Title of Regulation: 22VAC40-880. Child Support Enforcement Program (amending 22VAC40-880-240).

Statutory Authority: § 63.2-217 of the Code of Virginia; 42 USC § 651 et seq.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: March 6, 2019.

Effective Date: March 21, 2019.

Agency Contact: Alice Burlinson, Senior Assistant Attorney General, Department of Social Services, 4504 Starkey Road, Southwest, Roanoke, VA 24018, telephone (540) 776-2779, FAX (804) 776-2797, or email alice.burlinson@dss.virginia.gov.

Basis: Section 63.2-217 of the Code of Virginia provides that the State Board of Social Services shall adopt regulations not in conflict with Title 63.2 of the Code of Virginia as may be necessary or desirable to carry out the purpose of the title. Section 63.2-1918 of the Code of Virginia provides that there is a rebuttable presumption that the amount of a child support award that would result from the application of the guidelines is the correct amount. While the Code of Virginia lists factors for rebuttal, it states that "[a]dditional factors that may lead to rebuttal of the presumption shall be determined by Department [of Social Services] regulation."

Purpose: In approximately 80% of cases with the Division of Child Support Enforcement, the custodial parent has never received public assistance, or no public assistance debt remains. In such cases, the parents may seek a court order setting an obligation by agreement. The purpose of the amendment is to provide similar flexibility for parents who are subject to administrative support orders. Children need both financial and family support to grow and thrive. This regulation is essential to protect the health and welfare of children by establishing uniform child support enforcement procedures, which facilitate the financial stability of children and families.

Rationale for Using Fast-Track Rulemaking Process: The board does not believe that the amendments will be controversial. The amended regulation provides parents the opportunity for increased participation in setting a child support order. Such participation is voluntary, and judges may already consider parental agreements in court proceedings.

Substance: The amendment allows the department to issue an administrative support order based on an agreement of the parents.

Issues: There are numerous advantages to this regulatory action:

1. It expands parents' involvement in establishing child support obligations and increases their investment in the outcome. This investment can improve a noncustodial parent's willingness to comply with an order and the reliability of payments for the custodial parent.

2. It provides parents with flexibility to make strategic decisions. For example, a custodial parent may consent to a noncustodial parent paying less in the present to pursue education, because such education will allow greater payments in the future.

3. The ability to deviate by parental agreement already exists as a factor in court proceedings.

The agency is aware of no disadvantages to the public or to the Commonwealth.

The Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The State Board of Social Services (Board) proposes to allow the Department of Social Services (DSS) to issue an administrative child support order based on agreement of the parents.

Result of Analysis. The benefits likely exceed the costs for the proposed regulation.

Estimated Economic Impact. Under Virginia law,¹ DSS is authorized to issue an administrative child support order. Any parent who does not have an existing court support order can apply for services at DSS and seek an administrative support order. Such an administrative order is an alternative to obtaining a judicial order from a court if chosen by a parent. Virginia law also contains presumptive child support guidelines that judges and DSS must follow.² Guideline support amount is the starting point in determining the final amount and is the same as the final amount in cases where there are no factors warranting a deviation. Judges can deviate from the presumptive amount by considering a wide spectrum of factors (14 factors).³ However, under the current regulation, DSS has much less flexibility. DSS can deviate from the presumptive child support guidelines only by imputing income (i.e., using an income that the person should have been earning rather than what he or she actually earns) under certain circumstances. In addition to deviation by imputing income, the Board proposes to allow DSS to deviate from the presumptive guidelines when the parents have a written agreement as to the amount of support to be paid.

The main economic impact of the proposed change is in time savings to the parents, to DSS, and to the court system in general (e.g., fewer pleadings filed, less law-enforcement time to serve papers, less judge time to hear cases, etc.). The proposed change would also likely provide additional incentives to parents to be more agreeable to the amount of support in order to avoid court costs and delays. According to DSS, parents consenting to the amounts can, and most do, go to the Juvenile and Domestic Relations District Court without attorney representation. Courts also generally set a court date one month to possibly a year forward from the date of filing a petition, whereas DSS can enter an administrative order usually within a month or two of the application. Moreover, DSS sends a caseworker as well as an attorney to be present in the court hearings. Therefore, the proposed regulation would allow consenting parents to obtain an agreed upon order faster, save DSS administrative resources in terms of case worker as well as attorney time offset by increase in staff support needed to address additional administrative order cases, and relieve the court system from the additional workload these cases would represent.

Finally, the child support program is partially funded from a percentage of the collections. Lower administrative support amounts would reduce DSS's collections, but that reduction would likely be offset by collections from a higher number of expected administrative support orders and a higher expected compliance rate with such orders (because of their consensual nature).

Businesses and Entities Affected. The proposed amendments affect DSS, Virginia courts, and persons seeking child support. According to DSS, there were 12,860 administrative orders issued by DSS and 74,880 judicial orders entered by the courts in DSS cases in fiscal year 2018. The total number of judicial orders (with or without DSS involvement) entered by the courts in the Commonwealth is not available. DSS cannot predict how many of the court orders may be shifted from the court system to the DSS administrative order process as a result of this proposed regulation.

Localities Particularly Affected. The proposed regulation does not disproportionately affect particular localities.

Projected Impact on Employment. The proposed regulation is expected to reduce parents' time missed from work, reduce DSS caseworker and attorney time devoted to judicial support orders offset by increase in staff support needed to address additional administrative support order cases, and reduce court caseloads. Reducing time off from work should increase the overall supply of labor; the impacts on DSS and the court system should reduce the demand for their staff time and to a lesser extent the demand for attorney services (because most consenting parents go the courts without legal representation).

Effects on the Use and Value of Private Property. No significant impact on the use and value of private property is expected.

Real Estate Development Costs. The proposed regulation does not affect real estate development costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The proposed regulation may reduce the demand for attorney services at solo or small business law practices by a small margin. Other than that, the proposed regulation does not have costs or other effects on small businesses.

Alternative Method that Minimizes Adverse Impact. There is no alternative method that minimizes the likely marginal impact on small law firms while accomplishing the same goal.

Adverse Impacts:

Businesses. The proposed regulation may adversely affect legal businesses by a small margin.

Localities. The proposed regulation does not adversely affect localities.

Other Entities. The proposed regulation does not adversely affect other entities.

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¹Virginia Code §§ 63.2-1903 and 63.2-1918

²Virginia Code § 20-108.2

³Virginia Code § 20-108.1

Agency's Response to Economic Impact Analysis: The Department of Social Services reviewed the economic impact analysis prepared by the Department of Planning and Budget and has no comments.

Summary:

The amendments allow the Department of Social Services to issue an administrative support order based on an agreement of the parents as a third factor that may be considered to rebut the presumption of the amount of child support that results from the application of the child support guidelines as the correct amount of child support. This factor is already one that judges may consider in court proceedings.

22VAC40-880-240. Administrative deviation from the child support guideline.

There shall be a rebuttable presumption that the amount of child support that results from the application of the guidelines is the correct amount of child support pursuant to §§ 20-108.1, 20-108.2, and 63.2-1918 of the Code of Virginia. Deviations from the guideline guidelines shall be allowed as follows:

1. When either natural or adoptive parent is found to be voluntarily unemployed or fails to provide financial information upon request, income shall be imputed except as indicated below in this subdivision. A natural or adoptive parent is determined to be voluntarily unemployed when he the parent quits a job without good cause or is fired for cause.

a. The current or last available monthly income shall be used to determine the obligation if that income is representative of what the natural or adoptive parent could earn or otherwise receive.

b. If actual income is not available, use the federal minimum wage multiplied by 40 hours per week and converted to a monthly amount by multiplying the result by 4.333.

2. In non-TANF cases, where there is a signed, written agreement for child support, the child support obligation may be set at the agreed amount but at no less than the statutory minimum pursuant to § 20-108.2 of the Code of Virginia.

3. No other deviations from the child support guidelines may be made in establishing or adjusting administrative support orders or reviewing court orders. Should potential deviation factors exist, as stated in § 20-108.1 of the Code of Virginia, refer the case to court for additional action.