The Deficit Reduction Act of 2005: Major funding provisions impacting CSE:

Elimination of federal match on incentive payments - Section 7309 prohibits child support programs from claiming federal matching funds for reimbursable activities paid for with performance incentive funds. This provision took effect on October 1, 2006.

Reduction of federal match for genetic testing - Section 7308 eliminates the enhanced federal match rate for laboratory costs to determine paternity. The federal match rate dropped from 90 percent to 66 percent under the new law. This change became effective on October 1. 2006.

Mandatory parental fees - Section 7310 requires states to impose an annual fee of $25 on non-TANF families, who have never received assistance and whose cases have collections of at least $25. The effective date was October 1, 2006.

Maintenance of FPLS and technical assistance funding - Section 7304 and 7305 established fiscal year 2002 as the baseline for federal funding available to operate FPLS, training, technical assistance, research, and special projects. The general effective date of October 1, 2005 applied to this provision.

Distribution Provisions: The bill contains the following changes to rules governing the pass-through of child support payments to custodial parents.

• Pre-assistance assignment is eliminated by limiting the state's assignment to support owed while families receive TANF
• The State has the option to discontinue pre- and post- 1997 assignment of arrears
• The State has the option to eliminate the special distribution rule for tax offsets
• The federal share of collections is waived if a state pays collected support to former TANF families. For current TANF families, the federal share is waived if the state passes through and disregards support, up to $100 for one child and $200 for two or more children.

Establishment and Enforcement Provisions: The bill also contains a number of establishment and enforcement provisions which:

• Provide for mandatory review of TANF orders on a three-year cycle
• Make changes in medical support enforcement so that both parents' access to health insurance must be considered in establishment of a medical support order and permits the enforcement of failure to provide court ordered medical insurance against both parents
• Reduce the threshold for passport denial from $5,000 to $2,500
• Provide federal offset for arrears owed to adult children in non-TANF cases
• Provide for a state option as to whether to open a corresponding case when another state requests assistance
• Authorize HHS to use the Federal Parent Locator Service (FPLS) to match cases with overdue support with information maintained by insures

The full Deficit Reduction Act can be accessed at http://thomas.loc.gov