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Child Care Assistance Program Policy Manual Issued 07/2023 Annualizing lump sum income 6.15.15 Lump sums received prior to application If lump sum income is received prior to CCAP application, the lump sum is NOT included in the CCAP household income. However, if a CCAP participant receives lump sum income, the case closes and the family reapplies during the original annualization period, continue to count the lump sum through the end of the original annualization period. Do not start a new annualization period. Lump sum reporting and overpayments During the 12 month eligibility period When lump sum income IS reported timely, and the income puts the family over 85% of SMI, request verification of the lump sum and allow 15 days for the family to return the verification before closing the case. See Chapter 7.1 (Verification due dates) and Chapter 7.4 (Verification – 12-month eligibility period). • If verification confirms the family is not eligible, close the case with a 15-day notice of adverse action. • If verification is not provided within 15 days, close the case with a 15-day notice of adverse action. • If verification shows the family is still eligible, follow instructions in Chapter 8.1 (Changes in circumstances). When lump sum income is NOT reported timely, and the income puts the family over the maximum allowed for their family size (85% of SMI), cite an overpayment for child care assistance paid in excess of what should have been paid had the payment been reported timely. The overpayment includes the time period between the date of receipt of the lump sum and the end of the 15-day adverse action notice. Consider if all or part of the lump sum would have been disregarded as the first $60 in included lump sum income for the calendar quarter before assessing an overpayment. At redetermination If a lump sum received in the previous 12-month eligibility period is NOT reported at redetermination and would have put the family over 67% SMI or resulted in a higher copayment, cite an overpayment for child care assistance paid in excess of what should been paid had the payment been reported at redetermination. If the family exceeded 67% SMI at redetermination or a patch is needed for the copayment to increase, contact your policy specialist. Tracking the lump sum MEC2 does not remove the lump sum from income in eligibility when the annualization period ends. See the MEC2 User Manual for instructions on how to track the expiration of the lump sum income and steps to follow when it expires. Legal authority Minnesota Statutes 119B.011 Minnesota Statutes 119B.09