ARIZONA STATE SENATE
Phoenix, Arizona
Exempts from assignment child support collected by the Department of Economic Security (DES) for children ineligible for Temporary Assistance for Needy Families (TANF) benefits because of the “family cap” exclusion.
Under current federal and state statutes, persons who receive TANF benefits must assign their child support rights to the state, as reimbursement for benefits paid by the state. When a family no longer receives TANF benefits, child support continues to be assigned until the state is completely reimbursed.
Children born while their parents received TANF, during a period of voluntary withdrawal or during a period their parents were sanctioned are excluded from receiving TANF benefits. This exclusion is known as the “family cap”. The entire child support collected by the state for a family is withheld, without regard to the child or children to whom the support applies. Child support for a child who has never received TANF benefits is withheld to reimburse the state for benefits paid to another member of the family.
On October 6, 2000 a federal judge ruled that Indiana may not withhold child support paid for a child not receiving TANF benefits. A similar lawsuit was filed in Arizona on August 27, 2001. Almost half of the states nationwide impose a “family cap” policy. Seven states currently allow pass-through of child support for a TANF-ineligible child. Federal rules require states to return the federal share of benefits that would have been paid if the family cap did not exist, by counting support paid to a family rather than an individual child.
The bill excludes ineligible children from the portion of the child support rights assigned to the state. It requires DES to continue enforcing child support orders for the entire family, but the portion attributable to the ineligible child must be passed on to the family.
For identical legislation introduced last year, the Joint Legislative Budget Committee projected a state general fund revenue loss of $638,700 per year, which included a fund reduction to the six counties operating their own child support programs of $172,400 per year.
1. Exempts from assignment any child support collected by DES for children ineligible for TANF benefits.
2. Requires DES to continue enforcing support rights that are exempt from assignment.
3. Makes technical changes.
4. Contains a delayed effective date of January 1, 2003.
Prepared by Senate Staff
January 21, 2002