Library: Policy

340:25-5-351. Allocation and distribution of collections

Revised 9-14-24

(a) Authority. Oklahoma Human Services Child Support Services (CSS) allocates and distributes support collections, per Section 657 of Title 42 of the United States Code (42 U.S.C. § 657) and Sections 302.32, 302.51, and 302.52 of Title 45 of the Code of Federal Regulations (45 C.F.R. §§ 302.32, 302.51, and 302.52). CSS collects fees, per 42 U.S.C. § 654, 45 C.F.R. § 302.33, and Section 237 of Title 56 of the Oklahoma Statutes (56 O.S. § 237).

(b) Fees. CSS collects fees, per 42 U.S.C. § 654, 45 C.F.R. § 302.33, and 56 O.S. § 237. A case is exempt from fees when the custodial person (CP) is currently receiving Temporary Assistance for Needy Families (TANF). Fees are withheld prior to child support distribution to the CP. CSS collects:

(1) an annual fee on eligible cases, per 45 C.F.R. § 302.33. When there is more than one Title IV-D child support program involved, CSS collects the annual fee on cases when Oklahoma is the initiating state; and

(2) a three percent service fee for each payment distributed to the CP, up to a $10.00 per month maximum except when the CP is currently receiving SoonerCare (Medicaid).

(1) General allocation. Allocation refers to how a payment is divided among eligible obligations. Some obligors have more than one child support case and the allocation rules determine which case receives all or a portion of the collection received. A collection is allocated based on the source of the collection and the type of legal action resulting in a collection. • 1

(2) Allocation models. CSS divides collections among the obligor's eligible obligations based on the following models.

(A) Standard. All payments not made by income withholding order or federal income tax refund offset are allocated to eligible obligations in (i) through (iii):

(i) prorated to the current child support, cash medical support, and spousal support;

(ii) prorated to the monthly payment plan on past support; and

(iii) amounts remaining from the initial collection or additional collections received during the same month will allocate based on a prorated share of total arrears owed on all eligible obligations. The allocated amounts cannot exceed the total arrears due on the cases.

(B) Income Withholding Order (IWO). Periodic payments from an IWO are allocated to eligible obligations in (i) through (iii):

(i) prorated to the current child support, cash medical support, and spousal support;

(ii) prorated to the monthly payment plan on past support and other judgment(s), such as judgments for genetic testing costs; and

(iii) the steps in (1) and (2) of this subsection are repeated for amounts remaining from the initial collection or additional collections received during the same month, until the entire collection is allocated.

(C) Internal Revenue Service (IRS). Collections received from the offset of federal income tax refunds are allocated according to the existing federal hierarchy, per 42 U.S.C. § 657 and 45 C.F.R. § 303.72. CSS allocates only to balances certified to the IRS. CSS applies these collections to each eligible obligation:

(i) first to balances certified to the IRS as public assistance; and

(ii) then to any CP's certified balances.

(3) Specific enforcement actions. Collections received from case-specific enforcement actions are not allocated across all cases, but are allocated to the case(s) in which the action is taken. • 1

(4) Non-Title IV-D cases. In non-Title IV-D cases, CSS allocates payments as follows:

(A) payments received from an IWO are allocated using the IWO model. Collections are allocated to non-Title IV-D cases based on the amounts listed in the non-Title IV-D IWO; and

(B) all other payments are allocated using the Standard model. When CSS receives information on processing a specific payment, CSS may allocate the payment based on that information.

(5) Intergovernmental cases.

(A) Incoming. In cases where CSS is collecting support for a CP who is receiving services from another jurisdiction's child support agency, past-due payments are allocated based on information the initiating state provides. • 2

(B) Outgoing. Collections received from other jurisdictions resulting from an outgoing referral are allocated to that case.

(d) Distribution.

(1) CSS distributes collections based on the federal distribution hierarchy, per 42 U.S.C. § 657 and 45 C.F.R. §§ 302.32 and 302.51.

(2) CSS initially distributes collections to current support and current cash medical support obligations due each month. When collections are less than the amount of all current support and current cash medical support due, CSS distributes collections between the current child support and the current cash medical support obligations in proportionate shares.

(3) After the current child support and current cash medical support obligations are met, CSS distributes collections to current spousal support due.

(4) After current child support, current cash medical support, and current spousal support obligations are satisfied, remaining collections for the month are distributed to past-due balances.

(5) CSS distributes payments to interest owed after current child support and principal arrears balances are paid in full to each obligation.

(6) When a payment collected represents current support for future months, the amount is applied to such. When past support balances exist on any of the noncustodial parent's cases, payments are not applied to the next month's current support, per 45 C.F.R. § 302.51. • 3

(e) Distributed payment adjustments. When CSS determines a payment adjustment is required, CSS makes the necessary corrections to the statewide automated data processing and information retrieval system. • 4

INSTRUCTIONS TO STAFF 340:25-5-351

Revised 9-14-24

1. Examples of collections received from specific enforcement remedies are those made:

(1) during contempt proceedings or criminal non-support actions to satisfy a purge, bond, or sentencing agreement. This includes payments made in court or as a result of a court directive during these proceedings;

(2) to reinstate license(s); or

(3) as a result of a lien or levy. State's attorneys make agreements regarding the percentage of the settlement to take and how to split the collection among multiple cases.

2. Child Support Services (CSS) staff reviews the information the initiating state provides regarding whether the past-due balance on the case is owed to the custodial person (CP) or to the other state and time periods for balances assigned to the state(s). When the information provided is unclear or incomplete, CSS staff does not build the past-due balances in the Oklahoma Support Information System (OSIS) until the information from the initiating state is received. CSS staff monitors interstate cases to ensure the information regarding the assignment of balances is complete and current and requests additional information from the initiating state as necessary. When the initiating state fails to provide the necessary information, CSS staff initiates the closure process per Oklahoma Administrative Code 340:25-5-123.

3. (a) For example, a noncustodial parent (NCP) pays current support on February 1, makes another payment February 28, and has past due balances. When balances are owed to the state, the state retains the collection. When balances are owed to the CP, the CP receives both payments. When the NCP has multiple cases, the second payment distributes to any case with eligible balances and not to future support.

(b) When the second monthly payment received is a federal payment, such as Defense Finance and Accounting Service (DFAS) or Social Security Administration and represents a regular periodic payment, CSS logs the payment to the UNDA screen. When the OSIS futures program runs, the payment distributes to current support regardless of balances on the case.

3. Designated CSS district office staff submits distributed adjustment requests through a finance mail box. Before an adjustment is performed, the case information on OSIS must be updated. When case balances are corrected, all distributed payments are taken into account, even those incorrectly applied. When a payment is adjusted, OSIS automatically increases the balance of the case type to which the payment was distributed in error. Common reasons for adjustment requests and the appropriate balance adjustments, include, but are not limited to subparagraphs (1) through (4) of this Instructions to Staff.

(1) Current support distributed to the wrong case type.

(A) Current month. When this occurs in the current month, district office CSS staff corrects the Child Data (CHU) screen for each child and sends an adjustment request to correct the payment distribution. Balance adjustments are not necessary.

(B) Prior month. When this occurs in the prior month, CSS district office staff reduces the balance for current support on the incorrect case type, creating a credit if necessary, and increases the balance for current support on the correct case type. This balance adjustment has no effect on the NCP's overall case balance.

(2) Credit balance. CSS district office staff first determines what case type(s) is overpaid. For example, if case type C is overpaid, CSS district office staff initializes a credit balance on case type C.

(A) When a case type is overpaid and there are other balances, the Center for Finance and Budget transfers the specified amount from one case type to another.

(B) When a case type is overpaid and there are other balances but the credit is more than the balance owed, the Center for Finance and Budget transfers the specified amount from one case type to another and the remainder is refunded to the NCP.

(3) Payment logged to the wrong case.

(A) Balance adjustments are not necessary.

(B) The Center for Finance and Budget transfers the payment to the correct case.

(4) Current support posted for incorrect amount.

(A) When current support did not post on OSIS, CSS district office staff makes corrections on the Obligation Selection List by Family Group Number (FGN) (OBLU) screen and case balances post automatically.

(B) When an amount less than the correct amount posted on OSIS, CSS district office staff updates the:

(i) OBLU screen;

(ii) Past Due Support Adjustment (CFAR) screen to increase arrearages by the amount that did not post; and

(iii) current support on the Current Monthly Amount Due Adjustment (CFAD) screen.

(C) When an amount greater than the correct amount posted on OSIS, CSS district office staff updates the:

(i) OBLU screen;

(ii) CFAR screen to decrease arrearages by the amount posted in error; and

(iii) CFAD screen to decrease current support monthly due by the amount that posted in error. When the incorrect current support amount was issued to the CP, this adjustment creates a credit balance in current support.

(I) When there are sufficient arrearages for a similar case type as the current support amount that posted in error, zero the credit and reduce arrearages by the same amount. This balance adjustment has no effect on the NCP's overall case balance.

(II) When there are not sufficient arrearages for a similar case type as the current support amount that posted in error, further balance adjustments are unnecessary.