Credit balance cases are intrastate CSS cases in which the noncustodial parent (NCP) has been given credit for funds paid in advance and the custodial parent has already received the funds. This situation occurs when an NCP has paid "future" money toward the case prior to the case being redirected to CSS from AOC. These funds were not posted in ACTS, credited to the appropriate payor account, or paid to the custodial parent through ACTS processing; therefore, ACTS has no record of the credit balance. (If an out-of-state CSS case, this credit balance is referred to as "memo future money".)
When a case with a credit balance is redirected to CSS from AOC, caseworkers must prevent ACTS from starting Delinquency Processing for a case with a credit balance when the NCP chooses not to make payments until the future money is "used up". (However, ACTS still processes payments and disburses funds to the custodial parent if the NCP continues to make payments.)
CSS caseworkers must contact the NCP to determine why and when the credit balance occurred. If the NCP informs the caseworker that the payment was for something different than what was recorded by AOC or that the money was a gift to the custodial parent, then the credit balance is not a true credit balance. (Nothing more needs to be done, but caseworkers must document in ACTS any action taken on the case.)
If the credit balance is a true credit balance, caseworkers should inform the custodial parent that he/she possibly might not receive payments while the NCP "uses up" his/her credit balance.
Caseworkers set (or reset) the date of next enforcement in ACTS to a future date. This date should be when the NCP's arrearages equal the credit balance (assuming that the NCP does not make payments.) ACTS postpones automatic Delinquency Processing until the next enforcement date has passed.
The next enforcement date is determined by examining the credit balance and the charge frequency and frequency amount of the court order.
EX: If the court order specifies that the NCP should pay $100.00 per month and the credit balance is $400.00, then the he/she is not expected to pay the next $100.00 until the fifth month. If CSS acquired this case on June 15 and the start date of the court order was on the first of that month, then the date of next enforcement should be set to October 1. (A $100.00 arrearage accumulates for the months of June, July, August and September, totaling $400.00, which is the amount of the credit balance.)
When the next enforcement date arrives, caseworkers should review the case to determine if a credit balance remains. If a credit balance remains, caseworkers must continue to track it. If no credit balance remains, caseworkers must reset the tax intercept indicators for all the applicable subaccounts, resume Trade Line Reporting, and change the processing status of the case from "DELQ" (Delinquency) to "COLL" (Collections), if applicable.
When an NCP is under a criminal order to support, and probation is revoked and the suspended sentence invoked, the arrearages that have accrued under the order are not collectible.
IRS (Internal Revenue Service) Full Collection Services are available to CSS agencies for the collection of delinquent child support payments and arrearages. The IRS uses all means available (the same as those used for the collection of delinquent taxes) to collect on the child support debt.
When local CSS agencies have exhausted every other means to recover delinquent child support payments without results, they can choose to seek recovery through the Internal Revenue Service (IRS). This remedy should be attempted when the defendant has some assets which could be liquidated by the IRS for purposes of satisfying the NCP's obligations. Substantial wages are sufficient since the IRS has Federal authority to garnish wages. This enforcement procedure is separate from, but can be used in conjunction with, tax intercept.
IRS Full Collection Services are applicable to both WFFA/TANF and NPA cases provided that the following requirements are met:
The NC State Lottery Act of 2005 (NCGS 18C-134) authorizes the offset of lottery winnings claimed by a noncustodial parent (NCP - coded "AP") to pay past due child support. Lottery offest procedures follow tax offset procedures, as defined in NCGS 105A. Before the NC Lottery Commission pays a prize in the amount of $600.00 or more to a winner, that winner is matched against individuals that have child support arrearages of more than $50.00. When a match exists, the Lottery Commission pays an amount up to the certified arrearages to NCCSS and any excess to the NCP. When a winner contacts the NC Lottery Commission to collect a prize, the NC Lottery Commission advises the winner of the amount that is being sent to NCCSS.
The Pre-Offset Notice (DSS-4495) that is sent to NCPs on or about September 30th advises the NCP of the potential for the offset of tax refunds and lottery winnings to pay past due child support.
Before paying winnings of $600.00 or more, the NC Lottery Commission matches the name of the lottery winner to the CSS file of NCPs who owe $50.00 or more in arrearages. Payment of available funds up to the total owed is sent to NCCSS, and any remaining balance is paid to the NCP.
When it receives a payment from the NC Lottery Commission, the NCCSS
Within ten (10) days of receipt of a lottery payment, the NCCSS Tax Unit sends a Notice To Debtor - Lottery (DSS-4747) to the NCP for each of the NCP's cases that are certified for offset.
To appeal, the NCP must submit a petition (H-06 General Petition Form) to the Office of Administrative Hearings (OAH) within thirty (30) days of the Certification Date stated on the Notice to Debtor.
When an appeal is made, OAH notifies the Attorney General who represents CCSS. The attorney notifies the NCCSS Tax Unit.
If OAH allows the offset, the NCCSS Tax Unit releases the "HOLD" and the payment is processed. If OAH disallows the offset, the Tax Unit makes an adjustment request to disburse the held funds to the NCP.
An NCP can choose to waive the right to appeal a lottery offset so that the funds can be applied to the NCP's case(s) prior to the end of the 45-day "hold" period. The NCCSS Tax Unit sends an Affidavit For Release Of Lottery document to the NCP with the Notice to Debtor - Lottery (DSS-4747). The NCP can sign the Affidavit before a Notary Public and mail it to NCCSS or contact local CSS for assistance in completing the document. An Affidavit completed at the local CSS office must be faxed to the Tax Unit. The Tax Unit releases the "HOLD", and the payment is processed.
If the NCP does not appeal the offset or request early release of the funds, the "HOLD" is released and payment is applied to all appropriate cases on the forty-fifth (45th) day after the Notice to Debtor – Lottery (DSS-4747) was sent to the NCP.
NCGS 110-135 provides noncustodial parents (NCPs) with the opportunity to reduce their Public Assistance (PA) debt when the NCP:
On a quarterly basis, ACTS selects open cases that have a CSUP (Current support) extension and PA arrearages equal to or greater than $15,000. The PA debt is defined as a combination of TANF and IV-E arrearages. If the NCP has multiple cases under one docket number, at least one of the cases must have a CSUP (Current support) extension to be considered for the debt reduction. These cases appear on the quarterly Debt Reduction Arrears Report.
Upon receiving the Debt Reduction Arrears Report, CSS workers should determine if the NCP has the financial ability to make the agreed upon payments. NCPs might want to consider requesting a review of the order for possible modification.
The responsible CSS workers are to contact the NCPs who meet the criteria for possible debt reduction and attempt to obtain an agreement for payment of current support, plus an amount toward arrearages for twenty-four (24) consecutive months.
When an agreement is reached, the CSS worker completes a consent order, obtains approval of the court, and files a copy in the court file. It is important for CSS to advise the NCP that other remedies can also be used to collect the debt as provided by law. CSS workers should document the terms of the debt reduction consent order in the case record.
The Distribution Unit at the CSS Central Office is responsible for monitoring the case for compliance with the terms of the consent order during the 24-month period. Once the consent order is signed by the NCP and the judge, the responsible CSS worker notifies the Distribution Unit that the case is to be monitored under the debt reduction program.
If the NCP fails to pay as agreed, the Distribution Unit notifies the responsible CSS worker that the arrearages are no longer subject to the reduction under the existing agreement. The responsible CSS worker documents the noncompliance with the consent order in the case record. The NCP can renegotiate a payment plan under a new consent order to achieve twenty-four (24) consecutive months of payments.
If the NCP successfully meets the terms of the agreement, the Distribution Unit notifies the responsible CSS worker to reduce any remaining PA arrearage debt by two-thirds (2/3). The CSS worker modifies the order to reflect the two-thirds PA debt reduction and documents the successful compliance with the consent order in the case record.
If the NCP has multiple PA arrearage subaccounts for a case, the responsible CSS worker reduces each subaccount according to the distribution hierarchy on a prorata share basis.
If the NCP has multiple cases under one docket number, the responsible CSS worker prorates the reduction for each case, according to the distribution hierarchy.
EX: Docket # "99CVD12345" covers three (3) cases, and a total of $4000.00 in PA arrearages exist at the end of the 24-month period. The reduction of the PA arrearages is calculated as follows:
Case #1 has a $1000 PA arrearage balance
Case #2 has a $1000 PA arrearage balance
Case #3 has a $2000 PA arrearage balance
$4000 x 2/3 = $2667 total arrearage reduction
Arrearages for Case #1 are reduced to $ 667.00
Arrearages for Case #2 are reduced to $ 667.00
Arrearages for Case #3 are reduced to $1333.00
Total Arrearage Reduction = $2667.00
For questions or clarification on any of the policy contained in these manuals, please contact your local county office.