Child Support Enforcement DISTRIBUTION/DISBURSEMENT

RULES OF DISTRIBUTION USED BY ACTS

GENERAL INFORMATION

This topic contains information on the following subjects:

1. An overview of the ACTS rules of distribution;

2. The current rules of distribution (post-October 1, 2000);

3. The prior rules of distribution (pre-October 1, 2000);

4. The rules of distribution for funds from Federal tax intercepts;

5. The rules of distribution for funds from State tax intercepts.

RULES OF DISTRIBUTION OVERVIEW

Due to the Deficit Reduction Act of 2005 (DRA), changes have been made to enable ACTS to distribute more support to the family. However, the distribution hierarchy that took effect as a result of the Welfare Reform Act (PRWORA) on October 1, 2000, remains the same. All payments that were distributed prior to September 30, 2000, follow the "old" distribution priority.

ACTS distributes funds that are paid by a noncustodial parent (NCP) to his/her obligations according to a pre-defined priority system. The distribution process prorates and applies funds to the highest level of the priority system until all of the subaccounts at that level are satisfied. Then if funds are still available, ACTS moves to the next level of priority and prorates and applies funds to those subaccounts. If funds still remain after all of the NCP's obligations have been satisfied, those funds are kept in the NCP's participant account for distribution during the next charging/billing period.

The rules that follow apply to funds that are posted for an NCP's payment at ALL priority levels, unless indicated otherwise:

ARCHIVED CASES -

Funds are NEVER applied to closed cases that are archived or retrieved. A case must be re-opened before any funds can be applied to its associated subaccounts.

CLOSED CASES –

Funds are not applied to subaccounts in closed cases but are refunded to the payor. These funds are put on "HOLD" until it is determined whether or not a refund is appropriate. For cases that are closed due to redirection, however, ACTS sends the refund check directly to the appropriate Clerk of Court.

CLOSED SUBACCOUNTS/SUBACCOUNTS WITH ZERO BALANCE -

Funds are not applied to closed subaccounts or to subaccounts with a zero ($0.00) balance. A subaccount must be re-opened before any funds can be applied to it.

DIRECT TO DOCKET NUMBER -

When a payment that is posted in ACTS is directed to a specific docket number, funds are only applied to the cases associated with that docket number.

MINIMUM AMOUNT OF DISBURSEMENT -

Effective January 17, 2000, ACTS stopped issuing disbursement checks for amounts less than $10.00. These funds are placed on "HOLD". When the $10.00 minimum amount is reached, the "HOLD" is released, and ACTS disburses the funds. Effective February 29, 2008, payments of less than $10.00 that are owed to a client with an active direct deposit or active ncKIDScard account are deposited into that account.

PAYMENT SOURCE -

Only those subaccounts for which income withholding is allowed can have income withholding funds applied to them, regardless of the docket number associated with the payment. If ACTS finds no cases with an I/W Worksheet for the NCP, it puts the payment on "HOLD" and notifies the responsible CSE caseworker.

PRIOR MONTH RECEIPTS -

If the effective date entered for a payment is prior to the current month, that payment is processed as a prior month receipt. Funds are distributed based on the subaccount balances that existed during that prior month.

RULES OF DISTRIBUTION FOR SUBACCOUNTS (CURRENT)

ACTS uses the following rules of distribution for payments that were collected on or after October 1, 2000. Payments that were collected before October 1, 2000, were distributed according to a different set of rules.

The rules of distribution define the priority of payment distribution. Current support is distributed first (on all of the NCP's cases) before any arrearages are distributed. Once current support is satisfied, ACTS distributes payments to the arrearages with a frequency amount due (on all of the NCP's cases), then finally to any remaining arrearage subaccount balances. Each arrearage subaccount has a predefined priority level commonly known as the "distribution hierarchy".

NOTE: ACTS does not prorate payments that result from enforcement actions such as purge, FIDM, liens, and performance bonds. ACTS applies these payments based on the docket number that was specified in the court action.

FIRST PRIORITY LEVEL - CURRENT SUPPORT

Current support (CSUP) is given a higher priority than arrearages and is distributed within each support type before any arrearage balances are distributed. The support types in order of priority are:

Child

Spousal

Medical Support

Medicaid

Miscellaneous

ACTS distributes CSUP for “Child”, then CSUP for “Spousal”, then CSUP for the other support types per the predefined hierarchy. Once all CSUP is distributed for each support type, ACTS distributes the arrearages for each support type based on the predefined hierarchy.

If funds are not sufficient to satisfy the total current support on all of the NCP's cases, ACTS prorates the funds based on the current support due for each case.

SECOND PRIORITY LEVEL – ARREARAGES WITH A FREQUENCY AMOUNT

Once all current support (CSUP) is satisfied on all NCP's cases, ACTS distributes payments to arrearage balances that are assigned a frequency amount. CSE workers manually enter the frequency amounts based on the terms of the court order. A case can only have one frequency amount assigned to an arrearage subaccount per support type. In accordance with Federal Rules of Distribution, caseworkers should assign the frequency to the arrearage subaccount that is highest in the distribution hierarchy. If caseworkers enter the frequency amount on an incorrect subaccount, ACTS distributes funds up to that frequency amount to that suabccount and not according to the predefined hierarchy.

If funds are not sufficient to satisfy the total frequency amount due on all of the NCP's cases, ACTS prorates the funds based on the frequency amount due on each case.

NOTE: If no arrearage balances exist (on the distribution side) in any of the NCP's cases, ACTS will not distribute the funds. These funds remain at the payor participant level as undistributed funds (sometimes called "future money") and ACTS will not distribute them until the next calendar month when current support becomes due.

THIRD PRIORITY LEVEL - ARREARAGE BALANCES WITHOUT A FREQUENCY AMOUNT

Once the current support amount due and the ordered frequency amount due have been distributed, ACTS distributes funds based on a predefined arrearage hierarchy. The arrearage distribution hierarchy in order of priority is:


Never Assigned Arrears –

Priority	Subaccount
2	NPA Arrears - Unadjudicated
3	NPA Arrears - Adjudicated
4	NPA Arrears - Sum Certain Judgment

Unassigned Pre-Assistance Arrears -

5	Unassigned Pre-Assistance Arrears - Unadjudicated
6	Unassigned Pre-Assistance Arrears - Adjudicated
	There are NO Sum Certain Judgment Unassigned Pre-Assistance Arrears.

Conditionally Assigned Arrears -

7	Conditionally Assigned Arrears - Unadjudicated
8	Conditionally Assigned Arrears - Adjudicated
	There are NO Sum Certain Judgment Conditionally Assigned Arrears.

Temporarily Assigned Arrears -

9	Temporarily Assigned Arrears - Unadjudicated
10	Temporarily Assigned Arrears - Adjudicated
	There are NO Sum Certain Judgment Temporarily Assigned Arrears.

Permanently Assigned Arrears -

11	TANF Arrears - Unadjudicated
12	TANF Arrears - Adjudicated
13	TANF Arrears - Sum Certain Judgment

Unassigned During Assistance Arrears -

14	Unassigned During Assistance Arrears - Unadjudicated
15	Unassigned During Assistance Arrears - Adjudicated
	There are NO Sum Certain Judgment Unassigned During Assistance Arrears.

Permanently Assigned Arrears -

16	IV-E Foster Care Arrears - Unadjudicated
17	IV-E Foster Care Arrears - Adjudicated
18	IV-E Foster Care Arrears - Sum Certain Judgment

State Foster Home Fund Arrears -

19	State Foster Home Fund Arrears - Unadjudicated
20	State Foster Home Fund Arrears - Adjudicated
21	State Foster Home Fund Arrears - Sum Certain Judgment

Medical Arrears -

22	Medical Arrears - Unadjudicated
23	Medical Arrears - Adjudicated
24	Medical Arrears - Sum Certain Judgment

Out-of-State Arrears -

25	Other State Arrears Account

Legal Fees -

26	Noncustodial Parent Fees - Legal Fees

Parental Kidnap Fees -

27	Noncustodial Parent Fees - Kidnap

Genetic (Paternity) Test Fees –

28	Noncustodial Parent Fees – Paternity Test

IRS Interest -

29	Noncustodial Parent Fees – IRS Interest

Credit Card Fees -

30	Noncustodial Parent Fees - Credit Card

Not Sufficient Funds Fees -

31	Noncustodial Parent Fees - NSF Checks

RULES OF DISTRIBUTION FOR SUBACCOUNTS (PRIOR)

ACTS used the following distribution priorities for payments that were collected PRIOR TO October 1, 2000:

DISTRIBUTION HIERARCHY - FROM 09/01/1997 TO 09/30/2000

Priority	Subaccount
1 – 5	Current Support
6	NPA Arrears
7	Temporarily Assigned Arrears
8	AFDC/TANF Arrears
9	IV-E Arrears
10	SFHF Arrears
11	Medical Arrears
12	Out-of-State Arrears
13	Paternity (Genetic) Test Fees
14	Legal Fees

DISTRIBUTION HIERARCHY - PRIOR TO 09/01/1997

Priority	Subaccount
1 - 5	Current Support
6	AFDC Arrears
7	IV-E Arrears
8	SFHF Arrears
9	Medical Arrears
10	NPA Arrears
11	Out-of-State Arrears
12	Paternity (Genetic) Test Fees
13	Legal Fees

RULES OF DISTRIBUTION FOR FEDERAL TAX INTERCEPT FUNDS

ACTS uses the following distribution priorities when applying Federal tax intercept funds to subaccounts:

Priority	Subaccount
1	TANF Arrears - Unadjudicated
2	TANF Arrears - Adjudicated
3	TANF Arrears - Sum Certain Judgment
4	Temporarily Assigned Arrears - Unadjudicated
5	Temporarily Assigned Arrears - Adjudicated
6	Conditionally Assigned Arrears - Unadjudicated
7	Conditionally Assigned Arrears - Adjudicated
8	IV-E Foster Care Arrears - Unadjudicated
9	IV-E Foster Care Arrears - Adjudicated
10	IV-E Foster Care Arrears - Sum Certain Judgment
11	Medical Arrears - Unadjudicated
12	Medical Arrears - Adjudicated
13	Medical Arrears - Sum Certain Judgment
14	Unassigned Pre-Assistance Arrears -Unadjudicated
15	Unassigned Pre-Assistance Arrears - Adjudicated
16	Unassigned During Assistance Arrears - Unadjudicated
17	Unassigned During Assistance Arrears – Adjudicated
18	NPA Arrears - Unadjudicated
19	NPA Arrears - Adjudicated
20	NPA Arrears - Sum Certain Judgment
21	State Foster Home Fund Arrears - Unadjudicated
22	State Foster Home Fund Arrears - Adjudicated
23	State Foster Home Fund Arrears - Sum Certain
24	Other State Arrears Account

RULES OF DISTRIBUTION FOR STATE TAX INTERCEPT FUNDS

ACTS uses the following distribution priorities when applying State tax intercept funds to subaccounts:

Priority	Subaccount
1	Current Support
2	NPA Arrears - Unadjudicated
3	NPA Arrears - Adjudicated
4	NPA Arrears - Sum Certain Judgment
5	Unassigned Pre-Assistance Arrears - Unadjudicated
6	Unassigned Pre-Assistance Arrears - Adjudicated
7	Conditionally Assigned Arrears - Unadjudicated
8	Conditionally Assigned Arrears - Adjudicated
9	Temporarily Assigned Arrears - Unadjudicated
10	Temporarily Assigned Arrears - Adjudicated
11	TANF Arrears - Unadjudicated
12	TANF Arrears - Adjudicated
13	TANF Arrears - Sum Certain Judgment
14	Unassigned During Assistance Arrears – Unadjudicated
15	Unassigned During Assistance Arrears - Adjudicated
16	IV-E Foster Care Arrears – Unadjudicated
17	IV-E Foster Care Arrears – Adjudicated
18	IV-E Foster Care Arrears - Sum Certain Judgment
19	State Foster Home Fund Arrears – Unadjudicated
20	State Foster Home Fund Arrears – Adjudicated
21	State Foster Home Fund Arrears - Sum Certain Judgment
22	Medical Arrears – Unadjudicated
23	Medical Arrears – Adjudicated
24	Medical Arrears - Sum Certain Judgment
25	Other State Arrears Account
26	Noncustodial Parent Fees - Legal Fees
27	Noncustodial Parent Fees – Kidnap
28	Noncustodial Parent Fees – Genetic (Paternity) Test
29	Noncustodial Parent Fees - IRS Priority Interest
30	Noncustodial Parent Fees - Credit Card
31	Noncustodial Parent Fees - NSF Checks

For questions or clarification on any of the policy contained in these manuals, please contact your local county office.