42 U.S.C. § 657 — Distribution of collected support

(a) In general Subject to subsections (d) and (e), the amounts collected on behalf of a family as support by a State under a plan approved under this part must be distributed as follows: (1) Families receiving assistance In the case of a family receiving assistance from the State, the State must— (A) pay to the Federal Government the Federal share of the amount collected, subject to paragraph (3)(A); (B) retain, or pay to the family, the State share of the amount collected, subject to paragraph (3)(B); and (C) pay to the family any remaining amount. (2) Families that formerly received assistance In the case of a family that formerly received assistance from the State: (A) Current support To the extent that the amount collected does not exceed the current support amount, the State must pay the amount to the family. (B) Arrearages Except as otherwise provided in an election made under section 654(34) of this title , to the extent that the amount collected exceeds the current support amount, the State— (i) must first pay to the family the excess amount, to the extent necessary to satisfy support arrearages not assigned under section 608(a)(3) of this title ; (ii) if the amount collected exceeds the amount required to be paid to the family under clause (i), must— (I) pay to the Federal Government the Federal share of the excess amount described in this clause, subject to paragraph (3)(A); and (II) retain, or pay to the family, the State share of the excess amount described in this clause, subject to paragraph (3)(B); and (iii) must pay to the family any remaining amount. (3) Limitations (A) Federal reimbursements The total of the amounts paid by the State to the Federal Government under paragraphs (1) and (2) of this subsection about a family must not exceed the Federal share of the amount assigned about the family under section 608(a)(3) of this title . (B) State reimbursements The total of the amounts retained by the State under paragraphs (1) and (2) of this subsection about a family must not exceed the State share of the amount assigned about the family under section 608(a)(3) of this title . (4) Families that never received assistance In the case of any other family, the State must distribute to the family the portion of the amount so collected that remains after withholding any fee under section 654(6)(B)(ii) of this title . (5) Families under certain agreements Even if another law says otherwise paragraphs (1) through (3), for an amount collected for a family under a cooperative agreement under section 654(33) of this title , the State must distribute the amount collected under the terms of the agreement. (6) State option to pass through additional support with Federal financial participation (A) Families that formerly received assistance Even if another law says otherwise paragraph (2), a State must not be required to pay to the Federal Government the Federal share of an amount collected on behalf of a family that formerly received assistance from the State to the extent that the State pays the amount to the family. (B) Families that currently receive assistance (i) In general Even if another law says otherwise paragraph (1), for a family that receives assistance from the State, a State must not be required to pay to the Federal Government the Federal share of the excepted portion (as defined in clause (ii)) of any amount collected on behalf of that family during a month to the extent that— (I) the State pays the excepted portion to the family; and (II) the excepted portion is disregarded in determining the amount and type of assistance provided to the family under that program. (ii) Excepted portion defined For purposes of this subparagraph, the term “excepted portion” means that portion of the amount collected on behalf of a family during a month that does not exceed $100 per month, or for a family that includes 2 or more children, that does not exceed an amount established by the State that is no more than $200 per month. (b) Continuation of assignments (1) State option to discontinue pre-1997 support assignments (A) In general Any rights to support obligations assigned to a State as a condition of receiving assistance from the State under part A and in effect on September 30, 1997 (or that earlier date on or after August 22, 1996 , as the State may choose), may remain assigned after that date. (B) Distribution of amounts after assignment discontinuation If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected under the assignment as if the amounts had never been assigned and may distribute the amounts to the family under subsection (a)(4). (2) State option to discontinue post-1997 assignments (A) In general Any rights to support obligations accruing before the date on which a family first receives assistance under part A that are assigned to a State under that part and in effect before the implementation date of this section may remain assigned after that date. (B) Distribution of amounts after assignment discontinuation If a State chooses to discontinue the assignment of a support obligation described in subparagraph (A), the State may treat amounts collected under the assignment as if the amounts had never been assigned and may distribute the amounts to the family under subsection (a)(4). (c) Definitions As used in subsection (a): (1) Assistance The term “assistance from the State” means— (A) assistance under the State program funded under part A or under the State plan approved under part A of this subchapter (as in effect on the day before August 22, 1996 ); and (B) foster care maintenance payments under the State plan approved under part E of this subchapter. (2) Federal share The term “Federal share” means that portion of the amount collected resulting from the application of the Federal medical assistance percentage in effect for the fiscal year in which the amount is distributed. (3) Federal medical assistance percentage The term “Federal medical assistance percentage” means— (A) 75 percent, for Puerto Rico, the Virgin Islands, Guam, and American Samoa; or (B) the Federal medical assistance percentage (as defined in section 1396d(b) of this title , as that section was in effect on September 30, 1995 ) for any other State. (4) State share The term “State share” means 100 percent minus the Federal share. (5) Current support amount The term “current support amount” means, about amounts collected as support on behalf of a family, the amount designated as the monthly support obligation of the noncustodial parent in the order requiring the support or calculated by the State based on the order. (d) Gap payments not subject to distribution under this section At State option, this section must not apply to any amount collected on behalf of a family as support by the State (and paid to the family in addition to the amount of assistance otherwise payable to the family) under a plan approved under this part if that amount would have been paid to the family by the State under section 602(a)(28) of this title , as in effect and applied on the day before August 22, 1996 . (e) Amounts collected for child for whom foster care maintenance payments are made Even if another law says otherwise the preceding provisions of this section, amounts collected by a State as child support for months in any period on behalf of a child for whom a public agency is making foster care maintenance payments under part E of this subchapter— (1) must be retained by the State to the extent necessary to reimburse it for the foster care maintenance payments made about the child during that period (with appropriate reimbursement of the Federal Government to the extent of its participation in the financing); (2) must be paid to the public agency responsible for supervising the placement of the child to the extent that the amounts collected exceed the foster care maintenance payments made about the child during that period but not the amounts required by a court or administrative order to be paid as support on behalf of the child during that period; and the responsible agency may use the payments in the manner it determines will serve the best interests of the child, including setting that payments aside for the child’s future needs or making all or a part of it available to the person responsible for meeting the child’s day-to-day needs; and (3) must be retained by the State, if any portion of the amounts collected remains after making the payments required under paragraphs (1) and (2), to the extent that that portion is necessary to reimburse the State (with appropriate reimbursement to the Federal Government to the extent of its participation in the financing) for any past foster care maintenance payments (or payments of assistance under the State program funded under part A) which were made about the child (and about which past collections have not previously been retained); and any balance must be paid to the State agency responsible for supervising the placement of the child, for use by that agency under paragraph (2).