[Federal Register Volume 59, Number 235 (Thursday, December 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30107]
[[Page Unknown]]
[Federal Register: December 8, 1994]
VOL. 59, NO. 235
Thursday, December 8, 1994
DEPARTMENT OF AGRICULTURE
Food and Consumer Service
7 CFR Parts 271, 273, and 275
[Amendment No. 362]
RIN 0584-AB58
Food Stamp Program; Child Support Deduction
AGENCY: Food and Consumer Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule is being proposed to implement a provision of the
1993 Mickey Leland Childhood Hunger Relief Act establishing a child
support deduction. The deduction would increase the benefits of food
stamp households that pay legally obligated child support to a
nonhousehold member.
DATES: Comments must be received on or before February 6, 1995, to be
assured of consideration.
ADDRESSES: Comments should be submitted to Judith M. Seymour,
Eligibility and Certification Regulation Section, Certification Policy
Branch, Program Development Division, Food and Consumer Service, USDA,
3101 Park Center Drive, Alexandria, Virginia, 22302, (703) 305-2496.
Comments may also be datafaxed to the attention of Ms. Seymour at (703)
305-2454. All written comments will be open for public inspection at
the office of the Food and Consumer Service during regular business
hours (8:30 a.m. to 5 p.m., Monday through Friday) at 3101 Park Center
Drive, Alexandria, Virginia, Room 720.
FOR FURTHER INFORMATION CONTACT: Questions regarding the proposed
rulemaking should be addressed to Ms. Seymour at the above address or
by telephone at (703) 305-2496.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed 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
The reporting and recordkeeping burden associated with the
eligibility, certification, and continued eligibility of food stamp
recipients is approved under OMB No. 0584-0064. Current burden
estimates for OMB No. 0584-0064 include burden associated with
collecting and verifying information reported on the application to
determine initial household eligibility and also on the change report
and monthly report forms. The provision in 7 CFR 273.9 of this proposed
rulemaking which allows an income deduction for certain child support
payments does not alter burden estimates already approved under OMB No.
0584-0064. The methodologies used to determine the burden estimates
assume that all households will report information on each income and
resource line of the application form and will be subject to the same
level of reporting and verification burden as current levels require.
The public reporting burden for the Food Stamp Program application is
estimated to average 13.74 minutes per application. The proposed
reporting requirements in 7 CFR 273.12 and 7 CFR 273.21 do not alter
the burden estimate for reporting already approved under OMB No. 0584-
0064. Establishing a quarterly reporting option for the child support
deduction will not increase the reporting burden because households are
already required to report certain changes when they occur. At State
agency option, quarterly reporting would replace change reporting for
the child support deduction and would reduce the number of times a year
a household would have to complete a food stamp application form.
Comments regarding this burden estimate or any other aspect of this
collection of information, including suggestions to reduce this burden
may be sent to: U.S. Department of Agriculture, Clearance Officer,
OIRM, room 404-W, Washington DC 20250 and to Wendy Taylor, OIRM, Office
of Management and Budget, Paperwork Reduction Project (OMB No. 0584-
0064) Washington, DC 20503.
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 ``Effective Date'' 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. In the Food Stamp Program
the administrative procedures are as follows: (1) for Program benefit
recipients--State administrative procedures issued pursuant to 7 U.S.C.
2020(e)(1) and 7 CFR 273.15; (2) for State agencies--administrative
procedures issued pursuant to 7 U.S.C. 2023 set out at 7 CFR 276.7 (for
rules related to non-quality control (QC) liabilities) or Part 284 (for
rules related to QC liabilities); (3) for Program retailers and
wholesalers--administrative procedures issued pursuant to 7 U.S.C. 2023
set out at 7 CFR 278.8.
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 would increase the number of
potentially eligible food stamp recipients and would increase the
benefit level of households entitled to the deduction.
Costs
It is estimated that this action would increase the cost of the
Food Stamp Program by less than $1 million in Fiscal Year 1994; $55
million in Fiscal Year 1995; $125 million in Fiscal Year 1996; $130
million in Fiscal Year 1997; and $145 million in Fiscal Year 1998.
Background
On January 4, 1994, the Food and Consumer Service (FCS) published a
notice in the Federal Register announcing a public hearing on January
20, 1994. The public hearing was scheduled to provide an opportunity
for State agencies, advocacy groups, and other interested parties to
engage in public dialogue on issues concerning the regulatory
provisions to be published in connection with the Food Stamp Act of
1977 (Act) amendments made by 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). All provisions of
the Leland Act pertinent to the Food Stamp Program (Program), including
the child support deduction, were included as topics of dialogue during
the public hearing.
Child Support Deduction
A food stamp applicant's eligibility and coupon allotment are
determined, in part, by the amount of income the household has
available to spend on food after certain monthly expenses are deducted
from the household's total monthly income. Household expenses that are
deducted from income in determining food stamp eligibility and coupon
allotment include: (1) a standard deduction (which is provided to all
food stamp households); (2) an earned income deduction equal to 20
percent of the household's gross earned income; (3) a medical deduction
for expenses over $35 a month for elderly or disabled household
members; (4) up to a certain limit, a dependent care deduction for the
actual costs the household must pay for the care of children or other
dependents while household members are seeking or maintaining
employment or while they are participating in education or training
programs; and (5) the costs for shelter which exceed 50 percent of
income after other deductions. There is a limit on the shelter
deduction for households without an elderly or disabled member.
Section 13921 of the Leland Act (Pub. L. 103-66, Title I, Chapter
3, August 10, 1993) amends section 5(e) of the Food Stamp Act to add a
deduction for household members who make legally obligated child
support payments to or for an individual living outside of the
household. The provision is intended to encourage noncustodial parents
to comply fully with their child support obligations. At the same time,
the deduction will result in a more accurate reflection of the
household's reduced ability to buy food. The legislative history (House
Conference Report No. 213, 103d Congress, 1st Session (1993), p. 925)
indicates that Congress did not want an undue administrative burden
placed on the State agency as a result of this provision.
The Department is addressing a number of issues related to the
child support deduction in this proposed rule. These issues are
discussed below and include: (1) definition of a legal obligation to
pay child support and allowable amount of child support deduction; (2)
verification; (3) budgeting and reporting procedures; (4) length of
certification period; and (5) quality control requirements.
Legal Obligation and Amount of the Child Support Deduction
To be eligible for the child support deduction, the statute
requires that the household must be legally obligated to pay child
support. The Department is aware that various arrangements may exist
between unmarried, separated, or divorced parents with respect to child
support. However, the law is specific that the deduction is allowed
only for persons who have a legal obligation, such as a court order
that would be upheld by a judge in a court of law, an order issued
through an administrative process, or a legally enforceable separation
agreement. Accordingly, the Department proposes to amend 7 CFR 273.9(d)
to specify that persons who are legally obligated to pay child support
to or for an individual living outside the household and who make such
payments are eligible to receive a child support deduction.
The Department is proposing in this rule to amend 7 CFR 273.9(d) to
specify that the child support deduction must reflect the child support
the household pays or expects to pay during the certification period,
rather than the obligated amount. The legislation states that ``* * *
households shall be entitled to a deduction for child support payments
made (emphasis added) * * *.'' It is clear that the objective of the
law is to allow a deduction on the basis of payments actually made, not
the amount the household is legally obligated to pay. Current data show
that 49 percent of parents who are legally obligated to pay child
support either do not pay any support (24 percent) or pay less than the
full amount of the support (25 percent). (Overview of Entitlement
Programs, 1993 Green Book, Background Material and Data on Programs
Within the Jurisdiction of the Committee on Ways and Means, Committee
on Ways and Means, U.S. House of Representatives, p. 748.)
Strengthening the child support system is an important goal of the
Department. The Department believes that Congress did not intend to
provide a deduction for child support payments that the household
member did not actually pay. Such a deduction would simply be a
windfall to absent parents who fail to meet their responsibilities to
their children. Furthermore, a child support deduction that reflects
actual payments would allow the household to include child support
payments that were previously unpaid (i.e., arrearages). Most
importantly, basing the deduction on amounts paid would most accurately
reflect the current food assistance needs of the paying household.
The Department also is including a clarification discussed in the
legislative history of the Leland Act (114 Congressional Record,
S10726, August 6, 1993). The history indicates that legally obligated
payments paid on behalf of the nonhousehold member (such as paying rent
to a landlord) must be considered as part of the child support
deduction for the household making the payments. This would include any
additional payments the noncustodial parent is legally obligated to
make to obtain health insurance coverage for a child or children.
Accordingly, the Department is proposing to specify in 7 CFR 273.9 that
the child support deduction shall include payments the household makes
on behalf of the nonhousehold member to the extent that the payments
represent the household's child support obligation and have been
ordered by a court or administrative authority. Alimony or spousal
support payments that are made to or on behalf of a nonhousehold member
or payments made in accordance with a property settlement would not be
allowable as part of the child support deduction.
The Department is also proposing to add conforming language at 7
CFR 273.11(c)(1)(i) and (2)(iii) to provide procedures for allowing the
child support deduction for households with ineligible members. As
proposed, the child support deduction would be handled the same way as
the earned income, standard, medical, dependent care, and excess
shelter deductions. That is, the entire deduction would be allowed to
households with members disqualified because of intentional Program
violation or work requirements because the entire income of these
household members is counted. In the case of ineligible aliens or
members disqualified for refusal to obtain or apply for a social
security number, the amount of child support paid or expected to be
paid would be divided evenly among the household members, including the
ineligible member, and all but the ineligible member's share would be
deducted from household income.
The Department is proposing to add the provision of section 13921
of the Leland Act authorizing a child support deduction to the
allowable deductions in 7 CFR 273.9(d) by redesignating paragraphs
(d)(7) and (d)(8) as paragraphs (d)(8) and (d)(9) and by adding a new
paragraph (d)(7) following the provisions for the standard utility
allowance. In accordance with section 13921 of the Leland Act, the
child support deduction must be determined in the food stamp benefit
calculation prior to determining the household's excess shelter
deduction and it would be preferable to insert the child support
deduction before the shelter deduction at 7 CFR 273.9(d)(5). However,
redesignating 7 CFR 273.9(d)(5) and subsequent paragraphs would require
extensive renumbering of existing policy guidance and regulations in
clearance. Therefore, the Department is proposing to place the new
deduction following the standard utility allowance provisions. To
ensure the correct calculation of allotments, however, the Department
is proposing to amend 7 CFR 273.10 by redesignating paragraphs
(e)(1)(i)(F) and(G) as (e)(1)(i)(G) and (e)(1)(i)(H) and adding a new
paragraph (e)(1)(i)(F) to place the child support deduction before the
shelter deduction in the order of allotment calculation. The Department
will amend the food stamp application form and the food stamp worksheet
to include a space for households to identify child support payments.
Verification of Child Support Deduction
The Department is proposing that both the legal obligation to pay
child support and the actual amount paid be verified. The household
would be the primary source of verification of the legal obligation to
pay child support, the amount of the obligation, and the amount paid.
Any document that verifies the obligation to pay child support, such as
a court order, administrative order, or legally enforceable separation
agreement would be sufficient verification of the obligation and
obligated amount. Acceptable verification of amounts paid would include
canceled checks, wage withholding statements, verification of
withholding from unemployment compensation, and statements from the
custodial parent regarding direct payments or third party payments the
noncustodial parent pays or expects to pay on behalf of the custodial
parent. However, documents used to verify the household's legal
obligation to pay child support would not be acceptable verification of
the household's actual payments. If the household fails or refuses to
submit required verification, the State agency would determine the
household's eligibility and coupon allotment without consideration of
the child support deduction.
In addition, we are proposing that State agencies enter into
agreements with their State Child Support Enforcement (CSE) agencies to
obtain verification from CSE of child support payments made to the
agency by individuals in food stamp households claiming the deduction.
We are proposing that a match with CSE records be conducted at least
once prior to the household's next recertification. For households
certified for 3 months or fewer, the match would be required at
alternate recertifications. The State agency would also be required to
verify payments made to courts or CSE agencies in other States to the
extent that verification can be obtained electronically.
We are not proposing more specific requirements for scheduling the
matches at this time because we realize that CSE systems enhancements
are currently being developed. We encourage State food stamp and CSE
agencies to comment on the feasibility of requiring more frequent
matches with CSE information and the potential effectiveness of match
data as verification of child support obligations and payments. Of
particular concern is the effectiveness of automated verification
procedures when the food stamp household and the custodial parent do
not reside in the same State.
State agencies would be required to notify applicants on the
application form that child support information will be checked through
computer matching with CSE. The information obtained through the match
would be used to enable the State agency to make a more informed
decision regarding the household's deduction for the new certification
period. If the deduction is allowed prospectively based on an average
of past payments and recent data are available from CSE, the CSE data
could be used as the basis for anticipating future payments, taking
into account any changes in circumstances reported at recertification.
However, State agencies would not be required to conduct any month-by-
month reconciliation of amounts reported by the household and the CSE
data. Because the deduction will frequently be based on an average of
past payments, the amount of the deduction would not coincide with the
actual payment made. State agencies would not be required to use the
information retrospectively to establish claims or provide restored
benefits. Information from CSE records is considered unverified upon
receipt. Therefore, if there is a discrepancy between information
provided by the household and that obtained from CSE records, the State
agency would be required to give the household an opportunity to
resolve the discrepancy in accordance with procedures at 7 CFR
273.2(f)(9) for handling unverified data obtained through the Income
and Eligibility Verification System.
Accordingly, the Department is proposing to amend 7 CFR 273.2(f)(1)
to add requirements related to verification of child support at initial
certification. We are also proposing a conforming amendment to 7 CFR
273.2(b)(2) requiring the State agency to notify applicants that child
support information is subject to verification through computer
matching. An amendment to 7 CFR 273.2(f)(8)(i) is also proposed to
require verification of child support payments at recertification.
Changes reported during the certification period would be verified in
accordance with 7 CFR 273.2(f)(8)(ii). We are interested in obtaining
comments on these verification requirements and suggestions for less
burdensome ways of verifying child support payments.
Child Support Budgeting and Reporting Procedures
The Leland Act and legislative history indicate that the Department
may minimize requirements for budgeting and reporting changes in child
support payments. Section 13921 of the Leland Act allows retrospective
calculation of the support payments. Another option discussed in the
legislative history (House Conference Report No. 213, 103rd Congress,
1st Session (1993), p. 925) would permit State agencies to develop an
average based on payments made during the last certification period
(with appropriate adjustments to account for any changes in the child
support order) rather than track the household's monthly payments. The
Department is cognizant of the need to minimize the reporting and
budgeting burden while also ensuring that households receive a
deduction only for payments that are actually being made.
Accordingly, the Department is proposing several procedures in this
rule that strike a balance between the need to have accurate
information and the need to minimize burdens on food stamp households
and State agencies. State agencies will have the option to select the
procedure(s) which best suits their needs.
Option 1--Change Reporting and Prospective or Retrospective Budgeting
Current rules at 7 CFR 273.12 identify the changes a household must
report during its certification period. Households must report certain
changes within 10 days of the date the change becomes known. The
Department proposes to amend the current reporting requirements at 7
CFR 273.12 to establish reporting requirements for child support
payments. The intent is to provide a means of obtaining information
about payments being made that is not overly burdensome on the
household or the State agency. Because the Department recognizes that
some households will have a history of making child support payments
while others will not, the proposal includes reporting and budgeting
requirements for households with and without a child support payment
record.
Under this proposal, any household that is subject to change
reporting (for the child support payment) under 7 CFR 273.12(a) would
be required to report changes in the legal obligation, including but
not limited to changes such as a child reaching an age limit at which
child support is no longer legally obligated or a change in the legally
obligated amount.
For change reporting households that have 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 support deduction, taking into account any anticipated
changes in the legal obligation or other changes that would affect the
payment. The average would be used to establish a household's child
support payment for the certification period. The average would be
adjusted during the certification period in accordance with any changes
in the payment reported by the household or which otherwise become
known to the State agency. At recertification, the State agency would
obtain updated information on which to base a new average for the new
certification period.
For 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. The household would be required to report changes greater
than $50 in the amount of legally obligated child support actually
paid, excluding any amounts paid toward arrearages. The base from which
to measure the $50 change would be the figure used at the most recent
certification action to determine the household's allotment.
Under current 7 CFR 273.12(a)(1)(i), households have to report a
change in gross monthly income when the amount changes by more than
$25. The Department considered proposing a $25 change reporting
requirement for child support payments, but decided instead to increase
the reporting threshold. Using a higher amount would mean that fewer
small changes would have to be reported and processed, thereby saving
time for both households and the State agency and minimizing the
administrative burden. The Department believes the increased efficiency
would offset any confusion caused by the inconsistency in the reporting
thresholds. Included in the category of households without a payment
record would be households with a newly established legal obligation
and households that have failed to meet an obligation. These households
would be certified initially for a short period, in accordance with 7
CFR 273.10(f)(4), to allow development of a payment history prior to
assignment of a longer period with a deduction based on averaged
payments.
With certain exceptions, households subject to change reporting may
have their income and deductions budgeted prospectively or
retrospectively. The Department is proposing that a State agency may
budget child support payments either prospectively or retrospectively,
depending on the reporting option selected.
Option 2--Quarterly Reporting and Prospective or Retrospective
Budgeting
The Department is proposing to include a new reporting option State
agencies may use for households that are subject to change reporting
requirements under 7 CFR 273.12 and are eligible to receive a child
support deduction. Under this option, State agencies may require
households to submit a quarterly report to report changes in the amount
of child support paid and changes in the legal obligation. The
household would remain responsible for reporting changes other than
changes in child support payments as required by 7 CFR 273.12(a)(1)
within 10 days.
The Department is proposing quarterly reporting for two reasons:
(1) it enables State agencies to assign longer certification periods
while receiving periodic information on the actual amount of child
support paid, and (2) it allows States to adjust the deduction on the
basis of several months of data. Under this proposal, a State agency
electing to use the quarterly reporting system would be required to
provide the household with a quarterly report by the end of the second
month in each quarter. The State agency's quarterly report must be
written in clear, simple language, meet the bilingual requirements of
Sec. 272.4(b), and contain the following:
a. A requirement to report the actual amount of child support paid
for the first 2 months of the quarter and the actual amount paid or
anticipated for the third month;
b. A requirement to report changes in the legal obligation to pay
child support anticipated for the upcoming quarter, including but not
limited to changes such as the completion of an obligation or a change
in the legally obligated amount.
c. A requirement to return the report to the State agency by a
specified date in the third month in the quarter;
d. Notification of the verification the household must submit with
the report;
e. The individual or agency unit available to assist the household
in completing the form and the toll-free number (or number where
collect calls will be accepted) which the household may use to obtain
further information;
f. A statement to be signed by the household member who is
responsible for paying child support indicating his or her
understanding that the information may result in a change in the
household's food stamp benefits, including reduction or termination;
g. A statement that failure to return the report by the required
deadline may result in disallowance of the child support deduction;
h. A reminder that other changes required to be reported under 7
CFR 273.12(a)(1) must be reported within 10 days from the date the
household becomes aware of the change; and
i. A statement advising the household that the State agency will
act on a change reported before the quarterly report is submitted;
j. A brief description of the Food Stamp Program civil and criminal
penalties for fraud.
The State agency would use this report to make any changes in the
household's child support deduction for the next 3 months. State
agencies would be required to average the previous quarter's payments
to determine the deduction for the following quarter. The State agency
would also need to take into account any reported changes in the legal
obligation to pay child support.
Households must be given a reasonable time after the end of the
second month to submit the quarterly report. If the household fails to
file a quarterly report or files an incomplete report by the date set
by the State agency, the State agency would be required to send the
household a reminder notice advising the household that it has 10 days
from the date the State agency mails the notice to file a complete
quarterly report. If the household does not file a complete report by
the extended filing date, the State agency would recalculate the
household's eligibility and benefit level without allowing a deduction
for child support. The State agency would not be allowed to terminate
the household for failing to submit a complete quarterly report unless
the household is otherwise ineligible.
The State agency would be required to send an adequate notice as
defined under current rules at 7 CFR 271.2 if the household fails to
submit a complete report or if the information contained on a complete
quarterly report results in a reduction or termination of benefits.
Adequate notice is currently defined, in part, as a written notice that
advises the household of an action the State agency intends to take.
The notice may be received by the household prior to the date of the
action, at the time the household receives its reduced benefits, or at
the time the household would have received its benefits if the action
the State agency intends to take is a termination of benefits.
Households have 10 days from the mailing date of the notice to contest
the State agency's action. State agencies may combine the reminder
notice and adequate notice.
The Department is further proposing in this rule to prohibit
quarterly reporting for some food stamp households. Section 6(c)(3) of
the Act prohibits dual reporting requirements. Thus, if the State
agency elects to require a household to report any child support
payments quarterly, the quarterly report would be the sole reporting
requirement for reporting child support. Section 6(c)(1)(A) of the Act
prohibits State agencies from requiring certain households such as
migrant or seasonal farmworker households to submit periodic reports.
We are including these statutory prohibitions in this proposal at 7 CFR
273.12.
The Department does not intend that changes other than changes in
child support be included on the quarterly report. The Department has
recently approved several waivers allowing State agencies to implement
a quarterly reporting system for certain portions of the food stamp
caseload. We will be reviewing the impact of these waivers to determine
the feasibility of a more expanded quarterly reporting system. The
quarterly report described in this rule pertains only to child support
payments.
Option 3--Monthly Reporting and Retrospective Budgeting
State agencies may require households (except certain legislatively
exempt households) to report changes on a monthly report form under the
current rules at 7 CFR 273.21 (i.e., monthly reporting households). All
monthly reporting households are required to be budgeted
retrospectively. Section 6(c) of the Act and corresponding regulations
at 7 CFR 273.21(h)(3) allow the State agency to determine the changes
the household must report monthly. Households that are required to
report monthly under 7 CFR 273.21 would be required to report their
monthly child support payments on the monthly report if the State
agency includes the requirement on its monthly report. If a household
that is required to report its child support payment on a monthly
report fails to report or fails to submit required verification related
to its child support payment, the State agency would determine the
household's eligibility and allotment level without consideration of
the child support deduction. If the State agency does not require the
household to report its monthly child support payments on the monthly
report, the household would be subject to change reporting for child
support payments.
Summary of Child Support Deduction Reporting and Budgeting Procedures
The intent of all the possible reporting and budgeting systems is
to most accurately reflect a household's actual payment of child
support while minimizing the burden on households and State agencies.
For that reason, the Department has provided several options as
discussed in detail above. In summary, the options are:
(1) Change reporting: If a household has a record of at least 3
months of paid child support, the State agency would budget the child
support deduction either prospectively or retrospectively based on an
average of the payments made in at least 3 previous months, and the
household would be required to report within 10 days changes in the
legal obligation to pay child support.
If a household has no record of paying child support (or a record
of less than 3 months) the State agency would budget the child support
deduction prospectively or retrospectively using an estimate based on
available information in accordance with 7 CFR 273.10(c), and
households would be required to report within 10 days changes in the
legal obligation and changes in the amount of the payment of $50 or
more.
(2) Quarterly reporting: The State agency may budget child support
payments prospectively or retrospectively based on actual monthly
information reported by the household on a quarterly report form.
(3) Monthly reporting: The State agency may budget child support
payments retrospectively based on actual amounts reported by the
household on a monthly report.
State agencies may choose one or more of these options. State
agencies may use a combination of the options, depending on the
budgeting and reporting systems already in place. That is, a State
agency which has monthly reporting for part of its caseload and change
reporting for other households, may opt to require the monthly
reporting households to report changes in child support payments
monthly while other households are required to report the changes
within 10 days. However, a State agency may not impose a dual reporting
requirement on a household. The Department does not believe that a
household should be subject to all three reporting methods because the
reporting requirements would be too cumbersome. Thus, no household
would be required under this proposal to report child support on a
change report, a monthly report, and a quarterly report. Regardless of
the system used, the State agency must act on any reported change.
Accordingly, the Department is proposing to amend 7 CFR 273.10, 7
CFR 273.12 (a) and (b), 7 CFR 273.21(h) and 7 CFR 273.21(j)(3)(iii) to
specify the requirements for the options State agencies may elect for
child support reporting and budgeting. The Department is also proposing
to amend 7 CFR 271.2 to define ``adequate notice'' as it relates to
monthly reporting and quarterly reporting.
Child Support Deduction--Certification Periods
Under current rules at 7 CFR 273.10(f), the State agency must
establish a definite period of time (i.e., certification period) within
which the household is eligible to receive benefits. Depending on
household circumstances, the household may be certified for as short a
period as 1 month but for no more than 12 months.
The Department is not proposing special certification period
requirements for households eligible to receive a child support
deduction. Establishing special certification period requirements was
considered, but during the January 20 hearing it was pointed out that
current rules adequately address the situation of households that pay
child support. Under current rules, households with no record of
payments or which have extreme monthly variations in payments would be
certified for a short period of time in accordance with 7 CFR
273.10(f)(4). Households with a stable payment record and households
that report their child support payments quarterly or monthly would be
certified for longer periods from 6 to 12 months, in accordance with 7
CFR 273.10(f)(5) and (8).
Child Support Deduction--Quality Control (QC)
As indicated in the above discussion, Congress recognized the
fluctuating nature of child support payments and intended that
determining the monthly amount of the allowable child support deduction
should not be a burden for State agencies. Accordingly, the Department
has proposed to give State agencies flexibility in determining how to
budget the payments, including use of averaging. According to the
legislative history of the child support deduction provision (House
Conference Report No. 213, 103rd Congress, 1st Session (1993), p. 925),
State agencies would be able to average the payments made during one
certification period and use that amount, taking into account any
changes in the obligation, for the next certification period. The
report indicates that ``The managers do not intend for this [averaging]
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 implement this provision, the Department proposes that 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 determines 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.
Therefore, the Department proposes to add a paragraph to 7 CFR
275.12(d)(2) to specify that any variances in the child support
deduction resulting from unreported changes in actual child support
payments or obligation shall be excluded from the QC error
determination.
Implementation
Section 13971 of the Leland Act provides that State agencies may
implement Section 13921, Child Support Payments to Non-Household
Members, on September 1, 1994, and shall implement the child support
deduction no later than October 1, 1995. Therefore, we are proposing
the amendments in this rule be effective on September 1, 1994, and be
implemented no later than October 1, 1995. The provision must be
implemented for all households that newly apply for Program benefits on
or after October 1, 1995, or the date the State agency implements the
provision prior to the required implementation date. State agencies
would be 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. The State agency must provide
restored benefits to such households back to October 1, 1995, or the
date the State agency implemented the provision prior to October 1,
1995. State agencies which fail to implement by October 1, 1995, shall
provide benefits retroactive to October 1, 1995, or the date of
application, whichever is later. Variances resulting from
implementation of the provisions of the final rule would be excluded
from error analysis for 120 days from the required implementation date,
in accordance with section 13951 of Pub. L. 103-66, which amended
section 16(c)(3)(A) of the Act, 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.
List of Subjects
7 CFR Part 271
Administrative practice and procedure, Food stamps, Grant programs-
social programs.
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, 273, and 275 are proposed to be
amended as follows:
1. The authority citation of parts 271, 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 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS
3. In Sec. 273.2:
a. a new sentence is added at the end of paragraph (b)(2),
b. a new paragraph (f)(1)(xii) is added, and
c. a new sentence is added at the beginning of paragraph
(f)(8)(i)(A).
The additions read as follows:
Sec. 273.2 Application processing.
* * * * *
(b) Food Stamp application form. * * *
(2) Income and eligibility verification system (IEVS). * * * The
State agency shall also notify all applicants on the application form
that information regarding child support payments may be verified with
Child Support Enforcement agencies or courts.
* * * * *
(f) Verification. * * *
(1) Mandatory verification. * * *
(xii) Legal obligation and actual child support payments. The State
agency shall verify 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. The household is responsible for
providing verification of the legal obligation, the obligated amount,
and the amount paid. The State agency shall accept any document that
verifies the household's legal obligation to pay child support, such as
a court or administrative order, or legally enforceable separation
agreement. The State agency shall accept documentation verifying a
household's actual payment of child support including, but not limited
to, canceled checks, wage withholding statements, verification of
withholding from unemployment compensation, and statements from the
custodial parent regarding direct payments or third party payments the
noncustodial parent pays or expects to pay on behalf of the custodial
parent. 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.
In addition to requiring verification from the household, the State
agency shall be responsible for obtaining verification of the
household's child support payments if the payments are made to the
State's Title IV-D agency. State agencies shall enter into agreements
with Child Support Enforcement (CSE) agencies to obtain data regarding
the child support obligation and child support payment record of
members of food stamp households receiving a child support deduction.
The State agency shall match the records of food stamp recipients
receiving a child support deduction against CSE automated data files.
This match shall be conducted, at a minimum, at least once prior to the
next recertification. For households certified for 3 months or fewer,
the State agency shall conduct a match prior to alternate
recertifications. The State agency shall use the information in
determining the household's entitlement to a deduction in the new
certification period. The State agency shall give the household an
opportunity to resolve any discrepancy between household verification
and CSE records in accordance with paragraph (f)(9) of this section.
* * * * *
(8) Verification subsequent to initial certification. (i)
Recertification. (A) At recertification the State agency shall require
the household to verify the amount of legally obligated child support a
household member pays to a nonhousehold member. * * *
* * * * *
4. In Sec. 273.9, paragraphs (d)(7) and (d)(8) are redesignated as
paragraphs (d)(8) and (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. Child support payments paid by a
household member to or for a nonhousehold member, provided that the
household member has a legal obligation to pay child support and the
payments are verified in accordance with Sec. 273.2(f). Households that
fail or refuse to obtain necessary verification of their legal
obligation or of their child support payments shall have their
eligibility and benefit level determined without consideration of a
child support deduction. If the noncustodial parent makes child support
payments to a third party (e.g., a landlord or utility company) on
behalf of the nonhousehold member in accordance with the support order,
such payments shall be included in the child support deduction.
Payments that are made by the household to obtain health insurance for
the child or children shall also be included as part of the child
support deduction. For households that have at least a three-month
record of child support 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. Households that are eligible to receive a child support
deduction shall report changes in accordance with the reporting
requirements specified in Sec. 273.12 or Sec. 273.21.
* * * * *
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)''.
The additions and revisions read as follows:
Sec. 273.10 Determining household eligibility and benefit levels.
* * * * *
(d) Determining deductions. * * *
(8) Child Support Deduction. The State agency shall budget child
support payments either prospectively or retrospectively, depending on
the reporting system used. In addition, the following budgeting
procedures shall be used:
(i) For change reporting households with a history of 3 or more
months of paying child support, the State agency shall average at least
3 months of child support, taking into account any anticipated changes
in the legal obligation, and use that average as the household's
support deduction.
(ii) For change reporting households with no child support payment
record or less than a 3-month record, the State agency shall estimate
the anticipated payments (excluding payments toward arrearages) and use
that estimate as the household's support deduction.
(iii) For quarterly reporting households, the State agency shall
initially use either paragraphs (d)(8)(i) or (d)(8)(ii) of this section
as appropriate, then develop an average using the information provided
in the quarterly report for subsequent quarters, making any necessary
adjustments for anticipated changes.
(iv) For monthly reporting households, the State agency shall
initially use either paragraphs (d)(8)(i) or (d)(8)(ii) of this section
as appropriate, then adjust the deduction as appropriate based on the
monthly reports.
(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)(5).
* * * * *
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. The word ``and'' is removed at the end of paragraph (a)(1)(iv)
and the period at the end of paragraph (a)(1)(v) is revised to read ``;
and'' and a new paragraph (a)(1)(vi) is added.
b. A new sentence is added after the first sentence of paragraph
(a)(2).
c. Paragraph (a)(4) is redesignated as paragraph (a)(5) and a new
paragraph (a)(4) is added.
d. The heading of paragraph (b) is revised, new introductory text
is added to paragraph (b) and the introductory text of paragraph (b)(1)
is revised.
e. Paragraph (b)(2) is 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,
including termination of the obligation when a child reaches an age at
which child support is no longer legally obligated. A household with
less than a 3-month record of child support payments shall also be
required to report changes greater than $50 from the amount used in the
most recent certification action. Households required to report changes
in child support on a quarterly or monthly report shall report actual
monthly amounts paid in addition to changes in the legal obligation.
(2)* * *Households that are required to report a change monthly as
specified under Sec. 273.21 or that are required to report monthly
child support payments on a quarterly report as specified under
paragraph (a)(4) of this section shall not be required to report
changes within 10 days of the date they become known to the household.*
* *
* * * * *
(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 its monthly child support payments on a quarterly report.
(i) A State agency that elects to require a household to report its
monthly child support payments on a quarterly report shall provide the
household with the quarterly report no later than the end of the second
month in the quarter. The State agency shall provide the household a
reasonable period after the end of the month 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
quarterly 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 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 quarterly report results in a
reduction or termination of benefits. The quarterly report shall meet
the requirements as 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 shall be the sole reporting
requirement for reporting monthly child support payments. The State
agency shall not include other items for the household to report on the
quarterly report. The State agency shall not require households
excluded from monthly reporting as specified in Sec. 273.21(b) to
report monthly child support payments on a quarterly report. The State
agency is also prohibited from requiring monthly reporting households
to submit a quarterly report.
* * * * *
(b) Report forms. The State agency shall provide the household with
a form for reporting the changes required in paragraph (a) of this
section and shall pay the postage for the household to return the
report.
(1) The report form for reporting changes within 10 days of the
date the change becomes known shall, at a minimum, include the
following:
* * * * *
(2) The quarterly report form for reporting child support payments
shall be written in clear, simple language and meet the bilingual
requirements described in Sec. s272.4(b) of this chapter. The report
shall include the following:
(i) A requirement to report the actual amount of child support paid
for the first two months of the quarter and the actual amount paid or
anticipated for the third month;
(ii) A requirement to report changes in the legal obligation to pay
child support anticipated for the upcoming quarter, including but not
limited to changes such as the completion of an obligation or a change
in the legally obligated amount;
(iii) The date in the third month by which the State agency must
receive the form;
(iv) Notification of the verification the household must submit
with the report;
(v) The name of the individual or agency unit available to assist
the household in completing the form and the toll-free number (or
number where collect calls will be accepted) which the household may
use to obtain further information;
(vi) A statement to be signed by the household member who is
responsible for paying child support indicating his or her
understanding that the information may result in changes in the level
of benefits, including reduction or termination;
(vii) A statement that failure to return the report by the required
deadline may result in disallowance of the child support deduction;
(viii) A reminder that other changes required to be reported under
paragraph (a)(1) of this section must be reported within 10 days from
the date the household becomes aware of the change;
(ix) A statement advising the household that the State agency will
act on changes in its monthly child support deduction if the household
elects to report the change before submitting the quarterly report; and
(x) A brief understandable description of the Food Stamp Program
civil and criminal penalties for fraud printed in prominent and
boldface lettering.
* * * * *
8. In Sec. 273.21:
a. The colon at the end of paragraph (h)(2)(v) is removed and a
semicolon is added in its place and the period at the end of paragraphs
(h)(2)(vii) and (h)(2)(viii) is removed and a semicolon is added in its
place.
b. A new paragraph (h)(2)(ix) is added.
c. The period at the end of paragraphs (j)(3)(iii)(C) and
(j)(3)(iii)(D) is removed and a semicolon is added in its place and a
new paragraph (j)(3)(iii)(E) is added.
The revision and additions read as follows:
Sec. 273.21 Monthly Reporting and Retrospective Budgeting (MRRB).
* * * * *
(h) The monthly report form.* * *
(2) Monthly report form.* * *
(ix) If the 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.
* * * * *
(j) State agency action on reports.* * *
(3) Incomplete filing.* * *
(iii)* * *
(E) If the household does not report or verify its monthly child
support payment or a change in its legal obligation, 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: November 30, 1994.
Ellen Haas,
Under Secretary for Food, Nutrition, and Consumer Services.
[FR Doc. 94-30107 Filed 12-7-94; 8:45 am]
BILLING CODE 3410-30-U
