asked what action the State agency should
take if the household verified a payment but CSE had no record.
Response
The purpose in requiring State agencies to enter into an agreement
with CSE to match State agency records with CSE records was to ensure
that households would not continue to be given a deduction when they
were not actually making monthly payments. Under the proposed rule,
there was no requirement for reporting changes in child support paid
during the certification period unless the State agency required the
household to report quarterly or monthly. We believed matching would
enable the State agency to verify the degree to which the household had
met its obligation and determine whether it should continue to receive
a deduction.
We continue to believe that matching the household's food stamp
record of child support payments with CSE records is beneficial.
However, we have considered all comments and have decided not to
mandate a match. Where reasonable, State agencies should verify child
support information by all means available. Many States may not yet be
equipped to match child support information via automated CSE agency
records. However, the goal is to ensure that States take every
opportunity to
[[Page 54287]]
verify data provided by a recipient regarding another State or
Federally administered program. Verification could take place by match,
by checking available data on an on-line system or by other means. Our
expectation is that State agencies will seek every opportunity to
institute an appropriate verification system between programs.
We are leaving it up to State agencies to determine the extent to
which automated data systems can be used at this time. Some State
agencies already have the capability of conducting on-line matches with
CSE records and routinely consult these records before authorizing a
deduction. We strongly encourage all State agencies to develop and use
this capability as soon as possible. In the meantime, we believe the
reporting and certification period requirements described below will
provide protection against abuse of the deduction.
We also agree with the commenters that the proposed amendment to 7
CFR 273.2(b)(2) requiring State agencies to notify applicants on the
application form that information provided may be checked with CSE
records is unnecessary. Regulations at 7 CFR 273.2(b)(3) require all
State agencies to use an application form designed by FCS unless a
deviation is approved. The Food Stamp Program model application form
(FCS-385) already contains language notifying households that
information provided by the applicant will be compared with other
Federal, State and local records using computer matching systems.
Therefore, it is unnecessary to amend 7 CFR 273.2(b)(2) to include the
proposed specific notice requirement, and we are not adopting the
proposed amendment.
3. Budgeting and Reporting Requirements
The proposed rule provided State agencies three options for
handling budgeting and reporting requirements for child support. Under
Option 1, change reporting, the anticipated child support payment would
be budgeted either prospectively or retrospectively. For change
reporting households with a record of 3 or more months of paid child
support, the State agency would average at least 3 months of legally
obligated child support and use the average as the household's child
support deduction for the certification period, taking into account any
anticipated changes in the legal obligation or other changes that would
affect the payment. Households with an established payment history of 3
or more months would have to report only changes in the legal
obligation that occurred during the certification period.
For change reporting households without a record of at least 3
months of paid, legally obligated child support, the State agency would
base the child support deduction on anticipated payments, exclusive of
payments toward arrearages. These households would have to report
changes of more than $50 from the amount used in the most recent
certification action, excluding payments toward arrearages, until a
payment history was established. They would also have to report changes
in the legal obligation.
Under Option 2, quarterly reporting, State agencies could require
households claiming the child support deduction to report their actual
payments quarterly. These households would have the payments budgeted
either prospectively or retrospectively. They would be required to
report actual amounts paid and changes in the legal obligation.
Under Option 3, monthly reporting, a State agency could require
households claiming the child support deduction to report monthly.
After the beginning month or months, the household would have to be
budgeted retrospectively and would report changes in the amount paid
and the legal obligation.
The proposed rule also provided that for retrospectively budgeted
households in the beginning month or months of certification, the State
agency would either average past payments if the household had a
payment history or use an estimate of child support the household
expected to pay, excluding arrearages, if the household had no payment
history.
Comments
Three of the eight commenters on budgeting and reporting agreed
with the proposal. We received no specific comments on the proposal to
allow quarterly reporting of child support payments.
Several State agencies opposed the reporting provisions as
unnecessarily limiting and burdensome and indicated that child support
should be treated the same as any other type of income deduction.
Others objected to the proposed requirement that change reporting
households without a payment history report a change of more than $50
in child support paid and suggested alternative reporting requirements.
Several commenters objected to the averaging requirements for
prospective and retrospectively budgeted households in proposed
Sec. 273.10(d)(8). We are not describing these comments individually
because, as indicated below, we are not adopting the proposed $50
reporting requirement and the averaging requirements. One commenter
opposed the requirement to report changes in the legal obligation
between recertifications on the grounds that these changes rarely
happen. Another State agency indicated that the child support order
will include the age at which the legal obligation stops. The State
agency can track that date and remove the deduction when the child
reaches that age.
Response
We are retaining the three reporting and budgeting options
contained in the proposed rule: change reporting with prospective or
retrospective budgeting, quarterly reporting with prospective or
retrospective budgeting, and monthly reporting with retrospective
budgeting. However, in response to comments, we are simplifying the
requirements and providing increased State agency flexibility.
As indicated by the legislative history, Congress intended that
regulations implementing the child support deduction minimize burdens
on State agencies and households. The Conference Report (House
Conference Report No. 213, 103rd Congress, 1st Session, 1993, pages
925-26) states: ``For example, States could be permitted to base a
household's deduction for a certification period on the average amount
it paid in the prior certification period (with appropriate adjustments
for any changes in the order) rather than having to keep track
throughout a certification period of how much the absent parent
actually pays each month. The managers do not intend for this procedure
to deny a household a deduction for any child support actually paid,
but rather the intention is to give States the option to use consistent
budgeting procedures that would minimize the number of changes they
would be required to make. State agencies correctly following such
procedures would not be charged with quality control errors if the
amount of child support that a household paid increased or decreased as
long as the State agency adjusted the household's allotment
prospectively at its next recertification.''
To more fully meet the intent of Congress and address the concerns
of commenters, we are modifying the reporting and budgeting
requirements of the three options. This final rule allows State
agencies the option of certifying households receiving a child support
deduction more frequently or requiring periodic reporting of child
support information. We believe this coincides with procedures State
agencies currently use for identifying changes in
[[Page 54288]]
the circumstances of households with earnings.
As proposed, a new Sec. 273.12(a)(1)(vi) adds the requirement that
households report changes in the legal obligation to pay child support.
In accordance with 7 CFR 273.12(a)(2), the household would be required
to report these changes within 10 days. Although changes in the legal
obligation may be infrequent, the requirement to report such a change
may prevent overissuance of benefits to households no longer obligated
to pay child support.
Some State agencies may track the age of the child for whom the
support is provided and the date when the obligation stops; others may
rely on households to report the change. Therefore, we are retaining
the requirement.
Under the change reporting option as modified by this rule,
households with less than a 3-month record of child support payments
are not required to report a change of more than $50 in child support
payments, as was proposed. Under this final rule, a limit on
certification period length for these households would replace the
reporting requirement. The final rule provides at Sec. 273.10(f)(9)
that State agencies are required to certify change reporting households
without a record of regular child support payments for no more than 3
months, as described under ``Certification Periods'' below. State
agencies are required to certify change reporting households with a
payment history for no more than 6 months.
Therefore, we are adopting as final the addition of paragraph (vi)
to 7 CFR 273.12(a) to provide that change reporting households are
required to report changes in the legal obligation to pay child
support.
We are also modifying the requirements for option 2, quarterly
reporting, to increase State agency flexibility. We are not adopting
the provision of proposed Sec. 273.12(a)(1)(vi) that would have
required quarterly reporting households to report actual monthly
amounts paid in addition to changes in the legal obligation or the
provision in proposed Sec. 273.12(a)(4)(i) that the State agency would
have to provide the household with the quarterly report no later than
the end of the second month in the quarter.
We are also not adopting the provisions of proposed
Sec. 273.12(a)(4)(ii) and Sec. 273.12(b)(2) (i) through (x) regarding
the content of the quarterly report form. State agencies may determine
and specify on the quarterly report the child support information the
household is required to report and the date by which it must be
reported. State agencies may, but are not required to remind the
household about other changes that have to be reported. They may also
advise the household that the State agency will act on changes in child
support the household reports before submitting the quarterly report.
The requirements in proposed paragraphs 273.12(b)(2) (iii), (iv),
(v), (vi), and (x) for the quarterly report form are already provided
in 7 CFR 273.21(h)(2) (iii), (iv), (v), (vi) and (vii) for the monthly
reporting form. Therefore, we are adding a reference in
Sec. 273.12(b)(2) to 7 CFR 273.21(h)(2) (iii) through (vii). With these
changes, the proposed requirements for child support quarterly
reporting are adopted as final.
Under Option 3, the State agency may require categories of
households to report child support information on a monthly report. The
proposed rule would have amended 7 CFR 273.21(h)(2) to add a paragraph
specifying that if a State agency elects to require reporting of child
support payments on the monthly report form, the State agency shall
require the household to report changes in the actual monthly amount of
child support paid and any changes in the legal obligation to pay child
support. We are not adopting this proposed amendment. State agencies
may determine what information households are required to report on the
monthly report.
We are adopting with modification the proposed amendment to add new
paragraph (E) to 7 CFR 273.21(j)(3)(iii). We received no comments on
this provision that the State agency shall not allow a child support
deduction if the household does not report or verify child support
information the State agency requires to be reported or verified.
As provided in the proposed rule and required by section 6(c)(1)(A)
of the Act, households excluded from monthly reporting and
retrospective budgeting in accordance with 7 CFR 273.21(b) cannot be
required to report periodically, and the State agency cannot use
retrospective budgeting for the excluded households. Under all options,
State agencies are required to act on any changes in child support
payments reported by the household that affect benefits or eligibility.
The proposed sections 273.10(d)(8)(i), (ii), (iii), and (iv)
prescribing requirements for averaging and budgeting the child support
deduction are not being adopted because they are unnecessary in light
of the changes made in this rule. Under this final rule,
Sec. 273.10(d)(8) provides that State agencies may budget child support
payments prospectively, in accordance with 7 CFR 273.10(d) (2) through
(5), or retrospectively, in accordance with 7 CFR 273.21(b) and (f)(2).
The payments may be budgeted prospectively or retrospectively
regardless of the budgeting system used for the household's other
circumstances. Section 273.21(f)(2)(iv) currently provides that the
State agency shall budget deductible expenses prorated over two or more
months (except medical expenses) either prospectively or
retrospectively. We are adding a conforming amendment to 7 CFR
273.21(f)(2)(iv) to provide that the child support expense may be
averaged and budgeted prospectively or retrospectively.
We received no comments on the proposed amendment to 7 CFR 271.2
allowing use of an adequate notice in connection with quarterly
reporting, and the amendment is adopted as proposed.
With these changes, the final rule provides that State agencies
shall either require households receiving a child support deduction to
report a change in the legal obligation to pay child support within 10
days of the date the household becomes aware of a change or provide
specified information periodically (monthly or quarterly). The proposed
provision at Sec. 273.12(a)(4)(ii) which prohibits State agencies from
requiring households that report child support information periodically
to report the same changes within 10 days is adopted as final. An
option to use frequent recertifications in place of reporting
requirements is discussed below.
We received one comment supporting the proposal regarding treatment
of the deduction in households with a member who is ineligible because
of alien status or failure to provide a social security number. We
proposed to handle the child support deduction the same way as the
shelter and dependent care expenses of these households under 7 CFR
273.11(c)(2)(iii). That is, that portion of the household's allowable
child support expense which is paid by the ineligible member is divided
among the household members, including the ineligible member. All but
the ineligible member's share is counted as a deductible child support
expense for the remaining members. Therefore, the proposed amendment to
7 CFR 273.11 is adopted as final without change.
4. Certification Periods
The proposed rule contained no requirements regarding certification
periods for households eligible for the child support deduction.
However, in the preamble at 59 FR 63270 we
[[Page 54289]]
indicated that we were not proposing certification period requirements
because current rules at 7 CFR 273.10(f)(4) already address the
certification period length for households that experience frequent and
significant changes and those that have more predictable circumstances.
The preamble reflects the expectation that households with a regular
payment record and households that report their child support payments
quarterly or monthly would be certified for longer periods (6 to 12
months) while households with no payment record or which have extreme
monthly variations in payments would be certified for a shorter period
of time.
Comments
We received three comments on certification periods. One State
agency indicated that the problem of fluctuations in child support
payments could be addressed by using limited certification periods for
households receiving the deduction. Another State agency agreed with
the statement in the preamble of the proposed rule that establishing
special certification period requirements was not necessary. Another
commenter asked that ``short period'' as used in the preamble be
defined and asked whether a minimum certification period would be
required.
Response
As indicated above in the discussion about reporting and budgeting
requirements, we have reconsidered our position on the need for
certification period limits in connection with the child support
deduction. We agree with the commenter that assigning limited
certification periods to households claiming the deduction is one way
to control for fluctuations in payments. Requiring households to report
changes periodically is another way.
Under this rule State agencies can choose to use frequent
recertifications instead of reporting requirements to obtain
information about changes in child support payments. To protect Program
integrity, we believe it is necessary to set a limit on the number of
months a household may participate without some examination of the
amount of child support actually being paid. Therefore, this rule
provides that if the State agency does not require households to report
changes in child support payments periodically during the certification
period, the State agency shall assign certification periods that
correspond to the extent to which the household has made regular
payments. Households with no history of regular child support payments
who are not required to report periodically shall be assigned a
certification period of no more than 3 months. Households with an
established record of regular payments that are expected to continue
payments of the same amount and frequency shall be certified for no
more than 6 months if they are not required to report periodically.
State agencies may establish their own procedures for determining what
constitutes a ``record of regular child support payments.''
Households required to report periodically shall be assigned
certification periods of not less than 6 months and not more than 12
months, unless a waiver has been approved.
Current regulations at 7 CFR 273.10(f)(3), (6), and (7) governing
certification periods for jointly processed PA or GA cases and elderly
or self-employed households are based on requirements of section 3(c)
of the Food Stamp Act and shall continue to apply. We realize that
under current regulations, frequent recertifications can be a burden
for both households and State agencies. However, a proposed rule titled
``Simplification of Program Rules'' published January 11, 1995, would,
when final, simplify the recertification process to greatly reduce the
burden on households and State agencies. Households that establish a
regular child support payment history will benefit by having less
frequent recertifications.
Therefore, this rule amends 7 CFR 273.10(f) to add a new paragraph
(9). It requires State agencies to certify households eligible for a
child support deduction for no more than 3 months if they have no
record of regular child support payments and are not required to submit
periodic reports. Households with a record of regular payments shall be
certified for no more than 6 months unless they are required to submit
periodic reports.
5. Claims and Disqualification
Comments
One commenter asked whether a household would be charged with an
intentional Program violation (IPV) if it claimed a deduction and then
failed to report that the household member did not make the payment.
The commenter also asked whether a claim against the household would be
established when a deduction is granted but the household does not make
the anticipated payment, and what action would be taken if it was
discovered that the household had provided false verification.
Response
Current regulations at 7 CFR 273.18 provide requirements for
establishing inadvertent household error or IPV claims. If a household
is required to report a change in child support and does not report the
change, a claim will be established in accordance with 7 CFR 273.18(c)
(1) or (2). If the household is not required to report a change during
the certification period, a claim is not established because of failure
to report a change during that period. If the household provided false
information or verification, the household could be charged with an
IPV, in accordance with 7 CFR 273.16, or the State agency could pursue
court action against the household member. If the individual is found
to have intentionally violated Program rules, an IPV claim would be
established in accordance with 7 CFR 273.18(c)(2).
6. Quality Control
In accordance with the legislative history of the child support
deduction provision (House Conference Report No. 213, 103rd Congress,
lst Session (1993) p. 925), the proposed rule would have added a new
paragraph (ix) to 7 CFR 275.12(d)(2) to provide that any variance in a
child support deduction which was the result of an unreported change
subsequent to the most recent certification action shall be excluded
from the error determination. As indicated in the preamble to the
proposed rule at 59 FR 63270, the QC system would review the accuracy
of the deduction at the most recent certification action prior to the
sample month. Any unreported change in actual child support payments or
obligation subsequent to the certification action would not be the
basis for citing a household reporting error or a State agency error. A
variance would exist if the QC reviewer determined that the State
agency did not apply the proper deduction at the most recent
certification action or that the household reported a change after the
most recent certification action and the State agency failed to act or
acted improperly on the reported change.
Comments
The five State agencies that commented on quality control supported
the proposed provision.
Response
The proposed addition of paragraph (ix) to 7 CFR 275.12(d)(2)
regarding QC variances in child support cases is adopted as final
without change.
[[Page 54290]]
7. Implementation
The preamble to the proposed rule at 59 FR 63270 indicated that the
child support provision of the Leland Act was effective September 1,
1994 and was required to be implemented by October 1, 1995.
Comments
Two State agencies commented on the proposed implementation
requirements. One indicated that the State agency would have a problem
getting changes in place by October 1995, that there was no extra money
for programming, and an additional 6 months would be needed. The other
State agency indicated that for States which implemented before the
required date, there should be a paragraph explaining that only the
overall policy intent, not the procedural steps such as CSE matching
and reporting, had to be implemented at that time.
Response
In accordance with section 13971 of the Leland Act, this final rule
provides that State agencies were authorized to implement the child
support deduction effective September 1, 1994, but were not required to
implement the provision until October 1, 1995.
In accordance with Pub. L. 104-221, the Contract with America
Advancement Act of 1996, this final rule is effective December 16, 1996
and must be implemented no later than May 1, 1997. The provisions must
be implemented for all households that newly apply for Program benefits
on or after either the required implementation date or the date the
State agency implements the provision prior to the required
implementation date. State agencies are required to adjust the cases of
participating households at the next recertification, at household
request, or when the case is next reviewed, whichever comes first.
State agencies which fail to implement by the required implementation
date or adjust benefits as required shall provide restored benefits as
appropriate.
Variances resulting from implementation of the provisions of the
final rule are excluded from error analysis for 120 days from the
required implementation date, in accordance with section 13951(c)(2) of
the Leland Act. State agencies which implement prior to the required
implementation date must notify the appropriate regional office prior
to implementation that they wish the variance exclusion period to begin
with actual implementation, as provided in 7 CFR 275.12(d)(2)(vii)(A).
In the absence of such notification, the exclusionary period will begin
with the required implementation date.
List of Subjects
7 CFR Part 271
Administrative practice and procedure, Food stamps, Grant programs-
social programs.
7 CFR Part 272
Alaska, Civil Rights, Food Stamps, Grant programs-social programs,
Reporting and recordkeeping requirements.
7 CFR Part 273
Administrative practice and procedure, Aliens, Claims, Food stamps,
Fraud, Grant programs-social programs, Penalties, Records, Reporting
and recordkeeping requirements, Social security, Students.
7 CFR Part 275
Administrative practice and procedures, Food stamps, Reporting and
recordkeeping requirements.
Accordingly, 7 CFR parts 271, 272, 273, and 275 are amended as
follows:
1. The authority citation of parts 271, 272, 273, and 275 continues
to read as follows:
Authority: 7 U.S.C. 2011-2032.
PART 271--GENERAL INFORMATION AND DEFINITIONS
Sec. 271.2 [Amended]
2. In Sec. 271.2, the definition of ``Adequate notice'' is amended
by removing the words ``in a Monthly Reporting and Retrospective
Budgeting system'' and adding in their place the words ``in a periodic
reporting system such as monthly reporting or quarterly reporting.''
PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES
3. In Sec. 272.1, a new paragraph (g)(148) is added to read as
follows:
Sec. 272.1 General terms and conditions.
* * * * *
(g) Implementation. * * *
(148) Amendment No. 362. The provision of Section 13921 of Public
Law 103-66 establishing a child support deduction was effective
September 1, 1994, and was required to be implemented no later than
October 1, 1995. The provisions of Amendment No. 362 are effective
December 16, 1996 and must be implemented no later than May 1, 1997.
State agencies shall implement the provisions no later than the
required implementation date. The provisions must be implemented for
all households that newly apply for Program benefits on or after either
the required implementation date or the date the State agency
implemented the provision prior to the required implementation date,
whichever is earlier. State agencies are required to adjust the cases
of participating households at the next recertification, at household
request, or when the case is next reviewed, whichever comes first.
State agencies which fail to implement or adjust cases by the required
implementation date shall provide restored benefits as appropriate. For
quality control purposes, any variances resulting from implementation
of the provisions are excluded from error analysis for 120 days from
the required implementation date, in accordance with 7 CFR
275.12(d)(2)(vii) and 7 U.S.C. 2025(c)(3)(A). State agencies which
implement prior to the required implementation date must notify the
appropriate regional office prior to implementation that they wish the
variance exclusion period to begin with actual implementation, as
provided in 7 CFR 275.12(d)(2)(vii)(A). Absent such notification, the
exclusionary period will begin with the required implementation date.
PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS
4. In Sec. 273.2:
a. a new paragraph (f)(1)(xiii) is added and
b. two new sentences are added at the end of paragraph
(f)(8)(i)(A).
The additions read as follows:
Sec. 273.2 Application processing.
* * * * *
(f) Verification. * * *
(1) Mandatory verification. * * *
(xiii) Legal obligation and actual child support payments. The
State agency shall obtain verification of the household's legal
obligation to pay child support, the amount of the obligation, and the
monthly amount of child support the household actually pays. Documents
that are accepted as verification of the household's legal obligation
to pay child support shall not be accepted as verification of the
household's actual monthly child support payments. State agencies may
and are strongly encouraged to obtain information regarding a household
member's child support obligation and payments from Child Support
Enforcement (CSE) automated data files. The State agency shall give the
household an opportunity to resolve any discrepancy between household
[[Page 54291]]
verification and CSE records in accordance with paragraph (f)(9) of
this section.
* * * * *
(8) Verification subsequent to initial certification. (i)
Recertification. (A) * * * The State agency shall require a household
eligible for the child support deduction to verify any changes in the
legal obligation to pay child support, the obligated amount, and the
amount of legally obligated child support a household member pays to a
nonhousehold member. The State agency shall verify reportedly unchanged
child support information only if the information is incomplete,
inaccurate, inconsistent or outdated.
* * * * *
4(a). In Sec. 273.9, paragraphs (d)(7) and (d)(8) are redesignated
as paragraphs (d)(8) through (d)(9) respectively and a new paragraph
(d)(7) is added to read as follows:
Sec. 273.9 Income and deductions.
* * * * *
(d) Income deductions. * * *
(7) Child support deduction. Legally obligated child support
payments paid by a household member to or for a nonhousehold member,
including payments made to a third party on behalf of the nonhousehold
member (vendor payments). The State agency shall allow a deduction for
amounts paid toward arrearages. Alimony payments made to or for a
nonhousehold member shall not be included in the child support
deduction.
* * * * *
5. In Sec. 273.10:
a. The introductory text of paragraph (d) is amended by adding the
words ``child support'' between the words ``shelter,'' and ``and
medical''.
b. A new paragraph (d)(8) is added.
c. Paragraph (e)(1)(i)(E) is amended by removing the reference
``(e)(1)(i)(F)'' and adding in its place a reference to
``(e)(1)(i)(G)''.
d. Paragraphs (e)(1)(i)(F) and (e)(1)(i)(G) are redesignated as
paragraphs (e)(1)(i)(G) and (e)(1)(i)(H) respectively and a new
paragraph (e)(1)(i)(F) is added.
e. Newly redesignated paragraph (e)(1)(i)(G) is amended by removing
the reference to ``(e)(1)(i)(G)'' and adding in its place a reference
to ``(e)(1)(i)(H)''.
f. A new paragraph (f)(9) is added.
The additions and revisions read as follows:
Sec. 273.10 Determining household eligibility and benefit levels.
* * * * *
(d) Determining deductions. * * *
(8) Child support deduction. State agencies may budget child
support payments prospectively, in accordance with paragraphs (d)(2)
through (d)(5) of this section, or retrospectively, in accordance with
Sec. 273.21(b) and Sec. 273.21(f)(2), regardless of the budgeting
system used for the household's other circumstances.
(e) Calculating net income and benefit levels.
(1) Net monthly income.
(i) * * *
(F) Subtract allowable monthly child support payments in accordance
with Sec. 273.9(d)(7).
* * * * *
(f) Certification periods. * * *
(9) Households eligible for a child support deduction that have no
record of regular child support payments or of child support arrearages
and are not required to report child support payment information
required by the State agency periodically (monthly or quarterly) during
the certification period shall be certified for no more than 3 months.
Households with a record of regular child support and arrearage
payments that are not required to report payment information
periodically during the certification period shall be certified for no
more than 6 months. These requirements do not apply to households whose
certification periods are established in accordance with paragraphs
(f)(3), (f)(6), or (f)(7) of this section. Households required to
report monthly or quarterly shall be assigned certification periods in
accordance with paragraph (f)(8) of this section.
* * * * *
Sec. 273.11 [Amended]
6. In Sec. 273.11,
a. Paragraph (c)(1)(i) is amended by adding the words ``child
support,'' after the words ``dependent care,''.
b. Paragraph (c)(2)(iii) is amended by adding the words ``child
support payment,'' after the word ``allowable'' in the second sentence
and after the word ``deductible'' in the third sentence.
7. In Sec. 273.12:
a. A new paragraph (a)(1)(vi) is added.
b. Paragraph (a)(4) is redesignated as paragraph (a)(5) and a new
paragraph (a)(4) is added.
c. The heading of paragraph (b), the introductory text of paragraph
(b)(1), and paragraph (b)(2) are revised.
The revisions and additions read as follows:
Sec. 273.12 Reporting changes.
(a) Household responsibility to report.
(1) * * *
(vi) Changes in the legal obligation to pay child support.
* * * * *
(4) The State agency may require a household that is eligible to
receive a child support deduction in accordance with Sec. 273.9(d)(7)
to report information required by the State agency regarding child
support on a change report, a monthly report, or quarterly report. The
State agency shall process the reports in accordance with procedures
for the systems used in budgeting the household's income and
deductions. The following requirements apply to quarterly reports:
(i) The State agency shall provide the household a reasonable
period after the end of the last month covered by the report in which
to return the report. If the household does not file the report by the
due date or files an incomplete report, the State agency shall provide
the household with a reminder notice advising the household that it has
10 days from the date the State agency mails the notice to file a
complete report. If the household does not file a complete report by
the extended filing date as specified in the reminder notice, the State
agency shall determine the household's eligibility and benefits without
consideration of the child support deduction. The State agency shall
not terminate the benefits of a household for failure to submit a
quarterly report unless the household is otherwise ineligible. The
State agency shall send the household an adequate notice as defined in
Sec. 271.2 of this chapter if the household fails to submit a complete
report or if the information contained on a complete report results in
a reduction or termination of benefits. The quarterly report shall meet
the requirements specified in paragraph (b) of this section. The State
agency may combine the content of the reminder notice and the adequate
notice as long as the notice meets the requirements of the individual
notices.
(ii) The quarterly report form, if required, shall be the sole
reporting requirement for reporting child support payments during the
certification period. Households excluded from monthly reporting as
specified in Sec. 273.21(b) and households required to submit monthly
reports shall not be required to submit quarterly reports.
* * * * *
(b) Report forms. (1) The State agency shall provide the household
with a form for reporting the changes required in paragraph (a)(1) of
this section to be reported within 10 days and shall pay the postage
for return of the form. The
[[Page 54292]]
change report form shall, at a minimum, include the following:
* * * * *
(2) A quarterly report form for reporting changes in the child
support obligation and payments shall be written in clear, simple
language and meet the bilingual requirements described in Sec. 272.4(b)
of this chapter. The report shall meet the requirements of
Sec. 273.21(h)(2)(iii) through (h)(2)(vii).
* * * * *
8. In Sec. 273.21:
a. Paragraph (f)(2)(iv) is amended by adding a sentence at the end.
b. Paragraph (j)(3)(iii) is amended by removing the semicolon at
the end of paragraphs (j)(3)(iii)(A) and (j)(3)(iii)(B) and adding a
period in its place and by adding a new paragraph (j)(3)(iii)(E).
The additions read as follows:
Sec. 273.21 Monthly reporting and retrospective budgeting (MRRB).
* * * * *
(f) Calculating allotments for households following the beginning
months. * * *
(2) Income and deductions. * * *
(iv) * * * The State agency may average the child support expense
and budget it prospectively or retrospectively.
* * * * *
(j) State agency action on reports. * * *
(3) Incomplete filing. * * *
(iii) * * *
(E) If the household does not report or verify changes in child
support, the State agency shall not allow a child support deduction.
* * * * *
Part 275--PERFORMANCE REPORTING SYSTEM
9. In Sec. 275.12, a new paragraph (d)(2)(ix) is added to read as
follows:
Sec. 275.12 Review of active cases.
* * * * *
(d) Variance identification. * * *
(2) Variances excluded from error analysis. * * *
(ix) Any variance in a child support deduction which was the result
of an unreported change subsequent to the most recent certification
action shall be excluded from the error determination.
* * * * *
Dated: September 27, 1996.
Ellen Haas,
Under Secretary for Food, Nutrition, and Consumer Services.
[FR Doc. 96-26068 Filed 10-16-96; 8:45 am]
BILLING CODE 3410-30-U
