AT-00-01, Revision to "Hold Harmless" Payments under Public Law 106-169

U.S. Department of Health and Human Services
Administration for Children & Families
Office of Child Support Enforcement

OCSE-AT-00-01

ISSUED: JAN 3, 2000

TO: STATE AGENCIES ADMINISTERING CHILD SUPPORT ENFORCEMENT PLANS APPROVED UNDER TITLE IV-D OF THE SOCIAL SECURITY ACT AND OTHER INTERESTED INDIVIDUALS

SUBJECT: Revision to "Hold Harmless" Payments under Public Law 106-169

BACKGROUND: With the enactment of P.L. 104-193, the "Personal Responsibility and Work Opportunity Reconciliation Act of 1996," in August 1996, section 457(d) was added to the Social Security Act (Act). Under this section, any State was entitled to an annual "hold harmless" payment if, in the current fiscal year, its share of child support collections which could be retained by the State as reimbursement of past assistance payments made by the State was less than its share of similar collections in fiscal year 1995. As a result of this statute, hold harmless payments were sent to eligible States following fiscal years 1997 and 1998.

Under section 301 of P.L. 106-169, the "Foster Care Independence Act of 1999," enacted December 14, 1999, section 457(d) of the Act was amended to severely restrict the eligibility requirements for these payments, to reduce the amount of the payments, and to provide for the eventual repeal of this section.

REVISIONS: Eligibility. Under the original statute, all States were eligible to receive hold harmless payments. As amended, section 457(d) of the Act now provides that only States that meet specific eligibility criteria will receive hold harmless payments.

Under the revised criteria, States eligible for hold harmless payments are limited to either: (a) States that distributed to families that include an adult receiving assistance under title IV-A, at least 80 percent of the current support payments collected in the preceding fiscal year on behalf of such families, and the amounts distributed were disregarded in determining either the amount or type of assistance provided under title IV-A; or (b) States that distributed to families that formerly received assistance under title IV-A, collections received through the IRS tax offset program that could have been retained by the State as reimbursement of past assistance payments made by the State to such families.

States that fail to meet either of these criteria are no longer eligible for hold harmless payments.

Amount of Payment. Under the original statute, the hold harmless payment was equal to the difference between the State share of child support collections which could be retained from the current fiscal year and the State share of similar child support collections from fiscal year 1995. As amended, section 457(d) of the Act now provides that the hold harmless payment is equal to one-half the difference between the State share of child support collections which could be retained from the current fiscal year and the State share of similar child support collections from fiscal year 1995.

Expiration. The original statute contained no expiration date. Under the provisions of section 301(c) of the Public Law, section 457(d) of the Act will be repealed following fiscal year 2001. No hold harmless payments will be issued for fiscal year 2002 or thereafter.

EFFECTIVE DATES: The revisions to the hold harmless payments discussed above are effective retroactively for child support collections made on or after October 1, 1998. Hold harmless payments will no longer be available for child support collections made on or after October 1, 2001.

ACTIONS: Using the amended eligibility criteria and calculation, OCSE will award hold harmless payments to eligible States for fiscal years 1999, 2000 and 2001 approximately six months after the end of each fiscal year. OCSE will use the data submitted by States on Form OCSE-34A to calculate payments for the eligible States.

ATTACHMENT: Copy of section 301 of Public Law 106-169.

INQUIRIES: Inquiries should be made to the appropriate ACF Regional Administrator.

/s/

David Gray Ross
Commissioner
Office of Child Support Enforcement