that individual appropriately in fields, "Does Member Qualify for Hardship Exemption?"; "If Yes, For What Reason"; "Verify Source" and "Date" on ZC94. D. Upon the determination that an individual is living in Indian country where at least 50 percent of the adults are unemployed, code the exemption on ZC94. E. Upon the determination that an assistance unit no longer meets time limit exception criteria, terminate the case per usual instructions.[130] F. Adjust the number of months in the count toward the lifetime limit when needed, i.e., case was miscoded, claim due to ineligibility is processed, receipt in other states, etc., by completion of ZC86 by the Supervisor. [1]Rev 764 Oct 2009 [2]Rev 764 Oct 2009 [3]Rev 764 Oct 2009 [4]Rev 764 Oct 2009 [5]Rev 763 Apr 2009 [6]Rev 741 Sep 2004 [7]Rev 760 Apr 2008 [8]Rev 760 Apr 2008 [9]Rev 763 Apr 2009 [10]Rev 756 Oct 2006 [11]Rev 770 Apr 2012 [12]Rev 770 Apr 2012 [13]Rev 741 Sep 2004 [14]Rev 741 Sep 2004 [15]Rev 741 Sep 2004 [16]Rev 747 Mar 2005 [17]Rev 768 Nov 2011 85

[18]Rev 768 Nov 2011 [19]Rev 768 Nov 2011 [20]Rev 768 Nov 2011 [21]Rev 768 Nov 2011 [22]Rev 770 Apr 2012 [23]Rev 768 Nov 2011 [24]Rev 760 Apr 2008 [25]Rev 764 Oct 2009 [26]Rev 741 Sep 2004 [27]Rev 751 Aug 2006 [28]Rev 768 Nov 2011 [29]Rev 763 Apr 2009 [30]Rev 763 Apr 2009 [31]Rev 768 Nov 2011 [32]Rev 768 Nov 2011 [33]Rev 768 Nov 2011 [34]Rev 761 Feb 2008 [35]Rev 761 Feb 2008 [36]Rev 764 Oct 2009 [37]Rev 751 Aug 2006 [38]Rev 763 Apr 2003 [39]Rev 762 Nov 2008 [40]Rev 762 Nov 2008 [41]Rev 761 Feb 2008 [42]Rev 761 Feb 2008 86

[43]Rev 761 Feb 2008 [44]Rev 763 Apr 2009 [45]Rev 751 Aug 2006 [46]Rev 751 Aug 2006 [47]Rev 763 Apr 2009 [48]Rev 768 Nov 2011 [49]Rev 768 Nov 2011 [50]Rev 751 Aug 2006 [51]Rev 751 Aug 2006 [52]Rev 763 Aug 2009 [53]Rev 768 Nov 2011 [54]Rev 763 Aug 2009 [55]Rev 751 Aug 2006 [56]Rev 751 Aug 2006 [57]Rev 751 Aug 2006 [58]Rev 751 Aug 2006 [59]Rev 751 Aug 2006 [60]Rev 751 Aug 2006 [61]Rev 751 Aug 2006 [62]Rev 751 Aug 2006 [63]Rev 751 Aug 2006 [64]Rev 751 Aug 2006 [65]Rev 751 Aug 2006 [66]Rev 751 Aug 2006 [67]Rev 751 Aug 2006 87

[68]Rev 751 Aug 2006 [69]Rev 751 Aug 2006 [70]Rev 751 Aug 2006 [71]Rev 751 Aug 2006 [72]Rev 770 Apr 2012 [73]Rev 761 Feb 2008 [74]Rev 751 Aug 2006 [75]Rev 751 Aug 2006 [76]Rev 768 Nov 2011 [77]Rev 768 Nov 2011 [78]Rev 770 Apr 2012 [79]Rev 761 Feb 2008 [80]Rev 761 Feb 2008 [81]Rev 761 Feb 2008 [82]Rev 763 Apr 2009 [83]Rev 761 Feb 2008 [84]Rev 761 Feb 2008 [85]Rev 761 Feb 2008 [86]Rev 761 Feb 2008 [87]Rev 761 Feb 2008 [88]Rev 763 Apr 2009 [89]Rev 763 Apr 2009 [90]Rev 751 Aug 2006 [91]Rev 751 Aug 2006 [92]Rev 751 Aug 2006 88

[93]Rev 768 Nov 2011 [94]Rev 763 Apr 2009 [95]Rev 768 Nov 2011 [96]Rev 768 Nov 2011 [97]Rev 768 Nov 2011 [98]Rev 763 Apr 2009 [99]Rev 768 Nov 2011 [100]Rev 763 Apr 2009 [101]Rev 763 Apr 2009 [102]Rev 751 Aug 2006 [103]Rev 751 Aug 2006 [104]Rev 751 Aug 2006 [105]Rev 751 Aug 2006 [106]Rev 751 Aug 2006 [107]Rev 751 Aug 2006 [108]Rev 770 Apr 2012 [109]Rev 751 Aug 2006 [110]Rev 770 Apr 2012 [111]Rev 768 Nov 2011 [112]Rev 768 Nov 2011 [113]Rev 751 Aug 2006 [114]Rev 770 Apr 2012 [115]Rev 770 Apr 2012 [116]Rev 770 Apr 2012 [117]Rev 770 Apr 2012 89

[118]Rev 771 May 2012 [119]Rev 771 May 2012 [120]Rev 741 Sep 2004 [121]Rev 762 Nov 2008 [122]Rev 762 Nov 2008 [123]Rev 762 Nov 2008 [124]Rev 741 Sep 2004 [125]Rev 741 Sep 2004 [126]Rev 763 Apr 2009 [127]Rev 762 Nov 2008 [128]Rev 762 Nov 2008 [129]Rev 762 Nov 2008 [130]Rev 762 Nov 2008 [131]Rev 775 May 2014 [132]Rev 775 May 2014 [133]Rev 775 May 2014 [134]Rev 775 May 2014 [135]Rev 775 May 2014 [136]Rev 775 May 2014 [137]Rev 775 May 2014 [138]Rev 777 Jul 2014 [139]Rev 777 Jul 2014 [140]Rev 779 Sep 2015 [141]Rev 779 Sep 2015 [142]Rev 779 Sep 2015 90

[143]Rev 779 Sep 2015 [144]Rev 779 Sep 2015 [145]Rev 779 Sep 2015 [146]Rev 779 Sep 2015 [147]Rev 779 Sep 2015 [148]Rev 779 Sep 2015 [149]Rev 779 Sep 2015 [150]Rev 779 Sep 2015 [151]Rev 781 Apr 2016 [152]Rev 781 Apr 2016 [153]Rev 783 Nov 2016 [154]Rev 783 Nov 2016 [155]Rev 786 Nov 2017 [156]Rev 789 Jan 2019 [157]Rev 789 Jan 2019 [158]Rev 789 Jan 2019 91

Chapter 3................................................................................................................................................................. 3 Need ........................................................................................................................................................................ 3 3000 General.................................................................................................................................................... 3 3005 Payment Standard ................................................................................................................................... 3 3007 Income Limit on Initial and Continuing Eligibility ................................................................................ 3 3100 Family Budget – General........................................................................................................................ 3 A. Purpose................................................................................................................................................... 4 B. Budgeting Process.................................................................................................................................. 4 C. Anticipating Income............................................................................................................................... 4 3105 Persons to Include in the Assistance Unit................................................................................................ 6 3110 Number of Assistance Units .................................................................................................................. 11 3115 Computation of the Grant Amount ....................................................................................................... 12 3116 Maximum and Minimum Payments...................................................................................................... 13 3120 Length of Budget Period....................................................................................................................... 14 3125 Trial Budget .......................................................................................................................................... 14 A. Trial Budget at Application................................................................................................................... 14 B. Trial Budget to Determine Contribution of Spouse of FA Child.......................................................... 15 C. Treatment of Income of Individuals Excluded from the FA Unit......................................................... 16 D. Trial Budget to Determine Contributions of an Alleged Father Living in the Home with a Child in the Assistance Unit and the Child’s Mother ....................................................................................................... 17 E. Trial Budget to Determine Contributions of (Senior) Legal Parent (s) of Minor Parent ...................... 18 3200 Income.................................................................................................................................................. 21 A. Persons Whose Income Must be Considered Available ....................................................................... 21 B. Amount of Available Income from Legally Responsible Persons....................................................... 22 3205 Guide for Determining the Amount of Income to be Considered ........................................................ 22 A. Monthly Income.................................................................................................................................... 22 B. Income Received Other Than Monthly................................................................................................. 23 C. Farm Income ......................................................................................................................................... 24 D. Contributions......................................................................................................................................... 24 E. Child Support......................................................................................................................................... 25 F. Earned Income Received on a Contractual or Intermittent Basis.......................................................... 26 3210 Definitions of Terms used in Dealing with Income.............................................................................. 27 A. Gross Earned Income:........................................................................................................................... 27 B. Net Income:........................................................................................................................................... 27 C. Earned Income: ..................................................................................................................................... 27 D. Unearned Income:................................................................................................................................. 27 1

E. Earnings Disregard:............................................................................................................................... 27 F. Operating Expense:................................................................................................................................ 28 G. Work Expense:...................................................................................................................................... 28 H. Full-time Student: ................................................................................................................................. 28 I. Part-time Student:................................................................................................................................. 28 J. Full and Part-time Employment ............................................................................................................ 28 K. Deemed Income: ................................................................................................................................... 28 L. Contributions for Special Occasions .................................................................................................... 28 M. Child Support ........................................................................................................................................ 29 N. Timely and Accurate Report of Earned Income: .................................................................................. 29 O. New Employment: ................................................................................................................................ 30 P. Self employment:................................................................................................................................... 30 3215 Earned Income Deductions and Penalties............................................................................................. 30 A. Operating Expenses............................................................................................................................... 30 B. Work Expenses...................................................................................................................................... 30 C. Disregards.............................................................................................................................................. 31 D. Income to Which the Earnings Disregard Does Not Apply.................................................................. 35 E. Penalties and Related Good Cause Circumstances ............................................................................... 35 3225 Unearned Income to be Budgeted......................................................................................................... 37 3230 Earned and Unearned Income not to be Budgeted................................................................................ 40 2

Chapter 3 Need 3000 General Need is the basic eligibility requirement for aid. It represents the amount of money needed from the agency to supplement a person’s income in meeting the state department’s defined standard of living. To carry out requirements and intent of state and federal laws, the state department has defined within this section:[1] A. A healthful and decent living standard that can be taken into account within available funds; B. Policies, procedures, and certain standards for evaluating income; and [2] C. Maximum and minimum payments Policies and procedures for determining need and payment are mandatory upon the state and county departments to assure uniform administration and equitable treatment. 3005 Payment Standard The state department has developed a payment standard which varies by family size. This standard must be used in determining financial need in all cases. The standard is based on the amount of funds available and is used uniformly throughout the state. The countable income, if any, of the assistance unit is deducted from the standard to determine the entitlement amount of assistance. 3007 Income Limit on Initial and Continuing Eligibility A family with income applying for or receiving assistance may receive and/or continue to receive aid if otherwise eligible only if the total family gross income of the assistance unit after allowable disregards and deductions does not exceed the payment standard for the applicable family size and the family payment would be at least $10. At application, subsequent reviews, upon receipt of notification from IV-D of child support collections or changes between reviews affecting budget size and/or income, work a trial budget according to procedures in Section 3125. 3100 Family Budget – General 3

A. Purpose The purpose of the budget is to substantiate:  prospective eligibility of the assistance unit;  monthly payment to or in behalf of an eligible person or assistance unit; or  denial of aid based on lack of need. It is not necessary to compute a budget for a family ineligible for some reason other than need. B. Budgeting Process Eligibility and payment amounts are determined prospectively. Prospective eligibility and/or budgeting means determining eligibility and/or the amount of payment for a month based on the best estimate of income and other relevant circumstances which will exist in that month. Such estimate is made using available information about current and past income and circumstances (including those of the stepparent) and projecting it into the future to the extent it is anticipated to continue unchanged. Income anticipated to be received more often than monthly is converted to a monthly amount following procedures in 3205-B for budgeting purposes. Exception to Prospective Budgeting: All child support is counted as income in the month received and budgeted retrospectively, rather than prospectively as is all other income. Retrospective budgeting means determining the amount of payment based on circumstances which existed (child support received) two months ago. C. Anticipating Income In determining the amount of income to be used in the payment calculation (Section 3115) and eligibility for the disregard (Section 3215-C), take into account any income already received and any anticipated income the assistance unit and eligibility worker are reasonably certain will be received. In anticipating income, count as available only that income that is reasonably expected to be received in that month and only to the extent it is reasonably expected to be received. The history of previous receipt of income-pattern of fluctuations in amounts or schedule of intervals between receipts-must be examined to determine what amount, if any, of such income is expected in the month. There are no specific requirements (such as current month’s income or two full months of income, etc.) for the information/verification used in anticipating income. [3] Example 1: A client applies on January 2. At the application interview on January 10, the applicant reported she was laid off work on December 29. She received a paycheck for $430 on January 1, and anticipated her last paycheck in the same amount would be received on January 15. No other income was anticipated. The determination of eligibility is made on January 12. The income to be used is $860, the actual income received plus the income anticipated to be received. [4] 4

Example 2: A client applies on June 15. A client applies on June 15 and reports that s/he works part- time earning $4.00 per hour, 5 hours per week. S/he is paid every Friday. There are 5 Fridays in the month of application. She worked 8 hours overtime during the first two weeks due to a special order, but anticipates the overtime will not continue. She provided three paychecks which had been received at the time of the interview. Eligibility is determined in June. The amount of earned income to be used includes the actual amount of the three paychecks received plus the anticipated amount of the two paychecks that will be received later during the application month.[5] Example 3: Same as in 2 above, except the determination of eligibility is made in July before any income is received in July. The amount of earned income to be used is the amount anticipated to be received in July (do not use overtime) and converted (multiplied by 4.3) to a monthly amount according to Section 3205-B.[6] Example 4: A client applies on February 2. She began working on February 7th earning $6.00 per hour, 5-10 hours per week and is paid bi-weekly. The client reported the wages timely and accurately. S/he received $180 in February. At the determination of eligibility on March 17th, the client has received $180 in March. There are three paydays in March, one of which is left at the eligibility determination. The amount of income to be used is actual income received ($180) plus the $90 ($6.00 X 7.5 hours for each of the two weeks left in March and multiplied by one payday) anticipated to be received.[7] th th Example 5: A client came in for review on May 25 and reported she began work on May 7 and received her first pay on May 10th. The client earns $25 per day and works two days per week and is paid bi-weekly. Since the income was not reported timely and accurately, the client is ineligible for the disregard and the work expenses are lost for the month of May. As of May 25th she has received $50 and will receive one more check for two weeks pay ($100) on May 29th. The income used in determining continuing eligibility and the payment amount for May is the actual ($50) received and the amount anticipated ($100) to be received. The amount to be used for June and ongoing is the amount anticipated per pay period converted to a monthly amount (multiplied by 2.15) according to Section 3205-B. [8] If the amount of income that will be received or when it will be received is uncertain, the portion that is uncertain cannot be counted. Example: A household anticipating income from a new source, such as social security benefits, may not be certain of the timing and amount of the benefits. This income is not to be anticipated unless there is reasonable certainty concerning the month in which the payment will be received and the amount of the payment. 5

As a result of anticipating changes, the income used for one month may be different from that used for other months, as illustrated in examples one through five above. For example, at application, a member of the assistance unit has received two paychecks from new employment and knows she will not receive another during that month, but anticipates being paid weekly thereafter. The income used in the initial month(s) will be actual income received plus any anticipated income not yet received, whereas the income for the months after award will be anticipated and converted (multiplied by 4.3) to a monthly amount. 3105 Persons to Include in the Assistance Unit An application placed in behalf of a dependent child must include as applicants certain potentially eligible relatives living in the same household as the dependent child. The word "household" in this context indicates those family members living in common quarters who must be treated as a single household for the purpose of provisions listed above. Only after a decision as to which household members will actually comprise the assistance unit is the determination of eligibility made. Thus, establishing composition of the unit is generally a two step process starting with those required or optional members and ending with those that must be excluded.[9] A. Persons Required to be in the Assistance Unit in Order for a Child to be Eligible 1. All the child's blood-related (including both full and half) siblings or adoptive siblings under 18 (or under age 19 if s/he is a full-time student in a secondary school or in the equivalent level of vocational or technical training) living in the home who meet the age and relationship requirements with the exception of children excluded in C below. Stepsiblings whose legal parent resides in the home and stands as a stepparent to the applicant group are not required to be included in the assistance unit. A minor parent is required to be in the assistance unit with siblings when application is made in behalf of the siblings of the minor parent. NOTE: Marriage of a FA child does not remove his status as a dependent child. All agency policies are applicable as long as the child lives in the home of the grantee relative. In order to determine the amount of income to budget from the married child's spouse if living in the household, follow procedures as outlined in Section 3125-B. 2. The child's parent(s) as defined in Section 2500 or stepparent in the home who is not excluded under 3105-C regardless of whether the parent or stepparent is or is not exercising parental guidance and control. There is no presumption that this provision includes only married parents. Exception: 6

Convicted parent-prisoners sentenced to do unpaid public work and permitted by court order to reside with their families. An adoptive parent(s) living in the home with the dependent child will be considered the "parent" in terms of this provision, as all relationships for purposes of this provision will be determined from the legal, adoptive perspective of the dependent child. For example, if a child has been adopted by his grandparent but the natural parent (who is the son or daughter of the grandparent) is in the home, is under the age of 18, and is otherwise eligible, he or she will be included as a dependent child, since he or she would be an adoptive sibling. (See 1 above.) 3. A minorparent may be considered a child or an adult for purposes of determining the composition of the assistance unit. The decision must be based on a determination of who is the dependent child for purposes of application and who exercises responsibility for that child. (See Section 2400) If the only reason the minor parent is included in the assistance unit is that a parent of the dependent child must be included, the minor parent will be considered an adult for budgeting purposes and other siblings of the minor parent would not be automatically pulled into the assistance unit. The following examples illustrate some of the situations that may exist: a. If the minor parent applies for her child as the dependent child over whom she exercises parental guidance and control, the minor parent must be included in the assistance unit with her child. As the only reason she is included is the requirement that a parent must be included in the assistance unit with her child, the minor parent will be considered an adult for budgeting purposes and other siblings of the minor parent would not be automatically pulled into the assistance unit. The minor parent would be the grantee relative in this situation. b. But, if assistance is sought by the senior parent for the grandchild, and the minor parent is living in the home, a determination is necessary in regard to who is exercising responsibility for the control and care of the grandchild. If the minor parent is, in fact, the caretaker, the grandmother cannot receive assistance and her income will be considered according to 3125-E. If the senior parent exercises parental responsibility for the grandchild, but not for the minor parent, the minor parent would be included as an adult. The minor 7

parent in this latter situation would not automatically be considered a "dependent child" even though she meets all FA eligibility factors as such. (Since the minor parent would be considered an adult, although not the grantee relative, code as an adult on ZC94.) c. However, if the senior parent applies as caretaker of both the minor parent and the grandchild as dependent children, the minor parent and grandchild would both be considered children in relation to all eligibility factors. Other siblings of the minor parent and grandchild would be drawn into the assistance unit under Section 1 above. d. Similarly, if a minor parent is drawn into the assistance unit as a sibling, she will be treated as an adult or as a dependent child, depending on the circumstances involved. B. Persons Who May be Included in the Assistance Unit The caretaker relative retains the right to include or exclude certain other persons from the assistance unit; these persons include other related children who are not required to be members of the assistance unit who are otherwise eligible. For example, this includes stepchildren, nieces, nephews, etc.; but if one child of a sibling group is included, all of his siblings who reside in the household and who meet age and relationship requirements must be included. C. Persons Who Must be Excluded from the Assistance Unit 1. Certain parents, stepparents and siblings must be excluded from the assistance unit because they are not eligible for assistance under specific provisions of federal and state law. When any of these individuals are no longer ineligible to receive assistance, they must be included in the assistance unit. (See Section 3125 for treatment of the income of these persons.) This includes:[10] a. Individuals who receive SSI benefits, State Supplementation, FCMP, ACFC, or adoption assistance. NOTE: Continue to include a child receiving adoption assistance if excluding the child's needs and income would reduce the benefits. 8

b. Aliens who would be included but for the citizenship and alienage requirements at Section 2300. c. Aliens who would be included but are ineligible due to the deemed income or resources of their sponsors, or due to the sponsorship by an agency or organization per Section 2320. d. Individuals who would be included but for ineligibility on the basis of age or relationship, (for example, a sibling over 18 years of age, or an alleged father living in the home who refuses to acknowledge paternity and adjudication has not occurred). e. Aliens who would be included but for the five-year bar from assistance.[11] f. Individuals who are: (1) fleeing to avoid prosecution, or custody or confinement after conviction of a felony, or (2) violating a condition of probation or parole imposed under Federal or State law. The prohibition does not apply if the President grants a pardon to the individual.[12] g. Individuals convicted under federal or state law of a felony based on conduct occurring on or after August 22, 1996 which has as an element the possession, use or distribution of a controlled substance unless the individual has completed his or her sentence or is satisfactorily serving a sentence of probation.[73] See glossary for definition of conviction. h. Individuals found guilty under federal or state law to have fraudulently misrepresented residence in order to obtain benefits from two or more states' federally funded programs under Title IV-A of the Social Security Act, Food Assistance, or SSI. This individual is ineligible for cash assistance for a 10 year period beginning on the date of conviction. The prohibition does not apply if the President grants a pardon to the individual. 2. Individuals disqualified from participation under the provision of the FA Fraud Control Program, Section 22400, are to be excluded for the period of the penalty. (See Section 3125-C for treatment of the income of these persons.) 9

Such persons must be included when no longer ineligible, e.g., the sanction ends.[13] 3. Individuals terminated or denied due to a disqualification for failure to cooperate/comply with CS/JOBS cannot be included in any assistance unit during the disqualification period for one, six or twelve months, whichever is being served. Further, a disqualified grantee cannot receive for any child(ren) who may later join or be born into the household/assistance unit during the disqualification period. (See Sections 2610 and 2745)[14] This exclusion during a disqualification period does not continue to apply to children who no longer meet the age criteria specified in Section 2100 and who become adults in an assistance unit in which they are the grantee or spouse of the grantee.[67] Example 1: Client was receiving benefits for herself and two children. The client was non-compliant with JOBS and is now serving a six month disqualification. During the disqualification period, her 8 year old brother moves in and she wishes to apply and receive FA for him. Client is not eligible to receive FA for her brother until she has completed serving her disqualification period. Example 2: Client is serving a disqualification period. The two children who were in the disqualified assistance unit are now living with a grandmother. A third child, who was born into the disqualified assistanceunit's household after the disqualification, also lives with the grandmother. The grandmother cannot receive FA for the two children who were in the unit at the time of disqualification. However, she may apply and receive FA for the child born after the child's mother was disqualified. Example 3: Client and two children are serving a disqualification period. During this period one of the children turns 18 and is no longer in school. This former "child" in the FA assistance unit applies for FA for her newborn. If otherwise eligible, she may receive benefits.[68] 4. Individuals terminated due to a permanent disqualification for failure to comply with JOBS due to voluntary quit or job refusal cannot be included in any assistance unit. Further, a disqualified grantee relative (or other adult) cannot receive for any child(ren) who may later join or be born into the household/assistance unit during the disqualification (See Section 2745). The permanent disqualification does not continue to extend to children who no longer meet the age criteria as specified in Section 2100 and who later 10

become adults in an assistance unit in which they are the grantee or spouse of the grantee.[69] Example: Client and two children are disqualified. One of the children turns 18 and is no longer in school. The former "child" in the FA assistance unit applies for FA for her newborn. If otherwise eligible, she may receive benefits.[70] 5. Parents or step-parents who lose program eligibility pursuant to Section2960­ B cannot receive assistance for otherwise eligible children nor can such parent/step-parent be included in any assistance unit. 6. Caretaker relatives other than a parent or a stepparent must be excluded as they are not eligible. 7. Individuals removed from the assistance unit due to a permanent disqualification for failure to comply with benefit access and spending restrictions pursuant to Section 1400 cannot be included in any assistance unit. Further these disqualified grantee relatives cannot receive benefits on behalf of otherwise eligible children except for a temporary period while appointment of an alternate grantee relative is being processed.[71] 8. Individuals removed from the assistance unit for 12 months or due to a permanent disqualification pursuant to Section 2550 cannot be included in any assistance unit. Further, these disqualified grantee relatives cannot receive benefits on behalf of otherwise eligible children except for a temporary period while appointment of an alternate grantee relative is being processed. 3110 Number of Assistance Units In general, the number of assistance units is the same as the number of persons providing guidance and control for distinct sibling groups. However, certain types of extended family or multigenerational family or blended family (that is, a family composed of spouses where one or both have children living in the household from previous relationships) situations may create difficulty in terms of determining the number of assistance units in the household. In making this determination, focus on the dependent child(ren) for whom assistance is sought. A. Multiple Assistance Units Living in the Same Household Two or more assistance units exist when two or more distinct sibling groups of children with different caretakers live in the same household. These situations include the following: 11

1. Two sisters each with her own children live in one household and each exercises parental guidance and control over her own children; or 2. An adult daughter and her mother living in the same household and each having her own children and exercising parental guidance and control over her own children. B. Consolidated Assistance Units When an individual is required to be in two or more assistance units living in the same household, these units must be consolidated. As in the situations below, there may be two or more persons providing guidance and control for different sibling groups. The case will be set up in the name of one caretaker, the other caretaker will be shown as an additional client(s). 1. A married couple each having children by a previous marriage lives in one household. 2. An assistance unit consists of a mother and her children. If one of these children has a baby, the grandchild must be included in the senior parent's unit, if assistance is sought for the grandchild, as assistance unit provisions require that the minor parent be included in the assistance units of both her child and her siblings. C. An Assistance Unit(s) Within a Larger Household In some situations, an assistance unit(s) may exist within a larger household where assistance is not sought for all household members. This includes the following situations: 1. A child lives in the home of an aunt and her children and assistance is sought solely for the niece or nephew as the dependent child; or 2. A minor parent and her child(ren) live in the home of her parent(s) and other siblings, but assistance is sought solely for the child(ren) of the minor parent. The assistance unit would consist of the minor parent and her child(ren). 3115 Computation of the Grant Amount Although the actual grant amount will be computed by FACETS, there are some occasions when it will be necessary to determine the amount of the grant separately from the grant authorization. This may be accomplished through use of the automated payment trial budget screen (see FACETS Certification User Manual Section 8000) or by preparation of a manual budget. The steps for calculation of the grant are described below in narrative style: 12

A. Consider all earned income for the applicant/recipient and others to be included in the budget according to policies set out in Sections 3200 - 3230. For applicants, work a trial budget as described in Section 3125-A. B. Deduct work expenses from gross earnings of each wage earner in the following order: 1. 20% of gross earnings (round all fractions of a cent to nearest cent). 2. Child care or care of an incapacitated adult (parent/stepparent) living in the same home receiving FA. C. Consider all unearned income for the applicant/recipient and others to be included in the budget according to policies set out in Sections 3200 - 3230. D. Subtract the total countable earned and unearned income rounded to the nearest dollar from the payment standard. The difference represents the entitlement amount except when overpayments are being recouped or sanction amounts are being deducted. When overpayments are being recouped, the recoupment amount is deducted from the entitlement amount before the benefits are deposited in the EBT account. When a sanction amount is being deducted, it is subtracted from the entitlement amount and the difference is the net entitlement. If the net countable income is equal to or greater than the payment standard or if the net entitlement amount would be less than $10, deny or terminate. E. Prorate the money payment for the month of application by multiplying the net entitlement amount for the entire month by the ratio of the number of days in the month including and following the date of application to 30 days. Round the result down to the nearest dollar. If the date of the application is the 31st, the payment for the month of application is 1/30 of the net entitlement amount, otherwise, the number of days may be determined by subtracting the date of application from 30 and adding 1. For example, if the date of application is February 27; 30–27=3+1=4. Multiply the net entitlement amount times 4/30. Do not use common fractions, such as ⅓ or ½. Always convert to a decimal fraction (take to four places) prior to multiplying by the net entitlement amount. F. Compute the amount due additional household members to be added after initial award by subtracting the payment standard for the current household size from the payment standard for the new household size. The difference represents the entire month’s grant amount for the month of application (application was made after the 1st of the month), prorate the additional amount due according to procedures outlined in E above using the difference in the current payment standard and the new payment standard as the grant amount. 3116 Maximum and Minimum Payments 13

The monthly payment cannot exceed the budget deficit nor the payment standard. No money payment can be made unless a person’s benefit would be as much as $10. Exceptions:  The adjusted money payment for a case involving recoupment or sanction from current assistance may be as little as $1.  The money payment for the month of application may be less than $10 if the full month entitlement amount is at least $10. 3120 Length of Budget Period The payment computation on ZC45 must be reviewed, printed and filed in the case record each time there is a change in the recipient’s needs or income, and at least at every review. When there is no change in need or income at the time of review, the payment computation does not change. If a manual budget is used, leave intact figures, date, worker’s name, etc., on the previous budget and make the following notations in colored pencil or ink on it: [15]  The worker’s name by the previous name.  The new date by the previous date. If the same budget is used more than once, use a different colored pencil or ink each time. Notate ZC45 as well. 3125 Trial Budget A “trial” budget is a computer or manual computation to obtain information which may have bearing on the FA budget. Any trial budget is to be maintained in the record just as any other form(s) reflecting the grant computation. A. Trial Budget at Application For applicant families with earned income work a trial budget to determine whether the applicant is eligible for the earnings disregard. 1. Persons to include in the trial budget are the same as those to include in the payment budget. 14

2. If self-employed, subtract 40% from total proceeds to obtain gross earnings. From gross earnings subtract 20% work expense and child care expense. Subtract remainder and any unearned income from the payment standard. If there is no deficit, deny the application. 3. If the applicant has a deficit after the computation in 2 above, disregard 100% of his/her earnings for the first twelve months wages are received then deduct work expenses thereafter unless penalties apply. (See Section 3215)[16] Examples: 1. Mrs. Sorrells applies in March for herself and two children. Mrs. Sorrells works and earns $225 a month. She pays $75 a month for child care. Trial Budget $225 earned income $215 payment standard for 3 - 45 20% work expense -105 countable income $180 $110 eligible for the earnings disregard - 75 child care $105 countable income 2. Mrs. Greer applies in March for herself and two children. Mrs. Greer works and earns $385 a month. She pays $100 a month for child care. She also receives $165 a month child support. Trial Budget $385 earned income $208 countable earned income - 77 20% work expense + 165 child support $308 $373 total countable income - 100 child care $208 countable income $215 payment standard for 3 - 373 total countable income 0 assistance unit ineligible for earnings disregard and FA B. Trial Budget to Determine Contribution of Spouse of FA Child 15

Procedures in this section apply to the spouse of a dependent child living in the household. If the spouse has no income, or is receiving SSI and/or supplementation, a trial budget is not necessary, as he is receiving assistance in his own right. Likewise, if a dependent of the spouse receives FA, SSI and/or supplementation, such dependent is not to be included in the trial budget. Include both the spouse and the FA child who do not receive FA, SSI or SUP. Budget countable monthly income of the spouse only. Countable income is defined as all earned and unearned gross income as used for FA purposes. Income listed in Section 3230 may be excluded unless the exclusion is limited to applicants/recipients of FA. To determine income to be budgeted, compute as follows:  Subtract 20% from the gross earned income for work expense.  Subtract child care on an as paid basis.[17]  Add the remaining earned income to any unearned income. Then divide the countable net income by the total number of dependents to include the spouse, the FA child and their dependents, if any. “Dependent” for trial budget purposes includes the couple’s legal children under age 21, as well as other individuals, living in the same home that the couple claims, or could claim as dependents for determining Federal personal income tax liability. The result will be income to be deemed. Example: Ms. Ward receives FA for herself and three children. Her oldest child, Susie age 15, gets married and her husband moves into the home. Susie’s husband has earnings of $125 a month. Deeming Budget FA Budget $125 Susie’s husbands earnings $245 payment standard for 4 - 25 20% work expense - 50 deemed income $100 divided by 2 = $50 deemed $195 FA amount income C. Treatment of Income of Individuals Excluded from the FA Unit[18] 1. If the individual to be excluded under 3105-C.1 is the parent, stepparent or spouse of a child(ren) in the assistance unit or is a parent or stepparent disqualified under 3105-C.7 or 8[72], his/her income is deemed to the assistance unit. (See 3215-B for allowable earned income work expenses deductions.) (This provision does not apply to SSI, FCMP or SUP recipients.) 2. If the individual to be excluded is a disqualified alien under Section 3105-C.1.e and is the parent or spouse of a child(ren) or spouse of the grantee in the assistance unit, the income of that individual is considered available to his/her child(ren) and spouse. The earned income work 16

expense deduction (20%) is not applicable, however, child care expenses may be allowed if otherwise eligible for such deductions. 3. If the individual to be excluded under 2410-B or 3105-C.1 is not a parent, stepparent or spouse of a child(ren) in the assistance unit, exclude his income from the assistance unit.[19] 4. If the individual to be excluded is required to be a member of the assistance unit, but is excluded per 2410-B or 3105-C.2, his countable net income is deemed to the assistance unit. (See 3215-B for allowable earned income work expenses deductions.)[20] NOTE: In the case of an excluded minor parent who is living with a senior parent(s), the income, if any, from the senior parent(s), is still deemed to the assistance unit. (See 3125-D) D. Trial Budget to Determine Contributions of an Alleged Father Living in the Home with a Child in the Assistance Unit and the Child’s Mother When the alleged father (see Glossary for definition) is living in the home with a child in the assistance unit and the child’s mother, work a trial budget according to procedures in this section to determine what amount, if any, of the alleged father’s income is to be deemed to the assistance unit. The applicant/recipient is responsible for providing verification of information needed for the trial budget. Accept verification for whatever length of time is provided. If for less than a month or more than a month, convert to a monthly amount according to procedures in Section3205-B. No income from the alleged father is to be deemed to the assistance unit and a trial budget is not necessary when: (a) the alleged father has no income, as verified under usual procedures; or (b) when the alleged father receives SSI or SUP as he is receiving assistance in his own right. Trial budget procedures are as follows: Budget countable monthly income of the alleged father. Countable income is defined as all earned and unearned gross income as used for FA purposes. Income listed in Section3230 may be excluded unless the exclusion is limited to applicants/recipients of FA. To determine income to be budgeted, compute as follows: - Subtract 20% from the gross earned income for work expense - Subtract child care on an as paid basis when paid for the child of the alleged father. Deduction not allowed if mother in home is not working or in training. - Subtract court ordered child support and/or the cost of medical support on an as paid basis for his legal children not living in the home. - Subtract court ordered alimony on an as paid basis. - Subtract the payment standard for one to represent the needs of the alleged father and deem the remainder of the income to the assistance unit up to a maximum of $165 if he is the alleged father of one child in the unit; $190 for two; $215 for three, etc. Examples: 17

1. Household consists of Mrs. Jones and her two children, Joe and Sam and Mr. Allen, the alleged father of Sam. Mr. Allen works and earns $500 per month; pays court ordered child support of $100 per month. Alleged Father Deeming Budget FA Budget $500 earned income $215 Payment standard for 3 -100 20% work expense -135 deemed income $400 $ 80 FA payment -100 court ordered child support $300 -165 payment standard for one (Mr. Allen’s needs) $135 amount deemed to unit 2. Same as above except Mr. Allen is the alleged father of both Joe and Sam and he earns $1,000 per month; pays court ordered child support of $100 per month. Alleged Father Deeming Budget FA Budget $1000 earned income $215 payment standard for 3 - 200 20% work expense -190 deemed income $ 800 $ 25 FA payment -100 court ordered child support $700 -165 payment standard for one (Mr. Allen’s needs) $535 exceeds maximum $190 amount deemed to unit[60] E. Trial Budget to Determine Contributions of (Senior) Legal Parent (s) of Minor Parent When the parent of an FA child is under 18 and is in the home of her legal parent(s), work a trial budget according to the procedures in this section to determine what amount, if any, of the senior legal parent(s)’s income is to be deemed to the assistance unit. Deeming in these cases is appropriate through the month of the 18th birthday. (Minor parent is spoken of in this section as female; however, same rules apply for male.) The applicant/recipient is responsible for providing 18

verification of information needed for the trial budget. Accept verification for whatever length of time is provided. If for less than a month or more than a month, convert to a monthly amount according to procedures in Section 3205-B. No income from the senior parent(s) is to be deemed to the assistance unit and a trial budget is not (a) (b) necessary when: the senior parent(s) has no income, as verified under usual procedures; or when the senior parent receives SSI or SUP as s/he is receiving assistance in his/her own right. If the minor parent receives SSI or is otherwise excluded from the assistance unit, senior parent deeming procedures are still applicable. Trial budget procedures are as follows: 1. Minor Parent in the Home with Senior Parent Budget countable monthly income of the senior parent. Countable income is defined as all earned and unearned gross income as used for FA purposes. Incomes listed in Section 3230 may be excluded unless the exclusion is limited to applicants/recipients of FA. To determine income to be budgeted, compute as follows:  Subtract 20% from the gross earned income for work expense.  Subtract child care on an as paid basis.[21]  Add the remaining earned income or any unearned income. Then, Divide the countable net income by the total number of dependents who do not receive FA, SSI or SUP plus the senior parent and minor parent. “Dependent” for trial budget purposes includes the senior parent’s legal children under age 21, as well as other individuals, living in the same home the senior parent claims, or could claim as dependents for determining Federal personal income tax liability. The minor parent’s prorata share is budgeted in the FA payment computation. If the senior parent is contributing to the assistance unit, budget the greater of the contribution or the deemed income. Examples: 1. Household consists of Mrs. Allen and her three children. One of the children, Kim, has a baby. Kim has applied for FA for herself and her child. Mrs. Allen earns $925 per month. Senior Parent Deeming Budget FA Budget $925 earned income $190 Pymt. std. for 2 - 185 20% work expense rounded to nearest dollar - 185 deemed income $740 divided by 4 = $185 $ 5 AU ineligible for FA 19

2. Same as above except Mrs. Allen pays $275 per month child care. Senior Parent Deeming Budget FA Budget $925 earned income $190 Pymt. std. for 2 - 185 20% work expense rounded to nearest dollar - 116 deemed income $740 $ 74 FA payment - 275 child care $465 divided by 4 = $116.25 3. Same as number 1 except Mrs. Allen receives $501 RSDI per month. Senior Parent Deeming Budget FA Budget $501 divided by 4 = $125.25 = $125 $190 Pymt. std. for 2 - 125 deemed income $ 65 FA payment NOTE: When two or more minor parents in the same home with their legal parent(s) are applicants/recipients, only one trial budget is necessary. The prorata share of each would be included in their respective budget as a contribution. Be sure to place a copy of this budget in each minor parent’s case record. 2. Minor Parent in the Home with Senior Parent and Stepparent: When the minor parent is in the home with her parent and stepparent, the stepparent’s income is not to be considered available to the minor parent if she is an adult in the budget but only to her parent. Therefore, if the senior parent has his/her own income, a stepparent trial budget using deductions as in E.1 above must first be computed to determine the amount of income available to the senior parent. Then work a trial budget using the senior parent income plus the income available to the senior parent from the stepparent. Divide the senior parent’s countable net income by the number of the senior parent’s dependents who do not receive FA, SSI or SUP including the minor parent plus the senior parent herself and her spouse, i.e., stepparent. The minor parent’s prorata share is budgeted in the FA payment budget. Example: Ms. Ward lives with her mother and stepfather, Mr. & Mrs. Martin. Ms. Ward has applied for herself and her two children. Mr. Martin works and earns $700 per month. Mrs. Martin receives $125 RSDI per month. Stepparent Budget Senior Parent Budget 20

$700 earned income $208 income from spouse -140 20% work expense + 125 RSDI $560 divided by 2 = $280 $373 divided by 3 - $135 FA Budget $215 payment standard for three - 135 deemed income $ 80 FA payment amount 3200 Income Only currently available gross income is taken into consideration in determining eligibility for and the amount of the assistance payment. While it may be received regularly or irregularly, it must be budgeted on a monthly basis. The monthly amount considered in prospective budgeting is the amount anticipated to be received in that month except as stipulated in Section 3205-F. A. Persons Whose Income Must be Considered Available Income of certain persons, as listed below must be considered available to the assistance unit, unless specifically excluded under Section 3230. 1. Income received by any member of the assistance unit and income received for a member of the assistance unit by someone in the home who is not in the assistance unit. When a parent, stepparent or sibling who is required to be in the assistance unit is excluded as a penalty, his income is still considered available to the assistance unit. 2. Income received by a person in the home who is not in the assistance unit, but is legally responsible for the support of someone in the assistance unit. Persons legally responsible for the support of others are: a. Spouse responsible for spouse. 21

b. Parent and/or stepparent responsible and alleged father (living in the home with his child and the child’s mother)[61] for child under 18, or under 19 if a full-time student in secondary school or in the equivalent level of vocational or technical training. Income of a parent or stepparent or alleged father[62] ceases to be considered available to the minor parent in the home as of st th the 1 of the month following the month of a minor parent’s 18 birthday or if still in school, the end of the month prior to the month the child turns 19. Marriage of a child under 18 does not remove his status as a dependent if he continues to reside in the home of his parent. B. Amount of Available Income from Legally Responsible Persons There is no income considered available from a legally responsible person who has no income or who receives SSI, SUP or FA in his/her own right. Use trial budget procedures to determine the amount of available income from a senior parent (Section 3125-E). Use trial budget procedures in Section 3125-D to determine the amount of income available from an alleged father.[63] 1. When computing the trial budget for the month during which the senior parent and the assistance unit become members of the same household, include only that income which the senior parent or alleged father[64] received on or after the date s/he joined the household. 2. The “date s/he joined the household” as used above, generally refers to the date when the assistance unit moves into the home of the senior parent or alleged father[65], or vice versa. 3. Any income which was received by the senior parent or alleged father[66] prior to the date s/he joined the household, and is still on hand, is not considered as income available to the assistance unit.[22] 3205 Guide for Determining the Amount of Income to be Considered Income is to be considered on a monthly basis according to the guides below. A. Monthly Income Monthly income generally consists of fixed entitlement amounts based on law, regulation or policy or the issuing government entity, agency or other organization received once a month such as RSDI, VA, Railroad Retirement, etc. Income received on a monthly basis is to be budgeted as received. 22

B. Income Received Other Than Monthly 1. Weekly, bi-weekly, or semi-monthly income is to be converted to a monthly amount as follows: a. For prospective grant computations and trial budget computations, convert income to a monthly amount as follows: (1) Income anticipated to be received weekly will be multiplied by 4.3; (2) Income received every two weeks (bi-weekly) will be multiplied by 2.15. st th (3) Income received semi-monthly (twice per month, usually on the 1 and 15 ) will be multiplied by 2 and; (4) Income received at other intervals (infrequent/irregular) will be multiplied by the number of times it is anticipated to be received during the month. Each source of income must be converted separately. Averaging is limited to determining a weekly amount of income from which to derive the monthly amount. Only income, hours, hourly rates, etc., that can reasonably be anticipated to be received are to be included in the averaging. NOTE: Conversion of income is appropriate only if all income in the month will be anticipated (i.e., no actual income is used), the anticipated income will remain the same, and will be received in the same frequency. Therefore, income must not be converted for the initial month(s). b. For an overpayment computation for a month when the only verification of wage information available (company bankrupt or otherwise out of business, client or employer won’t verify, etc.) is DIR wage or SSA Bendex BEER match for the quarter, prorate the income shown over the quarter as if received equally in each month. On the notification to the client, advise of the method used to determine monthly income and that if inaccurate, proper verification must be submitted. If more accurate information is later received either from the recipient or through the Attorney General’s Welfare Fraud Unit, computations must be recalculated based on the new information. (See Section 22155) 23

The narrative must document all efforts to obtain verification of wages before using this budgeting procedure.[23] C. Farm Income Contact the State PA Help Desk for guidelines as needed. D. Contributions Contributions made to a member of the FA unit, which total $100.00 or less per special occasion of a birthday or high school graduation, are to be disregarded. To meet the criteria of a contribution to be disregarded, the cash gift must be received during the period in which the special occasion of a birthday or high school graduation occurs, and must total $100.00 or less per recipient per special occasion. For FA purposes, “during the period in which the special occasion occurs” includes receipt during the month before, the month of, or the month after the special occasion of a birthday or high school graduation. 1. The amount of a contribution in excess of $100.00 per recipient per special occasion of a birthday or high school graduation is to be budgeted as unearned income. Contributions which do not represent a gift for the special occasion of birthday or high school graduation cannot be disregarded under this policy and are to be considered as unearned income in the month received. 2. Contributions received from different sources can be disregarded as long as they are given for the special occasion of a birthday or high school graduation, the total amount received does not exceed $100.00 per special occasion per assistance unit member, and the contributions are received within the specified time frame. 3. Contributions from a deemer (senior parent) are treated in the same manner under this policy as contributions from other sources. However, budget the contribution (after application of this policy) or the amount deemed to the assistance unit (as determined according to 3125-E), whichever is greater. 4. A gift from an absent legal parent under court order to pay child support is child support and is treated according to 3205-E and 3210-M.[24] 24

E. Child Support 1. Applicants The amount of child support to be used in determining prospective eligibility or the level of benefit retrospectively must be the amount received (or anticipated to be received) each month. To determine this amount, child support is considered received (or anticipated to be received) by the applicant as follows: a. As of the day of collection, that is the date on which the payment is received by the central collection agent. and/or b. As of the date the payment is received by the applicant from the state or directly from an absent parent under court order.[25] Example 1: Client applies for FA for herself and two children in February. The children receive a total of $300.00 per month in court ordered child support. Budget is worked for February and March counting the child support received in February and the amount anticipated to be received in March. Case is determined prospectively ineligible and is denied.[26] Example 2: Same as above except children receive a total of $100.00 per month in court ordered child support. Budget is worked for February and March counting the child support received in February and the amount anticipated to be received in March. Case is prospectively eligible. Child support received in February is budgeted in April payment.[27] 2. Recipients The amount of child support used in determining prospective eligibility or the level of benefit retrospectively must be the amount mailed to the client from the State Office or the amount received directly from an absent parent under court order and not turned in each month.[28] If the child support payments have been going to the state for a case which becomes ineligible for a month, child support payment(s) for the month of ineligibility will be sent directly to the 25

family. The month for which the payment(s) must be considered as income to the family is the month in which the payment(s) was received by the collection agent. Budget retrospectively. F. Earned Income Received on a Contractual or Intermittent Basis 1. Contractual Income Prorate the total gross income of applicants/recipients to be received on a contractual basis over the number of months in the contract to arrive at a monthly gross income amount. Example: Twelve (12) month contract for $7260 would be $605 a month, even though the person was paid nine monthly payments of $806.66 each. The income is to be prorated over the number of months in the contract regardless of the fact that it may be received in fewer months than the contract covers. This applies whether the employee chooses to receive the income in fewer months than the contract covers or whether it is paid in fewer months at the convenience of the employer. 2. Intermittent Income Prorate the total gross intermittent income of self-employed applicants/recipients which may be received quarterly, semi-annually, or yearly over the period covered by the income. An example of this type income is seasonal income. For instance, a self-employed applicant/recipient works two seasons covering six months of the year and income for this work is received quarterly reflecting the total annual income. The total wages are then prorated over 12 months even though the work was completed in six months. Intermittent income received by applicants/recipients who are not self-employed is budgeted on an as received basis in the appropriate month. NOTE: Disregards are allowed for only those months in which they are applicable, work expense deductions and dependent care costs are allowed for the number of months in which the work is actually performed; however, these amounts are prorated over the number of months in the contract or the period covered by intermittent income for the self-employed. For example, using income for 12 months paid in nine months. Total gross income - 40% operating expense if self-employed difference - 20 work expense difference divided by 12 = monthly income - prorated child care (monthly child care x 9/12 amount to be budgeted 26

3210 Definitions of Terms used in Dealing with Income For FA purposes “income” refers to cash or in-kind benefits usually received on a recurring basis. A. Gross Earned Income: 1. In the case of wages, commissions, or fees, the total amount of income received before any deductions, including garnished wages. 2. In the case of income from self-employment, the total profit from the enterprise after deducting the self-employment operating expense (40%). [29] B. Net Income: The difference between gross earned income and deductible work expenses. C. Earned Income: Income in cash which a person receives by his own efforts, including managerial responsibilities. It may be received in the form of wages, salaries, commissions, etc., or through self-employment. This definition includes: 1. Wages under WIA. 2. AmeriCorps living allowances from all AmeriCorps programs other than AmeriCorps * VISTA. 3. Earnings under Title I of the Elementary and Secondary Education Act. 4. Salaries of Participants in JOBS programs. 5. Earned Income Tax Credit (EITC) payments. 6. Temporary worker’s compensation payments that are made to an individual who remains employed during recuperation from a temporary illness or injury pending his return to the job. 7. Severance Pay[30] D. Unearned Income: Income received without activities involving the individual’s own efforts. Examples: Contributions, unemployment compensation, Social Security benefits. E. Earnings Disregard: Exclusion of earned income by disregard of all earnings for the first twelve months of receipt of income. 27

F. Operating Expense: Business expenses (40% of total proceeds) deducted from income from self-employment to determine profit or gross income. G. Work Expense: The first 20% of gross earnings and the cost (on an as paid basis) of child care or care for an incapacitated adult (parent/stepparent) living in the same home receiving FA. The first 20% of gross earnings and the cost (on an as paid basis) of child care or care for an incapacitated adult (parent/stepparent) living in the same home receiving FA. H. Full-time Student: A student who is attending a school (including receiving home schooling of which the county Board of Education has been notified), college or university, Job Corps, or a course of vocational or technical training designed to fit him for gainful employment and has a school schedule equal to at least ½ of a full-time curriculum. This definition of a full-time student does not include attending GED classes.[31] I. Part-time Student: The same as a full-time student, except that his school schedule is less than ½ of a full-time curriculum and he must be employed less than full-time. J. Full and Part-time Employment 1. Full-time employment: No less than 40 hours per week at no less than the legal minimum wage rate, or, in the absence of a legal wage rate, at not less than the prevailing rate in the community. 2. Part-time employment: Any number of hours less than that listed in “1” above. NOTE: Consider that self-employed persons are working the number of hours they are at their place of business and ready to serve their customers or clients. Also consider that providing room and board is full-time employment and providing rooms only is part-time employment. K. Deemed Income: Income available to the assistance unit from any person(s) who is in the home and not in the budget who by definition is legally responsible for a member of the assistance unit (also includes alien sponsor). This income, (following trial budgeting procedures) regardless of the original source, earnings and/or unearned income, is by definition unearned income. L. Contributions for Special Occasions Contributions of $100.00 or less per recipient as a gift for the special occasion of a birthday or high school graduation. 28

M. Child Support Court ordered money from a legal parent paid to the state or other collection agency identified by the Child Support Enforcement Division as current, excess or arrears. Money paid directly by a legal parent under court order to the parent or other grantee relative. (The amount received in this instance is considered as current child support.)[32] N. Timely and Accurate Report of Earned Income: 1. Timely Report: Within 10 days of receipt of new or increased earnings. 2. Accurate Report: Correct facts regarding any information provided such as:  Correct identification of the employer. (This information is required.)  Correct hourly wage as far as is known by the client.  Correct number of regular work hours as far as is known by the client. 29

O. New Employment: 1. Applicants: Employment of an applicant is always treated as “new” employment for disregard/trial budget purposes. 2. Recipients: Employment following a one calendar month break of wages and employment. P. Self employment: 1. Income earned directly from one’s own business, trade or profession. Example: An individual who does housekeeping is considered self-employed if she is “in the business” of housekeeping. 2. Evidence of self-employment may include (not inclusive):  a license or permit to sell goods or services for money;  bonding;  an employer number for income tax purposes;  income tax returns filed as self-employed;  advertisements (including word-of-mouth) as being available for a particular service (i.e., housekeeping);  payment of one’s own social security tax rather than employer paying for it 3215 Earned Income Deductions and Penalties Under state and federal laws, all currently available net income of a person must be considered in determining his/her payment unless specifically exempt. A. Operating Expenses Deduct 40% of total proceeds received from self-employment to determine the profit/gross income from self-employment. B. Work Expenses The following work expenses are deducted from each applicant’s/recipient’s gross income except as specified in Section E below. 1. 20% of gross earnings. 30

2. Necessary expenses for the care of each dependent child or incapacitated adult (parent/stepparent) living in the same home and receiving assistance to permit a parent to leave home and work, provided it is verified that such expenses are paid by the parent included in the budget. Dependent care expenses may not be deducted when paid to a care provider (child or adult) who is otherwise in the assistance unit or to a parent of a child in the budget. When the payment is disallowed, count only the parent’s gross income. Do not consider any income to the child (or other provider) in the assistance unit as there has been no reduction of disposable income within the assistance unit. In some instances, the cost of child care will be paid by the agency as a service cost. When all or a part of the child care is not being paid under service provisions, that part of the cost verified as paid by the working person in the budget is deductible in arriving at net earnings, so long as the day care facility is not charging additional fees over and above those set by the department. Day care facilities may charge additional fees only for optional items or services, such as for liability insurance on the child or transportation to and from the facility except when transportation services are available under a Title XX Contract. C. Disregards 1. Disregard all earned income of any child receiving assistance provided the child is a full-time student who is not full time employed (see Section 3210 for appropriate definitions); and 2. Disregard 100% of earnings from new employment in the first twelve months that wages are received.[33] Applicants are eligible for the disregard if wages are timely and accurately reported and the applicant trial budget shows a deficit (see Section 3125-A). Current recipients are eligible for the disregard if wages are timely and accurately reported. Spouses of current recipients who become applicants in the assistance unit due to recent marriage or reconciliation are eligible for the disregard without the need for the applicant trial budget if the marriage/reconciliation and wages are timely and accurately reported. Ineligibility of the individual receiving the disregard or case closure for any reason results in the end of the disregard period. [34] 31

Exception: Spouses of grantees receiving the disregard may continue the previously established disregard period at application without the need for the applicant trial budget provided (1) the case in which the disregard was established closed solely due to absence of the grantee because of (2) (3) death, separation, divorce or desertion the absence of the grantee was reported timely and there is no lapse in eligibility.[35] Example: The grantee in a case leaves home on February 12th and does not plan to return. The spouse of the grantee was working and receiving the disregard. The spouse reports the grantee’s absence on February 14th and applies in her own name. The absent grantee’s case is terminated th st effective February 28 . The spouse’s case is awarded effective March 1 and the previously established disregard is continued without the need for the applicant trial budget.[36] Ineligibility later discovered also results in the end of the disregard. However, for cases that are currently otherwise eligible, the previously established period may be continued (or a new one established following usual procedures). If the case is determined to be eligible in the month of discovery, work a trial budget following procedures at Section 3125-A for the month following the last month of ineligibility. If the trial budget shows a deficit, eligibility for the previously established period is re-established and may continue. Months of ineligibility count as months of the disregard.[37] Example 1: A recipient is working and eligible for the disregard. The client began receiving Unemployment Benefits in June, the third month of disregard for wages, and did not report the UC. The worker discovers in September (month of discovery) that the client had received UC and was ineligible for June, July and August. The UC ended in August. The worker processes the overpayment and works a trial budget for September (the month following the last month of ineligibility). The trial budget shows a deficit. Eligibility for the previously established disregard is re-established and may continue. June, July and August count as months of the disregard making September the sixth month of disregard.[38] Example 2: A recipient is working and eligible for the disregard. S/he began receiving RSDI in February, the 5th month of disregard, and did not report it. The RSDI ended in March. The client lost her job in April and was last paid in April. The wages received in April do not cause ineligibility. She reported all changes in June when she came in to report getting a new job that started in June. The EW works a trial budget for June (month of discovery). There is no deficit. Since the client is not currently eligible, eligibility for the previously established disregard cannot be re-established. The case is terminated effective June 30th. The worker processes the overpayment for February, March and April.[39] 32

Example 3: Same as above, except there is a deficit in June. The client is eligible for a new disregard period since there has been a break in employment and wages for at least one month. The EW then works a trial budget for April to determine if the previous disregard period can be re­ established. There is a deficit for April. The wages received in April can be disregarded. The worker processes an overpayment for February and March. [40] NOTE: Individuals receiving assistance after 60 months are not eligible for the twelve month earnings disregard (even if timely and accurately reported) and must be terminated as soon as possible after becoming employed, but no later than the end of the month following the month of employment. It is not necessary to work a budget in these cases as ineligibility is due to being employed, not the amount of earnings. [41] nd th Example 1: Client applies on June 2 . She goes to work on June 13 , first receives wages on June 15th and timely and accurately reports. EW works a trial budget and determines that the client is eligible for the twelve month disregard of earnings. The case is awarded in July with an effective date of June 2nd. Wages are disregarded June through May of the next year which are the first twelve months that wages are received.[42] Example 2: Recipient goes to work on May 10th and timely and accurately reports wages which were first received on May 15th. She is eligible for the earnings disregard. Wages will be disregarded May through April of the next year. [43] Example 3: Recipient goes to work on January 10th and timely and accurately reports wages which were first received on January 20th. She is eligible for the earnings disregard. The factory for which she works is closed for the entire month of March due to lack of demand for product. Workers remain employed during the shut-down. She does not receive any wages in March. Factory reopens in April and client receives wages in April which are expected to continue. Wages are disregarded in January, February and April through January of the following year. The disregard is available for each instance of new employment that is timely and accurately reported as long as there has been a break in wages and a break in employment of at least one calendar month. The break in wages and employment may be for the same month or for two different months which are consecutive. A break in wages and employment does not have to occur for the disregard to apply to new wages reported timely and accurately if the disregard has not been previously received due to penalty for failure to report wages from the previous employment timely and accurately. Example 4: Recipient goes to work on April 15th and timely and accurately reports wages which were first received April 20th. She is eligible for the earnings disregard. She loses her job on April nd th th 22 and last receives wages on April 30 . She gets another job on May 25 and timely and 33

accurately reports wages which were first received June 2nd. She has had a break in wages of at least one month (May) but no break in employment of at least one month. She is not eligible for a new period of earnings disregard. Wages will be disregarded in April and June of the current year through April of the following year. Example 5: Recipient goes to work in April and timely and accurately reports wages which were first received in April. She is eligible for the earnings disregard. She loses her job in April and last receives wages in May. She gets another job in June and timely and accurately reports wages which were first received in June. She has had a break in employment of at least one month (May) but no break in wages of at least one month. She is not eligible for a new earnings disregard period. Wages will be disregarded April through March of the following year. th th Example 6: Client applies on April 12 . She goes to work on April 16 and is first paid in April and timely and accurately reports. EW works trial budget and determines that she is eligible for the earnings disregard. Case is awarded in May with an effective date of April 12th. She loses job in May and last receives wages in May. Wages for April and May are disregarded in April and May. She goes to work again in July and timely and accurately reports. She is eligible for a new period of earnings disregards as she has had a break in wages and employment for at least one calendar month. Wages from new employment will be disregarded July through June of the following year. Example 7: Recipient goes to work on July 3rd and timely and accurately reports wages which were first received on July 10th. She loses this job in July and is last paid from this job in July. She goes to work again on July 15th but fails to timely and accurately report wages which were first received on July 20th. Wages from the first job are disregarded in July. Wages from the second job cannot be disregarded. Example 8: Client’s wages are being disregarded September through August of the following year. In November FA is terminated at client’s request as she plans to move out of the state. The client quits her job in November and is last paid in November. In January, the client applies for FA in Alabama and has been hired back at the same job she quit in November when she moved out of state. An applicant trial budget must be worked to determine eligibility for the disregard. If there is a deficit, the client is eligible for a new disregard period as there has been a break in employment and wages for at least one calendar month. Earnings will be disregarded January through December.[44] Example 9: Clients wages are being disregarded September through August. Client goes on maternity leave in October and receives last wages in October. Client remains employed but has no earnings. Client returns to work in January and begins receiving wages in January. Since client has not had a break in employment, she is not eligible for a new disregard period. Wages are disregarded for September and October and January through October.[45] 34

Code ZC24 with a “Y” in field “Is Income Excluded?” “FA?” when 100% of earnings entered on this screen are to be disregarded in determining FA eligibility. Set a C760 alert for the twelfth month of the 100% disregard period. In the C760 alert month change the “Y” in field “Is Income Excluded?” “FA?” on ZC24 to “N”. Enter the amount of child care expense, if any, on ZC17. [46] Review ZC45. If the case is ineligible, terminate the case effective the end of the 12th month of 100% disregard. If the case remains eligible make a change disposition on ZC58.[47] D. Income to Which the Earnings Disregard Does Not Apply The earnings disregard is not applicable to earned income not timely and accurately reported (defined in 3210-N), or to the earnings of an individual receiving FA beyond the 60th month due to a time limit exception criteria; or to the earnings of an individual who is excluded from the assistance unit for a reason listed in Section 3105-C. E. Penalties and Related Good Cause Circumstances Certain client activities related to earnings will result in loss of the earned income work deductions for at least one month and loss of the earned income disregard unless good cause for the activity is established. Information in this section provides the good cause circumstances related to specific actions as well as the penalties when good cause is not applicable or is not established. Apply the “prudent person principle” in evaluating reported circumstances for voluntarily terminating employment or reducing earnings or failing to make a timely and accurate report of a change in earnings. Accept the client’s statement regarding his circumstances unless there is reason to question it. Follow usual procedures in resolving incomplete/inconsistent information. 1. Good Cause Circumstances a. Good Cause for Voluntarily Terminating Employment or Reducing Earnings (1) lack of adequate child/dependent care (2) lack of transportation 35

(3) personal illness or illness within immediate family (4) hazardous working conditions (5) deferral from work activities by the JOBS unit (6) distance from a work or training site of more than two hours commuting time, exclusive of time necessary to transport children to and from a child care facility unless the normal round trip commuting time in the area is more than two hours b. Good cause for failing to make a timely and accurate report of receipt of earnings or change in earnings exists when the client is involved in emergencies, such as serious illness/injury, fire, natural disasters, or dangerous weather conditions which could reasonably prevent a person from making a timely report, or tragedies, such as death or serious injury to an immediate family member.[48] 2. Removal of the Earnings Disregard, Work Expense and Dependent Care Costs The activities listed below will result in removal of the above deductions from earned income on a month-to-month basis as long as the activity requiring the penalty continues to exist as follows unless good cause can be established: a. An individual voluntarily terminated his employment or reduced his earnings without good cause. This includes an applicant who terminated his job or reduced earnings within 30 days preceding the application month. The initial determination of eligibility for an applicant who reduced earnings would reflect the penalty. For a recipient who reduced earnings, the penalty is imposed as soon as possible. The penalty is to be applied each month until: (1) the client has regained/obtained employment/earnings comparable to those which were terminated or reduced; or (2) the job/higher earnings from the particular employer are no longer available. (If the person has not regained/obtained comparable employment/earnings and the job/higher earnings are not available as verified by the employer or former employer, the penalty is no longer applied.) 36

Example: Ms. Jones reduced her earnings from the Acme Company without good cause. The penalty is invoked and the July payment is reduced. For the August payment, it is verified that the additional hours at the Acme Company are no longer available as someone else has been hired. Since the hours are not available, the penalty is no longer applicable. (If the hours are available and Ms. Jones does not have other comparable employment/earnings, the penalty continues for the next month.) b. A recipient failed without good cause to make a timely and accurate report (see 3210-N) of receipt of earnings or a change in earnings. The earnings disregard is no longer available. Loss of the work expense and child care deduction is applied on a month-to-month basis. [49] Example 1: The client reports on March 10th that she began working part-time on February 10th at $10 a day once a week. Because of failure to timely report, the client is not eligible for the disregard. Additionally the worker must impose penalties on February and March income. The penalty will be applied retroactively as part of the overpayment computation for February and March. On March 10th, the worker will determine eligibility prospectively for April allowing earned income deductions. If eligibility is established, payment for April is determined prospectively allowing earned income deductions. Example 2: The client reports on December 10th that she received a 40 cent raise in her hourly wages beginning in November. December is the client’s 4th month of earnings disregard. Because of failure to timely report, the client loses all months of the earnings disregard, and the earned income deductions for November and December. For November and December the penalty will be applied retroactively as part of the overpayment computation. On December 10th the worker will determine eligibility prospectively for January allowing the earned income deductions. If eligibility is established, payment for January is determined prospectively allowing only the earned income deductions. The earnings disregard cannot be applied to earnings received January through August.[50] 3225 Unearned Income to be Budgeted All unearned income received by any member of the budget group or received by someone not in the budget but in the home and designated for a member of the budget group must be included in the budget, unless specifically excluded or disregarded under provisions in Section 3230. For example, when Social Security benefits are paid to a representative payee on behalf of a member of the assistance unit and the payee lives in the same household as the assistance unit, the income must be counted in whole. When the representative payee does not live in the household, the Social Security is included only to the extent that a payee makes it available for the support of the beneficiary. Likewise; 37

when a member of the assistance unit is payee for unearned income for someone not in the assistance unit (and not required to be a member), the income will be considered available to the assistance unit only to the extent it is not made available to the intended beneficiary. Listed below are types of unearned income which must be considered in the budget, prospectively or retrospectively as appropriate. A. Pensions or other benefits at the entitlement amount even though a lesser amount (or none) is being received currently due to prior receipt of an overpayment and specified types of insurance and estates, such as: railroad retirement benefits; unemployment benefits; Retirement, Survivors and Disability Insurance (RSDI) plus the amount of the Medicare premium if it is being withheld; veterans benefits (pension or compensation, or soldiers allotments and allowances); recurring compensations for injuries or other disabilities, such as worker’s compensation that does not meet the definition in Section 3210-C.6; adoption assistance paid in behalf of an individual who is included in the assistance unit per 3105-C.1.a.Note. B. Returns from investments in personal property. C. Child Support Payments – Budget any court ordered support payment sent directly to the client from the legal parent in cases where the grantee refuses to turn over the support payments to the state; any support payments made by a legal parent during any month covered by a retroactive award and in the month the initial award is processed; and money sent to the client from the state identified by the Child Support Enforcement Division as current, excess, or arrears.[51] NOTE: Cash contributions from the alleged father meeting the criteria in D below will be budgeted as contributions. D. Cash contributions from any source, i.e., neighbors, friends, relatives, alleged parents of assistance unit members, a legal parent not under court order which do not meet the definition of contributions for special occasions as defined in 3210-L and, therefore, cannot be disregarded according to 3205­ D. E. Interest on the principal of a mortgage held on another person’s property and interest on child support arrearages, bank accounts, money loaned out or on proceeds from the sale of a resource to come in over a specified period of time. Interest is considered available to the account holder in the month it is actually posted to the account by the bank, regardless of whether it has been recorded in the client’s 38

passbook, bank statement or other bank document. Interest on a promissory note is usually available monthly. Child support interest is available in the month of receipt by the client. F. Rent from real estate, and royalties from lease of oil or mineral rights, unless a person is self- employed as a real estate dealer or in a royalty-related trade or business. Rent and royalties which are ordinarily income of a trade or business are earnings from self-employment and are, therefore, counted as earned income. G. Allotments paid to dependents of participants in Job Corps. H. Proceeds from loans which are determined to be invalid. I. That part of the VA educational assistance payment designated for the dependents of the veteran in the FA assistance group. Example: Assistance unit consists of an adult and two children. The total educational assistance from VA is $400. The dependent allotment is $100 for each child. Budget the dependents’ allotment of $200. J. Jury fees. K. Contributions from the senior parent (after application of policy at 3205-D) or the amount to be deemed as determined according to Section 3125-D, whichever is greater. L. Retroactive lump-sum SSI payments to senior parents who do not continue eligible for SSI. These payments are considered as income to the senior parent. NOTE: If the retroactive payment includes the month of receipt, the senior parent is considered an SSI recipient for that month and the income is disregarded per usual policy. M. Monies received from trust funds. Money placed in trust is considered income, which is counted only as received. Policies in Section 2005 apply to make such funds available. N. Money received from the sale of belongings, i.e., a home, other real property, vehicle, timber, appliances, etc.[52] O. Money from the sale of stocks, bonds and like investments. P. Money received as a lump sum from any source, i.e., Social Security, SSI when the lump sum payment does not include SSI for the month of receipt, VA benefits, child support, inheritance, winnings from gambling, personal injury awards, insurance settlements, worker compensation awards, etc. This includes retroactive, lump sum payments received by FA unit members or by excluded members who would, otherwise, be a required member of the FA unit. These payments are to be considered unearned income in the month of receipt. Examples of such income are retroactive lump sum Social 39

Security, SSI (when the lump sum payment does not include SSI for the month of receipt), VA benefits, lump sum payments on child support arrearages (returned to the recipient by the state or not turned over by the recipient), child support refunds from excess payments made to the state that have accumulated for two or more months without being sent to the client, and non-recurring payments that are in the nature of a windfall. A windfall is defined as a sum that is not earned, does not occur on a regular basis, and does not represent accumulated monthly income received in a single sum. A windfall might come from an inheritance, dog track, bingo or lottery winnings, personal injury awards, insurance settlements, worker compensation awards, etc. The amount to be budgeted is that which is not earmarked and used for the purpose for which it is paid, i.e., monies for back medical bills resulting from accidents or injury, funeral and burial costs, replacement or repair of items covered in an insurance settlement. Q. Retirement benefits paid out at retirement or withdrawn for another reason. R. State and federal income tax refunds. In case of a joint return, count one-half of a joint return received by a client who no longer lives with the joint recipient unless you have information that the client received more or less than one-half of the refund. In that case, count amount actually received. S. Short-term insurance benefits payable because of illness. T. Money received as a result of voluntarily terminating life or burial insurance before its maturity or the insured event occurs.[53] U. TANF payments received from other states. 3230 Earned and Unearned Income not to be Budgeted The income/benefits listed below are not to be considered in the eligibility determination of applicants/recipients or in the determination of the amount of the grant. A. Nutrition assistance as provided under the following Federal programs: 1. The value of the food stamp allotment. 2. The value of the USDA donated foods. 3. Benefits under Title VII, Nutrition Programs to the Elderly, Older Americans Act, 1965. 4. Food Assistance under Child Nutrition Act of 1966 and special food services under the National School Lunch Act. B. Any relocation payments received under the Uniform Relocation Assistance and Real Property Acquisition Act of 1970 (PL 91-646) and the Alabama Relocation Assistance Act. 40

C. Loans and grants as follows: 1. Proceeds from a valid loan. A valid loan is one made under a written agreement which includes the following provisions: [54] a. Borrower’s acknowledgement of obligation to repay; and b. Timetable and plan for repayment; and c. Borrower’s intent to repay by pledging either real or personal property or anticipated income. If a loan is determined to be invalid, proceeds are counted as unearned income in the month received. 2. Proceeds from all educational income to include educational loans, scholarships and grants. Examples of grants and loans to be excluded under this provision include PELL, SEOG, State Student Incentive Grants, College Work Study, Perkins Loans and guaranteed student loans (including PLUS loans and supplemental loans for students).[55] D. Funds distributed per capita to or held in trust for members of any Indian tribe under PL 94-114, effective October 17, 1975, PL 92-254, PL 93-134, as amended, PL 94-540, PL 97-458, effective January 12, 1983 or PL 98-64, effective August 2, 1983. This also includes tax-exempt portions of payments made pursuant to PL 92-203, the Alaskan Native Claims Settlement Act. E. Payment for supporting services or reimbursements made to volunteers under the following programs: 1. Persons serving as foster grandparents, senior health aides, or senior companions, and persons serving in the Service Corps of Retired Executives and Active Corps of Executives and any other programs under Titles II and III, pursuant to Section 418 of PL 93-113, Domestic Volunteers Service Act of 1973. 2. Payments to volunteers under Title 1 of PL 93-113, the University Year for Action Program. 3. Income received through the Ameri Corps* VISTA Programs F. Allowances paid to persons for participation or to encourage training as follows: 1. Special allowances provided by the state vocational rehabilitation agency to enable mutual clients to participate in a vocational rehabilitation program. 41

2. Training incentive allowances under JOBS. G. Monies not currently available to meet current basic need; this may include: 1. In-kind income, earned or unearned, from any source and vendor payments. 2. Cash contributions meeting the definition of contributions for special occasions as defined in 3210-L. 3. Monies from other social service agencies/organizations provided to a client for a different purpose or service not included in the comprehensive need standard and which is not intended to meet current need, such as adoption subsidy for special needs. Monies disbursed to pay the applicant/recipient for a service he provided to or through the agency/organization cannot be excluded under this provision. 4. Individual and Family Grant (I and FG), in recognition of the different purposes for which the grants are made and the fact that such grants are made for unmet or met needs which are not included in any standard. 5. Individual income which is less than a dollar a month from any single source. 6. Cash payments from a household member not included in the assistance unit (and not required to be in the assistance unit) that are paid only for his/her share of household expenses. Accept the statement of the non-unit household member as to the shared expenses unless you have reason to question; if so, resolve following usual procedures. Cash payments to the FA unit for unrestricted use will be treated as cash contributions. See 3225-D. NOTE: Cash payments received for room/board will continue to be counted as earned income. 7. Deposits to an Individual Development Account (IDA) which represent matching funds from the sponsor of the IDA.[56] H. All earned income of a dependent child who is a full-time student or a part-time student not full-time employed. I. Child support payments being collected by the state department on behalf of the family or being processed for collection by the state, beginning with the month following the month of approval (the month for which the award or reinstate disposition is made on ZC58.) J. Housing or utility assistance as follows: 1. Housing assistance paid to an applicant/recipient under provisions in the United States Housing Act of 1937; Section 101 of the Housing and Urban Development Act of 1965; or Title V of the Housing Act of 1949. This may be in cash to meet utility costs or as a vendor payment for shelter 42

and/or utility costs. When there is question as to the source of funding for housing assistance, the local housing authority should be able to identify the Act under which it is paid. 2. One-time or emergency assistance for the cost of utilities whether made as vendor payments or as direct payment to the client provided payment is made by another agency or organization from public funds. 3. HUD Community Development Block Grant funds paid under Title I of the Housing and Community Act of 1974 (PL 93-383) as expanded by HL 95-128 in 1977. Payments are made by check to the contractor and property owner. 4. Assistance under the Home Energy Assistance Act of 1980. 5. Utility assistance in the form of LIHEAP benefits provided under Section 2605-(f) of the Omnibus Budget Reconciliation Act of 1981. 6. Support and Maintenance assistance, including home energy assistance, which has been certified by the department, as both provided on the basis of need and (1) furnished in-kind by a private, non-profit organization, or (2) furnished in cash or in-kind by an entity providing home energy whose revenues are derived on a rate-of-return basis regulated by a state or federal governing body, or any supplier of home heating gas or oil, or a municipal utility providing home energy. In this context, support and maintenance assistance means any assistance designed to meet the expenses of day-to-day living. Home energy assistance means any assistance related to heating and cooling in the home. This includes payments for utility service or bulk fuels and assistance in-kind such as portable heaters, fans, blankets, storm doors or other items which reduce the costs of heating and cooling such as conservation and weatherization materials and service. K. Earned and unearned income which is derived from participation in programs carried out under the Workforce Investment Act (WIA) of 2000 will be excluded as follows: 1. Earned income of a child (regardless of student status) who is included in the assistance unit may be excluded. Examples of programs from which earnings will be excluded are the Summer Youth Program and work experience programs where on-the-job training is provided by a private sector employer. 43

2. Unearned income of a child who is included in the assistance unit may be excluded. Benefits to the child may be in-kind (tuition and books, for example) and/or in the form of a cash payment to cover expenses incidental to training, such as transportation and meals including allowances for personal necessities received while attending a Job Corps center. 3. Unearned income for participation in WIA programs received by the payee or other adult in the assistance unit may be disregarded under the provisions of Section 3230-G.3. NOTE: Earned income of the payee or other adult will not be excluded and must be used in the payment determination. L. Earned Income Tax Credit (EITC).[57] M. Payments received by individuals of Japanese Ancestry under Section 105 of Public Law 100-383, the Civil Liberties Act of 1988; and payments received by Aleuts under Section 206 of the same Public Law, Aleutian and Pribil of Islands Restitution Act. N. Payments received by individuals under Public Law 101-239 from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation. O. Payments received by individuals under the Radiation Exposure Compensation Act – Public Law 101­ 426 enacted October 15, 1990. P. ACFC payments and adoption assistance payments paid in behalf of individuals excluded from the assistance unit per Section 3105-C.1.a . Q. The SSI payment and any other income of a SSI recipient who might otherwise be included in the budget. This includes the stepparent who is a SSI recipient. R. Payments received from a state’s Crime Victim’s Compensation Commission.[58] S. Payments received from the Veterans Administration for children with covered birth defects who are the natural children of women veterans who served in the Republic of Vietnam from February 28, 1961 through May 7, 1975. (Authorized by Chapter 18, Title 38, United States Code.) T. Monies specifically excluded by other federal or state programs: 1. Payments received under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (PL 91-646) and the Alabama Relocation Assistance Act. 2. HUD Community Development Block Grant funds paid under Title I of the Housing and Community Development Act of 1974 (PL 93-383) as expended by PL 93-128 in 1977. Payments are made by check to the contractor or jointly to the contractor and property owner. 44

3. Funds distributed per capita to or held in trust for members of any Indian tribe under PL 94-114, effective October 17, 1985, PL 92-254, PL 93-134 as amended, PL 94-540, PL 97-458, effective January 12, 1983 or PL 98-64, effective August 2, 1983. This includes tax-exempt portions of payments made pursuant to PL 92-203, the Alaskan Native Claims Settlement. 4. Utility assistance in the form of LIHEAP benefits provided under Section 2605(f) of the Omnibus Budget Reconciliation Act of 1981. 5. Support and maintenance assistance, including home energy assistance, as described in Section 3230-J.6. 6. Payments to individuals under the Radiation Exposure Compensation Act (PL 101-426) enacted October 15, 1990. 7. Disaster assistance received under the Individual and Family Grant (IFG) Program (PL 93-288 as amended by PL 100-707) administered by the Federal Emergency Management Agency. Replacement property and/or items purchased with IFG funds are also excluded.[59] U. Money received as a death benefit from burial insurance, revocable and irrevocable burial contracts or burial trusts or from any other irrevocable arrangement to meet burial expenses. V. Money received as a death benefit from life insurance. [1] Rev 764 Oct 2009 [2] Rev 764 Oct 2009 [3] Rev 765 Jul 2010 [4] Rev 765 Jul 2010 [5] Rev 765 Jul 2010 [6] Rev 765Jul 2010 [7] Rev 765Jul 2010 [8] Rev 765 Jul 2010 [9] Rev 770 Apr 2012 [10] Rev 764 Oct 2009 45

[11] Rev 768 Nov 2011 [12] Rev 768 Nov 2011 [13] Rev 764 Oct 2009 [14] Rev 768 Nov 2011 [15] Rev 764 Oct 2009 [16] Rev 764 Oct 2009 [17] Rev 764 Oct 2009 [18] Rev 764 Oct 2009 [19] Rev 764Oct 2009 [20] Rev 764 Oct 2009 [23] Rev 750 Jul 2006 [24] Rev 761 Feb 2008 [25] Rev 761 Feb 2008 [26] Rev 761 Feb 2008 [27] Rev 761 Feb 2008 [28] Rev 761 Feb 2008 [29] Rev 750 Jul 2006 [31] Rev 760 Apr 2008 [32] Rev 761 Feb 2008 [33] Rev 764 Oct 2009 [37] Rev 765 Jul 2010 [39] Rev 765Jul 2010 [21] Rev 764Oct 2009 [22] Rev 764Oct 2009 [30] Rev 765Jul 2010 [34] Rev 765Jul 2010 [35] Rev 765Jul 2010 [36] Rev 765Jul 2010 [38] Rev 765Jul 2010 46

[40] Rev 765Jul 2010 [41] Rev 764 Oct 2009 [42] Rev 764 Oct 2009 [43] Rev 764 Oct 2009 [44] Rev 765Jul 2010 [45] Rev 764 Oct 2009 [46] Rev 764Oct 2009 [47] Rev 764 Oct 2009 [48] Rev 750 Jul 2006 [49] Rev 764 Oct 2009 [50] Rev 764 Oct 2009 [51] Rev 764 Oct 2009 [52] Rev 764 Oct 2009 [53] Rev 764 Oct 2009 [54] Rev 765 Jul 2010 [55] Rev 736 Nov 2003 [56] Rev 763 Apr 2009 [57] Rev 764 Oct 2009 [58] Rev 764 Oct 2009 [59] Rev 764 Oct 2009 [60] Rev 775 May 2014 [61] Rev 775 May 2014 [62] Rev 775 May 2014 [63] Rev 775 May 2014 [64] Rev 775 May 2014 [65] Rev 775 May 2014 [66] Rev 775 May 2014 [67] Rev 777 Jul 2014 [68] Rev 777 Jul 2014 47

[69] Rev 777 Jul 2014 [70] Rev 777 Jul 2014 [71] Rev 777 Jul 2014 [72] Rev 777 Jul 2014 [73] Rev 780 Jan 2016 48

Chapter 10 ....................................................................................................................................................2 Supplementation Eligibility Process ..............................................................................................................2 10000 Introduction ..................................................................................................................................2 10001 Summarized Eligibility Requirements ..........................................................................................4 10002 Supplemental Security Income Status.........................................................................................5 10015 Entitlement to Medicaid Due to Receipt of Cash Assistance in (Non-SSI) SUP .........................5 10030 Entitlement to Medicaid Due to Grandfathering Legislation or Court Decisions .........................5 10032 Persons in Medical Institutions ....................................................................................................6 10034 Persons who would be Eligible for Supplementation Except for the RSDI Cost-of-Living Increases Occurring After April 1977............................................................................................7 10100 Determining Initial and Continuing Eligibility................................................................................8 10105 Application Process - General 10200 Determining Initial and Continuing Eligibility for Blind or Otherwise Disabled Children and .....................................................................................................9 10110 Standard of Promptness ............................................................................................................11 10120 Interview for Application or Continuing Eligibility .......................................................................12 10125 Investigation to Secure Facts to Determine Initial or Continuing Eligibility................................15 10130 Accrual Rights of Applicant/Recipient........................................................................................20 10135 Taking Action of Basis of Findings.............................................................................................21 10140 Advising Applicant/Recipient of Action in the Case...................................................................27 Adults in Foster Care ..................................................................................................................28 10205 Application Procedures for Children and Adults in Foster Care ................................................28 10210 Disposition of Application for Children and Adults in Foster Care.............................................29 10215 Continuing Eligibility Procedures for Children and Adults in Foster Care .................................29 10300 Legal Representative or Legal Guardian....................................................................................29 10400 Delivery of Payments to Otherwise Eligible Individuals who are Homeless..............................30 1

[1] Chapter 10 Supplementation Eligibility Process 10000 Introduction The county Department of Human Resources is directly responsible for administering the public aid programs and making the decisions in regard to each person seeking aid. All decisions must be in keeping with laws governing the programs and with rules made by the State Department of Human Resources. The staff must, therefore, be thoroughly familiar with all legal requirements, policies and regulations relating to eligibility. Prior to January 1, 1974, the state administered the adult category public assistance programs partially funded with Federal monies under the Social Security Act. These programs, Old Age Pension (OAP), Aid to the Blind (AB), and Aid to the Permanently and Totally Disabled (APTD) were modified after January 1, 1974 to provide supplementary assistance payments from state funds alone for certain aged, blind and disabled persons. A. Supplemental Security Income Public Law 92-603 amended Title XVI of the Social Security Act to provide a federal program of supplemental security income (SSI) for aged, blind and disabled people with limited income and resources. Under this law, the Social Security Administration (SSA) began making payments January 1, 1974 to most recipients of the former OAP, APTD and AB programs of the Department of Human Resources. The SSI payment for many of the OAP, APTD, and AB recipients was equal to or more than their DHR payment. SSI benefits for some recipients, including most couple recipients and some individual recipients with additional shelter costs and/or special needs, were less than their DHR payments, and some former recipients were not eligible for SSI. B. Mandatory Supplementation To insure that persons would not be financially disadvantaged under SSI, Public Law 93-66 was passed to require that states implement supplemental programs to: (1) provide for payments to all December 1973 recipients of OAP, APTD and AB whose income level under SSI during any month (CIL – Current income level) is 2

less than their income level as of December 1973 (MIL – Minimum income level); (2) make payments equal to at least the difference between the December 1973 (3) income level and the income level under SSI; and maintain the December 1973 income level, reducing it only as a decrease in needs would have caused a difference in the December 1973 payment had such decrease been reported then. To identify persons subject to provisions of PL 93-66, show the amount of the MIL or zeros, as appropriate, on ZC26, SUP-Member Information, screen. The MIL is the total of amount of budgeted income/resources plus amount of payment for December 1973. If it is known that the individual was a recipient in December 1973, but case record material for that time has been destroyed, use one of the amounts below in the MIL, according to the category under which the person received aid in December 1973 and whether in his home or in a nursing home: Own Home Nursing Home AB $ 230 $ 32 APTD 232 22 OAP 258 48 C. When an individual who received AB, APTD, or OAP in December 1973, becomes ineligible for optional supplementation, terminate according to usual advance notice and accrual rights procedures. Then compare his current income level (CIL) to his minimum income level (MIL). If the CIL is less than the MIL, send the case record to the state department, Attention: Family Assistance Division, as eligibility determinations for persons eligible for only mandatory supplementation are the responsibility of the staff of that division. D. Optional Supplementation In addition to required or mandatory supplementation, the law gave states the option to make payments to aged, blind, and disabled persons under a program of optional supplementation. In accordance with these provisions, optional payments are made in Alabama to eligible individuals who were not receiving assistance in December 1973. Optional supplementation payments are provided to individuals who require nursing care and who are: 1. SSI recipients living in their own home or foster home licensed or approved by the Department of Human Resources; or 3

2. “Grandfathered” non-SSI recipients who were receiving optional supplementation payments for personal care as of March 7, 1986 in their own home, personal care home, hospital or foster home licensed or approved by the Department of Human Resources. NOTE: This includes SSI SUP recipients who became ineligible for SSI due to income on or before March 7, 1986 and would have continued eligible as a Non-SSI SUP recipient except for the program change whereby payments would only be made to SSI recipients who were otherwise eligible; or 3. “Grandfathered” SSI and Non-SSI recipients living in their own home or a personal care home, hospital or foster home licensed or approved by the Department of Human Resources who were receiving SUP payments for personal care as of September 30, 1986. These individuals will continue to receive supplementation payments for as long as they remain continuously eligible under supplementation eligibility criteria in effect prior to October 1, 1986. A break in eligibility for any reason results in loss of grandfathered status and the case must be terminated unless the individual now qualifies for a nursing care supplement. Optional supplementation payments are also made to persons receiving care in a cerebral palsy treatment center (only for persons who were eligible for such payment in May 1981). 10001 Summarized Eligibility Requirements For the worker’s convenience, general conditions of eligibility applicable to persons applying for supplementation on or after October 1, 1986 are summarized below. Detailed policies and procedures are given elsewhere. Refer to Section 12010-B for handling of applications. To receive aid under one of the three categories of supplementation, in addition to being a resident of Alabama, a person must be receiving: A. SSI (Aged, blind, disabled); B. Medicaid waiver services at the skilled nursing facility level. (Level to be determined by the state office Family Assistance Division); and; 4

C. Homelife care services in his own home or a foster home licensed or approved by the Department of Human Resources from an approved provider. The applicant/recipient must pay the provider of this care. 10002 Supplemental Security Income Status An individual’s status with SSA for SSI benefits must be cleared before s/he can apply for supplementation under OAP, APTD or AB. If an individual is ineligible for SSI benefits for any reason, s/he is not eligible for supplementation. 1. If a person is receiving SSI, accept his application and process it to a determination of eligibility or ineligibility. 2. If a person was denied SSI or becomes ineligible for SSI for any reason, s/he is not eligible for a supplementation payment and an application must not be accepted (or assistance must be terminated.) 10015 Entitlement to Medicaid Due to Receipt of Cash Assistance in (Non-SSI) SUP An eligible recipient of mandatory, mandatory/optional or optional supplementation (Non-SSI) is entitled to Medicaid for as long as s/he receives a supplementary payment under AB, APTD, or OAP. Certification of Medicaid eligibility for eligible recipients of non-SSI SUP is accomplished each month by the sharing of all active cases in the base file between the State Department of Human Resources and the Alabama Medicaid Agency. The information in the base file is updated as indicated by FACETS. 10030 Entitlement to Medicaid Due to Grandfathering Legislation or Court Decisions Federal legislation, regulations and court cases have provided protection of Medicaid benefits for individuals who would otherwise be ineligible for Medicaid benefits or lose entitlement to Medicaid benefits under the circumstances given below. Medicaid entitlement under these provisions exists as long as the individual meets the specified criteria. 5

10032 Persons in Medical Institutions Follow procedures below in determining and certifying Medicaid eligibility of “grandfathered” nursing home cases. “Grandfathered” refers to Medicaid eligibility of a person who was eligible for Medicaid as a patient in a nursing home on December 31, 1973. As a nursing home patient, he was eligible either as a money payment or no- money payment recipient. He continues eligible for “grandfathered” Medicaid for as long as he remains in the nursing home, has a need for the care provided, and receives a mandatory supplementation payment or would receive a money payment except for income sufficient to meet his personal needs but not in excess of certain income levels. His “grandfathered” status is not affected by a reclassification from receiving money payment to receiving no money payment, or vice versa, however, the procedure for determining and certifying eligibility is affected by such classification as set out below. A. Mandatory money payment recipient – See Section 12012. B. No money payment – The Medicaid District Office (MDO) is responsible for re­ determining eligibility of “grandfathered in” nursing home patients whose income is sufficient to meet their needs while in the nursing home, but is not as high as the following levels: OAP - $258 or $262 with RSDI APTD - $222 or $230 with RSDI AB - $225 The MDO will determine eligibility based on SSI criteria. However, if a “grandfathered” nursing home patient is not eligible based on those criteria, he is entitled to another determination using eligibility policies and procedures in effect prior to January 1974, including provision for disregard of the 20% RSDI increase of August 1972. This determination is made by the Family Assistance Division upon referral from the MDO. If the person continues eligible, MDO will continue to certify him as an active MDO case. 6

10034 Persons who would be Eligible for Supplementation Except for the RSDI Cost-of-Living Increases Occurring After April 1977 Public Law 94-566 (The Pickle Amendment) provides for Medicaid coverage for any recipient of Old Age Pension, Aid to the Blind and Aid to the Permanently and Totally Disabled who: (1) Received RSDI and SUP payments concurrently after April 1977; (2) Currently receives RSDI; (3) Is not eligible for SUP due to income; and (4) Would be eligible for SUP if all RSDI cost-of-living increases received (by him or his ineligible spouse) since he last received RSDI and SUP concurrently were deducted from current RSDI benefits. Only cost-of-living increases, not other RSDI increases, are deductible. However, as the Department of Human Resources is no longer making optional SUP payments to non-SSI SUP recipients, this provision becomes obsolete except as indicated in A below: A. Persons Eligible 1. Grandfathered Medicaid Recipients A person certified under this provision as of March 7, 1986 is grandfathered for continued Medicaid eligibility as long as he remains otherwise continuously eligible under this provision; that is, he would be eligible for SUP due to income if SUP payments were made to non-SSI recipients. If he becomes ineligible for Medicaid for any reason, his grandfathered status is lost. 2. Grandfathered Non-SSI SUP Recipients Grandfathered non-SSI SUP recipients whose SUP payment is terminated because of an RSDI cost-of living adjustment (COLA) will continue eligible for Medicaid under this provision. Detailed instructions for Medicaid only certification are issued as part of the mass change instructions specific to the COLA. B. Financial Requirements 1. Determine the amount(s) of applicable cost-of-living increases; increases for other reasons, such as a change from wife’s to widow’s benefits or a recalculation due to additional covered employment, are not to be included. 7

2. Subtract the total of all cost-of-living increases received by the Medicaid only or non-SSI SUP recipient since he last received SUP and RSDI from his current RSDI benefits to derive countable RSDI for Medicaid only. Also, subtract the ineligible spouse’s cost-of-living increases for the same period of time from her current RSDI in determining the amount of income to be deemed. 3. Work a trial budget according to procedures in Chapter 12 using countable RSDI from “2” above. If the recipient’s income exceeds need, he is no longer/not Medicaid eligible. If his income does not exceed need, he is/remains eligible for Medicaid only. C. Medicaid Certification Procedures The current amount of RSDI received by the individual is to be entered on ZC30 at “Social Security (RSDI)” and the amount of disregarded RSDI is also entered on ZC30 at “Disregarded RSDI”. Certify Medicaid by completing an award disposition on ZC49. 1. If the individual has a spouse who is also eligible for Medicaid only under these provisions, the spouse’s own RSDI benefit amount is to be entered on ZC30. Certify Medicaid for the spouse on ZC49. 2. If the individual has an ineligible spouse, determine the amount of deemed income to be shown on ZC30 at “Contribution/Individual” using the ineligible spouse’s current RSDI benefit less any cost-of-living increases received after the eligible spouse last received SUP and RSDI. D. Redetermination Process Re-determine eligibility for Medicaid at least every 12 months by completing/updating FACETS screens and, when appropriate, other needed Forms such as 696, 797, etc. Once a recipient is determined eligible for Medicaid under these provisions, all subsequent cost-of-living increases are to be disregarded in determining continued eligibility. Terminate Medicaid when the individual is no longer eligible. 10100 Determining Initial and Continuing Eligibility Responsibilities for the determination of initial eligibility for nursing care supplementation cases are shared by eligibility staff and Elderly and Disabled waiver 8

case managers. Generally, eligibility staff receives the completed application packet from the case manager either from the Department of Senior Services or the Department of Public Health. Detailed policy regarding this eligibility process is in Section 12010-B. Following the initial determination of eligibility, the determination of continuing eligibility of these cases and personal care supplementation cases is made by eligibility staff under usual procedures, policies, etc. Under rare circumstances applications may also be received directly from a Medicaid waiver recipient. Regardless of the source of the application, the eligibility record must contain proper documentation establishing eligibility. Once established, eligibility continues until a change in the recipient’s circumstances or agency policy occurs. 10105 Application Process - General The application process includes all activities from the time application is made by a “proper applicant” until the mailing of payment or other disposition of the application. If a person other than a “proper applicant” makes a request for aid for another without that person’s knowledge, the county department must advise the person making the request that the department can take no action without the knowledge and consent of the person concerned. A. Definition of Terms Used in the Application Process 1. A proper applicant is a competent adult who is physically able to apply for himself or on behalf of a minor (child under 19) or physically or mentally handicapped adult and who has made application for public assistance to the county department and whose application has not been disposed of by appropriate county department action. A proper applicant for a minor who is not in foster care or a physically or mentally handicapped adult is the person with whom he lives and who is responsible for his care, or a legal guardian, committee, or other legal representative. When the minor is mentally competent and between 16 and 19 years old with no legally appointed guardian, committee or other representative, and he is not in the care of another person, he may be the proper applicant for himself. The proper applicant for a minor who is in foster care under supervision of the county or state department is the county director or his (her) designee. The person for whom assistance is requested is referred to as the applicant or recipient and his name and Social Security number are the case identifiers. 9

When this person is a minor, or an adult with a legal representative or legal guardian, his assistance must be issued in the name of a substitute payee. The substitute payee for a minor in foster care is the foster parent; for a minor not in foster care, the substitute payee is the person responsible for his care. The legal representative or legal guardian is substitute payee for the person for whom his is appointed as such. 2. An application is the action taken by an individual in filling out and signing an application, Form 693, requesting assistance. The application may be new (initial) or it may be a reapplication. 3. An inquiry is a request for information only. An inquiry differs from an application in that the person’s intent is to obtain information rather than to receive financial aid. 4. A referral is classed as an inquiry. It is a request for information, service, or aid in behalf of an individual. It may be made by an agency, an institution, or another person. The county department will consider a referral as an inquiry until application is made. 5. The date of application for persons applying directly to the eligibility unit is the date on which the prescribed application form, properly signed by the applicant or a person acting responsibly for him is received in the county department. The date of application for others is the date on which the properly competed application packet is received by the eligibility worker/unit from the Medicaid waiver service e case manager. B. Clearing the Application Assure that every application and reapplication has been cleared, according to usual procedures for assuring that no duplicate file exists. A separate application and case record file is necessary for each person within a family group who may be eligible for aid in his own right. Each applicant must be individually cleared through county, FACETS and IEVS files. Refer to Sections 20000 and 20015 for instructions setting up the case record. 10

10110 Standard of Promptness A. Not more than 45 days in OAP and AB, and not more than 60 days in APTD, shall elapse between the date of application and date the first payment or the notice of denial is mailed. Only the following pending reasons are acceptable for exceeding the standard of promptness: 1. Agency failure to secure needed verification after repeated attempts. To meet this requirement, all efforts to secure the verification must be documented. 2. Client’s request that application be continued beyond the standard of promptness in order to provide additional information and/or verification. 3. Failure of applicant to provide information and verification requested. 4. Administrative emergencies that could not reasonably be controlled by the agency. (Illness and staff vacancies do not meet this definition.) B. Keep to an absolute minimum the number of cases in which the standard of promptness is exceeded. The reason for any delay must be specifically recorded. C. Complete as quickly as possible the investigation on delayed applications. Record the action on the application and the reasons for doing so in the narrative. Indicate disposition on ZC58. Notify each applicant of action taken. A determination of continued eligibility must be made for every recipient at any time changes which may affect eligibility are reported by the recipient or collateral sources or when information in the case record appears inconsistent. Additionally, the agreement to provide personal care or nursing care must be validated at least every 12 months. Any time the provider changes a new agreement is required. SSI status for SSI SUP recipients and income and resource information for non-SSI SUP recipients must be re-verified at the time of the annual validation of the agreement to provide care, i.e., the C600 alert month. A. Definitions of Terms (Phrases) Used in Continuing Eligibility 1. A Recipient is any person who receives a public assistance money payment and/or is certified to the Alabama Medicaid Agency for Medicaid. 2. Determination of Continued Eligibility is an investigation to determine that a recipient continues to meet all eligibility requirements. 11

3. Determination of Continued Eligibility Process refers to all of the activities involved in the investigation and determination of continuing eligibility for public assistance. B. Recipient Reporting Requirements Recipients are required to report changes in their situation which may affect eligibility or amount of payment within 10 days of the date the change occurred. Failure to report a change promptly may result in an erroneous payment. 10120 Interview for Application or Continuing Eligibility At least one face-to-face interview or telephone interview must be held with the client during the application process. The client may be assisted, if he so desires, by an individual(s) of his choice in the various aspects of determining and/or re-determining eligibility. He may be accompanied by such individual(s) in his contacts with the agency and when so accompanied may also be represented by such individual(s). There will be instances when a client cannot be interviewed personally when eligibility is being established. In such cases, have the person responsible for his care complete the 693 or 703 and have the client complete this form and sign it as soon as possible. When someone other than the client, his legal representative, his legal guardian, or the proper applicant for a minor, completes the application form, have him leave blank the section relating to the after-death payment. A. For an applicant, obtain the following information: 1. How he has managed in the past. 2. Explanation of changes which brought him to the agency. B. Explain the following to the applicant and to the recipient as needed: 1. The eligibility requirements. 2. The agency’s standard of promptness in acting on applications. 3. A person’s right to a fair hearing and the procedure for requesting a hearing 4. The method of establishing eligibility. a. The use of documentary and other records for verifying factual data. 12

b. The types of information the agency will have to obtain from him for determining initial or continuing eligibility. c. The use of computer match data secured as a part of the Income Eligibility Verification System using the social security number(s) of the individual as well as the number(s) of his spouse, if appropriate. 5. The need for making contacts with relatives, other agencies, doctors, hospitals, and other references for the purpose of securing and/or verifying information necessary to establish initial or continuing eligibility. 6. The Medicaid and Food Assistance Programs. 7. The fact that the agency complies with the Civil Rights Act of 1964 and the Rehabilitation Act of 1973. 8. HIS RESPONSIBILITY TO REPORT ANY CHANGES OF CIRCUMSTANCES THAT AFFECT ELIGIBILITY WITHIN 10 DAYS OF THE DATE OF THE CHANGE. 9. The fact that there are penalties for misrepresentation of facts. 10. The method of endorsing checks. Warrants or checks must be endorsed by the person in whose name they are issued and the endorsement must be spelled exactly the same as it is on the face of the check. If the individual is unable to write his name, his mark must be witnessed by one person who gives his address in full. The witness must be some person other than an employee of the state or county department. Proper endorsement of checks must be discussed with each individual before receipt of the first payment. 11. The need to check the provider agreement every 12 months. 12. The probable amount of the money payment he may expect if there is indication he may be eligible for aid. 13. The fact that use of the payment is unrestricted. 14. The fact that his cooperation is required in the determination of initial or continuing eligibility. 15. The fact that income and eligibility information will regularly be requested from the Department of Industrial Relations, Social Security Administration, Internal 13

Revenue Service and as necessary from other agencies in Alabama and other states. C. Secure from the applicant the following: 1. A completed 693. NOTE: Application forms may be mailed out or the client may take them from the office and seek the assistance of anyone in completing them. If they are to be returned by mail, give the client a stamped envelope addressed to the agency. After the forms have been signed, any changes or additions to them must be initialed by the client and dated; otherwise, the narrative must reflect the supplementary information furnished by the client. 2. Information about third party medical insurance. Explain that third party benefits include any sick claims, street indemnity policies, disability, accident or hospital coverage or to insurance benefits, or other money benefits arising from injuries or medical care. Any Medicaid recipient is deemed under Alabama law to have assigned such insurance or benefits to the state as an eligibility requirement for Medicaid to the extent that Medicaid assistance is provided. The Alabama Medicaid Agency is defined to be the last to pay, so that any such benefits to which a Medicaid recipient is entitled must be used to pay the medical provider or to reimburse the Alabama Medicaid Agency. If a SUP recipient states he has acquired such coverage or has had a change in coverage, send the information to the Medicaid Agency via email. Print a copy of the email for the case record. 3. Information about his after-death beneficiary. The designated person may be the husband, wife, or someone 21 years of age or over. An employee of the Department of Human Resources may not serve as after-death beneficiary. If the applicant/recipient wishes to designate the operator or manager of the nursing home, he may do so only if the nursing home is a corporation. If it is not and he wants to designate the operator or manager of the nursing home, in lieu of the home itself, advise him in doing so the monies may or may not be used for the benefit of the home. If the applicant/recipient has a legal guardian or legal representative, such person may designate someone to receive the after-death payment. He may designate himself, provided he does so before the client’s death. 14

Ask the client to notify the county department of the death of the person designated or of a change in his /her address. D. Complete and/or update the following forms according to instructions with the applicant/recipient when appropriate: 1. Physician’s Recommendations Regarding Personal or Attendant Care in Own Home – Form 696. 2. Agreement to Provide Personal Care – Form 797. 3. Other forms as necessary. 10125 Investigation to Secure Facts to Determine Initial or Continuing Eligibility Follow the procedures outlined below in determining eligibility. A. In preparation for the investigation, clear the files for available records on the applicant/recipient and study the material in the record to become familiar with the facts at hand. If it is necessary to contact public welfare agencies in other states, use form 1389 for routine out-of-state inquiries. B. The applicant/recipient is the most important source of information in the determination of his eligibility. Expect him to provide full and complete information (and verification, if possible) about his situation. If he cannot provide sufficient evidence/information as needed, offer help in obtaining data and securing verifications. When indicated, give the client a stamped, self-addressed envelope in which to mail the needed information. C. Analyze the information furnished by the applicant/recipient to identify gaps or inconsistencies that raise questions about eligibility. Weigh complete information in relation to agency policy to determine whether all points of eligibility are shown to be met. D. Verify receipt of SSI (or denial of individuals and/or couples) and RSDI amounts by using the SDX or BENDEX inquiry screens, in the CP alert month and other times as needed. If necessary, contact the district Social Security Administration Office for any additional information needed. Refer to Chapter 23 for acceptable kinds and sources of verification to be used in the eligibility determination. The narrative 15

recording must substantiate information obtained in the verification process, other than documentary evidence which is kept in the case record. E. When information is needed from a reference source to clarify unclear, incomplete or inconsistent information, always explain to the client what information is needed, why it is needed, how it is to be used and from whom it is to be obtained. Use as references only those sources having the facts needed at hand. When sources which do not disclose information without authorization are needed to verify facts, obtain such authorization in writing from the client. There may be times when a client objects to the use of a particular reference. When he does, consider his reasons for objecting and, if indicated, select another reference to which he agrees. When references are used to verify certain points, there must be a clear understanding by the client, reference and county department concerning the following: 1. The determination of eligibility for public aid is the responsibility of the county department and references are not expected to recommend that aid be approved or disapproved. 2. A person is used as a reference only of the has definite facts which he is willing to give about points of eligibility, and the county requests information related to these specific points. Examples of appropriate references are: (a) wages – the employer(s), (b) residence – neighbors, etc. 3. The reason certain information is needed. 4. The case record will include the facts the references give pertaining to eligibility and the case record will be available to the client and/or his representative as a part of the exhibits in the event of an appeal. F. Routine procedures in certain situations will require going beyond information on the form itself in determining eligibility and the amount of the payment, such as when professional medical examinations are needed for a determination of the need for personal care. G. When an applicant/recipient refuses to give his authorization for the clearance of facts or refuses to provide needed information (and/or verification if indicated) 16

within his capacity, explain clearly why the information is needed and if he still refuses, deny or terminate aid because of eligibility cannot be determined. As usual, he must be told of his right to reapply at any time. When an applicant/recipient fails to provide information or verification within his competence, consider failure as refusal and take action as indicated in this section after following the procedures below. The case record narrative should document your attempts to obtain from the client the information or verification required. The 686, 1132 or narrative recording must show that the client knew what was required and the consequences of failure to cooperate. If the 686 is used in meeting the requirements of this section, add the specific type of adverse action to be taken if the client does not keep the appointment or does not provide the necessary information. Take action as follows to assure that the client and agency meet responsibilities for obtaining information/verification. 1. Evaluate the information and/or verification that is being required to determine if it is essential to the determination of initial or continuing eligibility. 2. Upon determining that the requested material is essential, determine if the client’s presence is required or if the client could provide the necessary documentation by letter. If client’s presence is required, follow “3” and “4”. If the client’s presence is not required, follow “5” and “6”. 3. If an interview is required, send a 686 or 1132 to the client for an appointment and list verifications to be provided. Schedule the appointment at least seven calendar days from the date the request for an interview is mailed. 4. If the client does not keep the appointment, deny the application, or process termination. 5. If the client’ presence is not required and information and/or verification from the client is necessary to determine initial and/or continuing eligibility, state the specific information needed on the 686 or 1132 and enclose a self-addressed stamped envelope in which the client may supply the information. Request that the information be submitted within ten calendar days from the date the request for information is mailed. 17

6. If the client does not furnish the information and/or verification requested, deny the application, or process termination. H. Take action within 30 days to investigate any report of a change in the client’s situation. Changes in SSI status, income and resources (for non-SSI recipients) must be verified. Do not withhold payment during the period in which the investigation is being conducted, except when the client fails to respond to agency notices, in accordance with Section G above or J below. Changes for nursing care supplementation recipients must be reported by or confirmed with the Medicaid waiver services case manager prior to action being taken. Changes for personal care SUP recipients may be reported as follows: 1. Orally – Changes may come to the attention of the worker from the client or references in person or by telephone. a. It is permissible for the worker to accept a report of change from the client by telephone provided it is recorded in the narrative and includes (1) the date the change occurred, (2) all facts pertinent to eligibility related to such change and (3) any activity needed from the client. b. When the client comes to the office to report a change in circumstances, etc., always secure a written statement from him using the 703. (See Appendix II) 2. Correspondence – A letter or note signed by the client and dated may serve as a report of change. Reports from collateral sources will not serve as a notice of change. The client must be contacted. 3. Intra-agency – Other workers in the agency may notify the eligibility worker of a change in a client’s situation. The client must be contacted unless a statement about the change was secured from him. 4. Inter-agency – Routine comparison of information on SDX, BENDEX or Medicaid screens with information in the client’s case record may serve as notice of a change in his situation. I. Process changes in supplementary payments caused by change in the client’s situation according to the following guidelines: 18

1. When a change in situation is reported by a recipient who also receives SSI and the change may affect his SSI benefit, or by a non-SSI recipient who may now be eligible for SSI, tell him to advise the Social Security Administration of the change, if he has not done so already. 2. Except as specified in “3”, “4”, or “5” below, process the change immediately in line with usual advance notification procedures. If the recipient also receives SSI, the SDX screen should carry information about how his change affects his SSI benefit. When you have complete, current SSI information, process immediately any change in the supplementary payment resulting from the SSI change. Persons who become ineligible for SSI for any reason are no longer eligible for supplementation. 3. If a mandatory supplementation recipient enters a nursing home, take action as stated below: a. If the recipient gets SSI and also has other income or was denied SSI due to excess income, terminate and refer to the Medicaid Certification Division district office. b. If the recipient gets only SSI, terminate and re-award according to Section 12012-A after the SSI is reduced. c. If the client does not receive SSI for reasons other than excess income, process according to Section 12012-B. 4. If a former recipient in a nursing home returns to his own home. Process his application as usual. If he is not eligible for an optional supplement, and he received OAP, AB or APTD in December 1973, compare his current level (CIL) to his minimum income level (MIL). If his CIL is less than his MIL, mail the case record to the Public Assistance Division. 5. If an optional state supplementation recipient enters a medical facility such as a nursing home, continue benefits under the following conditions: a. A physician has certified that the person’s stay is not likely to exceed 90 days; and b. There is evidence that the person needs to continue to maintain and provide for the expense of the home or living arrangements to which s/he may return and 19

c. The SUP client continues to pay for and receive homelife care throughout his/her stay. NOTE: For SSI recipients, verification should be obtained through the Social Security Administration that unreduced SSI benefits will be continued during the temporary period of institutionalization. If the recipient has not left the facility by the end of the third month, contact the Social Security Administration to determine if SSI benefits have been reduced. If so, notify the recipient that the Optional Supplementation check must be stopped and refer to the Medicaid district office. J. Refer to alert procedures in the FCUM for controlling actions when changes which may affect eligibility or amount of payment are anticipated with reasonable certainty. When additional information is received, take action, as appropriate, to continue, change or terminate aid. If the client does not respond by the end of the alert month, process termination following usual advance notice and accrual rights policy. K. Verify the status of those persons receiving Medicaid waiver services through the use of the MSIQ screen. L. Verify income and resource information for non-SSI recipients in the month of the CP alert. 10130 Accrual Rights of Applicant/Recipient A. Applicant An applicant accrues the right to a money payment if he is alive and eligible on the day the eligibility worker completes the award documents. Then, he is entitled to a money payment for the month of award, i.e., the month during which the award document is processed. If the month of award is the same as the month of application, the payment for that month is a prorated amount equal to the amount payable if payment were made for the entire month multiplied by the ratio (carried to four decimal places) of the number of days in the month including and following the date of application to 30 days, rounded down to the nearest dollar. Applicant accrual rights are in effect until the case is actually awarded. 20

If an applicant is not eligible on the day the eligibility worker completes the eligibility determination (and would complete award documents if the applicant were eligible) the application must be denied and no money payment may be made, even though the applicant was eligible in one or more prior months. However, the applicant may be eligible for Medicaid according to Section 24455. B. Recipient A recipient’s right to a money payment accrues on the first day of each month provided he is alive and eligible on that date. If his needs increase after the first day of the month, his payment for the month may be increased; however, in case of payments after death, the county department must establish that the recipient was alive on the date that the increase was authorized. See Section 22840. 10135 Taking Action of Basis of Findings Evaluate all information at hand to determine if all points of eligibility are met. Process the proper documents as appropriate. A. Applicants 1. Approval – Approve an application when the eligibility record, properly documented, shows that all points of eligibility are met. NOTE: When available funds are expended on current recipients, the state department may freeze the caseload at the number of persons for whom funds are available. In the event of such an administrative emergency, specific procedural instructions to be followed during the emergency period will be released in administrative letters or official memoranda. 2. Denial – Deny an application when an applicant fails to meet one or more of the eligibility requirements, or requests that his application be discontinued. Also deny the application when the application process cannot be completed because the applicant has died or cannot be located. 3. Transfers – When an applicant moves to another county, the application is to be denied in county no. 1 (county where application was originally filed) and is then to be registered and processed to completion in county no. 2 (county to which the applicant moved). To protect the applicant’s accrual rights and 21

ensure that related statistics are valid, the following procedures must be followed: a. When county no.1 learns of the applicant’s move, the application is to be denied with reason code “TRS” b. On the next day after denial is processed, county no. 1 is to mail (by certified mail, return receipt requested) to county no. 2 a copy of the application, a copy of ZC52 and supporting case record material, and any necessary print products generated in county no.1. c. When county no. 2 receives case material, the application is to be registered in the case ID number currently shown on ZC52 and with the application date indicated as the date on which case material was received in county no. 2. d. County no. 2 is to process the application to completion, using the date received in county no. 1 as the date from which to determine initial eligibility. If the applicant is determined eligible, assistance is to be authorized beginning with the date received in county no. 1, or the earliest date thereafter when eligibility was attained, is not eligible on the date of initial application. NOTE: If the applicant leaves the state, evaluate in terms of loss of residence. B. Recipients Changes which could affect eligibility may occur at any time. If such changes occur, they must be treated promptly and efficiently. Any time a recipient expresses a desire that his case be terminated, take immediate action. Ask the recipient to make his request in writing. If he refuses, be certain that he understands the consequences of his request and that it is his own decision. (NOTE: Prior to such a voluntary termination for a nursing care recipient, contact the Medicaid waiver service case manager to discuss the request.) For all changes, follow procedures outlined below: 1. Prompt reporting requirement – Whenever a change is reported, establish the date on which the change actually occurred. If the change occurred more than 10 days before it was reported or confirmed by the client, ask for the reason for delay or failure to report; and: 22

a. Determine whether any overpayments have been made and follow appropriate procedures (Chapter 22) for handling them, and b. In any case, remind the recipient again of the need for reporting a change within 10 days of the date of change and the kinds of changes which could affect eligibility and need to be reported. 2. Before action is taken to reduce or terminate aid or terminate Medicaid (except where notice was provided regarding a closed period of eligibility), refer to procedures below for providing advance notification. 3. Process a change disposition on FACETS to reflect any change. 4. Process a termination on FACETS, if continuing eligibility is not established. Enter the reason code which specifically applies in the case to assure that the notice to the client is specific and that valid statistical data can be obtained. 5. When the computer-printed message for the reason code is not specific in a particular case, enter a hold notice code on ZC58 and process 657, to provide specific information to the recipient no later than the effective date of action, or at least 10 days before the effective date when advance notification is required. (Refer to “C” below and to Section 10140.) 6. Termination Later Found Invalid – The procedures below are designed to minimize client and worker duplication of effort when a termination has been processed and is later found to be invalid. In applying these procedures, give careful attention to the dates when: the termination was processed, the termination was effective, the termination was found to be invalid; and to the reason for the finding that a termination is invalid. a. Hearing Request Within Advance Notice Period – Assistance must be reinstated upon a client’s filing of a hearing request, which has been accepted, within the advance notice period. No application activity is required of the client. Reinstate assistance affective the first of the month following the month in which assistance was last received. b. Termination Found Invalid Because of Agency Error – When an agency error results in termination, assistance must be reinstated upon discovery of the error. No application activity is required of the client; however, related facts must be documented in the narrative. Effective date of 23

reinstatement is the first of the month following the month in which assistance was last received. When the time between processing the termination and processing the subsequent award is 30 days or more, review all information on the last 693, 694 and 797 with the client to assure that case record information is current. This review may be done by telephone. Document information from the telephone contact in the narrative. c. Termination Found Invalid Because of Change in Client’s Situation or a Change From the Already Reported Change – When a client-reported change results in termination and the change does not occur or another change in the client’s situation results in no loss of eligibility, whether the client must reapply or whether assistance is to be reinstated without application activity depends on when the client notified the agency of the fact that the reported change did not occur or of the other change. If the agency is notified before the effective date of termination and there was, in fact, no loss of eligibility, assistance is to be reinstated without application activity effective with the first of the month following the month in which assistance was last received. If the agency is not notified before the effective date of termination or there is, in fact, a loss of eligibility but a subsequent change seemingly results in the client regaining eligibility, the client must reapply according to usual procedures. The following examples illustrate some more common occurrences and correct procedures to be applied: Example 1: Client reports plans to move to another state later in the current month. Termination is processed to be effective the end of the current month. Client calls before the end of the current month to advise that he will not be moving as planned. Assistance is to be reinstated effective the first of the next month. Example 2: Same as example 1, except client calls on the fourth of the next month to advise that he did not move as planned or that he moved and decided to return. Client must reapply.* Example 3: Client’s C600 alert was due in July and was not completed as of the end of the month. Termination is processed for August 31st . Alert is completed before August 31. Assistance is to be reinstated effective the first of September. 24

Example 4: Same as example 3, except alert is not completed until September 2. Client must reapply.* Example 5: Grandfathered SSI personal care recipient is notified that SSI benefits will be terminated May 31. SUP termination is processed at the end of May to be effective June 30. In June, client is notified that SSI benefits will be reinstated effective July 1. Client must reapply as a loss of eligibility has occurred due to non-recipient of SSI in June.* * Reapplication is based in criteria effective October 1, 1986 as grandfathered status is lost. See Section 12010-B C. Advance Notification of Action 1. Except as set out in “2” below, when aid is being terminated or reduced, advance notice must be mailed at least 10 days before the effective date of action. This provides an explanation of the action taken, the facts considered in determining the action needed, and the recipient’s right to present any additional facts he wishes considered before expiration of the advance notification period. The computer-generated FACETS notice will serve as advance notice of reduction provided a change disposition reflecting the change is processed timely. a. If a hearing has not been requested (during the 10 day advance notice period) and no additional information changing the original decision has been presented by the effective date of the action, no further action or notice of action is required. b. If a hearing has not been requested but additional information is presented either through a conference or otherwise, take the action that may be called for based on the most current information made available. c. If a hearing is requested prior to the expiration of the 10 day advance notice, continue aid at an unreduced rate by submitting a change, if proposed action was reduction, or by processing a reinstatement, if proposed action was termination. Maintain this benefit level until the hearing is held and the decision on it is released. Then take action in line with the hearing decision. 25

2. It is not necessary to provide advance notice of action to be taken in situations listed below. However, the notice must be sent no later than the effective date of action, except for situations described in “a” and “d”. a. The county department has factual information confirming the death of the recipient. b. The county department receives a clear written statement signed by a recipient that s/he no longer wishes assistance, or that s/he waives the 10 day advance notice period to avoid receiving an overpayment, or that gives information which requires termination or reduction of assistance, and the recipient has indicated, in writing, that he understands that this must be the consequence of supplying such information. A clear written statement obtained from a recipient must contain the specific action to be taken on his money payment and/or Medicaid and his understanding of this action. This includes cancelling of a check returned by a recipient when he requests in writing that this be done. c. The recipient has been admitted or committed to a public institution. d. The recipient’s whereabouts are unknown and agency mail directed to him has been returned by the post office indicating no known forwarding address. The recipient’s check must, however, be made available to him if his whereabouts become known before the last day of the month covered by the returned check. e. The recipient has been accepted for assistance in another county or state and that fact has been established by the county department previously providing assistance. f. The recipient has been placed in skilled nursing care, intermediate care, or long term hospitalization. g. A special allowance granted for a specific period is terminated and the recipient has been informed in writing at the time of award that the allowance shall automatically terminate at the end of the specified period. h. The recipient has left, or has been removed from, a foster home. Whether or not he will be in another foster home is irrelevant. 26

In applying the above policies, careful attention should be given to the basic accrual rights policies as set out in Section 10130. D. Ex Parte Determination after Termination of Non-SSI SUP Cases (for reasons other than death). After termination of a non-SSI SUP case (for reasons other than death). mail the recipient a manual notice (PSD-657) advising of the SUP closure and possible continued Medicaid coverage through the Qualified Medicaid Beneficiary (QMB) program explaining that this coverage is administered by the local Medicaid District Office (MDO). Indicate the address and phone number of the appropriate Medicaid District Office and that information regarding their case has been forwarded to that office for further information. (See Appendix III for a listing of MDO’s.) Mail copies of the current SUP case material to the MDO with a cover letter explaining the SUP termination and potential QMB eligibility. NOTE: The administrative conversion of a non-SSI case to an SSI SUP case does not constitute a “termination” for purposes of this referral. 10140 Advising Applicant/Recipient of Action in the Case The applicant/recipient must be promptly advised of approval or denial of the application; changes in payment, including initiating or deleting protective payment; and termination of the case, except when the applicant/recipient is deceased or his whereabouts are unknown. “Promptly” means not later than the effective date of action. When a payment is reduced or terminated, the notice to the recipient must clearly and briefly state every condition or circumstance which had an impact in causing the reduction or termination. The particular Manual references including section number, Administrative Letter, or other policy issuance on which the negative action is based must also be cited. Up to three references must be cited when two or more reasons are the basis for action. A. System-Generated notices Refer to the FCUM for automated notice procedures and reason messages provided. Notices are produced by the system on the night of entry of appropriate code or data element (provided there is no error precluding file update) and are mailed from Montgomery directly to clients on the next work day. 27

B. Manual Notices The worker must enter the hold notice code and provide notice of action using Form 657 or 660, as appropriate, when the computer-generated notice is inadequate, such as when two or more conditions or circumstances cause the change in payment or termination. 10200 Determining Initial and Continuing Eligibility for Blind or Otherwise Disabled Children and Adults in Foster Care The Medicaid waiver service case manager and the eligibility unit in the county department will continue to share responsibility for establishing initial and continuing eligibility for supplementation for blind or otherwise disabled children and adults in foster care. To assure coordination between the related activities of each unit, the procedures in the sections below are to be followed. 10205 Application Procedures for Children and Adults in Foster Care The Medicaid waiver service case manager will apply for supplementation for a child in foster care or will ensure that the adult in foster care or other “proper applicant” completes an application for supplementation, after it has been determined that the individual receives SSI. A. Application The Medicaid waiver service case manager will initiate the application of a foster child by completing the 693. (Refer to Appendix II for the form and special instruction for its completion for a child or adult in foster care.) The completed forms are to be forwarded immediately to the eligibility supervisor with a cover Form 799 stating that the individual receives SSI. B. Care Provider The care provider must meet requirements outlined in Section 12010-C. Form 797 and, as needed, 1801 must be completed and submitted to the eligibility worker. 28

10210 Disposition of Application for Children and Adults in Foster Care The eligibility worker will determine eligibility for persons in foster care as for other persons for whom application for supplementation is made. For children in foster care, the notice of approval or denial will be sent to the foster care provider, who is to be shown as payee other than applicant on ZC87, at the SUP recipient’s address. For adults in foster care, the notice will be sent to the applicant/recipient. 10215 Continuing Eligibility Procedures for Children and Adults in Foster Care The eligibility worker will determine continued eligibility as indicated when changes are reported or information in the record appears inconsistent. Any notice of action as a result of a change will be sent as in the paragraph above. 10300 Legal Representative or Legal Guardian A person may be so physically or mentally handicapped that s/he cannot endorse his check by mark or signature. If so, s/he must have either a legal representative or a legal guardian if s/he is to receive assistance. Do not delay action on an application or hold a check pending appointment of a legal guardian or representative, if there is someone to act responsibly for a client who cannot act for him/herself. Endorsement by a person acting responsibly for a client after a client has touched the pen is acceptable. The person acting responsible for him cannot sign the eligibility or other forms for him unless appointed legal representative or legal guardian. It is, therefore, necessary that these provisions for establishing initial and continuing eligibility be temporary and referral to Adult Protective Services be made regarding his potential need for protection. A mentally handicapped person may require a legal guardian rather than a legal representative. The attorney’s recommendation should be followed. In some instances, even though a person is able to sign his check by signature or mark, s/he may want and/or need a legal representative or a legal guardian to protect his best interest. NOTE: An individual must be a legal representative or legal guardian to serve as an alternate payee for a SUP client (see FACETS Certification User Manual Section 3305). 29

10400 Delivery of Payments to Otherwise Eligible Individuals who are Homeless Due to the nature of the SUP Program, it would be unlikely to encounter a recipient who is homeless; however, should it occur, procedures in Section 1300 are to be followed for assuring delivery of checks to otherwise eligible SUP recipients who are homeless. Related procedures for delivery of Medicaid cards for non-SSI recipients are discussed in Section 24800. Referrals to adult services for neglect and/or abuse may be appropriate. [1] Rev 766 Nov 2010 30

Chapter 11 ....................................................................................................................................................2 Supplementation Eligibility Requirements Other Than Need........................................................................2 11000 General .........................................................................................................................................2 11100 Age...............................................................................................................................................2 11200 Residence.....................................................................................................................................2 11204 Where to Apply .............................................................................................................................3 11210 Who Has Residence.....................................................................................................................3 11215 Temporary Visits and Retention of Residence .............................................................................4 11225 Residence in Public and Private Institutions.................................................................................5 11300 Citizenship and Alienage – General .............................................................................................6 11500 Permanent and Total Disability.....................................................................................................6 11505 Definitions .....................................................................................................................................6 11510 Procedures for Requesting Decision on Re-Examination for Continuing Eligibility of a Non- RSDI Non-SSI SUP Recipient ......................................................................................................7 11600 Blindness ......................................................................................................................................8 11605 Definition of Blindness ..................................................................................................................9 11610 Procedures for Requesting Decision on Re-Examination for Continuing Eligibility of Non-RSDI, Non-SSI SUP Recipient................................................................................................................9 11700 Furnishing Social Security Numbers ..........................................................................................10 1

[1] Chapter 11 Supplementation Eligibility Requirements Other Than Need 11000 General There are several eligibility conditions that must be met in addition to need (and receipt of SSI) to qualify for assistance under the supplementation programs. Requirements related to residence, citizenship and alienage are the same for all categories. In addition, a person must be considered permanently and totally disabled for APTD and for AB a person must be blind and must not publicly solicit aims. 11100 Age Accept SSA information on age and date of birth unless there exists substantial evidence that the SSA information is incorrect. Such discrepancies should be called to the attention of SSA and reconciled. Age requirements in supplementation are set out by category below. A. OAP – At least 65. OAP may be paid to a person in the month he becomes 65. B. APTD and AB–Under 65. When a person reaches 65 and continues eligible, terminate assistance and award under OAP, effective with the month after the birth month. Hold the notice on ZC58 when processing the termination and the award. 11200 Residence A person must be a resident of Alabama in order to receive supplementation and must by physically present in the state when his application is approved unless detained because of illness while temporarily outside of the state and residence requirements are otherwise met. The reason a person comes to Alabama to reside had no bearing on his residence for public assistance purposes, except in determining whether or not he is in the state for a temporary purpose. 2

11204 Where to Apply A person applies for and receives aid in the county where he lives. (See Section 1135­ A) 11210 Who Has Residence A. A person over 21 is considered a resident of Alabama under one of the following conditions: 1. He is living in Alabama voluntarily, not for a temporary purpose, with the intent to make the state his home; or 2. He has entered Alabama either with a job commitment or to seek employment (whether or not currently employed) and is not receiving assistance from another state at the time his benefits from Alabama begin. B. A person over 21, incapable of stating intent to make Alabama his home, is considered a resident if he is living in Alabama and is not receiving assistance from another state at the time his benefits from Alabama begin. A person is considered to be incapable of stating intent if: 1. His IQ is 49 or less, or he has a mental age of 7 or less, based on tests acceptable to the state Department of Public Health; 2. He is judged legally incompetent; or 3. Medical or other documentation supports a finding that he is incapable of indicating intent. C. A person under 21 is considered to be a resident of Alabama for public assistance purposes if he is making his home in Alabama other than on a temporary basis. D. An applicant must be physically present in Alabama when his application is approved, unless detained because of illness while temporarily outside of the state and residence requirements are otherwise met. 3

11215 Temporary Visits and Retention of Residence A. Temporary absence from the state does not affect residence unless it is for the purpose of establishing residence elsewhere. When there was no opportunity to talk with the person before he left Alabama or his absence is not known until he has already left, begin immediately to determine whether or not he retains Alabama residence. Send the person a letter by certified mail, return receipt requested, saying that the county department will presume that he has abandoned Alabama residence id he does not reply within 20 days. 1. Applicant – If the applicant does not respond within 20 days, deny the application. 2. Recipient – If the recipient does not respond within 20 days and it is evident he received the letter by the returned receipt, process a termination due to loss of residence. If he presents acceptable evidence to the contrary before expiration of the advance notice period, reinstate aid immediately. B. If the applicant or recipient is visiting only and, therefore, keeps his Alabama residence, continue or reaward aid if he is otherwise eligible and 1. Reach a mutual agreement as to the time he plans to return to Alabama. Enter the appropriate alert code and the month after the month of expected return as the alert date. (Refer to FACETS User Manual Sections 11999 & 13215.) Unless he is detained because of an emergency or other unusual circumstances, terminate assistance according to alert procedures. If failure to return is due to illness of the recipient or member of his family, he must substantiate this fact by furnishing the agency a written statement from a physician. 2. After his first three months of absence from Alabama, have the recipient report quarterly his plans and intent to return to Alabama. Advise him that aid will be discontinued at any time he fails to do so. NOTE: When a recipient plans to visit outside of this state for more than three months, send the 1389 to the public welfare agency in the other state, in order to obtain information or documentation of the applicant/recipient status in the other state. 4

11225 Residence in Public and Private Institutions A. Public and Private Institutions Optional Supplementation payments cannot be made to a person who is a permanent resident of a nursing home. Payments may be made for up to three months to a recipient in a nursing home if a physician certifies that the person’s stay is likely not to exceed three months and the person needs to maintain former living arrangements. (See 1012-I.5) A person is not eligible for aid while he is a resident in a public institution. A person may receive aid, however, if he is living in a hospital or other types of private institutions. If in other types of private institutions, the following must apply: 1. The institution provides care for four or more unrelated persons and is licensed by the state Health Department as a personal care home; 2. The person is free to make his own arrangements, establish the terms of financial agreement with the institution, and determine the duration of his stay; 3. The person has not paid or transferred to the institution money or other valuables in sufficient amount to cover the cost of maintenance and care; and 4. The institution is not for mental disease. B. Educational and Vocational Institutions A person may receive aid if he is attending a public educational or vocational training institution, such as the State School for the Blind or a vocational training center. Questions as to eligibility in institutions should be cleared through the Family Assistance Division. The fact that an applicant/recipient is in a private facility which is not a medical treatment facility, and the duration of the stay, are immaterial to his eligibility for supplementation. A person in conditional release from an institution in which aid cannot be given (for instance, on “parole”, “trial visits”, etc.) if otherwise eligible, can receive aid, provided he is free of controls by the institution other than professional help or guidance. 5

Policies governing accrual rights as set out in Section 10130 apply for persons entering and leaving institutions in which aid cannot be given. 11300 Citizenship and Alienage – General To be eligible for SSI and, therefore, supplementation, a person must be a citizen of the United States or, if an alien must have been lawfully admitted to this country for permanent residence. Accept receipt of SSI benefits as meeting this requirement. “Grandfathered in” non-SSI SUP recipients have previously been determined to otherwise meet this requirement. 11500 Permanent and Total Disability A person must meet the Federal requirements of being permanently and totally disabled to the extent that he is substantially prevented from engaging in any useful occupation within his competence. The determination of eligibility for SSI (or RSDI) benefits by the SSA, based on disability is sufficient for establishing disability in APTD. If a “grandfathered in” non-SSI SUP recipient does not receive RSDI based on disability, any re-evaluation of his continued eligibility based on disability will be made by the Alabama Medicaid Agency. See procedures in Section 11510 below. 11505 Definitions (A) (B) (C) Given below are definitions of: permanent disability; total disability; and physical or mental impairment(s). A. Permanent Disability A permanent disability is a serious anatomical, physiological, or psychological impairment which can be expected to result in death, or which has lasted or can be expected to last for a continuous period of not less than 12 months. This does not include conditions known to be temporary or transient. B. Total Disability The determination of total disability requires two separate judgments: (a) an assessment of an individual(s) remaining capacity to perform physical or mental activities; (b) an assessment of an individual’s physical or mental capacity to 6

perform a job or group of jobs falling within the individual’s vocational spectrum, if the capacity to perform is less than the demands of the job, then the individual is disabled. C. Physical or Mental Impairment A physical or mental impairment is any serious anatomical, physiological or psychological abnormality which can be medically demonstrated. Such abnormalities must manifest themselves as signs or laboratory findings apart from symptoms which are an individual(s) own perception of his physical or mental impairment(s). 11510 Procedures for Requesting Decision on Re-Examination for Continuing Eligibility of a Non-RSDI Non-SSI SUP Recipient It is the eligibility worker’s responsibility to see that re-evaluations are made and submitted to the state Department of Human Resources, Attention: Family Assistance Division, when they are necessary to establish continuing eligibility. The Family Assistance Division determines whether the individual is or is not disabled. If the individual is not determined disabled, steps to terminate must be taken. Reexaminations must be made when recommended by the Family Assistance Division; when the client has had surgery or treatment; or when the worker notes an improvement in a condition previously diagnosed as a permanent impairment. Follow FACETS alert procedures to assure that re-examinations are promptly processed. A. Physical Changes 1. Medical Data To determine a person’s continued disability for the APTD category, there must be an examination and diagnosis by a legally licensed doctor of medicine or a legally licensed osteopathic physician. a. Medical information is frequently available from such sources as mental hospitals, mental health clinics, county health departments, cancer control clinics, VRS, CCS and VA. Do not authorize use of the 667 until clearance has been made with these agencies to which the person may be known. b. Use the 667 to obtain medical data from a physician when not available otherwise. If a public facility for the examination is not available, the recipient may use a doctor or physician of his choice and the cost up to $15 7

can be paid as an administrative expense. If the recipient is dissatisfied with the decision of the review team and wishes a second examination, he may do so at his own expense. 2. Social Data The worker must complete a 668 which provides detailed social information. This additional social information is not to be attached to the 667 before it is sent to the examining physician. NOTE: Re-examinations are not necessary when the physician has stated in writing that the person’s condition cannot improve. In such cases, resubmit the original examination to the Alabama Medicaid Agency and additional medical information will be requested if needed. B. Social Changes It is also the worker’s responsibility to submit new social information to the Family Assistance Division, when there are changes which may have a direct bearing on a recipient’s continued eligibility for APTD. For example, the worker may find that a recipient has new or increased abilities due to changes in environment, training, education, or adjustment to his impairment. If so, the worker submits a new 668, giving his observations and other current social information. The Family Assistance Division will make the decision as to whether the person still meets the criteria of total disability. In some instances, a new physical examination may be recommended. NOTE: When the county department submits current medical and/or social information for review, the worker should always attach it to the form(s) on which the Family Assistance Division based previous decisions, as well as forms notifying the county department of the decision of the Family Assistance Division. 11600 Blindness To receive AB, a person must be considered blind according to Federal requirements. The determination of eligibility for SSI (or RSDI) benefits by the Social Security Administration based on blindness is sufficient for establishing blindness in AB. 8

If a “grandfathered in” non-SSI SUP recipient does not receive RSDI based on blindness, the Family Assistance Division will determine whether he can continue to be considered blind under AB if a re-evaluation is made. 11605 Definition of Blindness A person is considered blind who has no vision, or whose vision with correcting glasses is so defective as to prevent the performance of ordinary activities for which eyesight is essential. Central visual acuity of 20/200 or less in better eye with correcting glasses is considered as economic blindness. A person, however, may be considered blind if his central visual acuity is more than 20/200 in the better eye with correcting glasses but a rough test shows him to have a marked field defect. The marked field defect is one in which the peripheral field has contracted to such an extent that the widest diameter of the visual field subtends an angular distance no greater than 20 degrees. 11610 Procedures for Requesting Decision on Re-Examination for Continuing Eligibility of Non-RSDI, Non-SSI SUP Recipient For assistance purposes, blindness may be said to continue until re-examination establishes that the recipient has vision in excess of that in the state’s definition. Re­ examinations are necessary to establish continued eligibility only under the following conditions: 1. Re-examination has been recommended by the eye examiner or on the report form. In such case, follow FACETS alert procedures, if recommended at a future time, or follow procedures in Section 10125-G, if recommended currently. 2. The person has had treatment or surgery 3. The worker notes an obvious improvement in the person’s vision. Re-examination should be submitted to the Family Assistance Division. Both the original and duplicate of PA-701 or PSD-87 must be sent. If additional information is needed, it will be requested from the county office. The Department of Human Resources can pay $15 for the cost of the re-examination as an administrative expense, provided the individual cannot secure such re-examination without cost from a free public or private diagnostic facility. 9

11700 Furnishing Social Security Numbers To be eligible for SSI and, therefore, Supplementation, a person must apply for or furnish his social security number. Accept receipt of SSI benefits as meeting this requirement. “Grandfathered in” non-SSI SUP recipients have previously been determined to otherwise meet this requirement by furnishing a number or meeting agency enumeration requirements. [1] Rev 766 Nov 2010 10

Chapter 12 ................................................................................................................................................................3 Supplementation Need..............................................................................................................................................3 12000 General ....................................................................................................................................................3 12005 Need and Payment Standards................................................................................................................3 12010 Supplements ............................................................................................................................................3 A. Independent Homelife Care Supplement (applicable only to persons receiving a Personal Care Supplement as of September 30, 1986.) ...........................................................................................................3 B.........................................................................................................................................................................6 C. Homelife Care Provider Requirements .......................................................................................................7 D. Paying for Care Requirement......................................................................................................................8 12011 Care in Cerebral Palsy Treatment Center – APTD..................................................................................8 12012 Mandatory Money Payment Recipient in a Nursing Home......................................................................9 A.........................................................................................................................................................................9 B.........................................................................................................................................................................9 12015 “Grandfathered-In” Non-SSI Optional SUP Recipients ............................................................................9 12100 Grant Computation - General ................................................................................................................10 12105 Grant Computation for SSI Recipients...................................................................................................10 12110 Grant Computation for Non-SSI Recipients with No Spouse ................................................................10 12115 Grant Computation for Non-SSI Recipients with Ineligible Spouse .......................................................11 12120 Grant Computation for Non-SSI Couple SUP Recipients......................................................................11 12121 Maximum and Minimum Payments........................................................................................................12 12125 Deeming of Income................................................................................................................................12 12200 Income ...................................................................................................................................................15 12205 Guide for Determining the Amount of Income to be considered ...........................................................15 12210 Definitions of Terms Used in Dealing with Income ................................................................................18 12215 Income Exclusions .................................................................................................................................21 12220 Income from Self-Employment ...............................................................................................................22 12225 Unearned Income to be Budgeted.........................................................................................................22 12230 Earned and Unearned Income not to be Budgeted ...............................................................................24 1

12300 Resources..............................................................................................................................................27 12305 Reserve Policy........................................................................................................................................27 12306 Establishing the Reserve ........................................................................................................................28 12310 Liquid Resources to be considered Under the Reserve Policy ..............................................................29 12311 Non-Liquid Resources to be considered Under the Reserve Policy ......................................................31 12315 Resources not to be Included in Reserve...............................................................................................33 12320 Home Property........................................................................................................................................37 2

Chapter 12 [1] Supplementation Need 12000 General Need is the basic eligibility requirement for aid. It represents the amount of money needed from the agency to supplement a person’s income/resources to meet the state department’s defined supplement to SSI. To carry out requirements and intent of state and federal laws, the state department has defined within this chapter policies, procedures, and certain standards for evaluating income/resources and the amount of supplements. Policies and procedures for determining need and payment are mandatory upon the state and county departments to assure uniform administration and equitable treatment. 12005 Need and Payment Standards The standards in the Supplementation Program vary dependent on the type of supplement, living arrangement and level of care. Information concerning the amounts of these standards is found in tables in Appendix I. 12010 Supplements A. Independent Homelife Care Supplement (applicable only to persons receiving a Personal Care Supplement as of September 30, 1986.) Some recipients require independent homelife care in order to be able to live as self-sufficiently as possible outside of the nursing home. When the individual’s needs are not totally met by home health care programs such as VRS’s Homebound Program, VA’s Aid and Attendant Care, and Alabama Medicaid Agency’s Home Care Programs and the department’s Homemaker Services Program and s/he is required to pay for care, or additional care s/he may be eligible for a supplement while residing in the home, hospital, personal care home, or a foster care home. 1. Types of Service Covered Services considered as enabling a person to live as self-sufficiently as possible include help (1) (2) with any one or more of the following: conducting a prescribed exercise routine: changing bandages or dressings on the advice of the physician; (3) using prostheses or ambulation 3

(4) (5) (6) aids; locomotion; maintaining an acceptable state of cleanliness; maintaining adequate nutritional standards in the purchase and preparation of food; (7) maintaining orientation to (8) (9) time, place and events; reminding of the need for medication; performing other activities needed to help a person care for himself when his illness or disability prevents him from adequately doing so. Companionship for pleasure or convenience rather than protection and necessity is not included in this definition nor is the provision of chore services such as transportation, home or yard maintenance, running errands, etc. Individuals needing only companionship or chore services are not eligible. 2. Levels of Independence Persons requiring services described above have varying levels of independence as discussed below. a. The individual is confined to a chair or bed; or The individual has mental limitations which alone or together with physical limitations cause him to require regular care from someone else throughout the day or night. (Level A.) NOTE: While there are individuals confined to wheelchairs who appear to be self-sufficient and not to require regular independent homelife care, the fact a person is confined to a chair is considered, for agency purposes, sufficient evidence to warrant classification in Level A. b. The individual is ambulatory, but requires regular care (not necessarily throughout the day or night) from someone else. (Level B) 3. Eligibility Determination Secure information and/or verification as indicated below, to establish that the person continues to require independent homelife care and that s/he has a care provider as defined in 12010-C below whom he is paying for the independent homelife care. a. Obtain new medical information from a legally licensed physician of the client’s choice, using the 696, if the need for care was not described as a permanent as indicated on the previous 696. Also, secure a new 696 when improvement is noted in a condition previously described as permanent and when a person’s level of independence appears to have changed enough to warrant a different classification. 4

b. Obtain social information from the recipient’s own statements, as well as observations of the worker and other persons in a position to know each time a new medical is completed. Social information refers to how the person generally spends his time, to what extent and from whom he usually receives help in daily activities, etc. This information may be recorded in the narrative or on Form 668. c. Verify the care arrangement every twelve months by setting a C600 alert. The C600 alert notice is sent to the client around the 20th of the month prior to the alert month. The alert must be completed and signed by the client and care provider and returned to the county th th office no later than the 15 of the alert month. If the alert is not cleared by the 15 of the alert month, the SUP case must be terminated effective the end of the alert month. If the alert is received and reflects a change, contact the client immediately to process a new 797. NOTE: When the care provider is employed by an agency to provide care to the client, the agency’s name, rather than the individual’s, is to be shown on the 797. d. For recipients for whom a new 696 is completed, the decision on continued eligibility based on need for care will be made by the eligibility worker using the physician’s recommendation and social information. When the worker does not concur with the physician’s recommendation, the decision on eligibility must be made by the state department. In such cases, mail a photocopy of the completed 696 and social information to your PA Field Supervisor requesting an eligibility decision. The field supervisor will advise the county department of the decision, which is binding until additional information is received indicating the need for reconsideration. e. Terminate the supplementation payment when the individual is no longer eligible under the criteria in effect prior to October 1, 1986 (unless he is now eligible under criteria in Section B below) or when there is a break in his eligibility for any reason. 4. Payment Levels The SUP payment levels for care are found in Appendix I, Table of Special Needs of Applicants and Recipients. The payment level for personal care in a private home or personal care facility is dependent upon the individual’s level of independence. There is only one payment level for personal care in a foster home. a. SSI Recipients 5

Persons receiving SSI are entitled to the full supplement for which they are determined eligible. A separate income/resource eligibility determination is not necessary to establish financial eligibility. A person who “receives” SSI, as used here, includes persons who have been determined eligible for SSI but whose SSI payment is in suspense (or withheld) for a reason other than ineligibility. b. Non-SSI Recipients (See Section 12015.) Persons not receiving SSI are entitled to a supplement in the amount of the difference between the full supplement and the amount by which their countable income exceeds the basic need standard, provided that the rounded amount of the supplement is as much as a dollar. NOTE: A person may be income-eligible for payment level “A” but not for “B” and may be functionally eligible for only “B”. In such case, the appropriate termination code is one for which the notice indicates that termination is due to income. When a recipient is income- eligible for both payment levels and his functional eligibility changes from “A” to “B” or vice versa, make a change to the level of care on ZC26 and notify the client of the change using Form 657. B. Specialized independent Homelife Care supplement (applicable to persons applying for supplementation on or after October 1, 1986) To be eligible for this supplement an individual must be receiving SSI and Medicaid waiver services at the skilled nursing facility (SNF) criteria and homelife care services as defined in A.1 above in a private home or foster home from someone whom they pay to provide such care. NOTE: “Specialized” refers to the circumstances of the individual in relation to the point in time when s/he applied for state SUP not the type of services. 1. Eligibility Process Responsibilities for specialized independent homelife care supplementation cases will be shared by staff at the department of Senior Services or the department of Public Health and eligibility staff. The eligibility worker receives and processes the application packet which should include a completed and signed 693 and 797 and, as needed, 1801. The cover Form 799 will state that the individual receives SSI and may indicate the individual has been approved for Medicaid waiver services at the skilled nursing facility (SNF) level. (NOTE: If no level is designated, obtain the determination of SNF level from the state office by mailing legible copies of the waiver services packet to the Family Assistance Division.) a. Verify the status of those persons receiving Medicaid waiver services by the use of the MSIQ screen. Waiver recipients are shown in field LTC with provider code 008500520. 6

b. Award supplementation payments according to usual procedures in the FACETS User Manual. Accrual rights are to the date of application which is the day the properly completed application packet is received by the eligibility unit/worker. c. Verify the provider of care every twelve months following procedures in A.3.c above. d. Process changes and terminations, as appropriate, based on information received from the individual’s Medicaid waiver case manager. If information is received from another source, including the client or care provider, confirm it with the case manager before taking action. If the client fails to respond to the C600 alert notice, contact the case manager for current information and then take appropriate action. Process terminations using regular closure codes. Hold the automated notice and provide notice using 657 as appropriate/needed. e. Verify SSI status in the alert month. 2. Payment Levels The payment levels for specialized independent homelife care in a private home or foster home are found in Appendix I. Persons eligible for specialized independent homelife care receive the full supplement for that particular living arrangement. C. Homelife Care Provider Requirements 1. General The care provider of persons receiving supplements as described in A and B above must be an employee of a certified home health agency; or (if the county health department does not make homelife services available in the county or certain cases) an individual who declares in writing that s/he has at least a 6th grade education; is physically and mentally able to provide care as evidenced by a medical statement (Form 1801); has not been convicted of a serious crime; and has not been fired or forced t resign from a position as a care provider due to dereliction of duty. The care provider cannot be of any of the following degrees of relationship to the applicant/recipient; child, stepchild, adoptive child, son or daughter-in-law; parent, stepparent, adoptive parent; spouse; or brother, sister, brother-in-law, sister-in-law. A certified home health agency is an agency so certified by the Alabama Department of Public Health, Division of Licensure and Certification. 7

2. Documentation of the non-availability of Certified Home Health Services If the County Health Department does not provide services in the county, secure a written statement from the health department to this effect and maintain it in department official files. Make a narrative entry in individual case records to indicate services are not available through the health department. If the County Health Department provides services but cannot provide them in certain cases, have the client secure a written statement from the Health Department indicating services are not available specifically to him/her and maintain it in the case record. D. Paying for Care Requirement 1. Definition A person is considered to be paying for care if payment for a month’s care is made timely. Timely is defined as follows: agency provider-within the billing cycle of the provider agency; or individual provider-no later than the month following the month in which care is provided unless the individual provider requires it earlier. 2. Example (Agency and Individual) Services (care) provided in June, billed for in July – due in July. To be considered paying for care for June, payment to the agency or individual must be made in July. If payment is not made until August or later, there has been a break in eligibility and the individual is no longer eligible. 12011 Care in Cerebral Palsy Treatment Center – APTD Eligible recipients receiving care in Cerebral Palsy Treatment Centers who were eligible for optional supplementation as of June 1, 1981, may continue to receive a monthly payment to supplement their other income to help pay for the cost of their care and certain basic needs. These APTD recipients are not entitled to Medicaid coverage by virtue or receipt of an APTD money payment. Those who receive SSI have Medicaid coverage under that program. A. Limitation of Coverage APTD for persons in Cerebral Palsy Treatment Centers is available only to a person who was in a Cerebral Palsy Treatment Center and eligible for APTD June 1981. “Eligible for” includes persons actually receiving APTD in the center in June 1981, as well as persons who before June 8

1981: were 18 years of age or older and in a Cerebral Palsy Treatment Center, and had applied for APTD before June 1981 and were later determined eligible. Eligibility continues only for as long as he remains in the Center and receives SSI, or would receive SSI except for income. (An interruption for any length of time in the stay in the center has no effect on the person’s eligibility upon his return to the center.) B. Amount of the Supplement The SUP payment level for persons in a Cerebral Palsy Treatment Center is $196 per month. No separate statement of income/resources nor budget is necessary for persons who receive SSI; their payment is the full supplement. Persons who do not receive SSI due to excessive income are eligible for a supplement in the amount of the difference between $196 and the amount of income in excess of the SSI Federal Benefit Rate (FBR). 12012 Mandatory Money Payment Recipient in a Nursing Home Money payments must be made to a person who received a money payment from the Department of Human Resources in December 1973, and who is presently in a nursing home and has income less than the personal needs allowance in effect in December 1973 ($48-OAP, $22-APTD, and $32-AB). A contact with the recipient must be made annually to verify presence in the nursing home and that there have been no other changes. Otherwise, determine continued eligibility as needed on these cases according to usual procedures. A. SSI Recipients SUP payment levels are $23 in OAP or $7 in AB. (There is no mandatory money payment in APTD for SSI recipients in nursing homes.) B. Non-SSI Recipients SUP payments must be computed according to policies and procedures in effect in 1973. Therefore, as needed, mail the case record to the Family Assistance Division for a determination of initial or continuing eligibility. When the case record is returned with that division’s decision, process the award, change or termination on FACETS according to instructions. 12015 “Grandfathered-In” Non-SSI Optional SUP Recipients 9

Eligible Non-SSI SUP recipients who were receiving SUP (as non-SSI recipients) as of March 7, 1986 may continue to receive a monthly payment (and Medicaid) to pay for personal care as long as they remain otherwise eligible including the requirement of being ineligible for SSI solely due to income. Policies and procedures related to income and resources in Chapter 12 are applicable only to these grandfathered non-SSI recipients. The policies and procedures related to need for personal care, establishing continuing eligibility, handling changes, etc., remain applicable to these grandfathered cases just as they are applicable to SSI SUP recipients. Grandfathered status under this provision is lost if the non-SSI recipient becomes ineligible for SUP for any reason or begins to receive SSI. 12100 Grant Computation - General The purpose of the grant computation is to substantiate: A. Monthly payments to or in behalf of an eligible person: or B. Denial of aid based on lack of need. A grant computation is not necessary when a person in ineligible for some reason other than need. Grant computations to determine eligibility and amount of payment are made by computer based on the level of care entered on ZC26 and the income (if any) entered on ZC24, ZC29 and/or ZC30. If an applicant/recipient is ineligible due to income, error message “Net Income Exceeds Standard” is received on ZC45 and ZC58. In such cases, print either screen to place in the case record to document ineligibility due to income. Process a denial or termination on ZC58. 12105 Grant Computation for SSI Recipients When FACETS is coded to indicate receipt of SSI, (SSI income entered on ZC30) the amount of payment will be determined by computer according to the level of care code entered on ZC26. 12110 Grant Computation for Non-SSI Recipients with No Spouse When FACETS is coded to indicate no SSI (no SSI income listed on ZC30) and no spouse, the computer will calculate the amount of payment using income entered according to the steps below. (Any manual payment computations must follow the same steps.) Deemed income from a parent(s) must be computed manually (Contact the FAD for instructions. See Section 12125-C) and entered as cash contributions on ZC30. A. Unearned income, excluding income based on need will be totaled. 10

B. The general exclusion ($20) will be subtracted. C. Earned income will be totaled. D. Any remainder of the $20 general exclusion will be subtracted from total earnings. E. $65 and ½ of the remainder will be subtracted from total earnings after any general exclusion. F. Unearned income remaining after Step “B”, earned income remaining after Step “E”, and income based on need, if any, will be totaled. G. The appropriate FBR (Federal Benefit Rate) will then be subtracted from total countable income to get excess income. If excess income is a figure ending in .50, it will be rounded up at this point. Otherwise, excess income will remain unrounded in this step. H. Excess income will be subtracted from the SUP payment level for the level of care code shown. The remainder, rounded to the nearest dollar, is the grant amount. 12115 Grant Computation for Non-SSI Recipients with Ineligible Spouse When FACETS is coded to indicate the recipient has an ineligible spouse and no SSI (no SSI income listed on ZC30), the computer will calculate the amount of payment, using income entered, according to the same steps as in 12110. (Any manual payment computations made by the worker must follow steps in 12110.) Deemed income as computed by the worker according to Section 12125-B must be entered as cash contributions on ZC30. 12120 Grant Computation for Non-SSI Couple SUP Recipients When the ZC26 for a SUP recipient is coded to indicate s/he has a spouse eligible for SUP (spouse added to unit) and no SSI (no SSI listed on ZC30), the computer will calculate the amount of payment, using income entered. (Any manual payment computation made by the worker must follow these steps.) Income amounts to be entered on each spouse’s ZC30 must be the total for both spouses. Screens must be coded to indicate that the couple FBR, either full or reduced, is to be used in computations. A. The computer calculation will follow steps “A” through “F” in Section 12110 to determine total couple countable income for each spouse. B. The appropriate FBR will then be subtracted to get couple excess income. 11

C. Couple excess income will be subtracted from the SUP payment level times 2. The remainder will then be divided by 2 to determine the grant amount, rounded to whole dollars, if necessary, according to either of the following: 1. If couple excess income obtained in step “B” was an even dollar amount with or without cents, or an odd dollar amount with cents, the grant amount for each spouse will be rounded to the nearest dollar: 49 cents or less, down; 50 cents or more, up. 2. If couple excess income obtained in step “B” was an odd dollar amount with no cents, the wife’s grant amount will be rounded up to the next dollar and the husband’s will be rounded down. 12121 Maximum and Minimum Payments The maximum monthly payment is the full supplement for which a person is eligible as determined by the case category and level of care. The minimum payment is $1. 12125 Deeming of Income Deemed income is income attributed to another whether or not the income is actually available to that person. Husband and wife, parent(s) and child(ren) living together generally share income and responsibility to each other and they generally share income and resources. Income is deemed only from spouse to spouse, or from parent and stepparent to child under 18. Consider all income available to an individual or couple in the deeming process, unless it is defined as income not to be budgeted, Section 12230, or is listed in A below. A. Items not included in Deeming 1. Assistance based on need (12210-G) or income based on need (12210-H), which is a. Furnished by the federal, state or local government; or b. SSI payments; and c. Income used to determine eligibility or payment of assistance or income based on need. 2. Monies considered not currently available. 12