; (B) shall not refer the child’s case to the State program funded under part D of title IV of the Social Security Act ( 42 U.S.C. 651 et seq.) or apply a penalty against the child’s family based on the custodial parent’s noncooperation with child support activities with respect to the child under paragraph (2) of section 408(a) of such Act ( 42 U.S.C. 608(a) ), but shall provide an exception to the custodial parent pursuant to section 454(29)(A) of such Act ( 42 U.S.C. 654(29)(A) ); (C) shall not be subject to penalties under section 409(a)(5) of such Act ( 42 U.S.C. 609(a)(5) ); (D) notwithstanding subparagraph (B), any such individual shall retain the right to apply for child support services under section 454(4)(A)(ii) of the Social Security Act ( 42 U.S.C. 654(4)(A)(ii) ) with respect to a child of the individual; (E) if the child has an open child support case with the State agency responsible for administering the State plan under part D of title IV of the Social Security Act ( 42 U.S.C. 651 et seq.), such State agency, shall suspend any activity to establish or enforce a support order with respect to the child (other than to establish the paternity of the child), and monthly child support obligations shall be suspended and shall not accrue, but only if both parents of the child agree in writing to the suspension; and (F) if child support activities are suspended in a case by agreement of both parents in accordance with subparagraph (E), may exclude the case in determining applicable percentages based on State performance levels under section 458 of the Social Security Act ( 42 U.S.C. 658a ), and the Secretary shall disregard the case in determining whether the State data submitted to the Secretary are complete and reliable for purposes of that section and section 452 of such Act ( 42 U.S.C. 652 ). (2) Eligible entity In this section, the term eligible entity means— (A) a State; (B) a unit of local government