Child Support Enforcement Program; Reasonable Quantitative Standard for Review and Adjustment of Child Support Orders

AGENCY:

Office of Child Support Enforcement (OCSE), Health and Human Services (HHS).

ACTION:

Final rule.

SUMMARY:

This rule finalizes without change the provisions of the Interim Final Rule published on December 28, 2004 and responds to public comments received as a result of the interim final rule. The rule permits States to use a reasonable quantitative standard to determine whether or not to proceed with an adjustment of an existing child support award amount after conducting a review of the order, regardless of the method of review used.

DATES:

These regulations are effective May 23, 2006.

FOR FURTHER INFORMATION CONTACT:

Paige Biava, Division of Policy, OCSE, 202-401-5635, e-mail: phbiava@acf.hhs.gov. Deaf and hearing-impaired individuals may call the Federal Dual Party Relay Service at 1-800-877-8339 between 8 a.m. and 7 p.m. eastern time.

SUPPLEMENTARY INFORMATION:

Statutory Authority

The provisions of this regulation pertaining to review and adjustment of child support orders are published under the authority granted to the Secretary by section 466(a) of the Social Security Act (the Act), 42 U.S.C. 666(a). Section 466(a) requires each State to have in effect laws requiring the use of specified procedures, consistent with this section of the Act and regulations of the Secretary, to increase the effectiveness of the Child Support Enforcement program. Review and adjustment of support orders at section 466(a)(10) of the Act is one of the required procedures.

Paperwork Reduction Act of 1995

No new information collection requirements are imposed by these regulations, nor are any existing requirements changed as a result of their promulgation. Therefore, the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), regarding reporting and record keeping, do not apply.

Regulatory Flexibility Analysis

The Secretary certifies, under 5 U.S.C. 605(b), as enacted by the Regulatory Flexibility Act (Pub. L. 96-354), that this rule will not result in a significant impact on a substantial number of small entities. The primary impact is on State governments. State governments are not considered small entities under the Act.

Regulatory Impact Analysis

Executive Order 12866 requires that regulations be reviewed to ensure that they are consistent with the priorities and principles set forth in the Executive Order. The Department has determined that this rule is consistent with these priorities and principles. This regulation is considered a “significant regulatory action” under 3(f) of the Executive Order, and therefore has been reviewed by the Office of Management and Budget.

Unfunded Mandates Reform Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that a covered agency prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year.

If a covered agency must prepare a budgetary impact statement, section 205 further requires that it select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with the statutory requirements. In addition, section 203 requires a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

We have determined that the final rule will not result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of more than $100 million in any one year. Accordingly, we have not prepared a budgetary impact statement specifically addressing the regulatory alternatives considered, or prepared a plan for informing and advising any significantly or uniquely impacted small governments.

Congressional Review

This regulation is not a major rule as defined in 5 U.S.C. chapter 8.

Assessment of Federal Regulations and Policies on Families

Section 654 of the Treasury and General Government Appropriations Act of 1999 requires Federal agencies to determine whether a proposed policy or regulation may affect family well-being. If the agency's determination is affirmative, then the agency must prepare an impact assessment addressing seven criteria specified in the law. These regulations will not have an impact on family well-being as defined in the legislation.

Executive Order 13132

Executive Order 13132 on Federalism applies to policies that have Federalism implications, defined as “regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on the States, or on the distributions of power and, responsibilities among the various levels of government.” This rule does not have Federalism implications for State or local governments as defined in the Executive Order.

Summary Description of Regulatory Provisions

This rule finalizes without change provisions of the Interim Final Rule published in the Federal Register on December 28, 2004 (60 FR 77659) and permits States to use a reasonable quantitative standard to determine whether or not to adjust an existing child support award amount after conducting a review of the order, regardless of the method of review used.

Under this final rule, a State may establish a reasonable quantitative standard, based on either a fixed dollar amount or percentage, or both, as a basis for determining whether an inconsistency between the existent child support award amount and the amount of support as determined as a result of a review is adequate grounds for petitioning for adjustment of the order, regardless of the method of review. This allows States to manage their limited resources and refrain from seeking unreasonably small order adjustments whenever the existing order amount varies by any amount, however small, from the amount calculated under the State's guidelines. Very few States have automated review processes in place. The application of child support guidelines often involves far more than a simple calculation based upon one parent's income, and may include decisions with respect to child care, health insurance and extraordinary medical expenses. This rule minimizes the burden, stress and uncertainty families would face in opening up their orders to change despite little anticipated gain. In addition, the rule reduces complex agency and tribunal record-keeping that could lead to errors, and lessens the burden on employers who would need to respond to constantly adjusting income withholding orders to address small differences in the amount withheld.

Section 303.8 continues to require State child support enforcement (IV-D) agencies to review child support orders at least every 3 years, upon request of a parent in any IV-D case, and upon request of the State if there is an assignment of support rights under title IV-A of the Act, and make adjustments, if appropriate, i.e. if the reasonable quantitative standard for an adjustment is met. Further, under paragraph (b)(5) of this section, a State must have procedures, under which a parent or other person who has standing may request a review and adjustment outside the regular 3-year (or shorter) cycle and if the requesting party demonstrates a substantial change in circumstance, for adjusting the order in accordance with its support guidelines.

We note that the Deficit Reduction Act of 2005 (Pub. L. 109-171) amended the child support statute (42 U.S.C. 666(a)(10)) related to review and adjustment of support orders to require States, effective October 1, 2007, to review all cases with an assignment of support rights under title IV-A every three years. We will issue separate regulations addressing this change.

Response to Comments

We received two comments from an advocate. Responses to these comments follow. We also received comments in favor of the regulation from four State IV-D agencies.

Section 303.8—Review and adjustment of child support orders

Comment: One commenter stated that the interim final rule is not consistent with Federal statute.

Response: We disagree. The regulation is consistent with Federal statute as originally interpreted in 1993 and as construed in OCSE-AT-97-10, on July 30, 1997. Section 466(a)(10)(A)(i)(I) of the Act, as amended by section 351 of Public Law 104-193, does not preclude a State law from providing a threshold deviation before an adjustment of an order is appropriate. Under section 466(a)(10)(A)(i) of the Act, the State must take “into account the best interests of the child involved.” A small reduction in support, or even an increase, because of a difference between the current order and the order amount calculated during a review, might not be in the child's best interests. The rule that allowed states to apply a reasonable quantitative standard for adjustment of an order was in effect for ten years. During that period there was no indication or evidence that the best interest of children would have been better served by requiring even incremental adjustments to orders (whether increases or decreases). On the contrary, we believe such frequent small changes to orders would have caused stress, uncertainty and confusion, and would have imposed an unreasonable administrative burden upon state agencies. In summary, such changes would not have been “appropriate.”

(As previously noted, we will be issuing separate regulations to address the changes made to section 466(a)(10) by the Deficit Reduction Act.)

2. Comment: This commenter also said that the interim final rule has the potential to harm needy children and parents. If the amount of the potential increase doesn't meet the quantitative standard, the child would be deprived of an amount of money that isn't insignificant over a year. The same commenter also stated that, if a change in the order amount would be a decrease and isn't sought, the low income obligor would be burdened with an excessive order or fall into arrears.

Response: We do not agree. Since the issuance of the Action Transmittal, we are aware of no evidence of harm done to families or obligated parents. We believe authority given to States by this regulatory change is necessary and consistent with the law.

As outlined in the preamble to the Interim Rule, OCSE issued policy on review and adjustment of orders in OCSE-AT-97-10 on July 30, 1997. Under section 466(a)(10)(A)(i)(I) of the Act, the language “if appropriate, adjust the order” is consistent with regulations which say that, if a State reviews a case under the 3-year cycle provision using State guidelines, it can determine not to adjust the order if the inconsistency between the current order and the guideline amount does not meet the “reasonable quantitative standard established by the State.” Under the regulations, the State could establish a reasonable quantitative standard based upon either a fixed dollar amount or percentage, or both, as a basis for determining whether an inconsistency between the existing child support award amount and the amount of support which resulted from application of the guidelines was adequate grounds for petitioning for adjustment of the order. The state should, of course, continue to take into account any significant changes.

Either party may still ask for a review and modification of the child support order notwithstanding the state's threshold rule limiting mandatory procedures requiring the IV-D agency to seek such small adjustments. The thresholds established by each state avoid de minimus actions which a court may reject anyway. This rule minimizes the burden, stress and uncertainty families would face in opening-up the order to change despite little anticipated gain.

List of Subjects in 45 CFR Part 303

• Child support
• Grant programs—social programs

(Catalog of Federal Domestic Assistance Programs No. 93.563, Child Support Enforcement Program)

PART 303—STANDARDS FOR PROGRAM OPERATIONS

Therefore, the interim final rule amending 45 CFR part 303 which was published on December 28, 2004 (69 FR 77659) is adopted as final without change.