Ariz. Admin. Code § R6-7-701 - Disbursement

A. The Title IV-D Agency shall disburse support and related payments that the Title IV-D Agency receives in a Title IV-D case to one or more of the following recipients:

1. An obligee or an agent authorized in writing by an obligee or as determined by law;

2. A Title IV-D agency of another state if the agency submits a request for support establishment or enforcement services and is authorized to receive support under U.I.F.S.A.;

3. The federal government, if Arizona is providing or has provided cash assistance to the assistance unit, or a member of the assistance unit, or if Arizona is providing or has provided Title IV-E foster care maintenance payments, or if the annual $25.00 fee is owed, pursuant to R6-7-611;

4. A state, if the state is providing or has provided cash assistance to the assistance unit that does not exceed the total amount of unreimbursed cash assistance;

5. An obligor, if a refund is due;

6. A bankruptcy trustee;

7. A state or federal agency as authorized by law;

8. A caretaker under Arizona statute and R6-7-712.

B. The Title IV-D Agency shall issue payments due to an obligee at the last known address filed with the Child Support Case Registry or the last address known to F.A.A.

C. If a payment to an obligee is returned to the Title IV-D Agency because it was undeliverable, the Title IV-D Agency shall make a reasonable effort to locate the obligee for the period authorized in A.R.S. § 25-503.

D. If the Title IV-D Agency is unable to locate the obligee by the end of the period authorized in A.R.S. § 25-503, the Title IV-D Agency shall contact the obligor to request oral or written approval to apply the funds to arrearages and any other unpaid obligations owed to the state. If the Title IV-D Agency is unable after a reasonable effort to locate the obligee or obligor, and an arrearage is still owed to the state, the Title IV-D Agency shall apply the payments to the arrearage. Any remaining amounts shall be handled consistent with applicable law.

E. If an obligee requests that the Title IV-D Agency directly deposit support in a financial institution and the financial institution returns those monies because the obligee's account is closed, or the financial institution will not accept the deposit, the Title IV-D Agency shall make a reasonable effort to locate the obligee for the period authorized in A.R.S. § 25-503, after receiving notice that the account is closed or that the financial institution will not accept the deposit.

F. Neither the return of monies to an obligor due to an inability to locate the obligee, nor the application of monies to arrearages or other support-related debts terminates an obligor's obligation ordered by a court or administrative entity.

G. The Title IV-D Agency shall disburse support that the Title IV-D Agency receives for a current assistance case within two business days of the last day of the month in which the Clearinghouse receives the payment.

H. Except as provided in subsections (G), (I), (J), (K), (L), and (M), the Title IV-D Agency shall disburse support within two business days of receipt by the Clearinghouse unless the Clearinghouse is unable to disburse the support for one or more of the following reasons:

1. The Title IV-D Agency does not have the obligee's current address;

2. The Title IV-D Agency or its payment posting contractor lacks sufficient information to identify the case to which the payment must be applied;

3. An action is pending before the Title IV-D Agency to determine whether:

a. An administrative income withholding order is enforceable under A.R.S. § 25-505.01, or

b. A limited income withholding order is enforceable under A.R.S. § 25-505;

4. The payment is for futures that federal law requires the Title IV-D Agency to hold for disbursement in a future month, or for prepaid support;

5. A court or administrative order, bankruptcy stay, or state or federal law requires the Title IV-D Agency to retain support or to use a different disbursement method or time-frame;

6. The Title IV-D Agency lacks information regarding a support order, an agreement, or any other obligation owed to the Department;

7. Support is returned to the Title IV-D Agency or the Clearinghouse due to the obligee's incarceration or because the obligee or only child still covered by the order is deceased;

8. A check received from an obligor or other payor has previously been dishonored, precluding the acceptance of a personal check under A.R.S. § 25-503; or

9. Other circumstances exist that prevent proper and timely disbursement of support through no fault or lack of diligence on the part of the Title IV-D Agency.

I. If a federal income tax refund offset is based on a joint federal income tax return, the Title IV-D Agency shall retain the offset for 180 days after receipt of the refund monies unless the Internal Revenue Service notifies the Title IV-D Agency of the resolution of an injured spouse claim, or until the spouse signs a waiver of any right to claim a portion of the refund. The Title IV-D Agency shall distribute and disburse a federal income tax refund offset that is based on a joint tax return in accordance with R6-7-709, R6-7-710 and R6-7-711 . The offset collections do not accrue interest and the Title IV-D Agency shall not pay interest on these monies.

J. If a [state income] tax refund is based on a joint income tax return and the department of economic security receives a written claim from the nonobligated spouse within forty-five days after the notice of a setoff for overdue child support, the setoff only applies to that portion of the refund due to the obligor. The nonobligated spouse shall provide to the department of economic security copies of both the obligated and nonobligated spouse's federal W-2 forms and evidence of estimated tax payments supporting the proportionate share of each spouse's payment of tax. The department of economic security shall retain the amount of the set off refund due to the obligated spouse determined by a proration based on the tax payments of each spouse by estimated tax payment or tax withheld from wages. A.R.S. § 42-1122(S).

K. The Title IV-D Agency shall distribute and disburse an Arizona income tax refund setoff that is based on a joint income tax return in accordance with R6-7-601 . The Title IV-D Agency shall not pay interest on these monies except as provided in A.R.S. §§ 42-1122 and 42-1123.

L. The Title IV-D Agency shall retain a state lottery prize that has been set off under A.R.S. § 5-525 for 30 days after the date on the notice of setoff and right to appeal as prescribed in A.R.S. § 5-525. The Title IV-D Agency shall not pay interest on these monies except as provided in A.R.S. § 5-525.

M. In addition to the reasons for retaining support already stated in this rule, the Title IV-D Agency may retain support for more than two business days if:

1. The amount received exceeds the amount due or owing, but is neither futures nor prepaid support;

2. The obligee's and obligor's financial accounts maintained by the Title IV-D Agency are out of balance;

3. An obligor has multiple cases and, in at least one case, has no known obligation to support a child, or a child covered by the support order is receiving Social Security benefits and A.R.S. § 46-407 applies;

4. A personal or business check received for support in one case exceeds $2,500 and there is no history of checks that exceed $2,500 clearing in that case. In no event shall the Title IV-D Agency retain these monies for more than 10 business days;

5. The Title IV-D Agency has received a notice of a stop payment order on a payment; or

6. The amount to be disbursed in a check is less than $3.00. When the amount held reaches $3.00 or more, the Title IV-D Agency shall disburse the amount.

N. If a support payment received by the Title IV-D Agency exceeds the amount due or owing and is neither futures nor prepaid support, the Title IV-D Agency shall refund the excess to the obligor at the last known address provided to the Child Support Case Registry.

O. If an obligee cannot be located before a case is closed, the Title IV-D Agency shall send any undisbursed amounts owed to the obligee back to the obligor.

Notes

Ariz. Admin. Code § R6-7-701

New Section made by final rulemaking at 11 A.A.R. 5201, effective November 15, 2005 (Supp. 05-4). Amended by final rulemaking at 15 A.A.R. 1250, effective September 5, 2009 (Supp. 09-3).