May Federal TANF or State MOE funds be used to reduce, pay off, or offset child support arrearages or debts owed by non-custodial parents?
A1: Yes, under certain circumstances, it is permissible to use Federal TANF, including TANF Recovery Act funds or State MOE funds to pay a benefit to a non-custodial parent to reduce or pay off child support arrearages owed to the family. While the State may also waive debt owed to the State, the State may not reimburse itself for the waived debt through TANF funds or count a waiver of debt owed to the State as a MOE expenditure. The State may use TANF or MOE funds to pay all or part of the child support debt owed to the custodial family in two ways: the State can directly pay off the arrearage in the form of a child support payment; or the State can pay a benefit to a custodial parent that the custodial parent accepts in lieu of unpaid child support owed to the family. For example, the State (or a third-party such as a community-based organization) could offer the custodial parent a payment equal to all or part of the amount of the debt owed to the family, conditioned on the custodial
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