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Page | 145 obligated means the household has a legal obligation to pay the support (e.g. court order, administratively ordered, legally enforceable separation agreement, etc.). Verification of the legal obligation must be obtained, however cannot be used as verification of the actual child support payment. Verification of the amount paid is also required.

Legally obligated child support payments made to a third party on behalf of an individual who is not residing in the payer's house are also allowed as an exclusion. The payment must be a legal obligation and verification of the order and amount must be obtained. Common examples of third party payments are health insurance premiums, rent payments paid to a landlord, etc.

IRS tax intercept payments are not allowable as an exclusion.

Following are the budgeting procedures to allow the child support exclusion:

a) 6 Month Reporting Households: The amount paid must be reported on the report form. After initial verification of the legal obligation and amount paid has been received, verification is only required if the legal obligation or amount changes, or the amount is questionable.

b) Change Reporting Households: If the individual has paid 3 or more months, an average of the last 3 months' payments would be used for the prospective amount, unless the household anticipates a change in the legal obligation or payment amount, or a change is known to the agency. If the average amount is used, the household is only required to report changes in the legal obligation such as a child reaching an age limit where support is no longer required or a change in the legally obligated amount. If changes are reported or otherwise become known to the agency, they must be acted on. A new average must be re-determined at the next renewal. If the individual does not have a stable payment history (less than 3 months), the anticipated amount will be based on the amount the individual anticipates paying, until a stable history can be determined. Three month certification periods are required for households with an unstable payment history. At the next renewal, the three months' payment history is established, and the average method could be used. Until the payment history/average procedure is used, the household is required to report changes in legal obligation, including if the legally obligated amount changed.

c) Child Support payments received by TANF recipients, who must be transferred to the Child Support Enforcement Office (Public Law 93-647) to maintain TANF eligibility, are excluded as income. Example: John pays court ordered child support to Jane in the amount of $300 a month. He has verified the court order and the amount he pays. Jane does not live with John. John’s gross income is $1300 but only $1000 is used in the eligibility/benefit determination. Exception: Legally obligated child support payments made to an individual or agency outside of the household may be allowed as an exclusion even if the child for whom the support was paid is a household member. This allows an exclusion if the child moves in or out of the payer’s house, or if arrearages are being paid to an outside agency, usually the Division of Child Support.