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(i) When spouses cease to live together, their income and resources shall be considered available to each other throughout the month in which they cease living together. Beginning with the first full month of separate residence, only actually contributed income and resources from the spouse shall be counted.

(ii) When a blind or disabled child younger than 18 years old ceases to live with his parent, the income and resources of the parent shall be considered available throughout the month in which they cease living together. Beginning with the first full month of separate residence, only actually contributed income and resources from the parents shall be counted.

C. Families and Children—Children Living With Parents or Other Caretaker Relatives.

(1) This section applies to children, their parents and caretaker relatives other than parents, and other persons younger than 21 years old. This includes a blind or disabled child living with a caretaker relative who chooses to have the child's eligibility determined as a person younger than 21 years old and an aged, blind, or disabled person who chooses to have his eligibility determined as a caretaker relative.

(2) Persons Living Together. The unit shall be established on the basis of persons living together, including persons who are temporarily absent from the home for purposes of attending school, or pursuing vocational or job training.

(3) Composition—Children Living With Parents or Other Caretaker Relatives. The assistance unit shall include, except as provided in §§A-1 and C(4) of this regulation, the parents, caretaker relatives other than parents, their unmarried children younger than 21 years old, and any other unmarried children younger than 21 years old (including second generation children who are parented by an unmarried person younger than 21 years old) who are related by blood, marriage, or adoption to the parent or caretaker relative other than parent. The relationship between children and caretaker relatives other than parents shall be limited to those specified in Regulation .02B(10)(a) of this chapter.

(4) Exclusion of a Child or Caretaker Relative Other Than Parent. (a) The provisions of §C(3) of this regulation may not apply when: (i) A parent or caretaker relative other than a parent chooses to exclude a child from the assistance unit provided at least one child is in the unit and the exclusion does not cause the applicant or recipient to lose Medical Assistance (Title XIX) status as a caretaker relative as defined in Regulation .02B(10)(a) of this chapter.

(ii) A caretaker relative other than a parent chooses to be excluded from the assistance unit. The choice of exclusion includes the caretaker relative's spouse.

(b) An excluded aged, blind, or disabled person retains the option of selecting any federal category in which technical eligibility may be established upon subsequent application.