The rules governing howchild supportcollections are distributed among families, the state, and the federal government have changed substantially. In contrast,under P.L.104-193 , payments to families who leave TANF are more generous. If a custodial parent assigned her orhis child support rights to the state before October 1, 1997, the parent had to assign all support rights for supportpayments (bothcurrent and past-due) that accrued to the family during the period of AFDC receipt, as well as payments that hadaccrued before theirapplication for AFDC benefits. These distribution rules do not apply to child support collections obtained by intercepting federal income tax refunds. To reiterate, effective October 1, 2000, the state must treat any support arrearages collected on behalf of a former welfare family,except for those collected through the federal income tax offset program, as accruing in the following order: (1)to the period after thefamily stopped receiving cash assistance, (2) to the period before the family received cash assistance, and (3) to theperiod while thefamily was receiving cash assistance. The result of these child support distribution changes is that states are nowrequired to pay ahigher fraction of child support collections on arrearages to families that have left welfare by making these paymentsto families first(before the state and federal government). In the 108th Congress, H.R. 4737 as passed by the House in the107th Congress.
P.L. 104-193, the 1996 welfare reform law, substantively changed the rules governinghow child support collections are distributed among families, states, and the federal government. The general rulesin effect as ofOctober 1, 2000 are that child support collected during the time a family receives cash welfare belongs to the state;current childsupport and arrearages (past-due payments) that are owed to a family that is no longer receiving welfare belongsto the family; andchild support owed to a family that never received welfare belongs to the family. This is referred to as the "familiesfirst" childsupport distribution policy. (These "families first" distribution rules do not apply to child support collections madeby interceptingfederal income tax refunds.) Many policymakers contend that Congress should simplify the child supportdistribution system whichcurrently requires the tracking of six categories of arrearage payments to properly pay custodial parents. Legislationthat includedprovisions to simplify child support distribution procedures and provide more of the child support collected tocustodial parents(rather than the government) was passed by the House in the 106th and 107th Congresses, but not by the Senate. Similar legislation hasbeen reintroduced as part of the welfare reauthorization measure in the 108th Congress. This reportwill be updated as needed toreflect legislative activity.