42 USC 609 - Penalties

U.S Code last checked for updates: Jan 30, 2025

§ 609.

Penalties

(a)

In general

Subject to this section:

(1)

Use of grant in violation of this part

(A)

General penalty

(B)

Enhanced penalty for intentional violations

(C)

Penalty for misuse of competitive welfare-to-work funds

(2)

Failure to submit required report

(A)

Quarterly reports

(i)

In general

(ii)

Rescission of penalty

(B)

Report on engagement in additional work activities and expenditures for other benefits and services

(i)

In general

(ii)

Rescission of penalty

The Secretary shall rescind a penalty imposed on a State under clause (i) with respect to a report required by section 611(c)(1)(A) of this title if the State submits the report not later than—

(I)

in the case of the report required under section 611(c)(1)(A)(i) of this title, June 15, 2011; and

(II)

in the case of the report required under section 611(c)(1)(A)(ii) of this title, September 15, 2011.

(iii)

Penalty based on severity of failure

(3)

Failure to satisfy minimum participation rates

(A)

In general

(B)

“Applicable percentage” defined

As used in subparagraph (A), the term “applicable percentage” means, with respect to a State—

(i)

if a penalty was not imposed on the State under subparagraph (A) for the immediately preceding fiscal year, 5 percent; or

(ii)

if a penalty was imposed on the State under subparagraph (A) for the immediately preceding fiscal year, the lesser of—

(I)

the percentage by which the grant payable to the State under section 603(a)(1) of this title was reduced for such preceding fiscal year, increased by 2 percentage points; or

(II)

21 percent.

(C)

Penalty based on severity of failure

(4)

Failure to participate in the income and eligibility verification system

(5)

Failure to comply with paternity establishment and child support enforcement requirements under part D

(6)

Failure to timely repay a Federal Loan Fund for State Welfare Programs

(7)

Failure of any State to maintain certain level of historic effort

(A)

In general

(B)

Definitions

As used in this paragraph:

(i)

Qualified State expenditures

(I)

In general

The term “qualified State expenditures” means, with respect to a State and a fiscal year, the total expenditures by the State during the fiscal year, under all State programs, for any of the following with respect to eligible families:

(aa)

Cash assistance, including any amount collected by the State as support pursuant to a plan approved under part D, on behalf of a family receiving assistance under the State program funded under this part, that is distributed to the family under section 657(a)(1)(B) of this title and disregarded in determining the eligibility of the family for, and the amount of, such assistance.

(bb)

Child care assistance.

(cc)

Educational activities designed to increase self-sufficiency, job training, and work, excluding any expenditure for public education in the State except expenditures which involve the provision of services or assistance to a member of an eligible family which is not generally available to persons who are not members of an eligible family.

(dd)

Administrative costs in connection with the matters described in items (aa), (bb), (cc), and (ee), but only to the extent that such costs do not exceed 15 percent of the total amount of qualified State expenditures for the fiscal year.

(ee)

Any other use of funds allowable under section 604(a)(1) of this title.

(II)

Exclusion of transfers from other State and local programs

Such term does not include expenditures under any State or local program during a fiscal year, except to the extent that—

(aa)

the expenditures exceed the amount expended under the State or local program in the fiscal year most recently ending before August 22, 1996; or

(bb)

the State is entitled to a payment under former section 603 of this title (as in effect immediately before August 22, 1996) with respect to the expenditures.

(III)

Exclusion of amounts expended to replace penalty grant reductions

(IV)

Eligible families

(V)

Counting of spending on certain pro-family activities

(ii)

Applicable percentage

(iii)

Historic State expenditures

The term “historic State expenditures” means, with respect to a State, the lesser of—

(I)

the expenditures by the State under parts A and F (as in effect during fiscal year 1994) for fiscal year 1994; or

(II)

the amount which bears the same ratio to the amount described in subclause (I) as—

(aa)

the State family assistance grant, plus the total amount required to be paid to the State under former section 603 of this title for fiscal year 1994 with respect to amounts expended by the State for child care under subsection (g) or (i) of section 602 of this title (as in effect during fiscal year 1994); bears to

(bb)

the total amount required to be paid to the State under former section 603 of this title (as in effect during fiscal year 1994) for fiscal year 1994.

Such term does not include any expenditures under the State plan approved under part A (as so in effect) on behalf of individuals covered by a tribal family assistance plan approved under section 612 of this title, as determined by the Secretary.

(iv)

Expenditures by the State

The term “expenditures by the State” does not include—

(I)

any expenditure from amounts made available by the Federal Government;

(II)

any State funds expended for the medicaid program under subchapter XIX;

(III)

any State funds which are used to match Federal funds provided under section 603(a)(5) of this title; or

(IV)

any State funds which are expended as a condition of receiving Federal funds other than under this part.

Notwithstanding subclause (IV) of the preceding sentence, such term includes expenditures by a State for child care in a fiscal year to the extent that the total amount of the expenditures does not exceed the amount of State expenditures in fiscal year 1994 or 1995 (whichever is the greater) that equal the non-Federal share for the programs described in section 618(a)(1)(A) of this title.

(v)

Source of data

(8)

Noncompliance of State child support enforcement program with requirements of part D

(A)

In general

If the Secretary finds, with respect to a State’s program under part D, in a fiscal year beginning on or after October 1, 1997—

(i)

(I)

on the basis of data submitted by a State pursuant to section 654(15)(B) of this title, or on the basis of the results of a review conducted under section 652(a)(4) of this title, that the State program failed to achieve the paternity establishment percentages (as defined in section 652(g)(2) of this title), or to meet other performance measures that may be established by the Secretary;

(II)

on the basis of the results of an audit or audits conducted under section 652(a)(4)(C)(i) of this title that the State data submitted pursuant to section 654(15)(B) of this title is incomplete or unreliable; or

(III)

on the basis of the results of an audit or audits conducted under section 652(a)(4)(C) of this title that a State failed to substantially comply with 1 or more of the requirements of part D (other than paragraph (24), or subparagraph (A) or (B)(i) of paragraph (27), of section 654 of this title); and

(ii)

that, with respect to the succeeding fiscal year—

(I)

the State failed to take sufficient corrective action to achieve the appropriate performance levels or compliance as described in subparagraph (A)(i); or

(II)

the data submitted by the State pursuant to section 654(15)(B) of this title is incomplete or unreliable;

the amounts otherwise payable to the State under this part for quarters following the end of such succeeding fiscal year, prior to quarters following the end of the first quarter throughout which the State program has achieved the paternity establishment percentages or other performance measures as described in subparagraph (A)(i)(I), or is in substantial compliance with 1 or more of the requirements of part D as described in subparagraph (A)(i)(III), as appropriate, shall be reduced by the percentage specified in subparagraph (B).

(B)

Amount of reductions

The reductions required under subparagraph (A) shall be—

(i)

not less than 1 nor more than 2 percent;

(ii)

not less than 2 nor more than 3 percent, if the finding is the 2nd consecutive finding made pursuant to subparagraph (A); or

(iii)

not less than 3 nor more than 5 percent, if the finding is the 3rd or a subsequent consecutive such finding.

(C)

Disregard of noncompliance which is of a technical nature

For purposes of this section and section 652(a)(4) of this title, a State determined as a result of an audit—

(i)

to have failed to have substantially complied with 1 or more of the requirements of part D shall be determined to have achieved substantial compliance only if the Secretary determines that the extent of the noncompliance is of a technical nature which does not adversely affect the performance of the State’s program under part D; or

(ii)

to have submitted incomplete or unreliable data pursuant to section 654(15)(B) of this title shall be determined to have submitted adequate data only if the Secretary determines that the extent of the incompleteness or unreliability of the data is of a technical nature which does not adversely affect the determination of the level of the State’s paternity establishment percentages (as defined under section 652(g)(2) of this title) or other performance measures that may be established by the Secretary.

(9)

Failure to comply with 5-year limit on assistance

(10)

Failure of State receiving amounts from Contingency Fund to maintain 100 percent of historic effort

(11)

Failure to maintain assistance to adult single custodial parent who cannot obtain child care for child under age 6

(A)

In general

(B)

Penalty based on severity of failure

(12)

Requirement to expend additional State funds to replace grant reductions; penalty for failure to do so

If the grant payable to a State under section 603(a)(1) of this title for a fiscal year is reduced by reason of this subsection, the State shall, during the immediately succeeding fiscal year, expend under the State program funded under this part an amount equal to the total amount of such reductions. If the State fails during such succeeding fiscal year to make the expenditure required by the preceding sentence from its own funds, the Secretary may reduce the grant payable to the State under section 603(a)(1) of this title for the fiscal year that follows such succeeding fiscal year by an amount equal to the sum of—

(A)

not more than 2 percent of the State family assistance grant; and

(B)

the amount of the expenditure required by the preceding sentence.

(13)

Penalty for failure of State to maintain historic effort during year in which welfare-to-work grant is received

(14)

Penalty for failure to reduce assistance for recipients refusing without good cause to work

(A)

In general

(B)

Penalty based on severity of failure

(15)

Penalty for failure to establish or comply with work participation verification procedures

(A)

In general

(B)

Penalty based on severity of failure

(16)

Penalty for failure to enforce spending policies

(A)

In general

If, within 2 years after February 22, 2012, any State has not reported to the Secretary on such State’s implementation of the policies and practices required by section 608(a)(12) of this title, or the Secretary determines, based on the information provided in State reports, that any State has not implemented and maintained such policies and practices, the Secretary shall reduce, by an amount equal to 5 percent of the State family assistance grant, the grant payable to such State under section 603(a)(1) of this title for—

(i)

the fiscal year immediately succeeding the year in which such 2-year period ends; and

(ii)

each succeeding fiscal year in which the State does not demonstrate that such State has implemented and maintained such policies and practices.

(B)

Reduction of applicable penalty

(C)

State not responsible for individual violations

(b)

Reasonable cause exception

(1)

In general

(2)

Exception

(c)

Corrective compliance plan

(1)

In general

(A)

Notification of violation

(B)

60-day period to propose a corrective compliance plan

(C)

Consultation about modifications

(D)

Acceptance of plan

(2)

Effect of correcting or discontinuing violation

(3)

Effect of failing to correct or discontinue violation

(4)

Inapplicability to certain penalties

(d)

Limitation on amount of penalties

(1)

In general

(2)

Carryforward of unrecovered penalties

(Aug. 14, 1935, ch. 531, title IV, § 409, as added Pub. L. 104–193, title I, § 103(a)(1), Aug. 22, 1996,

cite as: 42 USC 609