Reducing State Balances per State Debt Compromise Agreement
Once a court order is obtained to reduce state balances due to an NCP’s compliance with a State Debt Compromise agreement, a finance worker will adjust both the child support & TANF URA balances.
*Note: If the CP has multiple FGNs, only the child support balances will be reduced. The TANF URA will not be reduced per Policy 340:25-5-140 ITS 5.
The NCP has paid $600 over the last 6 months that retained to state owed past due balances and a court order states the state will waive $600 in state debt. The state balances on the case are $2,000 and the TANF URA is $16,525.
The NCP has paid $600 over the last 6 months that credited to private past due balances and a court order states the state will waive $600 in state debt. The state balances on the case are $2,000 and the TANF URA is $16,525.
CFPA Entry for Arrears
If the state balances to reduce are arrears, the worker will enter a $600 non-cash payment on CFPA directing the payment to arrears by entering a “Y” in the NONCASH & ARREARS field and a “C,” “Z,” “E” or “F” (depending on the state arrears balance type) in the AR TP field.
*Note: If interest is the state balance to be reduced, CFPA cannot be used. The worker will use INTADJ/ITU transactions.
CFPA Entry for Judgment
If the state balance to reduce is part of a judgment, the worker will enter a $600 non-cash payment on CFPA directing the payment to a judgment using the judgment sequence number (CFFBI). The worker will not enter anything in the JD TP field – this will be auto-populated based on the sequence number.
Once entered, the payment will display on CFPL with a “Y” in the NCSH field. This tells the user that the payment was a non-cash payment or waiver. Entering state waiver agreement amounts on CFPA is better financial record keeping than just adjusting the balances via CFAR/J. Below is an example of a judgment non-cash entry on CFPL:
Reducing the TANF URA
Once the child support balances have been updated, the worker will reduce the TANF URA by the amount of state debt waived. In this example, the NCP paid $600 – so the URA will be reduced by $600.
Adjustments to the IV-E URA are not necessary.
This adjustment is completed using the URAADJR transaction (URAADJR (space) C/H# (space) Person ID).
From this screen, the worker will update:
Benefit Type: C (for TANF)
Amount: The total amount of state money the state is waiving.
Effective Date: 1st of the month of the court order waiving state debt.
Notes: Indicate action taken.