Opinion ID: 516409
Heading Depth: 1
Heading Rank: 4

Heading: inconsistent agency regulations

Text: 48 An examination of the various regulations proposed and promulgated by the Secretary regarding the $50 disregard of child support payments since passage of DEFRA is also quite instructive. It reveals a pattern of vacillating, inconsistent rules, many of which are in direct conflict with the position taken by the Secretary in the instant case. 49 45 C.F.R. Sec. 302.51, as originally published on September 10, 1984, required that the first $50 collected on a monthly support obligation be paid to the AFDC family, and that such an allocation was applicable to collections of current support only, not to collections of arrearages. 49 Fed.Reg 35605 (1984). On September 19, 1984, however, the Secretary proposed a version of the rules which defined the date of collection such that the $50 pass-through would apply to collection of arrearages if the delay was the fault of the employer in wage withholding cases, or the collecting state in interstate cases. These proposed rules stated: 50 The date of collection shall be the date on which the payment is received by the IV-D agency or the legal entity of the State or political subdivision actually making the collection on behalf of the IV-D agency, except that: 51 (1) For purposes of interstate collections, the date of collection shall be the date on which the payment is received by the IV-D agency of the State in which the collection is made.... 52 (2) For purposes of wage withholding, the date of collection shall be the date the employer withholds the wages to meet the support obligation. 53 49 Fed.Reg. 36797 (1984) (emphasis added). Thus, these proposed regulations would have allowed for multiple pass-throughs to the AFDC family in precisely the kind of situations that confront many of the plaintiff class in this current action. Indeed, the Secretary himself stated that these proposed changes in the regulations were dictated by the statute: 54 We are making these changes under the authority of section 1102 of the Act in order to distribute payments as current support in interstate cases and in cases where multiple withholding payments are submitted in a lump sum to the IV-D agency. Thus, the IV-D agency will be able to distribute these payments as intended by the statute and to avoid possible inequities resulting from delays in forwarding payments by employers or responding states in interstate cases. 55 49 Fed.Reg. 36786 (1984) (emphasis added). The Secretary reiterated this sentiment the following year, [T]his change was proposed because the regulation as it was written did not allow for accurate distribution when current support was collected but not received until a later date by the IV-D agency making the final distribution. 50 Fed.Reg. 19634 (1985). Yet, in response to comments from various states that the proposed rules would create accounting problems from the high cost of reprogramming their systems, distribution problems from retroactive claims, and monitoring problems, the Secretary withdrew the proposed changes. Id. This withdrawal was not the result of any statutory mandate, but rather resulted purely from complaints by the states of potential accounting problems. Thus, despite explicit acknowledgement by the Secretary himself that the statute required the changes and that without them inequities would occur, he succumbed to the states' comments and put into place a rule which was expressly contrary to the statute. 56 This flouting of the statute resulted in the regulation at issue, Sec. 302.51(a), being published: 57 For the purposes of distribution ... amounts collected shall be treated first as payment on the required support obligation for the month in which the support was collected and ... [any] excess amounts shall be treated as amounts which represent payment on the required support obligation for previous months.... The date of collection shall be the date on which the payment is received by the IV-D agency .... For purposes of interstate collections, the date of collection shall be the date on which the payment is received by the IV-D agency in the State in which the family is receiving aid. 58 50 Fed.Reg. 19648 (1985) (emphasis added). AFDC families were thus deprived of money that was mandated by Congress in situations where on-time payments were made by the absent parent, but which were delayed in transfer by an employer or an agency from a different state. 59 The Secretary made another flip-flop on June 9, 1988. The rule was revised to permit the $50 pass-through in interstate cases where the child support payment is made by the absent parent to the out-of-state agency on time, but is not forwarded by that agency to the agency in the distributing state on time. Date of collection is now defined as the date a payment is received by the IV-D agency or the legal entity of the State or political subdivision actually making the collection, whichever is earliest. 53 Fed.Reg. 21642 (1988). But no comparable change was made for on-time payments to an employer who is withholding wages and does not forward these wages to the state agency on time. And yet, the Secretary's own justification for his reversal on interstate cases should apply to the employer wage withholding situation as well: 60 Th[e] revision to the definition of the date of collection will reduce the possibility that payments made on time will be distributed as payments on arrearages because of delays in transmitting collections between legal entities of the State or between States. It also furthers the intended purpose of the statute, i.e. to encourage voluntary and timely compliance with support orders.... Deleting this definition [of the date of collection] will ensure payment of $50 to the AFDC family when support is paid timely and avoid possible inequities resulting from delays in forwarding payments by responding States in interstate cases. 61 53 Fed.Reg. 21643 (1988). Once again, while the Secretary's own logic would seem to require that timely payments by absent parents to employers should also require pass-throughs to the AFDC family to avoid possible inequities, HHS nevertheless has barred such payments. 62 What is revealed by the history of the Secretary's regulations on the pass-through requirement since the amended statute was passed in 1984 is a series of self-contradictory rules. And although the Secretary explicitly acknowledged at various times that the statute required multiple pass-throughs for certain arrearage payments, many of the plaintiffs have found themselves denied those very pass-throughs. 63 It should be noted that throughout this period of changing proposals and regulations, the Secretary never alluded to Sec. 602 of the statute as precluding multiple pass-through payments. Indeed, as noted supra, the Secretary has stated on various occasions that the intent of the statute was to permit multiple pass-throughs if delays were the fault of out-of-state collecting agencies or employers. And even the regulation currently in effect (instituted after the instant lawsuit was initiated) partially incorporates this position, in that it permits such multiple pass-throughs if the delay is caused by an out-of-state agency. For the Secretary to now be arguing in the instant case that Sec. 602 is an absolute bar to multiple pass-throughs is in direct conflict with the very evolution of the regulations that HHS has been involved in shaping over the years. 64 Since HHS itself has conceded at various times (including in the most recent June 9, 1988 regulation) that at least under certain situations multiple pass-throughs are not contrary to the statute, Sec. 602 cannot be used as the source for a complete bar to multiple pass-throughs. Once this prop is removed, appellants are left with no support for the position that the statute imposes an absolute monthly $50 cap on pass-throughs, other than blind deference to the agency regulation itself.