+-----------------------------------------------------------------------+
| # MANAGING CHILD SUPPORT ARREARS                                      |
|                                                                       |
| ## *A Discussion Framework*                                           |
+-----------------------------------------------------------------------+

[Final Summary of the Administration for Children and Families Northeast
Hub Meeting on Managing Arrears]{.underline}

This Final Summary reflects recorded notes of roundtable discussions
held at the April 2001 Northeast Hub Meeting on Managing Arrears. The
views expressed in this summary are those of the participants. This
summary is not to be considered as an official policy document of the
Department of Health and Human Services or its agencies and it does not
necessarily reflect the views of HHS or its interpretation of Federal
law.

For more information, please contact Jens Feck, ACF ROII, at
Jfeck@acf.dhhs.gov.

NORTHEAST HUB MEETING ON MANAGING ARREARS

TABLE OF CONTENTS

INTRODUCTION 3

ARREARS MANAGEMENT -- A Discussion Framework 5

I.  PREVENTION OF ARREARS 5

II. ORDER ESTABLISHMENT 12

III. EARLY INTERVENTION 20

IV. ACCRUED ARREARS MANAGEMENT 25

ADDENDUM A -- Highlights of Issues 33

ADDENDUM B -- Highlights of Strategies 33

NORTHEAST HUB MEETING ON MANAGING ARREARS

ESTABLISHING A DISCUSSION FRAMEWORK

&

# DEVELOPING GUIDING PRINCIPLE

**INTRODUCTION:** State IV-D Directors and managers from fifteen
Northeast Hub jurisdictions, along with their Federal and private
partners, met in Philadelphia on April 11 and 12, 2001, to discuss a
broad range of issues surrounding an emerging topic of national
interest: *Child Support Arrears Management*. The meeting's ambitious
goal was to organize identified issues and corresponding strategies
within a framework conducive to developing guiding principles and
effective state arrears management policies. That goal is accomplished,
and the resulting framework and content are outlined below. However,
this is only an initial step and the development and implementation of
successful and cost-effective arrears management and prevention policies
continues to be a work-in-progress. Accordingly, the Hub partnership has
agreed to reconvene periodically in order to further this discussion,
share successes and failures of ongoing as well as pilot programs,
analyze implementation impediments, develop best practices, and
potentially propose overriding guiding principles of national
significance.

The compiled definitions, issues and strategies outlined in the
following Arrears Management Framework were identified during four
simultaneously facilitated roundtable discussions between IV-D
Directors, state IV-D senior management, private sector organizations
(CLASP, CSF, NPCL and the Urban Institute) and OCSE program managers.
The Framework design was completed during a subsequent group meeting of
all roundtable participants. The meeting agenda consisted of broad-based
discussion points relevant to issue description, identification of
corresponding solutions and strategies, and development of guiding
principles and next steps. Participants received extensive resource
material both prior to the meeting and on-site. At the conclusion of the
meeting, state participants agreed to implement at least one new idea
generated during roundtable discussions -- initially, one that would not
require a modification to existing policy or law. Private partners
agreed to share soon-to-be-released arrears management reports and to
incorporate the meeting outcomes into the underlying thought-process of
future reports. And OCSE agreed to facilitate continued Hub discussions
through establishment of a dedicated arrears management web-site.

The meeting opened with remarks by David Lett, Regional Administrator,
Frank Fuentes, Acting Commissioner, Mary Ann Higgins, Northeast Hub
Director, and Alisha Griffin, Assistant Director, New Jersey IV-D. These
remarks had two themes in common: the national importance of arrears
management, and the benefit of pulling together a broad range of Hub
assets in response to a state request for technical assistance. The
meeting closed on two parallel themes: (1) that effective arrears
management policies can enhance virtually all IV-D program functions and
improve program efficiency and customer service; and (2) that the Hub
sponsorship of this meeting, the collaboration between pertinent Hub
partners and the access to Hub resources were indispensable to the
success of this meeting.

In conclusion, the meeting participants hope that the attached summary
of their combined effort offers guidance on an issue that is common to
all, and yet is defined by operational systems that vary from state to
state -- at times in the extreme. Participants moreover hope that this
report, and future updates, can contribute substantively to a national
dialogue around the prevention of arrears and the management of accrued
arrears.

### 

### ARREARS MANAGEMENT -- A DISCUSSION FRAMEWORK

Meeting participants unanimously agreed to organize the thoughts and
information generated during the roundtable discussions into four
distinct categories: Prevention; Order Establishment; Early
Intervention; and Accrued Arrears Management. Each category contains the
following sub-categories: Definitions; Issues; Strategies and Next
Steps. (Editor notation: Next Step outstanding policy issues are
addressed in the November Follow-up summary.) This categorization serves
two purposes: Organizing information into a framework useful in the
generation of guiding principles and state-specific strategies; and
organizing current and future data on the impact, success and
cost-effectiveness of arrears management strategies.

## I. PREVENTION OF ARREARS

The concept of state, private, faith-based and IV-D agency action to
prevent the accrual of arrears weaves throughout most arrears management
discussions, and extends to preventive actions that may be appropriate
prior to the initial request for IV-D services and even prior to the
out-of-wedlock birth of a child. Nonetheless, it is appropriate to
assign this concept a distinct category, given the importance, potential
impact and far-ranging nature of arrears prevention activities. This
category emphasizes those activities with the least amount of overlap
into the remaining categories. Preventive activities that relate more
directly to order establishment, early intervention and arrears
management will be discussed in the corresponding Framework Section.

**[Definitions:]{.underline}**

The initial step in any process to manage arrears should be the analysis
of the arrears bucket (the totality of accrued arrears). This involves
identifying and segregating the bucket into its respective elements. The
following elements, or a combination thereof, will most likely make up
any given state's arrears total:

-   Child support

-   Spousal support

-   Interest

-   Medical support for child

-   Medical support for mother

-   Birthing costs

-   Legal costs

-   Genetic test costs

-   Child care

-   Fees

The child support arrears element may need to be broken down into two
additional sub-components:

-   Unpaid amount towards current support -- prospective from order date

-   Unpaid amount towards fixed retroactive support -- retroactive from
    order date

The second sub-component, retroactive arrears, usually accrues
"automatically" as a result of a state law or policy establishing
mandatory or discretionary retroactive child support obligations
(retroactive to or prior to the filing of a support petition). The
actual amount of the retroactive obligation is usually determined by a
tribunal at the same time that the current support amount is established
(i.e., the potential retroactive obligation has no legal consequence
until it is adjudicated).

In some states the legal obligation to pay support is only retroactive
to the filing date of the support petition. In other states the legal
obligation may be retroactive for a specified number of years, or even
to birth. In those states where retroactivity is limited to the filing
date, retroactive amounts may nonetheless be substantial if there are
significant delays between the filing and the hearing dates. Finally, in
some states the period of retroactivity depends on the parties'
wedlock/out-of-wedlock status -- out-of-wedlock status usually resulting
in a shorter period of retroactivity. Due to the fact that many NCPs are
not aware of the potential duty to pay retroactive support, the length
of the retroactive timeframe in a particular state may very well
determine the importance of pre-IV-D preventive strategies.

Once a state has identified the elements of its arrears bucket, it may
want to determine why a particular arrears component continues to
accrue. Generally speaking, arrears accrue because the NCP either (1)
failed or refused to pay even though he/she has the ability to pay, or
(2) failed to pay due to past and/or present financial inability. This
financial inability may relate to post-order-establishment decreases in
financial resources or it may relate to the fact that, at the time of
order-establishment, the current support amount exceeded the capability
to pay. Meeting participants identified a number of scenarios that could
underlie a financial inability and that might explain the "why" of
arrears:

-   Default obligations that are based on insufficient data about NCP
    ability to pay

-   Imputed NCP income that does not reflect actual NCP ability to pay
    (Note: the need for imputing income is not limited to default
    situations.)

-   Obligations based on inappropriate guidelines or failure to properly
    apply the guidelines

-   Retroactive amounts based on past ability to pay rather than current
    ability to pay

-   Multiple family/order situations, where total needs exceed the
    ability to pay, especially in those states that do not have a law or
    uniform standard providing for credit for prior obligations

-   NCP incarceration not followed by timely review and adjustment or
    modification (Note: in some states, Connecticut is an example, case
    law discourages downward modifications based on incarceration.)

-   Unemployment or under-employment not followed by timely review and
    adjustment or modification

-   Interest on arrears -- at times the interest on arrears may exceed
    the arrears amount

-   NCP lacks information about or access to the modification process,
    and the case should have been modified

-   Arrears accumulated due to delays in the establishment of an order,
    and/or delays in the implementation of immediate income withholding

-   NCP making direct payments or providing in-kind support to the CP
    and/or child, or cohabiting with the CP and making no payments, even
    though under a legal obligation to pay to the IV-D agency

A state may find it helpful to organize the various elements and terms
associated with the arrears bucket into a matrix. The matrix could be
used to analyze the entire arrears bucket or the arrears account of an
isolated case. The validity and usefulness of the matrix would of course
depend on a particular state's ability to input accurate data. A sample
matrix is found below (many variations are possible, and tables could
include assessments of current collectability based on case- and
NCP-specific data such as history of payments, current income and age of
debt):

+-------------+-------------+-------------+-------------+-------------+
| **Arrears   | **          | **Disc      | **Failure   | **Inability |
| Reason ⇒**  | Automatic** | retionary** | to Pay but  | to Pay**    |
|             |             |             | Appears     |             |
| **Arrears   | **          | **          | Financially | **(Short    |
| Type ⇓**    | Application | Application | Able**      | Term and    |
|             | of**        | of**        |             | Long        |
|             |             |             |             | Term)**     |
|             | **Policy or | **Policy or |             |             |
|             | Law**       | Law**       |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Child     | X           | Not         |             |             |
| Support     |             | applicable  |             |             |
| Current**   |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Child     |             |             |             |             |
| Support**   |             |             |             |             |
|             |             |             |             |             |
| **Re        |             |             |             |             |
| troactive** |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Spousal   | X           | Not         |             |             |
| Support**   |             | applicable  |             |             |
+-------------+-------------+-------------+-------------+-------------+
| *           |             |             |             |             |
| *Interest** |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Medical   | X           | Not         |             |             |
| Spt/child** |             | applicable  |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Medical   |             |             |             |             |
| S           |             |             |             |             |
| pt/mother** |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Birthing  |             |             |             |             |
| costs**     |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Legal     |             |             |             |             |
| costs**     |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Genetic   |             |             |             |             |
| test        |             |             |             |             |
| costs**     |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Child     |             |             |             |             |
| Care**      |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+
| **Fees**    |             |             |             |             |
+-------------+-------------+-------------+-------------+-------------+

**[Issues:]{.underline}**

A state may need to address various issues prior to the development of
appropriate prevention strategies, including:

-   **Analysis of arrears "bucket."** As stated, meeting participants
    agreed unanimously that the first step in arrears management should
    be the analysis of the arrears bucket. The completion of this
    exercise should allow the state to identity the source of the
    majority of arrears, and hopefully the reasons why NCPs failed to
    comply with the respective obligations. This information is the key
    to targeting preventive actions.

-   **Conflicts with public policy**. Generally speaking, prevention of
    arrears strategies does not foster public policy conflicts.
    Preventing arrears up-front is the antithesis of compromising
    arrears, which many view as rewarding "criminal" behavior.
    Preventing arrears is a pro-active policy that is NCP, CP, and
    child-friendly, and it will likely have a positive impact on IV-D
    incentive payments. It is also a cornerstone of the universal public
    policy that all children are entitled to adequate and timely
    support.

-   **Cost-effectiveness**. Not every potential or actual NCP will
    benefit equally from a given prevention strategy (or benefit at
    all). A state may therefore need to target strategies in order to
    maximize the effectiveness of the arrears accrual prevention
    message. If a state decides to implement a strategy that targets a
    pre-IV-D population, it may want to first identify those individuals
    who are most likely to become potential NCPs (teenagers, young
    fathers, etc.). A secondary and narrower identification would
    consist of potential NCPs who are most likely to benefit from a
    specific prevention strategy. Finally, the state should identify
    available resources (staff and financial) that can be devoted to
    prevention efforts. As the Hub jurisdictions engage in more
    preventive strategy pilots, any ensuing cost-benefit calculations
    will hopefully support arguments before legislators and
    budget-managers that prevention activities are effective if
    adequately funded.

> In deciding on the NCP target group parameters (both as to potential
> and current NCPs), states may want to consider the following: (1)
> based on various studies, about 50 to 60% of the total arrears bucket
> is owed by NCPs who earn less than \$20,000 annually; (2) based on
> experiential evidence, a division of NCPs into respective target
> groups should be more sophisticated than a division solely based on
> the case's public assistance status; and (3) an individual
> categorization should not necessarily be permanent in that the NCP's
> ability to pay can be very fluid and will most likely change over
> time. In conclusion, a state should recognize that a case may need to
> be subjected to different arrears prevention/management policies
> during its lifetime.

-   **NCP-friendly activities**. In order to be effective, the targeted
    NCP must understand and believe the prevention of arrears message.
    At minimum, this means that the following outreach elements need to
    be modified and adapted to address the diverse needs and
    characteristics of each particular group within the greater NCP
    population: (1) language; (2) the media used to reach the target
    group; (3) the messenger; (4) the terminology; and (5) the
    particular group's concept of "debt" (which may differ from the IV-D
    concept).

**[Strategies:]{.underline}**

The appropriateness and success of any given strategy will differ from
state to state due to the significant variance in arrears definitions,
arrears make-up, the timeframe of retroactive obligations, NCP
populations and state resources. If a cited strategy has already been
implemented, the respective state citation is included.

-   **Arrears Analysis**. Once more, the initial step of any state
    prevention effort should be the analysis of the arrears "bucket." A
    state should determine to what extent the automated system can be of
    assistance in this process. For purposes of Federal reporting, the
    state is only required to provide information on the total amount of
    arrears due, the total amount distributed as arrears, the number of
    cases with arrears, and the number of cases paying toward arrears.
    (See lines 26-29, Form OCSE-157.) Unfortunately, this data offers
    little in terms of conducting meaningful arrears analyses.
    Participants recommend that states review their system's ability to
    generate ad hoc reports that could divide the arrears bucket into
    the elements suggested above. For example, ad hoc reports could be
    generated that are based on state-specific data elements and/or case
    notes. Connecticut already has a system ability to segregate current
    arrears from retroactive arrears that were set at the time of order
    establishment. Virginia is currently processing data in order to
    develop a detailed dissection of its caseload, and the end product,
    when released, may result in further guidance and good practices.
    (Also see California's recently completed study on the
    collectability of its arrears. For more information, please contact
    Elaine Sorensen at esorensen@ui.urban.org.)

> The system effort could include a general case clean-up strategy that
> may result in establishing a more accurate arrears total. Case
> clean-up activities can include:

1.  Matches with vital statistics/probate records to identify deceased
    NCPs, followed by corresponding adjustments in the arrears balance,
    if appropriate. Also consider www.ancestry.com as a website source
    of death record information.

2.  Recommendation that similar matches be conducted with SSA "death
    records." (Note: FPLS is currently in negotiations with SSA to
    establish a proactive match between SSA death records and FCR data).

3.  Recommendation to use CSENet to obtain and update arrears balances
    in interstate actions.

> The completed arrears analysis and case clean-up effort will benefit
> virtually all aspects of arrears management. (See Sections III and
> IV.)
>
> Three information elements may be especially helpful in deciding upon
> appropriate prevention efforts and other aspects in arrears
> management:

1.  Retroactive arrears as a percentage of total arrears;

2.  Interest as a percentage of total arrears; and

3.  Identifying NCPs likely to accumulate arrears

The ACSES (Automated Child Support Enforcement System) database should
be able to provide information to determine to what extent retroactive
obligations and/or interest constitute an issue in a particular state.
However, most ACSES hold few if any data elements that can help in
segregating NCPs into unwilling, unable and similar categories. CBOs,
credit histories, NDNH and Quarterly Wage records, etc., should instead
be consulted for obtaining data that is hopefully more useful, relevant
and current. A review of private industry practice related to credit
extension and debt management might also result in the development of a
better grouping process. In conclusion, there is a consensus among the
Hub states that more research and studies are needed in order to better
judge who is or will likely be the unwilling instead of the unable
payor.

As a state identifies the major components of its arrears bucket, learns
to distinguish between willing and unwilling NCPs, and appreciates the
various scenarios that give rise to arrearage accumulations, it will be
better equipped to develop and identify appropriate prevention and
outreach activities.

-   **Prevention and Outreach activities**. The following information
    may be of interest as states begin to develop or re-design outreach
    activities addressing either potential and actual NPCs. The
    overriding goal of all preventive actions is to provide information
    about those steps in the IV-D process that, if overlooked or not
    understood by the NCP, are most likely to result in the accumulation
    of arrears.

1.  **Use of technology and web resources**. New Jersey operates a voice
    response system that refers NCPs to appropriate web-based resources
    and information. Massachusetts will soon operate an enhanced
    interactive website. New Mexico also operates an interactive
    website. This technology can be expanded and used to inform
    potential NCPs of the consequences of failing to appear at tribunal
    hearings and on state laws, if any, establishing a duty to support a
    child prior to the filing of a legal action. Innovative technology
    can also be used to inform potential NCPs about child support
    guidelines and the establishment process. There is a consensus that
    too many NCPs leave a tribunal "without a clue" as to how their
    obligation was established. Early sharing of information about the
    process and about the kind of financial information that is critical
    to fair guideline calculations should significantly improve the
    perception and reality of that first NCP/IV-D contact.

2.  **Family Service Agency partners**. Massachusetts uses the existing
    In-hospital paternity program to conduct extensive outreach to
    potential NCPs relative to all CSE functions. Amending the
    information that is offered in the hospital setting to also include
    arrears prevention information appears to be a cost-effective
    alternative that is available to all states. Likewise, states should
    review existing relationships, cooperative agreements and
    collaborative efforts with all other family service agencies, such
    as Head Start, IV-A and IV-E programs, to see how information
    currently provided about the CSE program can be amended to include a
    pro-active arrears prevention message. And IV-D programs should not
    overlook their own waiting rooms as an outreach opportunity. To
    date, many local offices are devoid of posters or brochures that, if
    made available, could offer arrears prevention information.

3.  **Community-based-organizations (CBOs).** The IV-D program must take
    the initial step and educate itself on the make-up of available
    community resources, and then focus on those CBOs that could best
    assist in NCP outreach activities. It is important that
    communications with the CBO be as clear, accurate and understandable
    as the eventual communications with NCPs. Cross training activities
    between IV-D and CBO staff present an excellent opportunity for
    sharing accurate prevention information. For example, in
    Connecticut, CBOs have a standing invitation to attend any IV-D
    training event. This has fostered a sense of trust and cooperation
    between IV-D and CBOs. Legal Aid offices are also good, and
    sometimes overlooked, outreach partners, especially when it comes to
    providing technical information in layman terms about the court
    process and the child support guidelines. Organizations that provide
    information on parenting skills and parental responsibility should
    also be approached and involved.

> CBOs may likewise offer the best opportunities to reach out to
> non-English speaking NCPs. CBOs that primarily serve non-English
> speaking populations should also be consulted whenever
> foreign-language outreach material is being drafted. Failure to do so
> may lead to failed outreach efforts. For example, the various
> nationalities within the Hispanic community may attach very different,
> and at times offensive, connotations to an identical Spanish word.

4.  **Media and innovative ideas**. What type of media will most likely
    reach the NCPs that need to be reached? While web sites are very
    effective communication tools, many NCPs do not have access to the
    Internet. Likewise, placing CSE public notices on the legal-notice
    page of a newspaper may be less than effective. Instead, meeting
    participants suggest the following: (1) using rap music to spread
    the message; (2) including a message on streamers found on the
    bottom of the screen at many cable TV stations; (3) establishing a
    "Psychic Child Support Hotline" that offers free advice; (4)
    distributing pamphlets, in various languages, at schools and other
    public sites, that answer the "10 most frequently asked questions
    about arrears management" (Note: a good example of language that
    needs a user-friendly transformation); (5) establishing a national
    1-800 number that offers 10 info-bits that apply to all states (for
    example, rights to modification services); and (6) use of continuous
    videos, similar to the videos on paternity used in West Virginia
    waiting rooms.

Rhode Island's "Dads Make a Difference" project, that uses teens to
train other teens on parenting, is an example of an existing successful
program that can incorporate an effective prevention message. In
addition to schools, prisons also represent excellent sites where a
positive outreach message can be connected with a captive audience.

5.  **Outreach to CPs.** Providing CPs with information about arrears
    prevention may also be a worthwhile activity as myriad CPs have
    spouses who pay support to second families. Educating CPs (who are
    entitled to tribunal-ordered support) on how the acceptance of
    in-kind support or direct support payments may result in arrears
    accrual (and the corresponding potential of committing fraud if the
    CP is a TANF recipient) can likewise be an effective arrears
    prevention message. Collaborating with the IV-A agency with regard
    to the latter effort is recommended.

In conclusion, the prevention of arrears outreach activity needs to
address the appropriate audience and provide timely and specific
information in plain and understandable language that will help the
targeted NCP avoid a child support debt.

**[Next Steps:]{.underline}**

Meeting participants recommend or request that --

-   OCSE explore availability of grants to support a national arrears
    prevention awareness campaign;

-   OCSE compile and distribute descriptive information about pilot
    programs that focus on arrears prevention activities (along with
    pilot programs on all other arrears management projects);

-   Hub states initiate or continue arrears analysis projects and share
    outcomes;

-   Hub states implement as many new prevention ideas as possible and
    share outcomes; and

-   Explore feasibility of research and/or studies to assist states in
    dividing NCPs into "able" and "not able," and "willing" and
    "unwilling" groups.

#### II. ORDER ESTABLISHMENT

Meeting participants are in consensus on at least two points related to
order establishment: (1) the order establishment methodology is one of
the most significant determinates of whether or not arrears are likely
to accumulate, and (2) the differences from state to state relative to
the two most important components in the process -- guidelines on
setting current support and laws effecting retroactive support -- are
astounding. Several participants expressed strong feelings that the
process of how a child support order is established needs to be
revisited at the national level. Such review inherently leads to a
struggle between flexibility and increased structure - and reaching an
acceptable balance between such conflicting needs and interests will be
a challenge. Nonetheless, the total national child support debt is
currently estimated at over \$80 billion dollars, and to the extent that
the order establishment process is a contributing factor, change may be
inevitable.

**[Definitions:]{.underline}**

The following terms are relevant to order establishment. The terms cited
in Section I, sub-section "Definitions," defining the make-up of the
arrears "bucket," and segregating current from retroactive arrears, are
equally relevant to this and the remaining Sections.

-   **Service** -- how is it accomplished, on whom, how is it
    documented, and does it meet due process -- varies from state to
    state

-   **Order** -- contested or by consent, administrative or court

-   **Default order** -- required if NCP was served and fails to appear
    -- in some states obligation is based on imputed income, in others,
    for example Connecticut (and, previously, Maine), the obligation
    defaults to the PA grant amount if no other information (past or
    present) is available to apply guidelines -- however, Connecticut
    leaves the record open for 4 months for the NCP to present
    additional information

-   **Child Support Guidelines** -- must take into consideration all
    earnings and income of the NCP, must be based on specific
    descriptive and numeric criteria and result in a computation of the
    obligation (a rebuttable presumption), and must provide for the
    child's health care needs -- no other Federal requirements apply -
    significant guideline variance across Nation

-   **Review of Guidelines** -- must be reviewed, and revised, if
    appropriate, at least once every four years -- review must consider
    economic data on the cost of raising children and must analyze
    frequency of deviations

-   **Imputed income** -- state ability to establish an income amount
    when the NCP fails to provide income information, or when the NCP is
    determined to be willfully unemployed or under-employed -- imputed
    income can be based on minimum wage, average wage, CP testimony,
    and/or independent evidence such as tax returns and past work
    history

-   **Self-support reserve** -- dollar amount some states set aside from
    available income to provide for the NCP's minimum needs -- usually
    incorporated into guidelines

-   **Retroactive support obligation** -- the amount of support an NCP
    may be required to pay for a period prior to the date that a support
    order is established -- In West Virginia and Connecticut, the
    retroactive period is 3 years for out-of-wedlock parties, in North
    Dakota it can be retroactive to birth, in other states it is left to
    court-discretion, and in several it goes back to the date of filing
    -- approximately 15 states charge interest on retroactive amounts

-   **Multiple cases** -- situations where the NCP has children living
    with multiple CPs, and/or with the NCP, and where the children may
    or may not be subject of a support order or otherwise receiving
    support -- some guidelines provide automatic credit for all NCP
    children, whether supported or not -- in contrast, other states have
    no statute and/or no uniform standard pursuant to which a NCP with
    other legal support obligations receives credit in the computation
    of a subsequent obligation

**[Issues:]{.underline}**

The following issues relate to order establishment:

-   **Conflicts with public policy**. The order establishment process
    can touch upon several areas of potential conflict and diverging
    interests. The overriding conflict is the one between the needs of
    children and the ability of NCPs to support their children. Other
    conflicts exist between the public's desire to recoup welfare
    payments, to recoup case-related costs, and to charge interest on
    public and private debt, set once again against the NCP's limited
    financial resources. To the extent that staff time and effort are
    required to enhance the order establishment process, there is a
    conflict between needs and available resources. As a state attempts
    to reach a balance and consensus with respect to any of these
    conflicting interests, meeting participants recommend the
    involvement of all interested partners, including but not limited to
    the courts, the Executive branch, the Legislative branch, advocacy
    groups, Bar Associations, WtW and WIB agencies, other states and ACF
    Regional Offices.

-   **NCP Appearance.** The state has an overriding interest in having
    the NCP appear at the time of order establishment. The state may
    need to review the entire order establishment proceeding to
    determine the extent to which each segment of the process promotes
    or undermines this interest. This includes a review of the
    effectiveness of pre-IV-D Prevention Activities that focus on
    informing the NCP about the procedure and importance of the initial
    hearing. Other issues include the content of the initial summons and
    notice; the ability to reach non-English speaking individuals; the
    setting of the hearing; the ability of high-income NCPs to benefit
    from a default setting; and the interplay with NCP interests in
    establishing visitation rights.

-   **The Courts.** Which tribunal is best suited to expeditiously
    establish a fair order? Several meeting participants believe that
    orders are more quickly established administratively, while some
    suggested that states that exclusively generate judicial orders
    experience higher payment rates. Others mentioned that the judicial
    process usually results in greater delays between order
    establishment and implementation of wage retention; or that the
    courts were more likely to ignore IV-D mandates relative to income
    withholding, guidelines and the prohibition on direct payments. And
    while some states may view the courts as a major barrier in arrears
    management, most agree that the courts, if already a player,
    probably would not support a proposal to transfer establishment
    functions to an administrative process. Accordingly, the immediate
    concern should be the enhancement of the process, regardless whether
    judicial or administrative.

-   **Child Support Guidelines.** A state should ensure that the
    guidelines are fair, are being applied consistently, and are being
    reviewed on a regular basis. While a review must be conducted every
    four years, not every state has been able to meet this mandate. On
    the other hand, some states believe that guidelines should be
    reviewed more often than every four years, especially if there is
    early evidence of significant instances of deviation. In reviewing
    the guidelines, a state needs to decide who should be involved in
    the process; and when it comes to potential revisions, a state needs
    to ensure that the guidelines can be successfully applied to
    low-income NCPs.

-   **Default Orders.** While most meeting participants agree that a
    state should be reluctant to issue default orders, if the NCP fails
    to appear, a default order must in fact be issued. Absent NCP
    testimony about income and assets, a state may need to resolve two
    issues: (1) how to establish the obligation, and (2) to what extent
    should the no-show NCP be allowed to subsequently challenge the
    default amount.

-   **Retroactive amounts and other monetary obligations.** In addition
    to establishing a current obligation for child and medical support
    (and possibly spousal support), the initial order may also contain
    an arrears judgment for a retroactive obligation, along with
    judgments for legal costs, genetic test costs, birthing costs, fees,
    and a provision for late-payment charges and/or interest on any or
    all of the above. A state may want to know how the ability to pay
    child and medical support is affected by these other obligations. To
    the extent that a state has discretion under state law, it may want
    to re-examine when to pursue a particular non-child-support
    obligation, how that obligation is best established, and how that
    process should interact with the NCP's overall ability to pay.

**[Strategies:]{.underline}**

Meeting participants recommend the following strategies (already
implemented or otherwise suggested), that may enhance a state's order
establishment process.

-   **Court vs. Administrative Process.** Even in a judicial process
    jurisdiction, the courts may be convinced that the limited transfer
    of some order establishment functions to an administrative (or more
    informal) process is beneficial to everyone. For example, during the
    last three years, New Jersey has been processing administrative
    orders in consent cases, significantly expediting the establishment
    process. In Maryland and Delaware, CPs and NCPs attend settlement
    conferences (a concept that can be applied to both the judicial and
    administrative process), with settlement rates as high as 70%. In
    addition to expediting the procedure, the settlement conference
    approach tends to improve the proceeding's overall atmosphere -- an
    important benefit, given anecdotal evidence that a NCP is 35% more
    likely to pay support if he/she was treated with *respect* in the
    establishment process. Finally, by actively engaging the NCP in the
    establishment proceeding, the NCP is more likely to be aware of the
    initial payment due date, of potential delays in initiating income
    withholding, and of rights to adjustment and modification
    proceedings.

-   **Getting the NCP to Appear.** Most states agree that default orders
    should be avoided whenever possible -- and for good reason, since
    experiential evidence indicates that the payment compliance rate is
    significantly lower in default cases. Initially, a state may want to
    calculate the number of default orders as a percentage of all orders
    issued, in order to determine the extent of the problem in a
    particular jurisdiction. If this is in fact an issue, the beginning
    strategy could be the implementation of appropriate Prevention
    Techniques (see Section I) that focus on education and outline the
    negative consequences intrinsic to defaults. Additional strategies
    to obtain higher participation rates may focus on the format of the
    summons or notice to appear. For example, in Connecticut, the use of
    "**YOU MUST APPEAR**" language on the initial notice has increased
    the appearance rate to 90%. Whatever notice is used, it is important
    that it is easy to understand and available in the languages that
    may be spoken in a particular city or jurisdiction (AT&T and other
    vendors have translation capabilities -- all similar avenues should
    be explored to reduce translation expense). States also need to
    determine whether or not minimum due process requirements were met
    before concluding that a failure to appear should result in default
    -- especially when service of process appears questionable. If the
    NCP is in fact in default, a participant suggested that in
    conjunction with the issuance of a temporary order, a bench warrant
    be issued to increase the likelihood of the NCP's attendance at a
    subsequent hearing to establish a final order.

Whether or not a IV-D hearing meets the NCP's expectations about
entitlement to visitation rights can also be a major factor influencing
the NCP's willingness to appear and cooperate. While there is no
consensus on what visitation-related functions IV-D can or should
perform (in light of the historic Legislative and legal separation of
the issues), there is some agreement that IV-D should partner with, and
possibly fund, CBOs and other entities that facilitate visitation,
supervision and/or mediation. The existing process for authorizing
grants to states for Access and Visitation Programs could very well be
the cornerstone of any such effort.

-   **Establishing a Default Order.** Most states agree that
    establishing (and publicizing) a pre-determined order amount in
    default situations (such as using the TANF grant amount, a specified
    amount, or the minimum wage) is not a good idea for at least two
    reasons: (1) the "educated" higher-income NCP will fail to appear if
    the default order is virtually guaranteed to be less than an order
    based on actual income, and (2) for low-income NCPs, the
    pre-determined amount may guarantee accumulation of potentially
    uncollectable arrears. (Note: Maine suspects that its past practice
    of using TANF grants as the default order amount was a windfall to
    many NCPs.) In striking the balance between the need to establish a
    default order and the desire to establish a fair order, meeting
    participants have the following suggestions:

1.  **Temporary orders.** Make all default orders provisional or
    temporary (as is done in New York) so that, if justified,
    established obligations are easily modified.

2.  **Avoid standard default amount.** Allow for the default order
    amount to be based on case-specific factors rather than uniform
    standards. For example, in Puerto Rico, CPs are allowed to testify
    relative to NCP income, past work history, assets, etc., on which an
    "income-estimation" can be based.

3.  **Matches with financial data.** Use historical income and tax data
    to set a more "reasonable" default order.

4.  **Keep the record open.** Allow the NCP to appear after the initial
    establishment of the default order to provide actual evidence of
    income and ability to pay. For example, in Connecticut, the default
    record is kept open for 4 months, during which timeframe the NCP can
    appear and provide updated income information (The NCP is notified
    of this right at the time of order service). In Massachusetts, the
    record is kept open for one year, during which timeframe the default
    order can be set aside based on updated NCP income information.
    Maryland has a similar process, as long as the NCP can provide
    acceptable documentation of income. In some states, the amount is
    changed prospectively, not retroactively, while in others, such as
    Connecticut, an order based on new evidence replaces the initial
    order.

-   **Appropriate Guidelines or "Getting the right order in the first
    place goes a long way towards managing arrears."** A majority of
    states agree that establishing an appropriate support amount is
    contingent upon accurately determining NCP income - and then
    applying that income to a formula that calculates a fair amount of
    child support, yet leaves the NCP with the ability to provide for
    other children, if any, and basic personal needs. Establishing NCP
    income can be relatively simple if the NCP is employed and receiving
    regular and consistent wages. In those cases where the NCP is
    self-employed, under-employed or unemployed, or if reliable evidence
    of actual income or ability to earn income is not available for any
    other reason, many states resort to imputing income. The same
    recommendations on imputing income cited in the subsection above
    also apply here. (Under-employed and unemployed NCPs are discussed
    in more detail in the following subsection). Meeting participants
    caution against an over-estimation of income. To counteract that
    possibility, and the equal likelihood that income is
    under-estimated, some participants recommend that any time an order
    is based on imputed income, it should be issued as a temporary or
    provisional order, for the same reasons that Default Orders are best
    established as temporary or provisional orders. Once income is
    established, guidelines are applied, resulting in a recommended
    amount (the rebuttable presumptive amount) as computed by the
    formula, or, if due to special circumstances, an amount established
    by the tribunal that deviates from the formula. Meeting participants
    make the following recommendations relative to child support
    guidelines:

1.  **Regular reviews.** Guidelines need to be reviewed, and if
    appropriate, revised on a regular basis. Several participants
    believe that guidelines are often unfair since they do not keep pace
    with socio-economic changes. To expedite the review, Rhode Island
    recommends that the process not be tied to Legislative approval.
    Most if not all participants agree that economists should be
    included in any guideline review.

2.  **Self-support reserve.** Guidelines should establish an adequate
    self-support reserve to provide for basic needs of low-income NCPs.
    (The concept that the NCP is entitled to a form of "self-reserve"
    already exists in Federal law. The Consumer Credit Protection Act
    establishes a limit on the amount of support that can be withheld
    from wages, and, given that close to 70% of collected support comes
    from income withholding, order amounts that exceed CCPA limits
    virtually guarantee substantial arrears accrual.) Generally
    speaking, participants are in agreement that guidelines should
    balance low-income family needs with low-income obligor realities. A
    possible solution is to look to outside programs that can add income
    to each or both sides of the equation. Some participants suggest
    that the IV-D order establishment process in low-income cases should
    serve as a gateway to other services, such as housing, CHIPs,
    childcare, etc. Finally, to the extent that the existing guideline
    formula cannot be successfully applied to low-income cases, IV-D may
    need to take the lead on requesting formula deviations.

3.  **Multiple families.** Guidelines should take multiple-family
    realities into account whenever establishing a support obligation.
    Not all do. For example, in Maryland, state law is silent as to
    multiple-families, and there is no uniform standard that provides
    for an NCP credit based on other obligations. In contrast, in the
    Virgin Islands, the guidelines automatically provide credit for
    every other NCP child (as long as paternity is established), whether
    or not a support obligation exists. The fact that the aforementioned
    CCPA limits apply regardless of the number of NCP obligations may be
    another valid reason to consider multiple-family obligations
    up-front before they result in potentially uncollectable arrears.

-   **Under-employed and unemployed NCPs.** Not all under-employed or
    unemployed NCPs are willfully under-employed or unemployed. Nor is
    their alleged status necessarily truthful. (Interestingly enough,
    Rhode Island reports that some unemployed NCPs, in order to avoid
    the "nuisance" of court-ordered job searches, will lie and testify
    that they are employed, resulting in orders based on non-existent
    income! If common enough, a poster in the court waiting area
    advising of the consequences of such perjury might be an effective
    prevention technique.) Participants recommend that the state
    separate, to the extent possible, those NCPs that have taken
    deliberate action to reduce income from those that are truly
    unemployed or not able to be consistently employed (for example,
    seasonal workers). Existing interfaces with the NDNH, internal
    revenue agencies, etc., and collaboration with CBOs may assist in
    the segregation process. If the unemployment status is willful or
    voluntary, income should be imputed -- something that Massachusetts
    has successfully done for years. If the unemployment status is not
    willful or voluntary, IV-D should attempt to:

1.  Collaborate with fatherhood groups and similar CBOs to assist NCPs
    who may not be immediately employable (including NCPs with substance
    abuse issues), and

2.  Collaborate with WtW/WIBs and Labor Departments to assist NCPs who
    may be employable. Generally speaking, WtW entities are able to
    assist any NCP who is under-employed or unemployed, or having
    difficulty in paying child support (as defined by the state), if the
    child(ren) is on TANF or TANF eligible.

-   **Retroactive Obligations.** Meeting participants cited several
    arguments both for and against the concept of establishing
    retroactive obligations. For example, avoiding retroactive
    obligations will, simply stated, avoid arrears. Reducing or
    eliminating the retroactive obligation may enhance the NCP's ability
    and willingness to comply with the current obligation. On the other
    side, if orders are only prospective, the NCP has a built-in
    incentive to evade service of process for the initial hearing.
    Equally important, many NCPs have the ability to pay retroactive
    support, and the CP and the child are most often in need of the
    retroactive financial assistance. As stated earlier, state law
    establishes the period of retroactivity in most jurisdictions, and
    accordingly, flexibility may be limited. However, participants
    believe that the following suggestions can be helpful in developing
    useful strategies, one or more of which may be applicable in any
    given state:

1.  **Ability to pay.** Base retroactive support amounts solely on the
    NCP's current ability to pay.

2.  **Mitigating Case-specific factors.** Determine the retroactive
    period based on case specific circumstances; for example, did the
    NCP delay the establishment process or were the CP and/or state
    directly or indirectly responsible for the delay; when was paternity
    established (unknowing father vs. evading father issue); etc.

3.  **Charge now -- collect/settle later.** Collect the amount of
    retroactive arrears allowable under law, recognizing that NCP
    ability to pay changes over the lifetime of a case, and keep open
    the option of eventual settlement or compromise.

4.  **Mitigating NCP factors.** Consider mitigating factors related to
    past NCP conduct when determining the retroactive obligation; for
    example, give the NCP credit for direct or in-kind support paid to
    the CP prior to the order establishment (in TANF cases, CP may need
    to be advised of potential consequences if support during TANF
    period is acknowledged -- it is also recommended that such policy
    clearly indicate that future direct support will not be credited
    against the prospective obligation); other mitigating factors can
    include past periods during which the child lived with the NCP or a
    third party, and past periods of NCP/CP cohabitation.

5.  **Cap arrears.** Consider applying a policy similar to New York's
    policy of capping retroactive arrears to \$500 if the NCP can
    establish an income below the poverty level; i.e., this policy could
    be applied to retroactive and/or future arrears accrual.

-   **Other "Add-on" Obligations.** Most meeting participants accept the
    proposition that establishing a fair and collectable child support
    obligation is difficult enough. Every obligation added on to the
    current child support amount, from interest to fees, makes the
    process that much more difficult. While no one proposed that medical
    support and childcare should not be a component of every support
    order whenever appropriate, there was little consensus on the
    remaining "add-ons." Participants were in general agreement that to
    the extent permissible under state law, each state should revisit
    its policy on pursuing "non-child-support" obligations. The
    completed arrears analysis could be useful in determining the extent
    to which a particular "add-on" is even an issue in a particular
    state.

The most controversial "add-on" is interest. Several participants
believe that charging interest or any type of penalty may, in the end,
be counter-productive to the primary mission of collecting child
support, and benefit neither the CP nor the child. Maine and others
indicated that their systems did not even have the capability to account
for interest (creating additional issues in interstate actions, whenever
Maine and similarly situated states have to interact with states where
interest is routinely charged). On the other hand, if interest is not
charged, will a NCP pay all of his or her other high-interest debt
first? Also, the ability to charge interest may offer the IV-D agency
additional leverage over the NCP in subsequent repayment negotiations,
because the NCP may fear having to pay greater amounts due to
accumulated interest. Nonetheless, if interest actually tends to accrue
at a higher rate than the rate it is paid off, as one participant
suggested, a state may want to examine to what extent the interest
charge could be responsible for the future need to engage in repayment
negotiations. Finally, if a state charges interest, it should have the
system capability to suspend the accrual of interest on collections that
are being held in escrow or temporarily held as a tax refund intercept
in joint returns.

A state may want to consider the following potential strategies relative
to "add-ons:"

1.  **Caps.** Cap the amount of "add-on" collections (just as
    retroactive support may be capped) if the NCP income falls below an
    established threshold; and/or

2.  **Flexibility.** Provide flexibility when it comes to "add-on"
    collections. For example, in Rhode Island, birthing and interest
    costs are negotiable, and the Court has discretion to stay interest
    charges.

In conclusion, it is important that any order establishment policy
decision maintains the integrity of the order -- that is to say that
both the CP and NCP have reason to respect the process, and that both
have the expectation that the order will be enforced -- timely and
consistently. At the same time, the order amount that is established
must be connected to a feasibility that it can be collected --
especially in relation to cases involving low-income NCPs. There is a
consensus that we are in an "arrears mess" -- improving the
establishment process may be one of the most effective ways to
eventually leave the mess behind.

**[Next Steps:]{.underline}**

Meeting participants recommend the following --

-   States, in partnership with OCSE, should consider compiling and
    sharing 4 year guideline reviews

-   Consider initiating a discussion/review of the order establishment
    process at the national level

-   Recommendation that Hub states implement as many enhancements in the
    establishment process as possible and share outcomes

#### EARLY INTERVENTION

Early Intervention relates to up-front strategies designed to avoid or
minimize the accrual of arrears. The concept is closely tied to
prevention and education strategies that (1) emphasize NCP
responsibility and (2) inform NCPs of their right to request review and
adjustment, modification and termination services. Early Intervention
also applies to developing strategies where the IV-D agency takes the
initial step to avoid arrears accrual. The concept has two primary
guiding principles: Immediately enforce the order whenever necessary and
immediately adjust the order amount whenever appropriate.

**[Definitions:]{.underline}**

The following terms are relevant to Early Intervention. In addition,
factors cited in Section I, subsection "Definitions," relative to NCP
inability to pay may also apply here.

-   **Review and Adjustment** -- the periodic review of the obligation,
    and, if appropriate, its subsequent adjustment, conducted at the
    request of either party (or another state) or conducted
    automatically at regular intervals. Federal law no longer requires
    automatic reviews, and states only need to review and adjust in
    response to a request.

-   **Modification** -- the ability to adjust the obligation at any time
    based on a change in substantial circumstances.

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-   **Age of emancipation** -- the age to which the NCP is normally
    required to support his child (in some states the age of
    emancipation is 18, in others it is 21; in Massachusetts support can
    run to age 23; and in New Jersey, the age of emancipation is not
    even codified). In several states, the legal age of emancipation
    does not terminate the legal obligation to pay if the child is
    attending a full-time educational institution; if the child is
    incapacitated, the obligation to support may continue for the
    lifetime of the child.

-   **Termination** -- the date on which the legal obligation to support
    terminates. This can be based on the child's emancipation, death of
    the child or NCP, NCP incapacity, NCP being granted child custody or
    changes in the NCP/CP relationship.

**[Issues:]{.underline}**

A state may need to address several issues during the strategy
development phase, including:

-   **Staff training and caseloads**. Staff training, whether related to
    outreach, conflict resolution or customer service is an important
    element in all aspects of arrears management. It is especially
    significant in early intervention strategies due to the high degree
    of staff involvement. Before training begins, a state should review
    current case management techniques to determine if they have kept
    pace with the latest enforcement methods made available under state
    and Federal law. Second, training should not only focus on
    enforcement skills, but also on the very different set of skills
    required for negotiations and interactions with high-risk NCPs. A
    state may also explore the desirability of involving existing
    customer service staff in NCP early-intervention outreach
    activities. Finally, a state should determine to what extent a
    worker's caseload affects the ability to provide appropriate early
    intervention services.

-   **Interstate Cases**. Several meeting participants felt that delays
    in the enforcement of interstate cases were a significant
    contributing factor in arrears accumulation. Two-state interstate
    enforcement actions were blamed for the longest delays. States need
    to determine to what extent one-state interstate actions can be
    better utilized. Finally, "arrears prevention" may need to be
    established as a distinct topic in on-going interstate discussions.

-   **Automation**. The automated system can have a positive and
    negative impact upon Early Intervention capabilities. For example,
    in some states, workers complain that overwhelming worklists
    undermine otherwise good intentions to provide early intervention
    services in a timely and meaningful fashion. On the other hand,
    automated systems could be enhanced so as to segregate the cases in
    need of early intervention from the remaining caseload, allowing
    staff to focus on problem NCPs. Automated systems may also assist
    states in providing more timely services to the interstate caseload.

-   **Wage Withholdings**. Delays between order establishment or
    modification and the initiation of wage retentions, and delays in
    initiating new wage retention whenever a NCP switches jobs also
    contribute to arrears accumulation. States should explore strategies
    to reduce delays whenever possible.

-   **Order Terminations**. States may need to review the process for
    terminating orders, and further determine whether or not the process
    is being conducted in a timely manner. This includes an examination
    of who can or must initiate the termination -- for example, state
    law may require the NCP to affirmatively request a termination.
    Finally, in the event that a termination was not initiated and/or
    completed in a timely manner, a state needs to decide whether or not
    to adopt an adjustment policy.

-   **NCP Access to the IV-D Process**. The NCP's access to modification
    and termination services depends not only upon notice, but also upon
    the ease or complexity of the process. States should try to ensure
    that the access to any service that may mitigate arrears accrual is
    understandable and easily accomplished by all NPCs.

**[Strategies:]{.underline}**

Meeting participants recommend the following strategies (already
implemented or otherwise suggested) that may enhance a state's ability
to avoid arrears accrual.

-   **Review and Adjustment/Modifications**. Immediate intervention
    whenever a NCP's capacity to pay changes may be a key factor in
    avoiding inappropriate arrears accrual. Strategies, as suggested
    below, may be pro-active, or reactive to a NCP's or other party's
    request:

1.  **Conduct more frequent reviews**. While a state is only required to
    provide review and adjustment services in three year cycles (and
    only if requested), allowing for more frequent reviews should help
    to ensure that the initial obligation continues to be fair to both
    parties on a future and uninterrupted basis. For example, New Jersey
    conducts reviews every two years.

2.  **Conduct automatic reviews**. Federal law no longer requires an
    automatic and periodic review and adjustment of either TANF or
    Non-TANF cases. No studies have been done to determine if reviews
    occur less frequently now that they must be requested -- however, it
    can be presumed that the more frequently reviews are conducted, the
    less likely that inappropriate arrears will accrue. Partly for that
    reason, Connecticut continues to conduct automatic partial reviews
    at regular intervals. New Jersey likewise automatically reviews
    cases on a periodic basis, and in selected Non-TANF cases, issues
    notices to the parties to determine interest in conducting a
    complete review/adjustment process. New Jersey also has a COLA
    adjustment (does not require guideline computations unless
    contested) that significantly simplified the process and reduced the
    appeal rate. In addition, New Jersey reports that this pro-active
    customer contact also supports general case clean-up efforts (for
    example, in response to a notice, a CP informs the agency that the
    child is emancipated).

3.  **Provide timely actual notice to NCPs**. For example, West Virginia
    includes a notice about modification rights in the notice that
    informs the NCP about the unemployment benefits' intercept. Other
    states provide a notice whenever the IV-D system becomes aware that
    the NCP is unemployed. In Puerto Rico, the IV-D agency conducts
    outreach at private or government entities about to experience major
    layoffs, providing NCPs with detailed information about modification
    rights (this may require establishing an interface with unions or
    DoL). The Virgin Islands intends to provide notice of modification
    rights to all newly incarcerated NCPs. (The law on incarcerated NCPs
    varies from state to state. In Connecticut, case law discourages
    downward modifications when a NCP is incarcerated. In Arizona, the
    order is suspended upon incarceration. Meeting participants
    recommend a middle ground to the extent allowable under existing
    state law: consider a downward modification based on incarceration,
    but only after a determination that NCP has no assets out of which
    to pay support. This is in line with Maryland's most recent case
    law, holding that incarceration will not imply an inability to pay,
    but it also is not a presumptive indication of an attempt to evade
    the obligation.)

4.  **Simplify the process**. Use settlement conferences and hearing
    officers to process modifications -- a solution also possible in a
    judicial process if it provides for eventual approval by the court
    (sign-off by a Judge). In fact, Judges often believe that contempt
    actions are really modification actions in disguise, and they may
    view this as an effective way to keep the number of contempt actions
    to manageable levels.

> Develop user-friendly pro-se packages. In one state, where all
> modification actions have to be filed in the court, a pro-se package
> is readily available but difficult to complete. If the forms cannot be
> readily simplified, a state can provide NCPs with information about
> fatherhood groups and other CBOs that are willing to assist in the
> completion of forms. In Maryland, the IV-D agency funds a city
> position assigned to assist NCPs in completing pro-se forms. Pro-se
> packages should be readily available in every jurisdiction, and they
> could be distributed via the Internet, as is being done in New Jersey
> and planned in Massachusetts. New Hampshire held evening workshops on
> the pro-se process -- even though turnout was not as great as
> expected.

Some meeting participants suggested establishment of "Pro-se Courts,"
where clerks would assist with the completion and filing of petitions,
where filing fees would be minimal or eliminated, and where the court
would assist with service of process. Mock calculations were also
encouraged as a "best practice" -- sort of a practice run to determine
whether or not proceeding with a full-blown modification was justified,
and a way to avoid using resources on requests that would ultimately be
denied.

5.  **Publicize information about review/adjustment and modification
    rights**. As part of the state's general prevention activities
    (discussed in Section I), Delaware operates an elaborate
    voice-response system to provide information about the modification
    process. In addition, it would be in any state's best interest if
    appropriate CBO's were well informed about that state's law and
    procedure with respect to this issue.

-   **Prompt Termination of Orders.** The following strategies may be of
    benefit in a state effort to timely terminate orders whenever
    factually appropriate.

1.  **Termination language.** Add language that the obligation will
    terminate upon a certain event, to the extent possible. However, in
    most jurisdictions, only marriage will automatically terminate an
    obligation, and most anything else will need some involvement by a
    tribunal.

2.  **Pro-active contacts.** In jurisdictions where reaching the age of
    emancipation does not necessarily result in a termination of the
    obligation, take pro-active steps to resolve the issue. For example,
    whenever a child reaches age 18, Connecticut is considering having
    the system automatically generate a letter to the CP requesting
    information as to the child's school status. If the CP fails to
    respond within a specified period of time, the order is terminated.

3.  **Caseload matches.** Match the caseload against vital
    statistics/probate records to identify deceased NCPs. (Also see
    discussion on vital statistics matches at Section I, "Strategies,"
    "Arrears Analysis.") However, if a NCP is deceased, IV-D may need to
    determine whether or not the estate can satisfy outstanding arrears,
    if any, before a case is actually closed.

4.  **Adjustment policy.** Establish a policy that allows you to adjust
    arrears for any amounts accumulated between the date when an
    obligation should have terminated and the date when it was
    terminated.

-   **Wage Withholdings and Other Enforcement Techniques.** Enforcement
    tools should be initiated automatically and immediately whenever
    appropriate. (Participants acknowledge the fact that state
    due-process laws may undermine that goal and serve to delay some
    enforcement efforts.) The following strategies, some of which extend
    the boundary of traditional enforcement actions, may be of benefit
    in the effort to avoid arrears accrual -- especially when automated
    enforcement tools are not available or applicable.

1.  **Up-front notice.** Provide up-front information to NCPs that they
    have an obligation to make support payments directly to the IV-D
    agency if the obligation is not being otherwise deducted from their
    paycheck. This is especially important in jurisdictions that
    routinely experience delays between order establishment and wage
    retention, and those that have large NCP populations that engage in
    seasonal employment, frequently switching jobs. The notice could be
    incorporated into the order or served along with the order as part
    of a separate document.

2.  **Interim notice.** Whenever the agency receives notice from an
    employer that a NCP is no longer employed, immediately issue a
    notice to the NCP that he or she may be entitled to modification
    services, obligated to continue paying support and required to
    inform the agency when re-employed.

3.  **30-Day contact.** Consider New Hampshire's successful policy of
    contacting all NCPs whenever the account is 30 days in arrears. The
    contact can be directly by staff, or by way of a notice that carries
    an appropriate rights-and-responsibilities message. There is
    experiential evidence of a link between the length of time since the
    last payment and the success in obtaining a future payment --
    possibly the reason why the implementation of New Hampshire's 30-day
    policy has been a positive experience.

4.  **90-Day contact.** Automatically sort cases on the basis of a
    90-day non-payment history, and order the respective NCP to appear
    before an Administrative Hearing Officer in order to identify and
    resolve the non-payment issues.

-   **Interstate Cases.** The concept of immediate enforcement of orders
    to avoid arrears accrual can be more difficult to implement with
    respect to the interstate caseload. Most often the "difficulty"
    relates to unreasonable delays in appropriate action by the
    Responding state, and/or doubts in the Responding state about the
    validity of the debt. Generally speaking, meeting participants
    recommend the use of one-state interstate actions. This maintains
    Initiating state control over the process and its timeliness.
    Several one-state interstate actions are very effective, but also
    new and sometimes misunderstood. For instance, one-state interstate
    lien actions are very useful in seizing all available NCP assets to
    pay off arrears -- but not every financial institution will
    necessarily honor a lien from another state. In the event that a
    state learns about a financial institution that has or will not
    accept liens from other states, or if a state is concerned about the
    adequacy of its state law in regard to establishing a mandate that
    such liens must be recognized, requests for technical assistance
    to (1) educate the financial institution, and/or to (2) analyze the
    state law, could be directed to the appropriate Regional Office.

**[Next Steps:]{.underline}**

Meeting participants recommend the following --

-   Consider availability of SIP grants for projects to make the Review
    and Adjustment process as fair and user-friendly as possible

-   Increase utilization of one-state interstate actions that relate to
    arrears reduction

-   Request Federal clarification on IV-D minimum responsibility to
    represent a requesting party in a review and modification action

-   Recommendation that Hub states implement as many new Early
    Intervention techniques as possible and share outcomes

**[IV. ACCRUED ARREARS MANAGEMENT]{.underline}**

The underlying purpose of the strategies outlined in Sections I, II and
III is to avoid the accrual of child support arrears. As these
strategies are implemented and hopefully prove to be effective, the
future need to manage accrued arrears will diminish. However, as
previously cited, the national total of accrued arrears is estimated at
\$80 billion dollars -- and the strategies outlined heretofore will do
little if anything to reduce this debt. Accordingly, states may need to
make several decisions relative to accrued arrears: (1) What portion of
the total arrears "bucket" is supportable and verifiable; (2) What
portion of the total is likely to be "collectable;" (3) What are the
best strategies to collect the "collectable;" and (4) What should be
done with the "uncollectable" debt. Virtually all aspects of these
decisions touch upon two major case-specific factors: (1) What is the
underlying reason for the arrearage in a particular case, and (2) will a
particular NCP ever be able to satisfy the arrearage.

**[Definitions:]{.underline}**

The following terms are relevant to Accrued Arrears Management. The
majority of the terms cited in the previous Sections are equally
relevant to this Section.

-   **Unreimbursed Public Assistance (URA) and TANF Arrears.** URA is
    the difference between the cumulative amount of assistance paid to a
    family and the assigned child support collected and credited against
    that amount. IV-D's responsibility is limited to collecting what is
    owed pursuant to a child support order. However, in some states a
    non-IV-D agency may enforce the collection of URA amounts that
    exceed the child support order. A conflict may arise if the arrears
    management policy does not extend to the collection of the URA
    excess (i.e., NCP arrears forgiven but CP's URA is not).

-   **OCSE Incentive Formula.** Relative to arrears, a state's Federal
    incentive payment is based on the number of cases in which a
    collection is made towards arrears, rather than the dollar amount of
    collections towards arrears. Accordingly, a collection of \$1 dollar
    towards arrears qualifies a case under the criteria.

-   **Arrears compromise.** Action to forgive all or a portion of the
    TANF or Non-TANF arrearage, or any other outstanding obligation.
    Must have the consent of all parties that have or may have an
    interest in the arrearage. (Note: the Federal interest in arrears
    does not vest until a payment on arrears is collected and available
    for distribution; accordingly, Federal consent is not necessary in
    the compromise phase -- see PIQ-99-03.)

-   **Statute of limitations.** Establishes a time frame after which an
    arrears amount may no longer be enforced. For example, Maryland has
    a 3-year statute if a debt is not reduced to judgement, and a
    12-year statute if the debt is reduced to judgement. In most
    jurisdictions, the judgement can be renewed prior to the expiration
    of the statutory period.

In the event that a state decides to adopt a policy authorizing the
compromise or settlement of arrears, it needs to determine who has a
financial and legal interest in the various portions of the arrears
bucket. Potential interests may be defined as follows:

-   Child Support Arrears owed to the CP and only requiring CP consent
    (never assigned and unassigned arrears)

-   Child Support Arrears owed to the state and only requiring state
    consent (permanently assigned arrears)

-   Child Support Arrears potentially owed to both the state and CP and
    requiring both state and CP consent (conditionally assigned arrears
    -- i.e., state retains interest if collection is made via IRS
    offset)

-   Child Support Arrears owed to the state, but only temporarily,
    therefore potentially requiring both state and CP consent
    (temporarily assigned arrears)

> (Note: As to temporarily assigned arrears, whether or not CP consent
> may be required pursuant to Federal and/or state policy is still open
> to interpretation. For now, the best course of action may be to obtain
> the consent of both the state and CP.)

A similar determination needs to be made for any component of the
arrears bucket that is based on something other than child support \--
for example, interest, fees, spousal support, medical support and child
care. A good practice may be to develop a state-specific matrix (see
sample below) that outlines the various arrears components, with
cross-references to the corresponding parties of interest.

###### 

###### Sample Consent Matrix 

+-------+----------+-----------+-----------+----------+-------+-----+
| *     | **Never  | **Perm    | **Condit  | **Tempo  | *     | **  |
| *Arre | &**      | anently** | ionally** | rarily** | *Spou | Fee |
| ars** |          |           |           |          | sal** | s** |
|       | **Unas   | **A       | **A       | **As     |       |     |
| **T   | signed** | ssigned** | ssigned** | signed** | *     |     |
| ype** |          |           |           |          | *Supp |     |
| **⇒** |          |           |           |          | ort** |     |
+-------+----------+-----------+-----------+----------+-------+-----+
| **    | No       | Yes       | Yes       | Yes      | No    | Yes |
| State |          |           |           |          |       |     |
| Cons  |          |           |           |          |       |     |
| ent** |          |           |           |          |       |     |
+-------+----------+-----------+-----------+----------+-------+-----+
| *     | Yes      | No        | Yes       | Yes      | Yes   | No  |
| *CP** |          |           |           |          |       |     |
|       |          |           |           |          |       |     |
| *     |          |           |           |          |       |     |
| *Cons |          |           |           |          |       |     |
| ent** |          |           |           |          |       |     |
+-------+----------+-----------+-----------+----------+-------+-----+

The matrix can be expanded to include information about whether or not a
particular type of arrearage should ever be compromised, and if so,
under what circumstances. (Note: Permanently assigned arrears, if in
excess of the URA balance, may revert to Unassigned.)

**[Issues:]{.underline}**

A state may need to address the following issues prior to formulating an
arrears management policy:

-   **Conflicts with public policy.** The extent to which an accrued
    arrears management policy allows for compromise or suspension of
    enforcement activities will determine the extent of potential
    conflicts with existing public policy, law and/or various interest
    groups, including CPs. Generally speaking, the following conflicts
    may arise:

1.  Only pursuing "collectable" arrears vs. the desire to fully recoup
    welfare payments

2.  Negotiated suspension of enforcement vs. legal requirements to
    enforce

3.  Desire to increase Federal incentive payments vs. reluctance to
    compromise debt

4.  Giving the delinquent NCP a break vs. sending a positive message to
    paying NCPs

5.  The good intention to manage arrears vs. the perception that one is
    rewarding criminal behavior

> Meeting participants agree that whatever accrued arrears management
> policy is adopted, it must not undermine the willingness of paying
> NCPs to continue to honor their obligations. This is especially true
> for those NCPs who have paid all support due even during times of
> personal financial hardship. (States, such as Maryland, that have
> already initiated limited arrears compromise pilots indicate that it
> is still to early to tell if there will be a backlash from NCPs who
> regularly pay support.)

-   **Suspending Enforcement.** The ability of the state to offer a
    suspension of certain enforcement techniques can be an effective
    tool in negotiating a payment plan with the NCP. Meeting
    participants recognize, however, that certain enforcement methods
    can not be suspended since Federal statute and/or state laws mandate
    their use. The requirements to initiate wage withholding and to
    submit cases for Federal and state tax refund offsets were
    specifically cited as Federal mandates (assuming that arrears exceed
    statutory threshold amounts). States may need to request OCSE
    confirmation that this list is complete (or do Federal mandates
    extend to credit bureau reporting, etc.); and they need to ensure
    that state law does not mandate an action that Federal law may not.

-   **Compromising Arrears.** The IV-D Agency should satisfactorily
    resolve several items before considering any compromise action:

1.  Does IV-D have a comfortable degree of certainty that the arrears
    are in the appropriate "bucket" so that all parties who need to
    consent to the compromise are properly identified;

2.  Does the CP have the authority to compromise arrears under state
    law. For example, in West Virginia a CP is not allowed to compromise
    arrears -- the CP can only indicate that arrears are not owed, and
    if approved by the Court, the arrears can be adjusted accordingly;
    and

3.  If the arrears are temporarily assigned, has IV-D clarified whether
    or not Federal or state policy requires CP consent (if yes, refer
    back to bullet "2").

> In addition, a state may want to know whether or not the partial or
> complete compromise of debt has a positive effect upon the NCP's
> future willingness or ability to pay current support. The eventual
> resolution of this ongoing debate may very well influence a state's
> final decision on whether or not to compromise.

-   **Selling Off Arrears.** Virginia indicated that it was considering
    the possibility of selling TANF arrearage accounts to a collection
    agency for a to-be-negotiated fraction of the dollar value. The
    concept found appeal among several meeting participants, including
    one who carried more than \$2 billion dollars worth of outstanding
    debt. However, since the Federal Government retains an interest in
    arrears that vests at the time of collection, it is presently
    unclear whether or not the "sale" of arrears is permissible under
    Federal law, and no state action should be taken until OCSE issues a
    policy clarification.

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-   **Domestic Violence.** Any aspect of arrears management that may be
    perceived as benefiting NCPs and that involves or requires CP
    consent can aggravate the potential for domestic violence. For
    example, the District of Columbia related its experience that many
    CP requests for IV-D case closure were the result of threats of
    violence. States should take proactive steps to ensure that a CP's
    consent to compromise arrears (or any other action that may require
    consent) is not the result of similar threats. Some participants
    suggested that any proposed policy that increases the potential for
    domestic violence should be rejected.

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-   **Interest and the arrears "bucket."** For states that charge
    interest on overdue support payments, the question of whether or not
    that interest is included in the arrears amount reported to OCSE may
    still need to be resolved. While a Federal interpretation was
    apparently issued to Alabama, the specific facts and the extent of
    the general applicability were unknown.

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-   **Able to pay vs. not able to pay.** Most meeting participants agree
    that before sustainable accrued arrears management decisions can be
    made, the state needs to be able to divide NCPs into those able to
    pay and those not able to pay off arrears. The discussions, issues
    and strategies outlined in previous Sections relative to making this
    classification should be applicable here; i.e., the type of NCP
    classified as not having the likely ability to satisfy retroactive
    arrears may have the same essential characteristics of the NCP not
    able to pay off subsequently accrued arrears.

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-   **Accrued Arrears Management Philosophy.** A state should define
    what it intends to accomplish with accrued arrears management. If
    the priorities are not clear, chances are the state will send a
    wrong message. Is the purpose to close dead cases, to collect all
    arrears, to focus on "collectable" arrears, or to simply appear more
    efficient by reducing arrears using all available means? A state
    needs to be aware that the eventual definition of the purpose will
    likely have a significant impact on the future integrity of that
    state's orders, on relations with CPs and on prospective NCP
    payments. A participant therefore suggests that any policy that
    reduces a legitimate debt must not be perceived as a windfall to the
    NCP, but instead must be seen as a cost-effective management tool.
    Finally, it is suggested that the eventual policy reflects the
    current state economy (a significant determinative factor relative
    to NCP ability to pay), and that the policy can be easily adjusted
    in order to accommodate future economic changes.

**[Strategies:]{.underline}**

Meeting participants recommend the following strategies (already
implemented or otherwise suggested) that may enhance a state's ability
to successfully manage accrued arrears.

-   **Caseload Clean-up.** To the extent that the state has not already
    conducted clean-up activities recommended in Section I and III, the
    following should be considered:

1.  **Matches with Vital Registry.** Conduct matches with Vital
    Statistics and Probate Records to identify all deceased NCPs in the
    caseload. Request regular Regional Office updates on proposed plans
    to match FCR with SSA death records and utilize this process once
    implemented. Prior to case closure, ensure that no action, including
    a levy against the estate, can be taken to satisfy arrears.

2.  **Emancipated children.** Identify all cases in which children are
    emancipated and the current order remains in effect, and request
    regular CP updates on child's school status to determine continued
    eligibility to received current support.

3.  **Federal case closure criteria, or "closing dead cases."** Review
    cases to determine whether or not they qualify for IV-D case closure
    pursuant to 45 CFR 303.11. For example, case closure is allowable
    when the arrearage is less than \$500 or unenforcable under state
    law, or when the NCP's location is unknown and the state's diligent
    efforts to locate have been unsuccessful. Even in a state where the
    modification of an incarcerated NCP's order is not permissible, if
    the NCP is incarcerated without chance for parole and the NCP is not
    able to pay support for the duration of the child's minority, it may
    be possible to close the IV-D case.

4.  **CSENet.** Once available, use of CSENet to update, verify and
    correct arrears balances in interstate cases.

5.  **Unreimbursed Public Assistance (URA).** Federal regulations only
    require that the history of past assistance paid to a family is
    retroactive for a minimum period of three years. Should a state
    determine that large URA balances are counterproductive to arrears
    management, and if permissible under state law, it may decide to
    calculate URA only for the minimum period of three years retroactive
    from the date of a given distribution. (See OCSE-AT-97-17).

6.  **Interest.** In the event that a state receives Federal
    instructions that interest should not be included in the amount of
    reported arrears, appropriate adjustments, if any, should be made to
    the arrears "buckets."

-   **Enforcement.** Every collection towards arrears serves to minimize
    the problem and helps to avoid the potential use of the more
    controversial management policies. In addition, as Massachusetts
    points out, even a dollar of collection helps in the Federal
    incentive calculation, and the state routinely attempts to collect
    at least a minimum amount in every case. If the enforcement effort
    goes beyond automated functions, and requires more intense staff
    involvement, it should be focused on the group of NCPs a state has
    determined to be most likely able to pay (as indicated above, this
    may involve the use of credit histories, CBO assistance and sorting
    lessons learned from private industry, and amounts to a separation
    of the collectable debt from the uncollectable debt). Most meeting
    participants agree that a state should aggressively attempt to use
    all available enforcement techniques prior to any consideration of
    debt compromise. Some suggestions are as follows:

1.  Maximize use of FIDM. New Jersey has found that the use of FIDM
    resulted in the satisfaction of a significant number of outstanding
    TANF arrears accounts.

2.  Expand use of one-state interstate actions.

3.  Emphasize the importance of good credit (the ability to refinance at
    current low rates) and publicize the thresholds for credit bureau
    reporting to encourage NCP payments.

-   **Suspending enforcement and other State concessions.** Many states
    have been successfully offering the suspension of certain
    enforcement tools in exchange for regular NCP payments towards
    current support and/or arrears. While some enforcement tools must be
    utilized (See Definitions subsection above), generally speaking, a
    state has broad discretion as to when and how to enforce an
    obligation. In some states (and if permissible under state policy),
    in exchange for regular NCP payments, IV-D may modify or reduce a
    future obligation. All strategies involve a performance-based
    approach -- i.e., the NCP makes regular payments in exchange for
    some state concession. Most involve some pre-determination of a
    limited capacity to pay. Some states apply the strategy to all NCPs,
    other states limit the strategy to arrears-only cases. Suggested
    strategies are as follows:

1.  **Amnesty Programs**. Suspend outstanding warrants (on a one-time
    basis) in exchange for a lump-sum payment towards arrears or in
    exchange for an agreement to pay off arrears pursuant to a mutually
    agreed to schedule. Virginia combined an amnesty program with an
    innovative initial enforcement action -- i.e., arrest warrants were
    issued against 57,000 targeted NCPs, who were then given the
    opportunity to enter into repayment agreements. If the opportunity
    was seized, the warrant was quashed. To date, 24,000 agreements have
    been reached.

2.  **Licenses**. Agree not to suspend licenses (especially effective as
    to driver's licenses) for so long as the NCP makes payments pursuant
    to a schedule.

3.  **Interest.** Suspend future interest charges on arrears for as long
    as the NCP makes payments pursuant to a schedule.

A related strategy involves establishment of a policy that applies NCP
payments to the debt (principal) first, in order to reduce the rate that
interest would otherwise accumulate.

4.  **Court-based enforcement**. Suspend contempt actions as long as NCP
    makes payments pursuant to a schedule, or as long as NCP cooperates
    with work searches and other re-employment activities. For example,
    in Maryland, court-based enforcement actions are suspended if the
    NCP signs and complies with a Personal Responsibility contract
    and/or attends substance abuse counseling and treatment.

-   **Third Party payments toward arrears.** In a pilot project in
    Allegheny County, Pennsylvania, the Goodwill Foundation pays a
    percentage of a NCP's arrears (up to a maximum grant of \$5,000) in
    exchange for the NCP's participation in a program designed to
    facilitate gainful employment and encourage the future regular
    payment of child support. Payments are made each time the NCP
    completes a significant program benchmark toward employment and
    compliance with the support obligation. The program lasts a maximum
    of six months, and the child support order can be modified during
    the enrollment period. Program activities range from parenting and
    Life Skills training to driver's education (and acquisition of a
    vehicle as needed for employment purposes through Goodwill's auto
    auction) and post-employment career development. As of 12-31-00, 2
    NCPs completed the program, 14 are actively participating and 4 were
    terminated for non-compliance. 15 NCPs are currently employed with a
    mean wage per hour of \$7.74.

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-   **Compromise and Settlement.** A number of meeting participants
    expressed reluctance about compromising all or even a portion of an
    NCP's debt. For example, West Virginia took the position that it
    would never compromise (even though it may consider writing off a
    debt after 10 years of account inactivity). The general preference
    was for enforcement, suspension of enforcement in lieu of a payment
    plan, or holding arrears in abeyance -- i.e., "it is better to defer
    the collection than to forgive the debt permanently." Maine stated
    that it would not agree to compromise any large amount of arrearage,
    believing that the future usually holds out collection
    opportunities. Other reasons for the disinclination to compromise
    varied from "why compromise given all the enforcement techniques
    that states now have" to "am worried that compromise will lead to a
    backlash from NCPs that do pay or try to pay."

Compromising arrears may nonetheless be an appropriate accrued arrears
management technique for some states and under some circumstances. For
example, one state conducted a match between the SCR and Mental Health
records and found that more than 5,000 NCPs experienced mental health
problems of varying degrees. Arguably, a percentage of those may have a
permanent inability to pay either current or retroactive support, or
they may have lacked the capacity to request modifications in the past.
Other states may have "questionable" TANF arrears that should not be
enforced, but could be used as compromise leverage to negotiate a
payment plan for the supportable remainder of the debt. New Hampshire
believes that the system of computing arrears is at times unfair,
especially when the NCP had no pre-summons knowledge about his or her
duty to support. The following examples reflect some circumstances under
which compromise may be appropriate in a particular jurisdiction:

1.  **Arrears-Only cases**. Connecticut has a compromise policy that
    currently involves court approval (legislation is pending to grant
    IV-D independent authority to compromise). The policy is limited to
    TANF Arrears-only cases, is based on the state's best interests, and
    results in the stipulation of a reduced amount in conjunction with a
    payment plan.

2.  **Formula-based policy**. Virginia has a debt-compromise statute
    that uses a formula to establish a reduced debt amount based on the
    length of time and the amount of the periodic payment required to
    pay off the existing debt. Vermont has a similar formula approach
    that requires a percentage lump-sum payment of the total debt, the
    percentage being dependent upon the estimated number of years that
    would otherwise be required to pay off the debt (the higher the
    number, the lower the percentage). The entire debt is reinstated if
    the percentage payment is not made.

3.  **Low-income NCPs**. Maryland operates a pilot compromise program
    that is limited to TANF debt and low-income NCPs who are presently
    receiving services from a CBO (substance abuse, unemployed, low
    skill/educational levels, etc). The CBO refers the NCP, and he/she
    must agree to cooperate with the CBO in the respective service plan
    that is designed to lead to eventual employment and payment of
    current support. IV-D screens the cases, and if accepted,
    enforcement actions are suspended. If the NCP successfully completes
    the initial 6 months of training, the debt is reduced by 25%.
    Thereafter, for each completed 6 month period of regular current
    support payments, the NCP qualifies for an additional 25% reduction,
    up to and until the entire TANF debt is forgiven.

> Domestic violence, as indicated earlier, may be an issue whenever the
> CP's involvement is required in the arrears management process. This
> most often applies when the state takes suspension of enforcement or
> compromise actions. Meeting participants recommend that caseworkers
> receive appropriate DV training, and that they are aware that this can
> be an issue in any case, even in those that do not have a DV
> indicator. If the case history does include DV, one state recommends
> that any suspension or compromise action is reviewed by the court. In
> conclusion, states should ensure that the CP's involvement in any
> action can be accomplished safely, and that the CP's decisions are
> voluntary.

**[Next steps:]{.underline}**

Meeting participants recommend the following --

1.  Request Federal clarification on whether or not credit bureau
    reporting is a mandated enforcement action

2.  Request Federal clarification on whether or not TANF arrears can be
    sold to collection agencies

3.  Request Federal clarification on whether or not the interest on debt
    charged in a particular state has to be included in the arrears
    amount reported on OCSE Forms

4.  Request Federal clarification on whether or not the CP has to
    consent to the compromise of temporarily assigned arrears

5.  Request Federal clarification on mandates to collect arrears after
    all children in the order have been emancipated and no longer
    entitled to current support

6.  Share end-result of Massachusetts analysis of appropriate arrears
    management policies with respect to criteria, internal process, etc,
    when completed and available

7.  Explore desirability and need for state-developed national standards
    so that NCPs receive equal and similar treatment across state lines

8.  Explore possibility of development of an "inactive/suspense" case
    type which is only subject to "automated" enforcement, based on
    pre-determination that state has taken all reasonable steps to
    enforce and collect, but without success

9.  Recommendation that Hub states implement as many new Accrued Arrears
    Management techniques as possible and share outcomes

# ADDENDUM "A" -- HIGHLIGHTS OF ISSUES

+-----------------+-----------------+-----------------+-----------------+
| # Prevention    | **Order         | # Ear           | **Accrued       |
|                 | Establishment** | ly Intervention | Arrears         |
|                 |                 |                 | Management**    |
+-----------------+-----------------+-----------------+-----------------+
| Arrears Bucket  | Re-examine      | Staff training  | Who consents to |
| Analysis        | Esta- blishment | and caseloads   | compromise      |
|                 | Process         |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| Pre-IV-D        | Court or        | Interstate      | Conflicts with  |
| outreach        | Administrative  | actions         | public policy   |
+-----------------+-----------------+-----------------+-----------------+
| Involvement of  | Re-examine      | Reduce delays   | Who is able and |
| CBOs            | retroactive     | in enforcement  | who is not able |
|                 | concept         |                 | to pay off      |
+-----------------+-----------------+-----------------+-----------------+
| Cos             | Review need for | Immediate       | Define state    |
| t-effectiveness | "add-on"        | termina- tion   | reason for      |
|                 | amounts         | if appropriate  | policy          |
+-----------------+-----------------+-----------------+-----------------+
| Focused         | Accommodate     | NCP access to   | Effect on state |
| NCP/poten-      | low-income NCPs | modifications   | incentive       |
|                 |                 |                 | payments        |
| tial NCP        |                 |                 |                 |
| outreach        |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| NCP-friendly    | Review Default  | Review and      | Enforce or      |
| outreach        | process         | adjustments     | suspend         |
|                 |                 |                 | enforcement     |
+-----------------+-----------------+-----------------+-----------------+

# 

# 

# 

# ADDENDUM "B" -- HIGHLIGHTS OF STRATEGIES

+-----------------+-----------------+-----------------+-----------------+
| # Prevention    | **Order         | # Ear           | **Accrued       |
|                 | Establishment** | ly Intervention | Arrears         |
|                 |                 |                 | Management**    |
+-----------------+-----------------+-----------------+-----------------+
| Dissect         | Develop better  | Match with      | Caseload clean  |
| Caseload        | guidelines      | Vital Registry  | up -- apply     |
|                 |                 | to terminate    | case closure    |
| Develop Matrix  |                 | orders          | criteria        |
+-----------------+-----------------+-----------------+-----------------+
| Use Internet -- | Cap retroactive | Pro-active      | Maximize use of |
| Websites        | and add-on      | contact at      | FIDM            |
|                 | amounts         | child           |                 |
|                 |                 | emancipation    |                 |
+-----------------+-----------------+-----------------+-----------------+
| Cross-train     | Temporary       | Frequent        | Suspend         |
| with CBOs       | Default orders  | automatic       | enforcement in  |
|                 | -- keep record  | reviews of      | exchange for    |
|                 | open            | order or        | payment plan    |
|                 |                 | pro-active      |                 |
|                 |                 | contact         |                 |
+-----------------+-----------------+-----------------+-----------------+
| Segregate       | Regular review  | Pro-active NCP  | Suspend         |
| Unable from     | of guidelines   | contact at time | interest in     |
| Unwilling NCP   |                 | of unemployment | exchange for    |
|                 |                 |                 | payment plan    |
+-----------------+-----------------+-----------------+-----------------+
| Include CP      | IV-D as Gate to | Simplify        | Compromise      |
| outreach        | WtW and CBOs    | modification    | uncollectable   |
|                 |                 | process         | arrears         |
+-----------------+-----------------+-----------------+-----------------+
| Use innovative  | Self-support    | 30/90-day       | Sell policy as  |
| media           | reserves        | contact after   | "               |
|                 |                 | non-payment     | cost-effective" |
|                 | For NCPs        |                 |                 |
+-----------------+-----------------+-----------------+-----------------+