Submission of Written Comments
Written comments on the proposed rules received at the above address, email, or through the http://adminrules. wisconsin.gov web site no later than July 30, 2008, will be given the same consideration as testimony presented at the hearing.
Agency Contact Person
Analysis Prepared by the Department of Workforce Development
Statutory authority
Statutes interpreted
Related statutes or rules
Explanation of agency authority
As of the date of filing, authority to promulgate this rule is within the Department of Workforce Development. Effective July 1, 2008, authority to promulgate the rule and contact individuals will be within the Department of Children and Families.
Section
49.22 (9), Stats., provides that the department shall promulgate rules that provide a standard for courts to use in determining a child support obligation based upon a percentage of the gross income and assets of either or both parents. According to the federal Office of Child Support Enforcement (OCSE), medical support is a subset of child support.
Summary of the emergency and proposed rules
Under s.
767.89 (3) (e), Stats., the content of a paternity judgment shall include an order establishing the amount of the father's obligation to pay or contribute to the reasonable expenses of the mother's pregnancy and the child's birth. The amount established may not exceed one-half of the total actual and reasonable pregnancy and birth expenses. The order shall specify the court's findings as to whether the father's income is at or below the federal poverty line and specify whether periodic payments are due on the obligation, based on the father's ability to pay or contribute to those expenses. If the father has no present ability to pay, the court may modify the judgment or order at a later date to require the periodic payments if the father has the ability to pay at that time.
If the birth costs were paid by the Medicaid program, the order for payment of birth costs under s.
767.89 (3) (e), Stats., will be to the State of Wisconsin. An unmarried mother who applies for or receives Medicaid is required to cooperate with the local child support agency in establishing paternity (if necessary), obtaining medical support, and assigning the rights to payment of medical support to the state. There are exceptions to the child support cooperation requirement for good cause and for women during pregnancy and 60 days post-partum.
Federal and state income tax refund offset is one of the primary tools for collection of birth cost orders owed to the state. OCSE recently notified Wisconsin that it will not certify the state's request for federal income tax refund offset for birth cost orders that have been determined using the methodology in s.
767.89 (3) (e), Stats. This provision requires the court to make a finding based on the father's ability to pay before setting a periodic payment on birth costs. OCSE's interpretation of federal regulations as issued in Policy Interpretation Question PIQ-07-01 provides that the judgment amount must be set according to guidelines that take into consideration the father's ability to pay.
This rule creates a procedure in the child support guidelines in Chapter
DWD 40 that allows a court to take into consideration the father's ability to pay in determining the birth cost judgment amount. The court may order a judgment that is the lowest of the following:
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An amount that does not exceed one-half of the actual and reasonable cost of the pregnancy and child's birth as provided under s.
767.89 (3) (e), Stats.
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An amount that does not exceed 5% of the father's income over 36 months.
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If a father's child support obligation was determined under s.
DWD 40.04 (4) and the father's monthly income available for child support is between 75% and 125% of the federal poverty guidelines, the court may use the maximum birth cost judgment amount provided in the schedule in Appendix D.
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If a father's child support obligation was determined under s.
DWD 40.04 (4) and the father's monthly income available for child support is less than 75% of the federal poverty guidelines, the court may order a birth cost judgment at an amount appropriate for the father's total economic circumstances.
Although the primary impetus for this rule is to comply with federal child support regulations to ensure that OCSE will certify birth cost orders owed to the State of Wisconsin in cases under Section IV-D of the Social Security Act, the birth cost provision will also apply to other parties, such as a private insurance company seeking recovery of birth costs under s.
767.89 (3) (e), Stats.
The department will revise the schedule of the maximum birth cost judgment amounts for low-income payers in Appendix D every year based on changes in the federal poverty guidelines and publish notice of the revisions to the schedule in the Wisconsin Administrative Register. Currently the schedule in Appendix C on determining the child support obligation of low-income payers is revised at least once every 4 years based on changes in the federal poverty guidelines since the schedule was last revised. The proposed rule will provide that both Appendix C and Appendix D will be revised every year based on changes in the federal poverty guidelines.
The proposed rule will also create a cross-reference to the medical support provision in s.
767.513, Stats., in the newly-created section on medical support in s.
DWD 40.05. OCSE has notified Wisconsin that the medical support provision in s.
767.513, Stats., must be within the child support guidelines in Chapter
DWD 40.
In addition, the proposed rule amends the section on determining income imputed based on earning capacity when information on the parent's actual income or ability to earn is unavailable. The current rule provides that the court may impute to the parent the income that a person would earn by working 35 hours per week for the federal minimum wage. This provision was created effective January 1, 2004, when the federal and state minimum wage were the same rate.
The state minimum wage has been higher than the federal minimum wage since June 1, 2005, and the provision on imputing income when information is unavailable has been inconsistently applied by counties since the increase. Some counties have been using the state minimum wage in determining earning capacity since it is the applicable minimum wage rate, while others have been using the federal minimum wage as the current rule provides.
The proposed rule will allow courts to impute income to the parent at the higher of the state or federal minimum wage. This change will have no effect in the near future since the federal minimum wage will soon be equal to or higher than the state minimum wage, but it will ensure consistency among counties if the state rate is again higher than the federal rate. Effective 7/24/08, the federal minimum wage rate will be $6.55 and the state minimum wage rate will be $6.50. Effective 7/24/09, the federal minimum wage rate will be $7.25, and the state minimum wage is proposed to also increase to $7.25.
Comparison with federal regulations
In PIQ-07-01, OCSE states that medical support is a subset of child support, and child support orders must be set under state guidelines that comply with
45 CFR 302.56. State guidelines must:
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Take into consideration all earnings and income of the noncustodial parent.
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Be based on specific descriptive and numeric criteria and result in a computation of the support obligation.
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Provide for the child's health care needs through health insurance coverage or other means.
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Provide a rebuttable presumption that the amount determined using the guidelines is the correct child support to be awarded.
The circumstances in which past-due support qualifies for federal income tax refund offset are listed in
45 CFR 303.72(a). The list includes cases where the child support agency is providing services to a Medicaid recipient.
Comparison with rules in adjacent states
All states are required to comply with the OCSE interpretation that birth cost judgment amounts must be set under the state's child support guidelines.
Summary of factual data and analytical methodologies
OCSE has notified states that birth cost judgment amounts must be set according to child support guidelines that take into consideration the father's ability to pay.
This rule provides that the amount of a birth cost judgment may not exceed 5% of the father's income over 3 years, with a graduated scale of lower amounts for fathers with income below 125% of the federal poverty guidelines. The 5% limit is based on a proposed federal rule on medical support in child support cases. The proposed federal rule provides that cash medical support or private health insurance is considered reasonable in cost to the obligated parent if it does not exceed 5% of his or her gross income. Child Support Enforcement Program; Medical Support, 71 Fed. Reg. 549965, (proposed September 20, 2006)
Analysis used to determine effect on small businesses
The rule could affect a private insurance company seeking recovery of birth costs under s.
767.89 (3) (e), Stats., but the effect would be
de minimus.
Initial Regulatory Flexibility Analysis
The rule may affect small businesses but will not have a significant economic impact on a substantial number of small businesses.
Fiscal Estimate
Summary
The rule allows Wisconsin to continue to collect birth cost judgments owed to the state through federal income tax refund offset. If the department failed to enact this rule to comply with OCSE requirements, the state and county child support agencies would likely experience a decrease in revenue. In calendar year 2007, the child support program collected $11,481,000 in birth costs through federal income tax refund offset. Of the nearly $11.5 million collected, approximately $6.62 million was returned to the federal government to reimburse Medicaid costs, $1.72 million was used by county child support agency programs to benefit children in the state, and the remaining $3.14 million was returned to the state Medicaid program.
State fiscal effect
None
Local fiscal effect
None
Long-range fiscal implications
Continuation of current revenue.
Notice of Hearing
Workforce Development
NOTICE IS HEREBY GIVEN that pursuant to ss.
49.138 and
227.11 (2) (a), Stats., the Department of Workforce Development proposes to hold a public hearing to consider rules revising Chapter
DWD 16, relating to emergency assistance for families with needy children.
Hearing Information
August 5, 2008
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MADISON
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Tuesday
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G.E.F. 1 Building, B205
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1:30 p.m.
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201 E. Washington Avenue
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Interested persons are invited to appear at the hearing and will be afforded the opportunity to make an oral presentation of their positions. Persons making oral presentations are requested to submit their facts, views, and suggested rewording in writing.
Visitors to the GEF 1 building are requested to enter through the left East Washington Avenue door and register with the customer service desk. The entrance is wheelchair accessible via a ramp from the corner of Webster Street and East Washington Avenue. If you have special needs or circumstances regarding communication or accessibility at the hearing, please call (608) 267-9403 at least 10 days prior to the hearing date. Accommodations such as ASL interpreters, English translators, or materials in audio format will be made available on request to the fullest extent possible.
Copies of Proposed Rule
A copy of the proposed rules is available at
http://adminrules.wisconsin.gov. This site allows you to view documents associated with this rule's promulgation, register to receive email notification whenever the Department posts new information about this rulemaking order, and submit comments and view comments by others during the public comment period. You may receive a paper copy of the rule or fiscal estimate by contacting:
Elaine Pridgen, Office of Legal Counsel
Department of Children and Families
201 E. Washington Avenue
Madison, WI 53707
Submission of Written Comments
Written comments on the proposed rules received at the above address, email, or through the http://adminrules. wisconsin.gov web site no later than August 6, 2008, will be given the same consideration as testimony presented at the hearing.
Agency Contact Person
Analysis Prepared by the Department of Workforce Development
Statutory authority
Statutes interpreted
Explanation of agency authority
As of the date of filing, authority to promulgate this rule is within the Department of Workforce Development. Effective July 1, 2008, authority to promulgate the rule and contact individuals will be within the Department of Children and Families.
Section
49.138, Stats., provides that the department shall implement a program of emergency assistance to needy persons in cases of fire, flood, natural disaster, homelessness or impending homelessness, or energy crisis. “Needy person" has the meaning specified by the department by rule.
Summary of the proposed rule
The emergency assistance program is funded by the federal Temporary Assistance for Needy Families (TANF) block grant, which requires that the funds be used for eligible needy families with a child. The proposed rule will add a provision to the nonfinancial eligibility section regarding the child for whom emergency assistance is requested. The current rule provides that the child is or, within 6 months prior to the month of application, was living with a qualified caretaker relative. The proposed rule also requires that the child will live with the qualified caretaker relative in the month following the application date.
Comparison with federal regulations
In general, states must use TANF funds for eligible, needy families with a child and for one of the four purposes of the TANF program:
1. To provide assistance to needy families.
2. To end dependence of needy parents by promoting job preparation, work, and marriage.
3. To prevent and reduce out-of-wedlock pregnancies.
