14.5 Disbursement

Overview

Federal law requires that any payment received by the State Disbursement Unit (SDU) or Clerk of District Court will generally be disbursed within 2 days of receipt, and POSSE automates the distribution and disbursement of child support payments for the SDU and Clerk of District Court.

Policy

Once payments are distributed according to the federal rules as described in 14.4 Distribution, the payment may be disbursed (or sent) to the appropriate payee.

Types of Disbursement

A custodial parent may choose one of three ways to receive collections disbursed by the SDU. Each option is described below.

Check

Depending upon the county, the custodial parent will either receive a check from the Clerk of District Court or the SDU. In some instances, the SDU transfers receipted payments to the Clerk of District Court for distribution and disbursement. For information regarding those Clerks of District Court, please see Appendix 14.C – Clerk of District Court - Distribution & Disbursement.

Direct Deposit

In order to receive collections via a direct deposit, the custodial parent will complete a direct deposit request form provided by the SDU and send the completed form to the SDU. The custodial parent may choose to receive the direct deposit in either a checking or a savings account.

ReliaCard

The ReliaCard is a pre-paid Visa card loaded with the custodial parent’s child support payments. Once the custodial parent completes and returns the ReliaCard application, the SDU will automatically deposit child support payments to the Visa card which can be used anywhere Visa is accepted.

Delayed Disbursements

Disbursements may be delayed by the SDU for the following reasons which include but are not limited to:

• Insufficient identifying information on the payment;

• Unknown address for the custodial parent;

• IRS intercept; or

• Joint IRS refund.

Cost Recovery

Under certain limited circumstances, the SDU will initiate proceedings to recover money disbursed to the custodial parent. These circumstances are listed below:

• The SDU applied the collection to the wrong case; or

• The Internal Revenue Service (IRS) reverses/rescinds the federal tax refund.

The SDU will:

• Notify the custodial parent, in writing, of the cost recovery and request agreement for the cost recovery to proceed;

• Monitor for a response by the custodial parent;

• Repeat the notification process 2 more times;

• Set up a cost recovery in POSSE whether the custodial parent responds or not;

• Monitor the case until the overpayment is repaid; and

• Once paid in full, remove the cost recovery information from POSSE.

In addition to the two scenarios listed above, if the check from the non-custodial parent or the employer is returned due to non-sufficient funds (NSF), the SDU will deposit the check a second time. The non-custodial parent or the employer is normally contacted by their bank that their check is NSF. The non-custodial parent or employer can then contact the SDU to make arrangements to provide a replacement check or money order. After the check is returned on the second deposit attempt, the SDU will turn the check over to a collection agency. The SDU will not try to recoup the payment from the custodial parent.

Cross Reference

Appendix 14.C – Clerk of Court – Distribution & Disbursement