§576D-10 Collection and disbursal of child support; direct payment exception. (a) The agency shall collect and disburse child support payments when an order requires the collection and disbursal. In the event of any default by the obligor, upon notification of the default by the custodial parent, the agency shall proceed against the obligor for the arrearage and the agency shall have jurisdiction over future child support payments. Notwithstanding any other law to the contrary, the agency shall maintain a special interest bearing account for child support payments. Moneys collected by the agency for child support payments shall not be deposited into the state treasury, but shall be deposited into this account. Moneys to be disbursed by the agency for child support payments shall be disbursed from this account without appropriation or allotment. The interest realized from this account shall be used:

(1) For related costs of the maintenance and operation of the account; and

(2) To improve the child support enforcement agency's ability to promptly disburse payments to the custodial parent.

The balance shall be deposited into the state treasury to the credit of the general fund.

(b) Any child support payments required by a court order effective on June 30, 1986, to be made to a court or clerk of the court and disbursed to a custodial parent shall be made to the agency after June 30, 1986. The agency shall disburse the payments as appropriate under the court order.

(c) Other than for child support payments disbursed to the department of human services or to any other state or agency administering a program under Title IV-D, the custodial parent shall elect to receive child support payments from the agency by means of an electronic benefits transfer system or by directly depositing the amount into an account designated by the custodial parent. If an election is not made, the agency shall determine whether the disbursement of child support payments shall be by means of an electronic benefits transfer system or by an alternate method of disbursement that complies with the time frame required under Title IV-D.

(d) At the time a child support obligation is first established or at any time thereafter, the court may approve an alternative arrangement for the direct payment of child support from the obligor to the custodial parent as an exception to the provisions for income withholding through the agency, as required by sections 571-52.2(a)(1), 571-52.3, and 576E-16(a).

(e) The court may approve an alternative arrangement for the direct payment of child support where either:

(1) The obligor or custodial parent demonstrates and the court finds that there is good cause not to require immediate withholding; or

(2) A written agreement is reached between the obligor and the custodial parent and signed by both parties;

provided that in either case where child support has been ordered previously, an alternative arrangement for direct payment shall be approved only where the obligor provides proof of the timely payment of previously ordered support. For purposes of this section, good cause to approve an alternative arrangement shall be based upon a determination by the court, either in writing or on the record, that implementing income withholding would not be in the best interests of the child. Such a determination shall include a statement setting forth the basis of the court's conclusion.

(f) Any alternative arrangement for direct payment shall provide that either parent may void the arrangement at any time and apply for services from the agency to act as agent to receive payments from the obligor parent. The alternative arrangement for direct payment also shall provide that, if the subject dependents of the obligor parent commence receiving public assistance, including public assistance from the department of human services under chapter 346, foster care under section 571-48, Title IV-E or Title XIX of the federal Social Security Act (42 U.S.C. §1396), or if either parent applies for services from the agency, the agency may immediately void the direct payment arrangement by sending written notice by regular mail to the custodial and obligor parents at their last known addresses, as disclosed in the alternative arrangement agreement.

(g) The alternative arrangement for direct payment agreement shall include the most recent addresses of the custodial and obligor parent. If the obligor parent alleges direct payment of child support to the custodial parent after the subject dependents of the court-approved alternative arrangement become recipients of public assistance, including public assistance from the department of human services under chapter 346, foster care under section 571-48, Title IV-E or Title XIX of the federal Social Security Act (42 U.S.C. §1396), or after the custodial parent applies for services from the agency, and after receiving proper notification of the change of payee to the agency, then the obligor shall have the burden of proving that the child support payments were made by presenting written evidence, including canceled checks or receipts.

(h) No alternative arrangement for direct payment shall be approved where the obligor or the custodial parent is receiving services under Title IV-D of the federal Social Security Act or where the dependents of the obligor receive public assistance, including public assistance from the department of human services under chapter 346, foster care under section 571-48, Title IV-E or Title XIX of the federal Social Security Act (42 U.S.C. §1396), or where the obligor owes child support for a period during which public assistance was provided to the child or children by the department of human services.

(i) Any alternative arrangement for direct payment shall pertain only to the method of payment of child support. The amount of child support shall be determined according to the child support guidelines pursuant to sections 576D-7 and 576E-15.

(j) The alternative arrangement for direct payment shall become effective upon approval and filing by the court. For any order approved pursuant to this section on or after October 1, 1998, each party shall send a certified copy of the order to the state case registry established under section 576D-6.

(k) The agency shall not be required to maintain records while an order obtained pursuant to this section is in effect, except for any payments received and disbursed by the agency. [L 1986, c 332, pt of §2; am L 1987, c 323, §1; am L 1988, c 34, §1; am L 1992, c 246, §2; am L 1996, c 178, §2; am L 1997, c 294, §3; am L 1999, c 300, §3; am L 2002, c 31, §1 and c 72, §5; am L 2009, c 115, §2; am L 2011, c 79, §3]

Case Notes

Where, after reviewing the applicable state and federal rules, there was no authority for the child support enforcement agency's (CSEA) voiding of the direct payment arrangement and directing payments to itself simply because mother applied for CSEA services, family court did not abuse its discretion by ordering CSEA to cease all collection and enforcement efforts against father who did not fail to comply with the child support order, but erred in finding that the CSEA had instituted "income withholding". 118 H. 268 (App.), 188 P.3d 782 (2008).

Where, pursuant to subsection (e), each party has the right to void the direct payment arrangement at any time and apply for collection and disbursement services from the child support enforcement agency (CSEA), family court abused its discretion by ordering mother to direct any future child support modification requests to the court and not to CSEA and by ordering CSEA not to open a future case on father and institute collection and enforcement efforts against father without the court's approval. 118 H. 268 (App.), 188 P.3d 782 (2008).

Family court erred by ordering direct child support payment to wife without providing that either party may void the arrangement. 134 H. 431 (App.), 341 P.3d 1231 (2014).