Issue:
The Child Support Improvement Act of 2003 (not yet introduced by Cornyn), contains language regarding the electronic disbursement of child support payments to families. It appears to require all payments be disbursed through an electronic means and does not allow any flexibility for exceptions to this requirement.
Background:
A proposal would add the following to section 454A of the Social Security Act:
"Not later than October 1, 2008, each State disbursement unit operated under section 454B shall implement a system to electronically disburse, through direct deposit or widely accessible card-based system, all child support collections disbursed to families under that section." [Emphasis added]
The section does not appear to allow any flexibility to states in regard to the electronic disbursement of child support collections. By requiring all payments to be electronically disbursed, this prevents states from having any flexibility for those situations where a custodial parent is physically or mentally handicapped, or any other situations, which may be deemed as an appropriate exemption, by the state.
Requiring all payments to be sent electronically would potentially put states that currently allow for exemptions in the electronic disbursement of payments to notify the Secretary of the need to opt out. The only choices seem to be a system where all payments are sent electronically, or no payments are sent electronically.
Even regulations requiring a federal agency to disburse payments electronically allow for exemptions. See 31CFR 208.4 Waivers.
Proposal:
The proposed legislation should be amended to remove the word "all" or allow for a minimal percentage of state-designated exemptions from this requirement.
NCCSD Statement in Support:
The language regarding disbursement of child support payments electronically is recognized by the NCCSD as the wave of the future. There are benefits to the custodial parents and states that result from this means of disbursement. We appreciate and support the inclusion of the language in this legislative proposal, taking into account the concern for those custodial parents who may have unique limitations that electronic disbursement would further complicate. By allowing states to designate exemptions, they will take into account issues surrounding urban and rural areas.