921 KAR 1:420reg. Child support distribution

      Section 1. Allocation of income withheld payments in IV-D and non-IV-D cases. (1) The cabinet shall allocate an income withheld payment among an obligor's cases that include an income withholding order by:

      (a) Totaling the obligor's current support obligations subject to income withholding;

      (b) Dividing each current support obligation by the total amount from paragraph (a) of this subsection, to determine a percentage; and

      (c) Multiplying the withheld payment received from the employer by the percentage from paragraph (b) of this subsection, to determine the portion of the payment to be applied to each current support obligation subject to income withholding.

      (2) The cabinet shall allocate the payment amount determined in subsection (1)(c) of this section to each of the obligor’s current support obligation amounts subject to income withholding.

      (3) If the obligor’s current support obligations subject to income withholding are satisfied for the current month, the cabinet shall allocate a remaining income withholding amount among the obligor’s ordered arrears obligations subject to income withholding by:

      (a) Totaling the obligor's ordered arrears obligations subject to income withholding;

      (b) Dividing the monthly arrears obligation for each child support case by the total amount from paragraph (a) of this subsection, to determine a percentage; and

      (c) Multiplying the remaining income withholding amount by the percentage from paragraph (b) of this subsection, to determine the portion of the payment to be applied to each arrears obligation subject to income withholding.

      (4) The cabinet shall allocate the payment amount determined in subsection (3)(c) of this section to each of the obligor’s arrears obligations subject to income withholding.

      (5) If the obligor’s current support and arrears obligations subject to income withholding are satisfied for the current month, the cabinet shall allocate a remaining income withheld amount proportionately according to subsections (1) through (4) of this section.

      (6) Allocation of nonwage payments in IV-D and non-IV-D cases. The cabinet shall allocate nonwage payments:

      (a) As designated by an obligor for a specific case; or

      (b) If not designated by an obligor, by allocating a proportionate share to each of the obligor’s child support cases, as determined in subsections (1) through (4) of this section.

 

      Section 2. K-TAP and Kinship Care Accounts Distribution. (1) A child support payment collected on behalf of a K-TAP or Kinship Care recipient shall be:

      (a) Payable to the Department for Income Support,[Division of] Child Support Enforcement; and

      (b) Reported to the K-TAP or Kinship Care agency within ten (10) working days of the end of the month in which an escrow payment is disbursed to a recipient.

      (2) Upon receipt of a notice of payment, the K-TAP or Kinship Care agency shall redetermine eligibility for assistance payments and report the result to the child support agency.

      (a) If the K-TAP or Kinship Care case becomes ineligible, the child support agency shall:

      1. Distribute to the family at the end of the month the amount of child support collected; and

      2. Notify the family of continuation of child support services as specified in 921 KAR 1:380, Section 1(4)(b).

      (b) Unless a hearing is requested or a case remains eligible for assistance, the child support agency shall distribute the collection as specified in Section 6 of this administrative regulation.

 

      Section 3. Distribution of Foster Care Accounts. A child support payment collected on behalf of a foster care recipient shall be:

      (1) Payable to the Department for Income Support,[Division of] Child Support Enforcement; and

      (2) Distributed and disbursed to the foster care agency.

 

      Section 4. Distribution of Tax Refund Intercept Amounts. (1) A tax refund intercepted in a public assistance account shall be:

      (a) Applied to assigned arrearage and forwarded to the public assistance agency within thirty (30) calendar days of the date of initial receipt; or

      (b) If no assigned arrearage remains, the amount collected shall be:

      1. Distributed to the family within thirty (30) calendar days, unless a joint income tax return is filed; or

      2. Held by the cabinet for six (6) months before being distributed if a joint income tax return is filed.

      (2) A tax refund intercepted for a nonpublic assistance account shall be:

      (a) Applied to assigned arrearage; or

      (b) If no assigned arrearage remains:

      1. Held by the cabinet for six (6) months, if a joint income tax return is filed, before being distributed; or

      2. Forwarded to the family within thirty (30) calendar days of the date of initial receipt.

      (3) Within fifteen (15) calendar days of the date of resolution of an obligor's appeal contesting the accuracy of a past-due arrears, the cabinet shall forward the ordered amount to:

      (a) The obligor, if resolution is in the obligor's favor; or

      (b) The agency or family, if resolution is against the obligor.

 

      Section 5. Interstate Case Payment Distribution. A child support payment that is collected by a responding state on behalf of an initiating state shall be forwarded to the location specified by the child support agency in the initiating state, within two (2) business days of initial receipt.

 

      Section 6. Treatment of Escrow and Excess Payments. (1) A child support payment shall be applied to the obligation amount for the month in which the support is received.

      (2) In a K-TAP or Kinship Care case, if the obligation for current support and the collection for current support exceed the grant paid for the month in which the collection was made, the difference between the grant and the obligation or the collection, whichever is less, shall be considered escrow and distributed as follows:

      (a) The portion that represents the federal share, as determined by the Medicaid match rate, shall be sent to the federal government for reimbursement of public assistance previously paid;

      (b) The portion that represents the state share, as determined by the Medicaid match rate, shall be sent to the family; and

      (c) An amount in excess of the current obligation shall be applied to arrearage.

 

      Section 7. Return of Overpayment. (1) If a child support overpayment is found to be due to the noncustodial parent, the amount shall be verified and, if legitimate, approved by the Department for Income Support,[Division of] Child Support Enforcement, Processing and Distribution[Accounting] Branch.

      (2) Upon approval by the Processing and Distribution[Accounting] Branch, a check writer shall be sent to the Department of Treasury for processing.

      (3) A check for the approved amount of child support overpayment shall be issued to the noncustodial parent within one (1) to seven (7) days, unless the overpayment is due to a[joint] tax return. If the overpayment is due to a[joint] tax return, the approved amount shall be issued to the noncustodial parent[through a manual voucher]:

      (a) Within thirty (30) days if a single return[Once the unobligated spouse’s share of the refund has been paid]; or

      (b) Within six (6) months, if a joint return, from the date of the notification of federal tax offset or until notified that the unobligated spouse’s share of the refund has been paid, whichever is earlier, [Six (6) months from notification of the federal tax offset] in accordance with 45 C.F.R. 303.72(h)(5).

 

STEVEN P. VENO, Commissioner

VICKIE YATES BROWN GLISSON, Secretary

      APPROVED BY AGENCY: June 17, 2016

      FILED WITH LRC: June 27, 2016 at 3 p.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall, if requested, be held on August 22, 2016, at 9:00 a.m. in the Health Services Auditorium, Health Services Building, First Floor, 275 East Main Street, Frankfort, Kentucky. Individuals interested in attending this hearing shall notify this agency in writing by August 15, 2016, five (5) workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. The hearing is open to the public. Any person who attends will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to attend the public hearing, you may submit written comments on the proposed administrative regulation. You may submit written comments regarding this proposed administrative regulation until August 31, 2016. Send written notification of intent to attend the public hearing or written comments on the proposed administrative regulation to:

      CONTACT PERSON: Tricia Orme, Office of Legal Services, 275 East Main Street 5 W-B, Frankfort, Kentucky 40602, phone [phone], fax [phone], [e-mail].

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact Person: Mary W. Sparrow, [e-mail], [phone] ext. 4832

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This administrative regulation establishes procedures for the allocation and distribution of child support payments.

      (b) The necessity of this administrative regulation: This administrative regulation is necessary to carry out how payments are allocated and distributed in accordance with state and federal law.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: The Cabinet has responsibility under KRS 194A.050, 205.712, 205.720, 205.721, 205.750, 205.755, 205.795 and 405.467, and by virtue of applying for federal funds under 42 U.S.C. 654, 659, and 666 to establish procedures to allocate and distribute child support payments for recipients of IV-A, IV-E, Title XIX, and individuals who apply for IV-D services.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: This administrative regulation, through the processes and procedures outlined, will assist in the effective allocation and distribution of child support payments.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: The name of the Child Support Enforcement program has been updated, as well as the process of how an overpayment from a tax intercept is issued to a noncustodial parent.

      (b) The necessity of the amendment to this administrative regulation: The amendment is necessary to update the program name and the process of issuing a payment to a noncustodial parent as a result of an overpayment from a tax intercept.

      (c) How the amendment conforms to the content of the authorizing statutes: This amendment conforms to the authorizing statutes by outlining the processes and procedures utilized by the Child Support Enforcement program in the allocation and distribution of child support payments.

      (d) How the amendment will assist in the effective administration of the statutes: This amendment will assist in the effective administration of the authorizing statutes through revisions made in the procedures for issuing a payment to a noncustodial parent based on an overpayment from a tax intercept.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: This regulation affects noncustodial parents, child support enforcement workers, General Accounting, Division of Accounting and Procurement Services and the Department of the Treasury.

      (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: There will be no new responsibilities added to those already existing for any individual, business, organization, or state and local government.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): There are no new costs for the entities involved to comply with this amendment.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): Noncustodial parents will receive their tax intercept refund from an overpayment more quickly as the refund does not have to go through the manual voucher process. This change will also reduce the number of manual vouchers being sent to General Accounting, Division of Accounting and Procurement Services and the Department of the Treasury.

      (5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:

      (a) Initially: No additional funds will be necessary to implement the amendment to this administrative regulation.

      (b) On a continuing basis: No additional funds will be necessary to implement the amendment to this administrative regulation.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:

Federal funds from The Child Support Enforcement State Program under Title IV-D of the Social Security Act support the implementation and enforcement of this administrative regulation. State General Funds are also utilized.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new or by the change if it is an amendment: Neither an increase in fees nor funding is necessary to implement this administrative regulation.

      (8) State whether or not this administrative regulation established any fees or directly or indirectly increased any fees:

This administrative regulation neither establishes nor increases any fees.

      (9) TIERING: Is tiering applied? Tiering is not applied, as this administrative regulation is applied in a like manner statewide.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

      1. What units, parts or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? The Cabinet for Health and Family Services, Department for Income Support Child Support Enforcement program, General Accounting, Division of Accounting and Procurement Services and the Department of the Treasury and will be impacted by this amended administrative regulation.

      2. Identify each state or federal regulation that requires or authorizes the action taken by the administrative regulation. 45 Code of Federal Regulations 302.32(b)(2)(iii), 302.51(b) and (4)(i), 303.72, 303.100(a)(5), 303.102, 308.2(d)(1) and (2) and 304.20(b)(4). Kentucky Revised Statutes194A.050, 205.712, 205.720, 205.721, 205.750, 205.755, 205.795 and 405.467

      3. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect.

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? This administrative regulation will not generate additional funding.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? This administrative regulation will not generate additional funding.

      (c) How much will it cost to administer this program for the first year? No additional funds will be necessary to implement this administrative regulation.

      (d) How much will it cost to administer this program for subsequent years? No additional funds will be necessary to implement this administrative regulation in subsequent years.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.

      Revenues (+/-):

      Expenditures (+/-):

      Other Explanation:

Notation

      RELATES TO: KRS 13B.010(2), 13B.170, 205.720, 205.750, 205.755, 205.795, 405.520, 407.5101, 45 C.F.R. 302.32, 302.38, 302.51-302.54, 303.72(h)(5),[407.5101,] 42 U.S.C. 651

      STATUTORY AUTHORITY: KRS 194A.050(1), 205.755(1), 205.795

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 194A.050(1) requires the secretary to promulgate administrative regulations necessary to implement programs mandated by federal law, or to qualify for the receipt of federal funds necessary to cooperate with other state and federal agencies for the proper administration of the cabinet and its programs. KRS 205.755(1) authorizes the secretary to prescribe the manner in which distributions of payments of support shall be made, consistent with state and federal law and administrative regulations. This administrative regulation establishes procedures for distribution of child support payments.