Subsidized Child Care Assistance Program Policy Manual Chapter 4. Application, Eligibility Determination & Documentation

Subsidized Child Care Assistance Program Policy Manual Chapter 4. Application, Eligibility Determination & Documentation

REVISED 04/27/2026

1 I. CHAPTER OVERVIEW

Individuals have the right to apply for and, if eligible, receive assistance in the State of North Carolina. Individuals wanting to apply for Subsidized Child Care Assistance (SCCA) must apply at their local Department of Social Services (DSS) or Local Purchasing Agency (LPA). This chapter provides an overview of the application process as well as guidelines for implementing a Plan of Care.

II. INITIAL GUIDED INTERVIEW

Subsidized Child Care Assistance may be provided to individuals demonstrating a need for child care and who have been determined eligible for assistance. The eligibility requirements below must be discussed with the applicant/recipient during the initial interview and all requirements must be met to authorize child care assistance. The guided interview recommendations include asking the applicant the following information:

• Household Composition • Address confirmed • Residency/Living Arrangement • Is an authorized representative needed • Need for Care • Verification needed to support need for care for example: Employment details/Education details • Income – Earned and Unearned • Resources • Expenses • Child care worker should ask questions about developmental delays and special needs; this includes whether referral information is needed. • Child care worker should discuss with applicant if joint custody is in place if both parents are not in the home. • Child care worker should review the 30-day processing time for application • Child care worker should review the applicant’s rights and responsibilities and have the document signed by the applicant at that time.

Subsidized Child Care Assistance Program Policy Manual Chapter 4. Application, Eligibility Determination & Documentation

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2 • Child care worker should explain how the parent fee is assessed and payment requirements • Child care worker should discuss choosing a provider • Child care worker should discuss signing the voucher and voucher timelines • Child care worker should review all documentation with applicant and request signatures at that time • Voter Registration • Developmental Screening • Child care worker should explain certification period timeline

III. REASON CHILD CARE IS NEEDED

The local DSS/LPA must determine the reason SCCA is needed. To qualify for child care services, the applicant/recipient must need care for one of the following reasons: • To maintain employment or a WFES referral to seek employment. • To support Child Protective Services (CPS). • To attend school or job-training activities that lead to employment. • To meet the developmental needs of children. • To support child welfare services (CWS); or • Other reasons as approved by the local Smart Start partnership if Smart Start funds are used.

The provision of Subsidized Child Care Assistance for reasons other than those listed below may occur if other funds are available to the agency such as Smart Start. Subsidized Child Care Assistance provided with Smart Start funds for reasons other than those described in this manual must be included in the local partnership’s Smart Start Plan and approved by the North Carolina Partnership for Children (NCPC). Smart Start funds can provide services for preschool age children only.

IV. INCOME ELIGIBLITY REQUIREMENTS

The applicant/recipient applying for Subsidized Child Care Assistance must meet current income eligibility requirements to be approved for assistance

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3 unless the assistance is available without regard to income. At the time of application and recertification, the applicant/recipient must attest that their assets are not more than one ($1,000,000) million dollars. If assets exceed $1,000,000, they are ineligible for Subsidized Child Care Assistance. The asset limit is waived for the applicant/recipient receiving care for CPS/CWS.

A. Parental Fees

A parental fee is based on the applicant/recipient’s gross monthly countable income, not on the type of child care arrangement. If there are multiple children in care, the parental fee is assessed to the child receiving the greatest number of hours of care. Usually this is the youngest child receiving care. The Intake Application, Signature and Statement of Understanding form must be signed and dated. Telephonic signatures are acceptable if the agency has the software to record them.

1. If the applicant/recipient is eligible for SCCA, the applicant/recipient may be required to pay a parental fee, i.e., a portion of the cost of care. The parental fee is assessed based upon the applicant/recipient’s income.

2. Child care workers must explain that the parental fee is based on the applicant/recipient’s gross monthly countable income. If there are multiple children in need of care the fee is assessed to the child receiving the greatest number of hours of care. In most instances, this is usually the youngest child receiving care.

Refer to Chapter 8 for additional information Parental Fees.

V. WHO CAN APPLY FOR SCCA

Any of the following individuals may apply for Subsidized Child Care Assistance:

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4 • A parent or responsible adult needing SCCA. The parent or responsible adult is the applicant/recipient and is referred to as the person or persons with whom the child lives and who has primary responsibility for the care and the well-being of the child.

• An applicant/recipient needing child care assistance must apply with their local DSS/LPA.

• An Authorized representative (A/R) for the applicant/recipient can be requested if the applicant/recipient is incompetent or incapacitated. Authorized representatives who apply for Subsidized Child Care Assistance for the applicant/recipient have the same responsibility as applicant/recipient to provide accurate and complete information to the DSS/LPA.

• Staff designated by the DSS/LPA director if the child is in custody of the Department of Social Services. Designated agency staff should only sign the application DCDEE-0456 or the printed application from NC FAST if the child/ren are in the custody of the county (foster care). For CPS and CWS with a referral, the parent/responsible adult must sign the application DCDEE-0456, Recipient Responsibilities and Voucher. The parent/responsible adult will sign the application DCDEE-0456, Recipient Responsibilities, and Voucher when the child is not in DSS custody.

• Anyone other than that child’s parent (s) or legal custodian (s) who is providing full time care for a child who is not in the custody of a North Carolina County Department of Social Services.

• Federal Land Trust Residents. Applicants/recipients referred by the Eastern Band of Cherokee Indians for Subsidized Child Care Assistance to support Child Protective Services (CPS), Child Welfare Services (CWS) and Foster Care. The application will be made in the applicant/recipient’s county of residence with the appropriate referral.

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5 • Vulnerable Populations. Vulnerable Populations include families experiencing homelessness and children with special needs according to McKinney-Vento Homeless Assistance Act. Living Situation: If a client is homeless, select Lacks Fixed Nighttime Address, Hotel/Motel, or Place Not Designated for Sleeping as the client’s living situation.

Refer to Attachment 1 Living Arrangement Fact Sheet & the SCCA – Homeless Living Arrangements Job Aid for more information on homeless selections.

VI. APPLICATION REQUIREMENTS

A. Form Requirements

All individuals who request Subsidized Child Care Assistance must be allowed to sign an application unless the county does not have sufficient funding to serve additional applicants/recipients. When either funds or child care spaces are not available and services cannot be provided immediately, counties are required to establish and maintain a waiting list.

A formal request for Subsidized Child Care Assistance must be initiated by completing the application in NC FAST by the designated staff person. All applications for Subsidized Child Care Assistance will be processed through NC FAST.

The recipient will be required to sign the last page of the Intake Application that is generated in NC FAST. The NCFAST-20009 Recipient Responsibilities must be signed by the applicant/recipient.

When the parent or responsible adult of a child ages 0-5 years applies or recertifies for SCCA, the child care worker will provide the recipient with resources about developmental screenings. If the eligibility determination does not occur during an office visit, the child care worker will mail developmental screening information to the recipient. Once the developmental screening information is shared with the parent or responsible adult, the child care worker must document this information in

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6 the case narrative. The information that must be shared with recipients is the Exceptional Children’s Assistance Center (ECAC) brochure, Look What I Can Do handout, and the Benefits of Developmental Monitoring and Screening for Young Children handout.

If services are needed to support CPS and CWS with a referral, the parent/responsible adult must sign the application, Recipient Responsibilities and Voucher. Depending on the reason for CWS, it may be the responsible adult (ex. pending adoption) or parent (ex. domestic abuse situations) that must sign.

For foster care, the agency designee must complete and sign the application. Designated agency staff should only sign if the child/ren is in custody of the county.

Refer to Chapter 9: Attachment 5 Child Care Voucher Procedures Timeline Chart & the SCCA - CPS, CWS, and Foster Care Referrals Job Aid for more information regarding the application process.

The DCDEE-0456 Application for Child Care Services will only be used in two circumstances. One is when the recipient mails a printed DCDEE- 0456 to the local DSS/LPA to apply for Subsidized Child Care Assistance. The other circumstance is when child care is needed for a child in foster care.

A referral from the DSS/LPA must be made in foster care cases. When a referral for SCCA is received from a DSS worker for a child in foster care, the paper version of the DCDEE- 0456 may be completed and signed by the DSS designee. The DSS designee may either complete and sign the DCDEE-0456 or the Intake Application from NC FAST.

VII. RESIDENCY REQUIREMENTS

An applicant/recipient requesting Subsidized Child Care Assistance must be a resident of North Carolina and must apply for assistance in the county in which they reside, and that county is responsible for payment. There is no requirement for duration of residency. The residency requirement does not

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7 apply to some situations, such as protective services cases under the terms of interstate compacts or in response to court orders. When a child is in the custody of a Department of Social Services and lives with a relative or responsible adult in another state, it may be necessary to provide child care subsidy to a provider in another state. See Chapter 15, Approval and Enrollment Procedures for Licensed Facilities for more information.

VIII. CITIZENSHIP REQUIREMENTS

To align with the provisions in the Childcare and Development Fund Act of 2014, only the citizenship and immigration status of the child, who is the primary beneficiary of the CCDF benefit, should be considered. The citizenship and immigration status of the parent should not impact the child’s eligibility for assistance. One of the following citizenship criteria must be met:

• Child is a U.S. Citizen; or • Child is a legal U.S. Non-Citizen (residing in U.S. legally). Examples of a child who is a legal U.S. Non-Citizen shall include but is not limited to: o Refugee o US Citizen/Naturalized Citizen o US Non-Citizen National o Documented Alien

In NC FAST, citizenship status shall only be selected when registering a new recipient. Child care workers shall not change the citizenship status of an existing recipient. Changing the status could affect the recipient’s eligibility for other programs. Citizenship status should only be changed if documentation is provided by the recipient.

Subsidized Child Care Assistance may be provided to non- citizens who are legal residents if the other eligibility criteria are met. Non-citizen families who are not legal residents (including the child and the parents) may receive services in the following instances if all other eligibility criteria are met.

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8 1. If the child needs child care to support child protective services or the child is receiving foster care services; or

2. If the child needs child care to support his/her developmental needs.

A. Citizenship Requirements and Verification

Only the citizenship and immigration status of the child, who is the primary beneficiary of the CCDF benefit, should be considered. If residency is questionable, verification may be obtained or requested to determine residency status. A birth certificate or hospital/physician record is acceptable verification of the child’s citizenship status.

The burden of proof regarding documentation of legal status or residency rests with the applicant. The Division does not require workers determining child care eligibility to report any citizenship or residency information to Immigration and Naturalization Service. The applicant/recipient’s statement regarding citizenship or residency is accepted unless there is a reason to question the individual’s legal status.

For additional information regarding the type of documentation that may be used to document legal status, refer to Section 111 in the Work First Manual. If the applicant is a recipient of Work First Family Assistance benefits, citizenship and residency were established at the time of application for Work First Family Assistance benefits.

IX. AGE REQUIREMENTS

Child care assistance may be provided to children through age 17. However, requests for assistance for children ages 13 through 17 must be carefully evaluated to determine the need for care. Some examples of instances in which assistance for teenagers may be provided include the following: the teen has a special need; is under court-ordered supervision; is receiving child protective services or foster care services; or the child would be left in an unsafe situation if care is not provided.

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9

A child meets the age requirement if they are:

i. Birth through 12; or

ii. 13 through 17, when one of the following situations is documented in the case record.

a) Child has a special need or circumstance which could include a documented medical situation.

b) Child is under court-ordered supervision.

c) Child is receiving child protective services or foster care services.

d) Child would be left in an unsafe situation if care were not provided. For example, a single parent works second, or third shift and the child would be home alone at night.

A child may be eligible for Adult and Family Services once they reach their eighteenth birthday. When a child becomes eligible for kindergarten services in public school (turns age five (5) on or before August 31 of that school year), child care services may only be provided during those days and hours that the regular school program is not in operation.

However, there may be case-specific situations when it is in the best interest of the child to delay entry into the public-school system. An example may be when the child just meets the cutoff date to be eligible for public school but is small or immature for their age or has some other developmental delays and the child would benefit from continuing to receive preschool care for an additional year. The reason for the child not enrolling in public school must be documented in the record. In any case, child care may not be provided for more than one (1) year past the date the child is eligible to begin kindergarten.

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10 A school-age child is defined as a child who will reach the age of five (5) on or before August 31 of that school year and is enrolled in a public or private school during the school year in accordance with the rules of the educational institution where the child is enrolled. If the child’s birthday is:

• First day of the month - the child is considered their new age for the entire month.

• Any other day - the child is considered their new age starting on the first of the following month.

A. Specific age groups with NC FAST

1. Child Turns Five Years Old When a child turns five, a task is sent the month prior to a child turning five years old, requesting that the case owner determine if the child is attending school. The recipient may need a change to hours of care.

2. Child Turns Six Years Old When a child turns 6, a task is sent the month prior to a child turning six years old, requesting that the case owner determine if the child is attending school. The service changes from 0-5 Years to School Age. The recipient may also need a change to hours of care and/or a change to the provider.

3. Child Turns 13 Years Old When a child turns 13, SCCA benefits will continue through the end of the current certification period. Do not terminate services at the time of a child’s 13th birthday or during the month that they turn 13 years of age.

However, if the child turns 13 on the 1st day of their new certification period, end date services on the last day of the prior month. The case worker receives a task the month prior to a child turning 13 years old, requesting a review of the evidence to determine if the child has special circumstances that make them eligible for continued benefits, such as court-ordered supervision or

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11 mental incapacity. If the child has special circumstances, add Exemption Evidence.

NC FAST will automatically terminate care on the last day of the certification period after a child turns 13 years of age. No action is required in NC FAST to make this termination occur. Child care workers need to ensure that the child’s parent/responsible adult understands that services will terminate at the end of the certification period and not during the birthday month.

If a applicant/recipient receives Graduated Phase Out at the end of their certification period and a child turns 13 during the Graduated Phase Out, Subsidized Child Care Assistance for the 13-year-old child must continue until the end of the Graduated Phase Out. If the applicant/recipient becomes income eligible during the Graduated Phase Out, the 13-year-old cannot be recertified past the end date of the Graduated Phase Out.

X. VOTER REGISTRATION REQUIREMENT

The purpose of the National Voter Registration Act (NVRA) is to make more opportunities available for individuals to vote. The NVRA requires individuals, who are U.S. citizens, and at least 16 years of age, be offered the opportunity to register to vote or update a voter registration record at any application for service, recertification, or renewal, or when reporting a change to their address when related to an existing application. Voter registration does not need to be offered for applications, recertifications, renewals or change of address for child only cases where a child is in foster care.

Voter registration services must be offered when an NVRA covered transaction (at application, recertification, or change of address) is received via telephone, mail communication, email, fax, or in-person. Therefore, at any time a person seeks services at an agency that offers public assistance, disability services, or unemployment services, the person must be offered voter registration services.

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12 The written protocol and NC FAST documentation must always remain current. County DSS agencies must report a change in county NVRA point of contact to the NC DSS Civil Rights/NVRA Coordinator.

NVRA CONTACTS FOR ASSISTANCE State Board of Elections (SBE) – nvra@ncsbe.gov DHHS NVRA Coordinator – NVRA@dhhs.nc.gov

The child care worker must ensure that NVRA requirements were documented by the SCCA worker in the narrative as required and DCDEE staff must see that the most recent date NVRA evidence was updated at a later date than that of the documentation date. The consultant can view the history to see if there was an update at the time of the SCCA worker’s narrative.

Refer to section XIV. Narratives and Documentation and DCDEE-0473 SCCA Sample Narrative and Documentation Form for additional information regarding documentation.

XI. ESTABLISHING THE INITIAL ELIGIBILITY PERIOD

A. Standard Eligibility Period

Once deemed eligible, the applicant/recipient must receive a continuous 12-month eligibility period. The 12-month eligibility period will start on the date the application is approved, and applicant/recipient is determined eligible for the SCCA Program. This will ensure that every recipient receives a full 12 months of eligibility. The application must be date stamped as verification of the date received. The certification period will end on the last day of the last month of the eligibility period regardless of weekends and holidays.

When an application is received by an agency on a weekend day, holiday, or after established business hours in which an agency is closed for business, the child care worker will enter the next business day as the date an agency received the application.

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13 For example, if an application is emailed on Saturday, October 21, 2023, the date received by an agency is Monday, October 23, 2023. If an application is left in an agency’s drop box on July 4, 2024, the date received will be the next business day an agency is open, July 5, 2024.

See examples in the chart below.

Application Submission Method Actual Date Received in Agency Next Business Day used as Application Date Email Friday 11/17/2023 @ 9:58pm Monday 11/20/2023 Fax Saturday 11/18/2023 Monday 11/20/2023 Mail Tuesday 12/26/2023 *Agency is closed for Christmas Holiday 12/25/23- 12/27/23 Thursday 12/28/2023

If the DSS/LPA operates on the weekend and applications are submitted during an agency's weekend operating hours, the date used as the application date will be the same date the application is received by an agency. For Example:

Application Submission Method Actual Date Received in Agency Application Date Email, Fax, or Mail Saturday 11/21/2023 @ 9:58 am Saturday 11/21/2023

B. Application Processing Timeline

The DSS/LPA has 30 calendar days from the date the signed application is received by an agency to determine eligibility. If eligibility is not determined within 30 calendar days, the application is denied. Failure by the applicant/recipient to provide the required information to determine eligibility within 30 calendar days is an allowable reason for the application to be denied.

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14 However, a signed application must not be denied for failure to provide verification prior to the 30 calendar days. If the 30th calendar day falls on a weekend day, holiday, or agency closure, the worker must process the signed application on the last business day prior to the 30th calendar day.

If a client submits a signed application but does not have a need for care but states they will have a need for care and verification within the 30 calendar days, the child care worker must wait for the 30 calendar days from the date received before denying the application.

NOTE: All signed applications must be disposed of within 30 days of the date the application was received in the agency.

C. Notifying the Applicant at Initial Application

The applicant/recipient must be notified of any eligibility decision within 30 calendar days after the date of application. A copy of the child care application or intake application serves as notice.

Be sure to document the case narrative thoroughly. The worker may also refer the applicant to the Work First Program if the applicant is seeking a job.

XII. APPLICATION PROCESS

For a child to receive Subsidized Child Care Assistance, an application must be completed with the local DSS/LPA. The application is necessary to gather accurate and complete information used in deeming an applicant/recipient eligible for services. There must be a determination that the income unit is correct, there is an established need for care, the countable income is verified and computed correctly, and that the parental fee is correct.

Refer to Chapter 7 Family Definition and Determining Eligibility for additional information regarding the Income Unit and Countable Income.

Types of SCCA applications include:

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15 • A new application from applicant face to face interactions, • Mailed, faxed, or emailed applications to be processed, • CPS, CWS, & Foster Care

When an applicant has been determined eligible for Food and Nutrition Services (FNS), they are deemed income eligible for Subsidized Child Care Assistance. Some of the information needed for the initial interview can be found in NC FAST. This includes members of the income unit, child’s age, race, citizenship status, and income. Using the information from NC FAST as the first step of the interview process will help streamline the application process. For applicants/recipients that state they are self-employed or receive child support, do not deem these income types from FNS.

Refer to Chapter 7: Family Definition and Determining Income Eligibility & DCDEE-0474 SCCA Verification of Child Support for more information about child support.

Social Security Numbers (SSN) are NOT required to determine eligibility for Subsidized Child Care Assistance and eligibility cannot be denied due to the failure of the applicant to provide a Social Security Number. If applicants choose to provide a Social Security Number, it must be made clear that providing the Social Security Number remains optional and services will not be denied if the Social Security Number is not provided. The child care worker must inform the applicant that the Social Security Number may be used to assemble research data (that do not identify individuals), perform person searches in the NC FAST system or verify income.

Refer to DCDEE-0466 SCCA Request for Information as an optional form that may be used when additional information is needed to process an application.

Refer to Chapter 7 Family Definition and Determining Eligibility for additional information regarding Social Security Numbers and Online Verification (OVS).

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16 A. Application Submission

The electronic application is completed in NC FAST by the worker. Exceptions to this are only when foster care referrals are received by the worker and when an applicant/recipient completes a mail-in application. In these cases, the SCCA Application (DCDEE-0456) is utilized and subsequently entered in NC FAST.

Applicants/recipients may submit a SCCA application by mail, fax, or email, or in person. Applicants/recipients may also complete a face-to-face application with a worker at the local DSS/LPA.

1. Mailed Applications

When an application is submitted by mail, the date the agency receives the application will be the first day of the certification period and the date entered in NC FAST as the application date regardless of when the application was signed and dated.

2. Faxed or Emailed Applications

When an application is submitted by fax or email and the documents are legible, the application shall be accepted. The date the agency receives the application by fax or email will be the first day of the certification period and the date entered in NC FAST as the application date regardless of when the application was signed and dated.

If a faxed or emailed application is not legible, the county worker must contact the applicant and request that the application be resubmitted in a legible format. The date the application is resubmitted and legible will be the first day of the certification period and the date entered in NC FAST as the application date regardless of when the application was signed and dated. If a faxed or emailed application is not accepted via fax or email, the county worker must

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17 document the reason for declining the application and notify the applicant.

3. Face-to-Face Application

When an application is completed during a face-to-face appointment, the date of the face-to-face appointment will be the first day of the certification period and the date entered in NC FAST as the application date.

NOTE: In all situations, except for face-to-face applications, applications shall not be keyed in NC FAST until a signed paper application is received in the agency. Applications and recertifications must be date-stamped. If the email is available (either from the worker’s history or applicant’s), this can also be used as verification of date of receipt.

While completing the Application for Subsidized Child Care Assistance in NC FAST, child care workers must ask why Subsidized Child Care Assistance is needed, including specific information regarding the days and hours the care is needed. Determine the family unit, calculate income, and parent fees correctly, and obtain verification of income.

Processing an SCCA application includes evidence management, verifications, eligibility checks, activating evidence, and authorization or denial of benefits. An authorized application creates a case that must be activated. Active cases must be followed by voucher processing.

Children authorized for payment must be determined eligible by the DSS/LPA for the entire period for which the provider is paid. Recipient files may be checked to determine that proper documents are located there, with proper signatures and due dates.

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18 The current Child Care Voucher (DCDEE-0446) must be on file for each child enrolled and authorized for payment. The applicant/recipient must sign the printed voucher with a wet or typed signature. Vouchers will no longer be on paper when sent to the provider but will be sent via the NC FAST Provider Portal for provider to accept or reject. Vouchers are maintained electronically.

B. Signature on Application

The signature on an application can be:

1. Wet signature

A wet signature is acceptable with or without chain of custody.

2. Telephonic signatures

A telephonic signature is acceptable if the agency has the software to record them. A Telephonic signature is a type of electronic signature software that uses an individual's verbal attestation in place of an ink signature.

In the event a worker completes a telephone interview, a wet signature, telephonic, or typed signature (with the chain of custody), on the application is required.

3. Typed signatures

A typed signature is acceptable with chain of custody in a communication by the client that the county can consider the typed signature their signature. Examples include:

• The original communication from applicant/recipient from their personal or business email address with the document attached (photo of document acceptable).

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19 • A typed signature is equivalent to a handwritten (wet), signature only they are created in a digital environment.

If an applicant/recipient submits a typed signature, the worker must:

• Document in the case notes that it is a typed signature and record chain of custody. • Provide verification from the applicant that shows their intent to communicate electronically and for the county to accept their typed signature.

Documents that may have a typed signature include:

• SCCA Application, • SCCA Recertification • Recipient Rights and Responsibilities • Voucher

If the DSS/LPA does not have an email (chain of custody) and there was a typed signature, without documentation, then it is a financial error that will result in a county responsible overpayment.

C. Applications When There is More Than One Case

A recipient can submit one (1) application for all children in the household. Through NC FAST, there can be one (1) application for a applicant/recipient that has more than one (1) case.

If a recipient applies for services for his/her own child in addition to a child whom they are the nonparent caretaker, there will be one (1) application and two (2) cases. The exception to this would be for foster children who are in the legal custody of DSS. In these situations, the foster care social worker is required to apply for child care services.

When a recipient applies for SCCA for his or her own child and has unofficial or undocumented responsibility of another child, who is not in

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20 the legal custody of DSS, both children can be placed on one application for both cases.

NC FAST will create one or more cases based on who should be included in the income unit. If there is more than one income unit, then there will be multiple cases created from one application. Documentation of the recipient’s case file must provide adequate information regarding eligibility and the Plan of Care.

D. Applications for Applicants/Recipients Experiencing Homelessness

Section 725 of the McKinney-Vento Act defines the following homeless children and youths as:

Homeless children and youths mean individuals who lack a fixed, regular, and adequate nighttime residence. The term includes—

1. Children and youths who are sharing the housing of other persons due to loss of housing, economic hardship, or a similar reason; are living in motels, hotels, trailer parks, or camping grounds due to the lack of alternative adequate accommodations; are living in emergency or transitional shelters; or are abandoned in hospitals.

2. Children and youths who have a primary nighttime residence that is a public or private place not designed for or ordinarily used as a regular sleeping accommodation for human beings.

3. Children and youths who are living in cars, parks, public spaces, abandoned buildings, substandard housing, bus or train stations, or similar settings; and

4. Migratory children (as defined in section 1309 of the Elementary and Secondary Education Act of 1965, as amended), who qualify as homeless because they are living in circumstances described in this definition.

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21 Applicants/recipients experiencing homelessness or at risk of homelessness must be prioritized in accordance with the General Provisions for subsidized child care. The length of the child care authorization shall be 12- months and recertification will be completed at the end of the 12- months. The local DSS/LPA has the option to add to their 4% set aside for Applicants/recipients experiencing homelessness and children with special needs. Refer to Chapter 2: Funding for Subsidized Child Care Services for more information.

If no appropriate openings are available, the applicant/recipient may be placed on a separate waiting list. If the DSS/LPA contacts DCDEE and requests transfer of funds from the 4% set aside to non-smart start, then these vulnerable populations cannot be added to the waiting list. Funds for these populations must be fully expended before adding them to the waiting list.

The local DSS/LPA must provide child care assistance to applicants/recipients if they are considered homeless and have a valid need for child care. Every recipient must have a need to be evaluated for SCCA. This includes employment, job search, education and/or training, developmental needs, CPS, and CWS. Note, job search is not considered an acceptable need for new applications unless the client is an active Work First recipient with a referral.

Applicants/recipients experiencing homelessness and seeking Subsidized Child Care Assistance through this program must comply with the financial and service need requirements of the income eligibility requirement of the SCCA Program. If a recipient meets the criteria of homelessness at the time of initial application or recertification, this information must be entered into NC FAST per the SCCA – Homeless Living Arrangements job aid.

E. Living Arrangements

When determining whether applicants/recipients are experiencing homelessness when they apply for child care assistance, the child care

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22 worker will ask the applicant/recipient if their current address is a fixed, regular and/or adequate nighttime address. Below is a list of suggested questions to assist the child care worker in determining if the applicant/recipient is in a homeless living arrangement.

1. Can you tell me about where you and your family are currently living? 2. Is this the location where you sleep most nights? 3. How long have you been living at your current location? 4. What led you to live at this location? 5. Would you describe your current living arrangement as temporary or permanent? 6. How long do you expect to be able to live at your current location? 7. Are you currently looking for a more permanent place to live? 8. Where do you receive your mail? 9. Do you feel safe in the place where you are living?

When an applicant/recipient comes in to apply/recertify for child care assistance, and it is stated that the applicant/recipient lacks a fixed, regular and adequate nighttime address, the worker will select the appropriate living arrangement in NC FAST indicating where their applicant/recipient resides.

Refer to Attachment 1 Living Arrangement Sheet for additional information regarding Living Arrangements.

F. Grace Period for applicants/recipients experiencing homelessness

If a applicant/recipient experiencing homelessness applies and does not have all supporting documentation at the time of application submission, and the applicant’s reported information meets all eligibility criteria, a 30-day grace period is given and child care services can begin immediately.

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23 The application is entered into NC FAST and approved. The recipient will then have 30 days to provide all needed documentation to support their eligibility for child care services. Failure to submit required documentation within 30 days will result in termination. If the recipient provides the required documentation within 30 days and is found eligible for child care services, a parent fee is then established based on the documentation provided. This is not considered an increase in parent fee during the 12-month certification period because the income is being assessed at initial eligibility determination. If the application has already been approved and child care services have started, the parent fee will be assessed after a 10-day notice and effective the first of the next month.

If it is determined that the applicant is not eligible for child care services once all required documentation has been submitted, the child care case must be terminated with a 10-day notice provided to the recipient and the child care provider.

A 10-day notice must also be provided if a recipient does not provide the required documentation to support his or her eligibility for child care services by the end of the 30-day time period. If either of these situations occur, the child care provider shall be paid for services provided based on the start date on the voucher through the last day of the 10-day notice.

Any payment made to the child care provider prior to the final eligibility decision shall not be considered an error or an improper payment and shall not be recouped from the provider. Refer to the Homeless Living Arrangements Job Aid.

G. Applications for Federal Land Trust

During the application process for Federal Land trust, the child care worker will select yes or no in NC FAST if the applicant/recipient states they live on a tribal reservation.

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24 H. Applications for Foster Care

When Subsidized Child Care Assistance is needed for a foster parent, the child care worker must have a written referral from the foster care social worker to support the need for care, indicating whether placement of the child is in a licensed foster home or in the home of a relative. A referral for foster care is required at application and recertification even if the placement remains the same.

When the need for care supports employment whether there are one or two foster parents in the licensed foster home, employment information, including name of employer and days and hours of employment, must be verified for each foster parent and the information must be included on the referral from the foster care social worker.

The DSS designee must complete and sign the paper version of (DCDEE0456) or the printed application signature page from NC FAST. Children in foster care are the case head in their own case and the staff designated by DSS will sign the voucher. With sibling groups, the youngest child will be case head. When entering in NC FAST, enter the youngest child first. If the family is divided, each child will be his own case head.

The guided interview includes questions about the referral, and the answers are mapped (transferred) to create Program Referral evidence on the application. The worker must start the application from the child’s Person Page as the child is the case head on an SCCA application. If there are multiple foster children in a household, enter the youngest child first. Foster care applications are child-only except in the case of sibling groups.

If there is a sibling group placed in the same foster care home, the case head on that application is the youngest foster child, and that child’s address must be the address of the DSS.

If there is a sibling group placed in the same foster care home, and one

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25 of the children is placed with a new foster parent outside of the sibling group, that child must be the case head on their own case.

The worker will maintain their cases individually even if they later rejoin the sibling group.

1. Foster Care Referrals & Evidence

The worker must record referrals as Program Referral evidence on the Evidence Dashboard. Foster Care Program Referral evidence requires verification such as the written referral, signed by the foster care worker or their supervisor. Program Referral evidence ensures NC FAST applies foster care status to policy rules on the application and case.

When a case due for recertification contains Program Referral evidence, both a new Foster Care referral and SCCA – Program Referral evidence is required. The worker must update the Program Referral evidence with information from the new referral and then keep the new referral on file. This involves end dating the current program referral evidence and creating new Program Referral evidence. The child care worker must record the need type and schedule of care in the Plan of Care evidence and the Plan of Care start date must be the start date of the new certification period. The completed Foster Care Referral functions as verification of the selected need type; no additional verifications evidence, such as paid employment, earned income or student evidence, are required.

Workers can continue to use the same Plan of Care evidence that was used when the case began unless changes need to be made. Document thoroughly that a new referral was obtained and the dates on the referral must line up with the recertification date.

2. Foster Child Transition to a New Living Situation

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26 If a foster child receives SCCA based on a foster parent’s need type of education or employment and their living arrangement changes within a 12-month certification period, the worker will reassess the need for care of the new foster family (or relative or caregiver):

If the new foster family has a need for care, review the new Program Referral for changes to the case and update Plan of Care evidence as needed. SCCA coverage will continue through the end of the certification period.

If the new foster family does not have a need, the child care worker must confirm with the new foster family as to whether they would like to continue services. If the new foster family declines child care, the Plan of Care evidence must be end-dated and the case will remain open through the end of the certification period.

If the new foster family does not decline child care, the worker must allow services to continue through the end of the certification period. This information must be clearly documented in the case notes.

If a child is no longer in foster care and is not under the legal custody of the County DSS, SCCA services must continue through the end of the certification period. The child care worker must end-date Program Referral evidence to ensure the correct fund source is used. The address must be updated in NC FAST to reflect the new custodial family’s address. If the custodial family's address is located in a county different from the county that had custody of the child, the case must be transferred to the custodial family’s county of residence. The transferring county must document the SCCA case thoroughly.

At the end of the certification period, the foster care subsidy case must be closed, and the foster family has the choice to apply for services. The recertification packet may be submitted and used as a new application document. The new application must include the custodial adult or

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27 adoptive parent as the case head. The custodial adult or adoptive parent must meet all initial income and need eligibility requirements at that time. If the custodial adult or adoptive parent applies by the end of the child’s 12-month eligibility period and is approved, the custodial adult or adoptive parent must not be placed on a waiting list.

3. Foster Care Outside the County

When a child in foster care resides outside the county which has custody, the county Department of Social Services that has custody of the child has responsibility for payment. In some situations, the county which has custody of the child may have a conflict of interest, for example, the child is related to a staff member of the initiating DSS/LPA. In these situations, another county Department of Social Services may manage the child’s foster care case, such as conducting visits with the child. Additionally, the county which manages and conducts the child’s foster care will be responsible for payment of the SCCA case, even if custody remains with the initiating county. When a child is in the custody of a Department of Social Services and lives with a relative or responsible adult in another state, it may be necessary to provide child care subsidy to a provider in another state. See Chapter 15, Approval and Enrollment Procedures for Licensed Facilities for more information.

4. Foster Care Need Type

NC FAST follows policy in determining requirements and benefits for children in foster care:

i. Foster care is not a need type in Plan of Care evidence.

ii. Foster parents must have a need for child care (such as employment or education) that has been verified by the foster care worker.

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28 iii. Because a foster parent is not included on the application for foster care, the system cannot track the 20-month time limit when the Education need type is selected.

If the need type is Education in a foster care case, select Developmental Needs as the need type and keep track of the 20-month time clock outside of NC FAST.

Each responsible adult in the household can receive 20 months of SCCA to support education for foster care cases.

Refer to Chapter 5: Establishing Need and a Plan of Care & DCDEE-0465 Sample Foster Care, CPS, CWS Referral for additional information regarding FC.

NOTE: DCDEE-0465 is optional and may be used as a guide. Use of DCDEE-0465 does not eliminate the requirement for workers to enter and complete referral evidence in NCFAST.

XIII. AUTHORIZING CHILD CARE ASSISTANCE

A. Determining a Plan of Care

When an applicant/recipient has been determined to meet all eligibility criteria, the child care worker must then work with the applicant/recipient to determine what type of child care arrangement best meets the needs of the child and family. The circumstances that justify the need for child care assistance and the Plan of Care must be documented in the case record.

NOTE: Every child in the same assistance unit must have the same need type in their Plan of Care.

Refer to Chapter 5 Establishing Need and Plan of Care for additional information regarding Plan of Care.

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29 B. Issuing the Child Care Voucher

The Child Care Voucher (DCDEE-0446), which authorizes eligibility for Subsidized Child Care Assistance, must be issued to the applicant/recipient for each child in need of assistance. The DSS/LPA must discuss the recipient choice when selecting a child care facility. Explain the difference between regulated and unregulated child care arrangements.

Refer to Chapter 9 Voucher Procedures for additional information regarding Vouchers.

XIV. NARRATIVES AND DOCUMENTATION

Childcare workers must use narratives (case notes) in NC FAST to document the verification of requirements, such as verifying income through pay stubs. Narratives must include details of follow-up actions on incomplete application information and the outcomes of those actions. The case notes must describe conversations and actions taken on a case, including eligibility determinations, the Plan of Care, reasons for needing care, and income details. Information from the application does not need to be repeated in the narrative, but the specific circumstances creating the need for care must be thoroughly explained in the case notes.

A. Narrative Use

1. Child care workers use narratives to record the recipients’ initial office visits, dates and circumstances for applications and recertifications, to record reported changes and actions taken on the case, and to document any communications with recipients such as emails and telephone calls.

2. The narrative must support key details like the need for care, the Plan of Care, special needs of the child, and eligibility for supplemental payments or care for a child aged 13 years or older.

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30 3. The narrative must include the date information was received and the initials of the person entering it. When entered into NC FAST, the system automatically records the worker’s identity.

The following guidelines are best practices when documenting in the case narrative/notes:

• Be factual. • Refrain from giving opinions or subjective evaluation of the facts. • Be clear, concrete, and complete. • Avoid irrelevant details. • Base any impression on observable and specific facts. • Support the eligibility decision.

B. Handling Telephone Interviews

1. For telephone interviews, child care workers must not finalize NC FAST applications, nor issue vouchers, until a signed application is received. Refer to section XII. B. for application signature requirements.

2. For initial applications, child care workers must not enter into NC FAST until the signed application is on file.

C. County-Specific Documentation Systems

Counties may use their local documentation systems (e.g., Northwoods) as directed by their agency director, but any documents not available in NC FAST that are required for audits must be uploaded to NC FAST before the audit begins. DCDEE permits agencies to submit missing information that could reduce potential errors during audits, as long as it is readily available.

D. The following documentation must be provided in the narrative:

1. Document circumstances to justify the need for child care services and the Plan of Care. Include days, hours, and level of care.

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31 i. If the need for care is employment, document the place of employment and work schedule.

a) When there are two responsible adults, the place of employment and work schedule must be included for both responsible adults. This also applies if there are two foster parents.

b) Document travel time to and from the child care facility and work that is included in the Plan of Care.

ii. If the need for care is education, document the education or training program and class schedule.

a) Document the education/training scheduled hours and whether the classes are in-person, online or self-paced.

b) Document travel time to and from the child care facility and school (this includes traveling between the child care facility and home for online courses).

c) Document the appropriate study time needed and included in the Plan of Care.

iii. Describe the basis on which developmental needs or delays or risks of delays were determined.

a) If the child has special needs, the worker must document how special needs were verified: IEP, IFSP, 504 Plan, PCP.

b) Document whether part-time or full-time care is approved to support the child’s developmental or special needs and the care hours and travel time included in the Plan of Care.

iv. CPS/CWS

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32 a) Document that a referral was received for a need type of CPS.

b) If the need type is CWS, document the basis to support the need. This may include documentation that a referral was received or a description of the circumstances that justify eligibility, such as in a crisis.

c) Document the hours approved to support the CPS or CWS need for care, including travel time.

v. Work First Employment Services, including seeking employment.

a) Document that a referral and Mutual Responsibility Agreement (MRA) was received from the Work First Employment Services worker to justify the need for child care.

b) Document the hours and level of care approved to support Work First activities, including travel time.

vi. Document hours and level of care.

a) Document the approved level of care and circumstances that justify the level of care (i.e. total employment hours or total school and study hours), including travel and any extenuating circumstances.

b) Document the days and hours approved in the Plan of Care.

c) Document why Schedule Varies was used, if applicable.

d) Document why authorized hours are different than requested hours, if applicable.

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33 3. Document when a typed signature is used.

i. If a typed signature is used, a chain of custody must be included. (Refer to Chapter 4. XII.A. Application Submission regarding chain of custody).

4. Document Applicant/Recipient statement of available income, including a statement of no income.

i. Document the source and type of income.

ii. Document frequency and amount of income.

iii. Document how income was verified.

iv. If income outside of the base period or an alternative method of averaging income was used, explain the method used and why.

5. Explain any unusual circumstances, including but not limited to: third (3rd) shift work and first (1st) shift care, joint/split custody, or care for a child over the age of 12.

6. Document that Developmental Screenings handouts were given if there are children ages 0-5 in the home.

7. Document that Voter Registration was offered at a covered transaction.

8. Record the basis for denial, reduction, or termination of services.

Document in the record each time there has been contact through phone calls, interviews, items requested, received, or sent. Include purpose of contact and results.

i. Document changes, i.e., change in schedule or type of child care arrangement, employers, or shifts.

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34 ii. Workers must document if /when they requested information and if they followed-up on incomplete or missing information and the outcome. E. Other supportive documentation, if applicable, must include:

1. Written documentation of information verified from the WFFA/FNS tab on the evidence from the integrated case.

2. Written referral from the foster care worker to support the need for care indicating placement of the child in a licensed foster home or with an adult other than their parents.

3. Information about the payment of a special needs supplemental rate that is not included on the Child with Special Needs Additional Expense Documentation form (DCDEE-0454A).

Refer to Chapter 5 Establishing Need and Plan of Care for additional information regarding Work First.

NOTE: If an applicant/recipient request copies of their records, the DSS/LPA may share copies of the record. Copies include the application, voucher, Child Care Action Notices, etc. However, information in the record from third party sources should not be provided as copies to the applicant/recipient but they should have access to view them.

Refer to DCDEE-0473 SCCA Sample Narrative and Documentation Form and the Job Aid – SCCA – Narratives in NC FAST for additional information regarding Documentation.

XV. RECERTIFICATIONS

A. Recertification Application Submission

If an applicant/recipient submits a signed recertification document (NCF20106) after the last day of the certification period and during the

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35 suspended month (the month after the certification period ends) the recertification form can be used to enter a new application. The original case must be closed before entering the new application. The following steps must be completed:

1. An application guided interview must be completed to capture all necessary information to initiate a new application.

2. The child care worker must key a new application in NC FAST. The certification period begins on the date the signed recertification document is received in the agency.

NOTE: If the county is on a waiting list, the recertification document will be used as a screening tool for placement. When the applicant/recipient is to be served from the waiting list, normal application procedures will be followed at that time. A new application must be completed and signed and the application date will be the date the new application is received in the agency. Counties must notify applicants/recipients that they have been screened and added or not added to the waiting list in this situation. DCDEE-0468 – Sample Waiting List Notice is an optional notice template that may be used to notify applicants/recipients.

Refer to Chapter 7 Family Definition and Determining Eligibility, Chapter 11 Responding to Eligibility Changes and Recertification and Chapter 7 Attachment 3: Application, Recertification & Base Periods Guide for additional information regarding Recertification & Base Periods.

XVI. TERMINATION OF SCCA

Termination notices are only sent when certain situations occur.

Refer to Chapter 11 Responding to Eligibility Changes and Recertification for more information regarding Termination of SCCA.

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36 XVII. PREVENTION OF OVERPAYMENTS AND FRAUDULENT MISREPRESENTATION

The key to preventing fraudulent misrepresentation and inadvertent errors is skillful interviewing during the initial application, during reviews and when changes in the applicant/recipient’s situation occur. Therefore, the child care worker must ask the applicant/recipient specific questions, evaluate their reaction, and document the responses. The questions are to be phrased in an understandable way and the applicant/recipient must be given ample time to respond in their own words.

At recipient application and review, the child care worker must:

1. Explain to the applicant/recipient, before the Application for Child Care Services is completed in NC FAST, their obligation to give accurate and complete information regarding the need for Subsidized Child Care Assistance and the applicant/recipient circumstances.

2. Ask if they have been disqualified from receiving Subsidized Child Care Assistance in any county.

3. Read, discuss, and explain the information on the Recipient Responsibilities for Subsidized Child Care Assistance NCFAST-20009 and the Application for Child Care Assistance that addresses rights and responsibilities, hearings and appeals, and sanctions. Obtain their signature and file the original documents in the applicant/recipient’s child care case record and give a copy to the applicant/recipient.

4. Other preventative measures include establishing intra-agency communication among the various units in the DSS/LPA by developing a systematic way to report changes and exchange information. To obtain prompt and accurate information needed to determine eligibility, it is important to establish a good working relationship with other agencies, employers, and institutions as well.

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37 For additional information on policy discussed in this chapter please refer to:

SCCA Manual:

Refer to Chapter 5: Establishing Need and a Plan of Care Refer to Chapter 7: Family Definition and Determining Income Eligibility Refer to Chapter 8: Parental Fees Refer to Chapter 9: Parental/Recipient Choice and Voucher Procedures Refer to Chapter 10: Local Options and Waiting List Policies Refer to Chapter 11: Responding to Eligibility Changes and Recertification

Attachments

Attachment 1 Living Arrangement Fact Sheet

NC FAST Job Aids:

SCCA- Action and Termination Notices Reference Guide SCCA- Add Client to Case SCCA- Age Change SCCA- Alien Evidence: Temporary Process Change SCCA- Application to Case - Guided Interview SCCA- Application to Case Check list SCCA- Applications for Work First Recipients SCCA- Cancelled, Reissued, Rejected, and Voided Vouchers SCCA- CPS, CWS & Foster Care Referrals SCCA- Creating Vouchers SCCA -Decision Details Reference Guide SCCA- Documented Alien Evidence SCCA- Eligibility Decision Results Reference Guide SCCA- Employment, Self-Employment, and Income Evidence SCCA- Evidence Reference Guide SCCA- Exemption Evidence SCCA- Foster Care SCCA- Homeless Living Arrangements SCCA- Joint Custody

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38 SCCA- Managing Evidence for Military Applicants SCCA- Narratives in NC FAST SCCA- Overpayments and Underpayments Verification Worksheet SCCA- Overpayments and Recoupments: Receive, Allocate, and Reverse

Payments SCCA- Plan of Care Evidence SCCA- Provider Sanctions Fraudulent Misrepresentation SCCA- Special Need Supplemental Payment Evidence SCCA- Special Needs Evidence SCCA- Split Parent Fee SCCA- Task Reference Guide SCCA- Unearned Income Evidence SCCA- Using FNS Evidence as Verified SCCA Evidence SCCA- Voucher Reference Guide, SCCA- Voucher Tasks and timeline Reference Guide SCCA- Waiting List Configuration SCCA- LPA Fund Manager: Funding approval process for Out of County Children

Subsidized Child Care Assistance Program Policy Manual Chapter 7. Family Definition and Determining Income Eligibility

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I. CHAPTER OVERVIEW Subsidized Child Care Assistance (SCCA) is provided to families with a demonstrated need for care and who meet the current income eligibility criteria based on the income unit. Within this chapter, policy and requirements for the SCCA program include income eligibility, the household income unit, self-employment, sources of income, assessing monthly income, calculation of income, base periods, child support, deductions & disregards. Additionally, this chapter provides policy as it pertains to the types of countable and non-countable income used to determine eligibility. The SCCA Program requires that all information is accurately entered in North Carolina Families Accessing Services through Technology (NC FAST). II. INCOME ELIGIBILITY Individuals who need child care assistance must qualify based on income. The gross monthly income must not exceed the state’s maximum income eligibility limit for the number and age of persons in the income unit. The following income limits apply: A. With Regard to Income At the time of initial application, income eligibility for children served in the SCCA program must be compared to: i. 200% of the federal poverty level for children ages 0-5 and for all children with special needs. ii. 133% of the federal poverty level for all children ages 6-12 who do not have special needs. At the time of the redetermination, the family income must be compared to: i. 200% of the federal poverty level for children ages 0-5 and for all children with special needs.

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ii. 133% of the federal poverty level for all children ages 6- 12 who do not have special needs. iii. 85% State Median Income (SMI).

If income is less than 85% SMI but exceeds the federal poverty limits of 133% or 200%, a graduated phase out period of 12 months is given during which services continue with an adjustment of the parental fee. The graduated phase out period shall begin the day after the certification period ends.

A recertification packet is not mailed to children in graduated phase out. In situations where one child is in graduated phase out while the other children are eligible for continued services, the child in graduated phase out is not eligible to recertify and the remaining eligible children will receive a recertification packet.

If the income exceeds 85% SMI at redetermination, a ten (10) work day notice is issued to terminate services if there are more than ten (10) work days left in the current certification period. If there are less than ten (10) work days left in the certification period, the case will terminate at the end of the certification period.

If a recipient reports a decrease in income during the graduated phase out period and the reduced income is at or below the appropriate FPL, the child care worker must process this as a change in circumstance in NC FAST and decrease the income. This will also decrease the parental fee, which is appropriate.

The child care worker will react to the reported decreased income as a change in circumstance and will not complete a new application. Subsidized child care services shall continue through the end of the 12- month certification period. NC FAST will recognize that the family is

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no longer in graduated phase out and a recertification packet will be mailed to the recipient at the end of the 12-month certification period.

B. Without regard to Income There are certain situations in which SCCA is available without regard to income. Those situations include: 1. Children who need child care assistance to support child protective services in order to remain in his/her own home. 2. Children who need child care assistance and meet eligibility for child welfare services. 3. Children receiving foster care services who are in the custody of a county department of social services (DSS) and have been placed with an adult other than their parents or in a licensed foster home. Refer to the SCCA FPL & SMI Chart and Chapter 11 regarding Redeterminations. III. DEFINING INCOME UNIT FOR DETERMINING ELIGIBILITY

When the amount of income available to an individual is a condition of eligibility for subsidized child care assistance, it is necessary to determine the number of persons in the individual’s income unit and the amount of the gross monthly income available to that income unit. Therefore, it is necessary to define the term “income unit” to assess whose income must be included when eligibility is determined. The term “income unit” shall apply to persons who live in the same household and who, according to North Carolina law, are responsible for the financial support of the child whose eligibility for child care assistance is being determined. Also considered in this determination are individuals who would normally be part of the unit but are temporarily absent from the home.

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NOTE: The household unit for families who are receiving benefits from the Food and Nutrition Services (FNS) program may differ from the income unit for child care assistance. The child care worker should ask the parent questions to clarify any differences.

A. Responsible Adult

The applicant/recipient is the person or persons with whom the child lives and who has the primary responsibility for the care and well- being of the child. However, a child may live with an adult who is responsible for his/her care but is not financially obligated for the support of the child, such as a grandparent, that may have custody of a child.

Legal custody or court-ordered custody does not act to terminate parental rights and therefore does not relieve parents of financial obligation to their child. According to North Carolina General Statute, parents’ financial obligations toward their children are relieved when an order of adoption or termination of parental rights is entered by the court. Couples who are not legally married may claim to be common-law marriage partners; however, common-law marriage is not legally recognized in North Carolina. Marriage must be solemnized as required by law in order for individuals to be considered spouses under the definition of family. However, if both parents (biological or adoptive) of a child in need of child care assistance reside in the same household, both are members of the income unit and both incomes are counted for the purpose of determining eligibility.

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The following are defined income units for the purpose of determining eligibility and parental fees for child care assistance:

NOTE: This list is not an exhaustive list.

1. Biological and adoptive parents and their minor children under the age of eighteen. Married parents including stepparents shall be included in the income unit with his/her spouse when the children in need of care include their biological, adoptive, and step children.

i. An 18-year-old is only included in the income unit if he/she is still attending high school and is scheduled to graduate before age nineteen.

2. A child who lives with both parents and one parent is in college or serving in the military forces in a different locale. The parent in college or serving in the military is included in the income unit and their income is counted. This is an income unit of (3).

3. A child who lives with grandparents, due to the absence of the parent who is in college or serving in the military forces in a different locale. The parent’s income must be counted. The grandparents can request child care for the child due to the absence of the child’s parent and because they also meet the need criteria. The parent in college or serving in the military is included in the income unit. 4. A minor parent (under the age of 18) and his or her children. If the parents of a minor parent apply for child care subsidy for another child of theirs, the minor parent is counted in the parents’ income unit. The grandchild, however, is not. The parents, the minor parent, and their other minor children are included in the parents' income unit.

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5. A child who lives with a responsible adult who is not the biological or adoptive parent is considered a child only income unit. If the child has siblings, they are also included in the income unit.

6. Children in foster care will be the case head in their own case and the staff designated by DSS will sign the application, rights and responsibilities and the voucher. With sibling groups, the youngest child will be the case head. If the family is divided, each child will be their own case head.

B. Child Protective Services (CPS), Child Welfare Services (CWS), and Foster Care (FC) Income Units:

When the income unit involves CPS, CWS, or FC, SCCA is provided to children receiving child protective services without regard to the family’s income and parental fees are not assessed.

1. CPS When a recipient applies for child care assistance based on CPS, the recipient will be given 12-months of eligibility. The child must be receiving child protective services and must need child care in order to remain in his/her own home.

When a CPS application is being processed, the child care worker must collect and verify income information from the responsible adult and enter the income into NC FAST to establish a parental fee. The parental fee is waived until the need for CPS ends. Once the CPS need ends, the parental fee can be assessed to the family.

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If the income information is not collected from the family at the time of eligibility determination, a parental fee cannot be assessed to the family until the next redetermination at the end of the 12-month certification period. If the income information cannot be collected and verified o the application and subsequent services should continue without the income information.

2. CWS When a CWS application is being processed, and the applicant is the child’s biological or adoptive parent, the child care worker must collect and verify income information and enter the income into NC FAST to establish a parental fee.

The parental fee will be waived until the need for CWS ends. Once the CWS need ends, the parental fee can be assessed to the family. If the income information is not collected from the family at the time of eligibility determination, a parental fee cannot be assessed to the family until the next redetermination at the end of the 12- month certification period. If the income information cannot be collected and verified, the application and subsequent services should continue without the income information.

When CWS is the need type to support implementation of

permanent placement and the family is adopting the child, CWS can

no longer be the need type once the adoption final. The adoptive

parents become financially responsible for the child and the CWS

need type ends.

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3. FOSTER CARE (FC)

When an application for child care assistance is completed for a child in foster care , the income of the foster parent(s) is not counted. If the foster child receives any income such as social security benefits, the child’s income is disregarded and a parent fee is not assessed.

C. Non-parent Caretaker Income Unit:

When the parent of the child receiving subsidy does NOT live in the home with the child:

1. The non-parent caretaker and the caretaker's spouse and child(ren) are not included in the income unit. 2. The non-parent caretaker and his/her spouse must meet the need criteria. 3. The income of the non-parent caretaker is NOT counted in the calculation of income to determine eligibility for the child. Income is only counted for biological and adoptive parents. Child care workers should verify if the non-parent caretaker is employed. 4. If a non-parent caretaker applies and receives services, and CWS is not involved, i. the child care need may be employment, or a need other than CWS. ii. the non-parent caretaker remains the case head. iii. the income unit will be the child(ren) only.. Income of the child(ren), such as but not limited to, social security survivor benefits and child support continues to be counted and the parental

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fee is assessed on the child(ren)’s income alone Refer to Chapter 4 and 5 for information regarding CPS, CWS & FC. D. Joint Custody Income Unit

Joint custody is when an applicant/recipient shares physical custody of a child. When an applicant/recipient shares physical custody of a child and both applicants/recipients need child care assistance, each applicant/recipient applies separately for SCCA, and each applicant/recipient has their own child care case and service plan based on their individual need for SCCA.

At initial application, child care workers must inquire if the family has joint custody. Child care workers are encouraged to ask joint or split custody questions when completing a thorough interview.

Each parent can complete an application for the period of time the child resides in his/her home. Each application is reviewed separately as each parent must meet eligibility. Each parent shall pay the corresponding parental fee even if the child is with the same child care provider. The joint custody application is largely similar to a traditional application with the exception of changes to the plan of care evidence.

If the parents reside in separate counties, each parent will apply in the county where the parent resides. For example. One parent is in County A and the other parent is in County B.

Refer to Chapters 4 and Chapter 5 regarding Income Unit and Plan of Care and the NC FAST Joint Custody Job Aid.

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IV. SOURCES OF INCOME

Although all sources of income must be considered in the base period month the household receives the income, not all income is counted in the family’s gross monthly income when determining eligibility for child care assistance.

A. Countable Income The following are sources of income which must be counted when determining eligibility for child care assistance:

1. Gross earned wages or salaries (earnings received for work performed as an employee), including: i. wages, ii. salaries, iii. commissions, iv. tips, v. piece-rate payments, vi. cash bonuses earned, before any deductions such as for taxes, bonds, pensions, and union dues; vii. pay for leave including sick, vacation, or holiday leave should be counted when it is paid at the regular rate of pay and covers the time when the applicant/recipient would typically work. If the applicant/recipient worked during a holiday at a higher rate of pay, the child care worker should assess if this pay is representative.

Note: Child care workers should not count mileage or per diem when listed on a recipient’s pay stub.

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2. Gross income from taxable self-employment income after deductions made for business expenses and any other expense that is deductible for purposes of federal or state tax returns;

3. Social Security benefits (includes social security pensions, survivors’ benefits for both children and adults, and permanent disability insurance payments).

4. Dividends, interest (on savings or bonds), income from estates or trusts, royalties, adjusted gross rental income on houses, stores or other property. Adjusted gross rental income is defined as the rental income remaining after allowable expenses, such as mortgage interest, property taxes, insurance, maintenance, and repairs, have been deducted. Rental assistance provided by an organization on a regular basis.

5. Pensions and annuities paid directly by an employer or union or through an insurance company.

6. Workers’ compensation.

7. Unemployment insurance benefits (UIB).

8. Alimony (includes court ordered payments as well as voluntary payments and may include regular payment of bills such as rent and utilities).

9. Child support, direct or indirect (includes payments made to the applicant/recipient or to the court based on terms of an agreement and may include payments such as rent, utilities, insurance, etc.). Note: Do not use Food and Nutrition Services (FNS’s) conversion of child support income since the FNS

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conversion requirement is based on frequency of pays.

10. Pensions paid to veterans or survivors of deceased veterans.

11. Compensation for veterans with a disability of at least 10% because of injuries or disease that occurred or were aggravated during active military service.

12. Veteran Affairs (VA) Caregiver's Stipend Program VA provides a stipend to caregivers of a veteran injured after September 11, 2001. This is a nontaxable income to the caregiver.

13. On-the-Job Training (OJT) payments.

14. Work Force Investment Act (WIA) payments made to an adult. Previously referred to as the Job Training Partnership Act (JTPA).

15. AmeriCorps stipend (living allowance).

16. Armed Forces pay (only the amount taxable, such as base pay). 17. Work release payments.

18. Cherokee Tribal Per Capita Income paid to adult family members.

19. Work-study payments, if the income is from a program not administered under Title IV of the Higher Education Act or the Bureau of Indian Affairs and is paid directly to the applicant/recipient or responsible adult.

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20. Recurring (ongoing) payments paid directly to the applicant/recipient. Recurring payments is income received at regular intervals and may be scheduled at various frequencies. In instances of recurring payments, the child care worker must average the income for the period it covers to reflect the applicant/recipient's regular monthly income accurately.

Child care workers must document the average monthly amount on the application for Child Care in NC FAST. Examples of recurring contributions include: (Note this is not an exhaustive list).

i. longevity pay, ii. profit sharing, iii. bonuses

B. Non-countable Income Although the income is non-countable, the non-countable income should be addressed in case narrative as non-countable. For example (sale of personal assets). The following are sources of income that are NOT counted when determining eligibility for SCCA:

1. Work First Family Assistance (WFFA). 2. Supplemental Security Income (SSI). 3. Non-recurring lump sum payments are received as a one-time payment and are not on a regular basis. Lump sum payments are usually large, single payments made at a particular time. These payments are considered non-recurring. Examples of a non- recurring payment include: (Note this is not an exhaustive list). i. severance pay, ii. social security benefits back-pay, iii. workers’ compensation, iv. alimony (one-time lump sum),

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v. holiday bonuses from employers (if not recurring), and vi. HUD. 4. Foster care assistance payments.

5. Adoption Assistance payments.

6. Payments/trust funds under the Indian Claims Commission.

7. Payments from the Alaska Native Claims Settlement Act.

8. Income from sale of personal assets (stocks, bonds, house, car, and insurance).

9. Bank withdrawals.

10. Money borrowed.

11. Tax refunds.

12. Gifts or contributions. (These are non-recurring gifts or contributions, e.g., gifts for birthdays, holidays, occasional monetary contributions, purchase of diapers, clothing, etc.).

13. Other (non-recurring) in-kind donations from non-legally responsible adults. In-kind donations which are not in the form of direct cash payments to applicant/recipients. This may include food, clothing, furniture contributions, in-kind military benefits, and vendor payments. Does not include instances when individuals use their business to pay for such types of items.

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14. Emergency Assistance (EA), Low Income Energy Assistance Program (LIEAP), Crisis Intervention Program (CIP), General Assistance, Progress Energy’s Energy Neighbor Fund payments, and other similar energy programs.

15. Section VIII housing subsidy.

16. Capital gains.

17. Value of food stamp benefits allotted under the Food Stamp Act of 1977.

18. Free and reduced lunch program.

19. Any and all food subsidy programs.

20. Relocation/Acquisition Act payments.

21. Earnings of a dependent child under 18 years of age, unless the dependent child is also a minor parent of a child needing child care.

22. Loans, grants (including Pell or Carl Perkins grants), scholarships, and money received through job training programs.

23. Home produce utilized for household consumption.

24. Volunteers in Service to America (VISTA) earnings.

25. Payments received as Earned Income Tax Credits or Dependent Care Credits.

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26. All subsidized housing and housing allotments, paid directly to the landlord, including military housing allotments.

27. Money received from an employer as an employee benefit for child care.

28. Work-study payments, if the income is from the College Work- Study Program administered under Title IV of the Higher Education Act or the Bureau of Indian Affairs. (Likewise, if the income from college work-study goes directly to the college, it is not counted as income.) For applicants/recipients that receive Wage$, the income is not counted even though it is taxable and a 1099 is issued.

29. Reimbursement for expenses incurred in connection with employment or education are not countable when determining eligibility for child care assistance. Examples of employment related expenses that are not countable include but are not limited to mileage, medical, per diem, phone calls, travel, and lodging. Examples of reimbursements for educational expenses such as tuition and fees.

30. Social Security benefits should not be counted if the beneficiary does not have access to the benefits. For example, if a teenage parent applies for her own child and receives Social Security benefits, but the teenager’s mother is the payee, the Social Security benefits are countable for the teenager’s mother who is the payee but not for the teenager in her own child care case. The same principle applies if the payee is someone outside of the household and the beneficiary does not have access to the funds.

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31. BAH/BAS portion of Armed Forces pay is not countable. All other Armed Forces pay is not countable as long as the soldier is serving in a combat/hot zone.

32. Veterans Benefits such as: a. VA Aid and Attendance additional monthly pension benefit administered by the Department of Veterans Affairs that may be available to war time Veterans and surviving spouses who have in-home care or who live in nursing homes or assisted-living facilities. b. VA Aid to the Homebound is an additional monthly pension benefit administered by the VA when a person is substantially confined to their immediate premises because of permanent disability. c. VA Reduced Improved Pension The Improved Disability Pension provides a monthly benefit to certain low-income veterans. d. VA Unreimbursed Medical Expenses Reimbursement from VA for medical bills that the veteran has paid. e. Veterans Administration Educational Assistance Program and GI Bill Income received by veterans for educational expenses.

V. SELF-EMPLOYMENT Self-employment income is the gross income from taxable self-employment income after deductions from allowable business expenses. Self-employment income may be received annually or monthly, or it may fluctuate, as in a seasonal self-employment activity. To determine if an individual is self- employed, the individual’s work situation must be evaluated. An individual is self-employed when he or she is working in their own business, trade, or profession, not for an employer. A self- employed person generally exercises control over how the business will be conducted, not just

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the product. Self-employment includes but is not limited to selling recyclables, babysitting, roomer/boarder income, rental income, farm income, cosmetologist, carpenter, and income earned by an individual working as a consultant or independent subcontractor, such as Door Dash, Instacart & Uber drivers. Independent subcontractors are considered self-employed as they are issued a 1099 if they have earned more than $600.00 in the year. Independent subcontractor applicants must be able to provide proof of steady, consistent work hours and wages earned to calculate income. Note: If Social Security and income taxes are being withheld by an employer, the individual is not self-employed. • If eligibility is being determined before that year's tax filing deadline, then use the previous year's tax returns if representative. • If eligibility is being determined after that year's tax filing deadline, then use the tax return for the most recent year if representative. • If the federal tax return for most recent year is not available, then use quarterly tax statements if representative. • If quarterly tax statements are not available, the child care worker must use: i. Business accounting records, bookkeeping records such as ledger books, or records maintained by the applicant. ii. Information from the verification forms for Self-Employment Income and Expenses (Attachment 2) to be completed by the applicant/recipient. Applicants/recipients can be liable for paying self-employment tax even if they receive social security benefits.

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When the applicant/recipient indicates a net loss from the business, the child care worker must discuss how current living expenses are being met to determine what other income is available to the family. If client's statement is taken, the information must be recorded in the case narrative (or case notes in NC FAST). The child care worker may accept the applicant/recipient’s statement as verification only if: 1. The applicant/recipient cannot obtain the verification from any source, i.e., the source refused to provide verification or cannot be located, and 2. The statement is not questionable. Do not accept the statement if the applicant/recipient refuses or simply fails to provide verification of income.

A. Newly Self-Employed Recipients

In a household with a newly formed business (in operation for less than 12 months), the income must be averaged over the amount of time the business has been in operation. The child care worker must document the month and year that the new business was started. If a recipient becomes self-employed during their eligibility period, the child care worker should consider any income that has been received at the time that the new self-employment is reported. If the recipient reports they have become self-employed, but no earnings have been received due to the business being new, the child care worker must thoroughly document why no self-employment income is being counted. Refer to the Verifications section for information regarding verifying self-employment.

B. Temporary Loss of Profit

"Loss of Profits” means a financial loss caused to the business activity through the interruption of operations or through additional costs incurred for the sole

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purpose of avoiding or minimizing such interruption. The business or activity is expected to be continued but no profit is realized due to temporary circumstances beyond the control of the applicant/recipient.

If an applicant experiences a temporary loss of profit:

1. At application, if the applicant has been self-employed longer than 12 months and reports they do not have any self-employment earnings, therefore not gainfully employed, the applicant is not eligible since their gross income ($0) divided by minimum wage results in zero gainfully employed hours. The applicant will have to reapply once gainfully employed. If the applicant has been self-employed for less than 12 months and is not gainfully employed, refer to section V.D. Gainful Employment.

2. If a self-employed applicant/recipient reports a temporary loss of profit during the certification period, the child care worker must assess whether this decrease is a normal seasonal variation in business earnings (e.g., lower income during winter for a lawn care business) or an unexpected situation such as illness-related absence from work. If the decrease is normal, it is considered in the income assessment during the 12-month base period, and no adjustments are made to the case. However, if the decrease is unexpected and abnormal, the child care worker must end date the income, discuss how current living expenses are being paid, and explore other potential income sources for the family. The child care worker must advise the applicant/recipient to notify the child care worker within 10 business days of resuming the business activity.

3. If the applicant/recipient reports a temporary loss of profit from their self- employment at recertification but plans to resume earnings, the temporary loss of profit is factored into the 12-month base period for self-employment. The 12-month base period accounts for the fluctuating nature of self- employment income, including temporary loss of profit. The child care

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worker should review and average the past 12 months of earnings and expenses from business records, the self-employment verification form or the previous year tax return, if representative, to calculate the income and level of care.

4. In any temporary loss of profit situation, the child care worker must document the case thoroughly. Refer to X. Verification of Income Types

C. Calculation of Self-Employment and Operational Expenses 1. Tax Forms When an applicant/recipient submits a tax form (Schedule C, Schedule K, etc.) as verification of self-employment, the child care worker must determine the gross income amount from the tax form. The child care worker must then determine the total expenses claimed on the tax form and deduct that total from the gross income amount to determine the countable self-employment income. If expenses claimed on the tax form are less than 20% of the gross income, the applicant/recipient will receive the automatic 20% deduction.

NOTE: Tax forms must be filed with the IRS in order to be accepted as verification of self-employment.

For example: An applicant/recipient is self-employed and provides a Form 1040 Schedule C tax form as verification.

Part I Income

1 Gross Receipts or sales. $341,840 2 Returns and allowances

3 Subtract line 2 from $341,840

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line 1 4 Cost of goods sold (from line 42) $85,310 5 Gross profit. Subtract line 4 from line 3. $256,530 6 Other income

7 Gross income $256,530

In this example, since there are “cost of goods sold” on line 4, the “gross income” on line 7 is less than “gross receipts” or sales on line 1. Line 1 should be used as the gross income amount for SCCA. The amount on line 4 for cost of goods sold should be added to the expenses from Part II of Schedule C. The child care worker must use the expenses from the deductions section on Part II of the Form 1040 Schedule C document.

In this example, the total expenses on line 28 of Part II of the Form 1040 Schedule C are $212,235 (not pictured in the chart above). The child care worker will need to add “cost of goods sold” from line 4 of Part I ($85,310) to the total expenses from Part II ($212,235). $85,310 + $212,235 = $297,545 total allowable expenses.

$341,840 gross receipts minus $297,545 total allowable expenses = $44,295 countable self-employment income.

If a Schedule C form is submitted for verification of self-employment, the child care worker should carefully review Part I - Income to determine the gross income to be counted. On the Schedule C form, if there is income listed on line 6 of Part I for "Other Income", this will result in line 7, "Gross Income", being higher than line 1, "Gross Receipts or Sales". In this case the "Gross Income" from line 7 should be considered the gross income for SCCA purposes. If there is an amount listed on line 4 for "Cost

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of goods sold", this will result in line 7 being less than line 1. In this case, the higher amount on line 1 should be used as gross income, as the Cost of Goods sold on line 4 should be considered an expense. The child care worker should use the higher amount from either line 1 or line 7. If there are costs of goods sold, this amount should be used as an expense deduction (along with expenses from Part II) as shown in the example above.

2. Expenses Operational expenses are the cost of carrying on a trade or business. To be deductible, an operational expense must relate to or pertain to a trade or business and be both ordinary and necessary. An ordinary expense is one that is common and accepted in the trade or business. A necessary expense is one that is helpful and appropriate for the trade or business.

A deduction from gross income receipts of a business will be allowed for the ordinary and necessary expenses required for the operation of the business. The individual is automatically eligible for the 20%, which is automated in NC FAST once the child care worker enters the Gross Receipts Evidence. If the recipient has operational expenses greater than the standard 20% deduction, the operational expenses must be verified to be considered a deduction from self-employment income. If a self- employed individual provides their income taxes, the child care worker must use that as expense verification to offer more than 20% deduction, if applicable. Child care workers must enter correct and accurate information into NC FAST. If the applicant/recipient requests an expense deduction greater than the standard 20%, the applicant/recipient must provide verification of the expenses and the worker must enter the expenses in the Expense Evidence in NC FAST. If Expense Evidence is entered in NC FAST that exceeds

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20%, NC FAST will deduct the higher expense amount. If the applicant/recipient is determined ineligible from gross receipts income with the 20% standard deduction, the child care worker must ask the applicant/recipient if he/she would like the option to deduct actual expenses. When both parents are self-employed in a two-parent household, each self-employed parent can receive a deduction for self-employment expenses. The 20% automatic expense deduction will be applied to each self-employment. If expense evidence is entered for expenses greater than 20%, the greater amount will be deducted. If one self-employed parent has multiple self-employments, each self-employment and associated expenses is entered separately in NC FAST. For actual expenses, the worker must use expenses reported on the Expense Section on Federal tax documents, or the recipient may provide actual receipts for expenses. Operational expenses must be carefully reviewed to determine the actual level of income available to the family. Operational expenses include business expenses and any other expense that is deductible for purposes of federal or state tax returns. Operational expenses include but are not limited to: 1. Taxes required to operate the business. 2. Licenses, commissions, and permit fees. 3. Rent payments (not for home-based businesses, except that part allowed as a deduction by the IRS). 4. Insurance associated with operating the business (fire, liability, theft, storm, health insurance for employees, Unemployment Insurance, and workmen’s compensation costs). 5. Labor costs including wages and contract labor.

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6. Maintenance and repairs associated with the business. 7. Cost of products, materials and supplies required to operate the business. 8. Business-related transportation costs as allowed by the IRS. 9. Utilities costs associated with the business. 10. Interest on business debts, including mortgages and loans; necessary for producing income. 11. Actual unreimbursed food costs to provide meals as part of the business, such as licensed child care providers or elder care. 12. Accounting, advertising, and legal costs associated with the business. 13. Telephone expenses, including local and long-distance service, fax, and internet, if the telephone line is used exclusively for business. 14. Depreciation (a reduction in the value of an asset with the passage of time, due in particular to wear and tear. Depreciation deductions: account for the gradual loss in value of assets over time, such as furniture and equipment used in child care, allowing providers to spread these costs over the assets’ useful life.) For more information on self-employment expenses, please refer to the links below: https://www.irs.gov/instructions/i1040sc 2023 Instructions for Schedule C https://www.irs.gov/forms-pubs/about-publication-334 Publication 334, Tax Guide for Small Business https://www.irs.gov/forms-pubs/about-publication-587 Publication 587, Business Use of Your Home (Including Use by Daycare Providers).\

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D. Gainful Employment

Gainful employment is defined as making at least minimum wage. Recipients/applicants who are employed, including self-employment, must be gainfully employed. Applicants who have been self-employed for 12 months or longer must be evaluated for gainful employment. Child care workers must determine the number of gainful employment hours to establish the level of care.

Newly self-employed individuals shall receive 12-months of eligbility to allow time to establish gainful employment. At redetermination, newly self-employed applicants/recipients must have established minimum wage. Child care workers must document that they reviewed the gainful employment requirements with applicants/recipients. The recipient is required to report changes in accordance with Recipient Rights and Responsibilities.

1. If the recipient has been in business for less than 12 months at initial application, the recipient shall receive 12 months eligibility and gainful employment will be re-evaluated at redetermination. At redetermination, if gainful employment has not been established in the initial 12 months of eligibility, gainful employment hours must be re-evaluated to determine level of care.

2. If a recipient becomes self-employed during their eligibility period, the eligibility period dates must remain the same. If the recipient has not been self-employed for 12 months at the time of redetermination, recipient shall receive another 12 months of eligibility to determine gainful employment. Gainful Employment shall be re-evaluated at the following redetermination. Eligibility cannot be reviewed prior to the

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end of the 12-month eligibility period. Refer to Employment, Self- Employment, and Income Evidence Job Aid.

If the gross amount is less than minimum wage based on the hours the applicant/recipient states they work, the number of hours will be determined by taking the gross income and dividing it by the current minimum wage to determine gainful employment hours in determining level of care.

If the income is $0, it would be considered “No income” and the gainful employment policy should be followed. These hours are used to determine the gainful employment hours for determining the level of care and parental fee.

If a self-employed client applies and voluntarily provides their tax information, the child care worker can accept the tax forms (generally a Schedule C) as verification of their Self-Employment income and the child care worker must use that as verification of their income.

To determine the Level of Care, the child care worker uses gross income (before deductions) to determine level of care.

For example: The initial gross $17,761/12 = $1480.08/$7.25 = 204.15 hours per month/4 = 51.04 hours per week. The applicant/recipient is eligible for up to full time care.

Refer to Chapter 5 for information regarding Level of Care.

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VI. CHILD SUPPORT When assessing child support, child care workers must determine if the child support is received or paid out. The base period for child support, and alimony when received is the three months prior to the month of application or redetermination (date received in agency) if representative.

The base period when child support is paid out is one month prior to the month of application or redetermination (date received in agency) if representative.

Child support is a payment made by a non-custodial parent which is available to meet the child’s basic needs. It may be paid voluntarily, under a court order or enforced in compliance with a state agreement under Title IV-D. Child support includes both direct and indirect payments. When budgeting child support income, a child is defined as 1. Any individual under the age of 18 or 2. Any individual age 18 and 19, if attending high school full time. Child support income belongs to the child. Child support evidence must be entered under the child’s name. If the child is included in the SCCA income unit, the child support income must be budgeted regardless of whether the child receives child care services or not. When there are siblings in the income unit NC FAST will count child support for both children. There is only one assistance unit created. Applicant/recipients whose children are not receiving child support should be encouraged to seek the assistance of the local Child Support Services Office in obtaining child support payments from the child’s non-custodial parent(s). However, seeking assistance from Child Support Services shall not be a condition of eligibility for receiving child care assistance. The child care worker should try to obtain a written statement from the non- custodial parent before taking recipient's statement of child support as a last resort.

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When assessing child support, child care workers must first determine if the child support is received or paid out. A. Child Support Received Child support payments received are counted in the family’s total gross monthly income. These payments may appear to be fluctuating income and/or irregular income. The child care worker will use the amounts that the applicant/recipient receives, NOT the amount that the non-custodial parent is obligated to pay. If child support is received, the base period is three (3) months prior to the month of application or redetermination (date received in agency) if representative. The child care worker must review the payments issued during the 3-month period to determine the number of representative payments and then average the amount received over a period of three (3) months. If child support payments are received weekly, child care workers are not to convert the weekly payments to a monthly payment. Child care workers must calculate the sum of all child support payments received in the three (3) month base period and take the average by dividing the sum by three (3).

If child support received is based on a new order, and no payments have been received yet, do not project. A new order with payment in the base period requires the child care worker to divide by last three months.

1. Lump Sum Child Support Payments Lump sum child support payments shall be disregarded unless the recipient states they only receive child support income via lump sum payments. If a recipient reports receiving child support income only via lump sum payments, the child care worker will use a 12-month base period (prior to the month of application or redetermination if representative), add the total child support payments received (regular

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payments and lump sum/tax intercept payment) from the 12 months together and average (divide by 12). Document the case record to support the decision to document the case record to support the decision to use a 12-month average. The following are examples of child support lump sum payment types; however, this is not an exhaustive list.

ii. One-time, nonrecurring lump sum payments

iii. Recurring lump sum payments

iv. Tax intercepts, payments received as a result of tax refund intercept.

2. Child Support received for Minor Parent (s) If major mother/father receives child support for his/her child who is a minor mother/father, the amount of child support that the major mother receives for the minor mother is only counted as income when determining the minor mother’s eligibility for child care assistance. If a minor parent applies for SCCA for his/her child and the minor’s parent receives child support for the minor parent, the child support is not counted in the minor parents’ case for the child. B. Child Support Paid Out When an applicant/recipient whose income is used in determining eligibility for child care assistance pays out any amount of child support, that amount is deducted from the amount of countable gross monthly income for determining eligibility. If child support is paid out, the base period is one (1) month prior to the month of application or redetermination (date received in agency) if representative. Child care workers need to use the one-month base period.

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If a recipient voluntarily reports that child support is being paid out during the certification period, the base period is the month prior to the month the change was reported. Refer to section XIV. Verifying Income below regarding verifying child support paid out. Child Support Expense evidence must be entered into NC Fast to reflect the amount being paid out and the frequency; for example, if $100 is paid out and reflected on biweekly check stubs from the base month, the Child Care Expense evidence would reflect the amount of $100 with a frequency of biweekly. Refer to the Income Clarification Chart Regarding Certain Categories of Countable and Non-Countable Income for the SCCA Program. C. Types of Child Support

1. In-Kind donations paid to the parent or directly to the creditor on the parent’s behalf by the non-custodial parent is countable income. Child care workers must use the 3-month base period.

2. Countable child support payments made by the non-custodial parent to the creditor / vendor on behalf of the applicant/responsible adult include: i. rent, mortgage payments, ii. utilities, iii. vehicle payments, and iv. payments for insurance other than health/medical insurance. v. school tuition, camps, lessons, and afterschool activities

3. Non-countable items purchased by the non-custodial parent includes: i. diapers, ii. clothes, and iii. baby food.

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4. Terminated child support income i. If a child support order terminates,

a. Child Care Workers must count child support payment(s) in the last month received. The date the last child support payment was received is the date used to end date the child support income.

ii. If the non-custodial parent is no longer making child support payments, but the child support order has not terminated

a. The child care worker must use the 3-month base period to calculate the countable child support income i. If the new average of child support income is higher than the current child support income, the child support income must not increase and shall stay the same. ii. If the new average of child support income is lower than the current child support income, the child support income entered must reflect the lower amount.

NOTE: Recipients are responsible for reporting any changes in child support payments. Child care workers must review both the mandatory and optional reporting requirements with recipients to ensure accurate reporting of child support payments received and any cessation of such payments.

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VII. DEDUCTIONS AND DISREGARDS

Deductions and disregards are any dollar amount that is or may be deducted from countable income. It can come in the form of money, property, or services. Child care workers will act by excluding or deducting from the countable income. The deduction may vary by household. If the child care worker deducts or excludes any amount, the total amount excluded must be less than the dollar limit that applies.

Allowable deductions include but are not limited to:

A. Child Support When adding the child support expense deduction, the collection fee for child support monies is to be included in the calculation of the child support expense deduction. Example: using the client’s pay stubs which will show child support deductions and calculate the average monthly expense based on pay frequency. For example, client is paid weekly, child support expense deduction showing on pay stub per pay period is $ 75.00/ $ 50.00 /$ 80.00/ $ 75.00 = $280.00/4=$70.00 weekly average. $70.00 X 4.3= $301.00 per month. Child Support Expense evidence must be entered into NC Fast to reflect the amount being paid out and the frequency. For example, if $100 is paid out and reflected on biweekly check stubs from the base month, the Child Care Expense evidence would reflect the amount of $100 with a frequency of biweekly. Refer to Chapter 7 Attachment 1: Clarification Regarding Certain Categories of Countable and Non-Countable Income Chart.

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B. Self-Employment

Refer to the list under section above, V.C. Calculation of Self-Employment and Operational Expenses.

C. Cafeteria or Health Benefit and Employer Sponsored Benefit Plan Income

The type of cafeteria or health benefit plans offered by employers will vary. When the income of an applicant/recipient has both health benefit income and health benefit deductions reflected on the pay stub, the cost of medical, dental and vision insurance premiums are deducted from the countable gross monthly income to determine income eligibility. The child care worker reviews the pay stub or other documentation from the applicant/recipient or employer which reflects health benefit income in the earnings/gross income and deduction sections.

One of the following criteria will determine if the income from the health benefit is countable. 1. The health benefit income is countable if benefits such as medical, dental, or vision deductions are not reflected on the pay stub or other documentation. This is not an exhaustive list. In instances where the employer pays a one-time annual benefit to employees who elect to purchase insurance from another source other than the employer, the lump sum is countable and divided over the months covered by the benefits.

2. If benefit is deducted by the employer, the health benefit income is non-countable. If the recipient received funds in hand to purchase benefit, then the child care worker must count the income.

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i. The health benefit income is partially countable if the benefit deduction amounts are less than the benefit dollars listed in the gross income section. When this occurs, the benefit dollars that are not utilized for medical, dental or vision insurance are countable. ii. The health benefit income is not countable if the deductions equal or exceed the benefit dollars in the gross income section. If health care benefits do not meet the criteria, child care staff should contact their Subsidy Services Technical Assistance Consultant to determine the deductions and countable income.

D. Medical Expenses

When an applicant/recipient states they have out-of-pocket medical expenses, those medical expenses that exceed more than 10% of the gross monthly income must be considered by the LPA/DSS for the purpose of reducing the parental fee, not in determining basic income eligibility. Medical expenses include payments to medical providers, the purchase of prescriptions, and post taxed medical insurance only. To determine the amount of the decrease that is reasonable, the LPA/DSS must:

1. Verify the medical expense that is paid in the base period only. Verification may include a billing statement from the provider showing the amount due after insurance coverage; or proof of the amount covered and uncovered expenses from all insurance carriers.

2. Deduct only the amount of the total medical expenses from the gross income.

3. The parental fee assessed will be reduced by subtracting the amount of

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documented medical expenses that exceeds more than 10% of the gross income. Once the medical expenses have been entered in NC FAST, there should be a reduction in the parental fee.

Refer to Chapter 8 for additional information regarding parental fees and Medical Expenses.

E. Alimony When an applicant/recipient pays out alimony, the amount paid out is deducted from the countable gross monthly income for determining eligibility. The base month for alimony being paid out is one month prior to the month of application or redetermination.

VIII. ASSESSING MONTHLY INCOME FOR DETERMINING ELIGIBILITY

When assessing monthly income, the determination of countable monthly gross income is based on: • The assessment of the family income that is anticipated during the twelve- month period following the date of application (this includes the child care worker asking questions to ascertain the recipient’s financial situation). • Consideration of all sources of income and determining what income is counted for the eligibility for SCCA, • Verification of all employment, and all sources of countable income, • Allowing and verifying child support payments that are received or paid out, and • Making accurate calculations. When the family actively receives benefits from FNS, the child care worker’s first step is to access the most current FNS income information from NC FAST since the income information shown in NC FAST has been verified. The following types of income that can be deemed from FNS include:

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• Earned Income, and • Unearned Income (excluding child support) The child care worker must complete the guided interview using the information obtained from FNS. The childcare worker cannot require the applicant to provide additional income information. However, if the applicant voluntarily provides more current information, the new information must be verified following SCCA policy. In the following situations, income is NOT deemed from FNS: • Non-representative income • Lottery or gambling winnings • Self-Employment Income • Child Support

At the time of application, and redetermination, the child care worker must emphasize to the recipient the importance of reporting changes. The child care worker must use the Recipient Responsibilities for Subsidized Child Care Assistance NC FAST-20009 form, when reviewing the reporting requirements with the applicant/recipient. Refer to Chapter 13 regarding Recipient Rights and Responsibilities. A. Base Periods & Special Base Periods

The base period report for initial applications is the month prior to the month the initial application is received in the agency. The base period for recertification applications is the month prior to when the recertification application is received in the agency. Refer to Chapter 7 Attachment 3: Application, Recertification & Base Periods Guide

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1. Base periods Are the periods of time that are the basis for determining income eligibility. The base period establishes a set period for child care workers to create a “snapshot” of a budget unit’s income and for which income must be verified. The base period should be an accurate representation of the income the household is expected to have available during the certification period.

The following are static base periods used for representative income:

One Month: The base period for most income is the month prior to the month of application or redetermination if representative. Three Months: The base period for child support, spousal support, and alimony is three months prior to the month of application or redetermination if representative. Calculate by adding the income from the three months together and divide it by 3 to obtain a monthly average.

Twelve Months: If the income is received annually or from self-employment, the base period is 12- months. Refer to section V. SELF-EMPLOYMENT

When the child care worker is assessing a family for application or recertification, the above base periods must be discussed. Documentation requested from the recipient shall be based on the above base periods. For the majority of representative income, a 1- month base period is used.

NOTE: When child support is received a 3-month base period is used.

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Refer to the Chapter 7 Attachment 3: Application, Recertification & Base Periods Guide for reference.

2. Special Base Periods Certain types of income require special base periods, particularly if the income is not stable or the income fluctuates. Income that fluctuates significantly should be averaged in such a way that child care assistance will not be interrupted, and the family can anticipate and budget for the parental fee that remains unchanged throughout the eligibility period. This method of calculating income must be used sparingly and carefully.

i. Non-representative income is income from the base period that is received irregularly, has changed, or terminated, and cannot be reasonably expected to be available to the recipient’s household during the certification period.

a. If reported income is not representative, the child care worker must determine which budgeting method is the most representative estimate of the budget unit’s income over the certification period. The child care worker must provide detailed documentation of what was used for representative income and why it was used.

B. Determining Representative Income

The following steps must be used for determining income when non- representative income is in the base period: 1. Explore alternative budgeting methods for averaging income. The child care worker may consider one of the following or other alternative budgeting methods:

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i. an average income of the three months prior to application, ii. an average of six months prior to application, or iii. an average that includes three months prior to the application and three months of anticipated future income.

If the child care worker uses an alternate budgeting method, the worker must document why the base period is not representative and how the child care worker determined what is representative. Include the calculations in the documentation.

2. Project using the best available information about the number of hours, rate of pay, and frequency of pay expected to be received over the certification period.

i. Nonrepresentative income includes new income that was not previously available to the household but is now or will be available to the household during the certification period. New income can include the following but is not limited to:

• New employment. • Increase / Decrease in rate of pay. • New position with same employer. • Increase/ Decrease in work hours.

If the new income provided is representative, use the appropriate base period income to average gross income.

ii. If new income is not representative due to the household not receiving a full month’s income, it may be necessary to project income for future months. Project income by using the best available information about the number of hours, rate of pay, and frequency of pay expected to be received over the certification period.

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C. Calculation of Income The computation of gross monthly income is made based on an assessment of the family’s income that is available during the appropriate based period. It includes asking questions to ascertain the client’s situation, considering all sources of income, determining what income is counted for the eligibility for child care services, verifying all sources of countable income, and making accurate calculations. If pay stubs are not available due to the applicant/recipient being newly employed, the DSS/LPA should not delay the approval of the application. Income that is anticipated by someone who is newly employed is based on an employer’s statement (either by telephone, written statement, or a wage verification form) that indicates the rate of pay and the number of hours for each pay period the applicant/recipient is scheduled to work. The calculation of earned income must be clear and can be explained by one of the following: • An explanation in the case narrative. • Handwritten notes on the application (DCDEE-0456). • A calculator tape for income which should be uploaded as an attachment in NC FAST. • Any unusual circumstances that the child care worker considers in calculating income must be documented in detail in the case narrative.

1. Alternative Budgeting Method- If income is not representative, child care workers must provide detailed documentation of why the child care worker used what they used and detailed documentation of why the budget was calculated differently.

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2. Calculating Regular ongoing income: Income that the household has been or expects to receive on a regular, ongoing basis. This income can fluctuate across pay periods, so the child care worker should use all representative (full) pay received in the base period to average gross income across pay periods to determine the amount of gross income available to the household for each pay period. i. Calculation: averaging the representative income to establish an accurate representation of the income expected to be received each pay period. ii. Determine the total gross income for each pay stub received during the base period. iii. Determine the number of pay dates. iv. Divide the total gross income by the number of pay dates; do not round.

If the base period contains a pay period of $0 that is representative of the regular ongoing pay use $0 in your averaging.

If the $0 pay is not representative, then do not use that pay period and thoroughly document the reason the income is not representative in the case notes.

The following formula is used to convert average incomes to a monthly amount: • If received weekly, multiply by 4.3 • If received biweekly, multiply by 2.15 • If received semi-monthly, multiply by 2 • If received quarterly, divide by 3 • If received monthly, use the monthly gross • If received semi-annually, divide by 6

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• If received annually, divide by 12

The monthly income amount is entered on the application in NC FAST.

3. Calculating Terminated income:

Income the household has previously received that has terminated or will terminate during the certification period.

If terminated income is reported prior to the receipt of the last pay, the last pay received is counted and the end date shall reflect the date the last pay is received.

For example: Recipient reports terminated employment on 03/13/2024. The recipient’s last pay check is expected on 03/29/2024. The last pay received on 03/29/2024 is counted and the income is end dated on 03/29/2024.

If terminated income is reported after the last pay has been received. The income shall be end dated the date the recipient reports the terminated income.

For example: Recipient reports terminated employment on 04/15/2024. The recipient’s last pay check is expected on 03/29/2024. The last pay received on 03/29/2024 is counted and the income is end dated on 04/15/2024.

Client statement regarding terminated income is accepted unless it is questionable. If client statement is questionable, child care workers should request verification and must document why verification of terminated income has been requested.

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IX. VERIFICATIONS Verifications are used to support evidence in the determination of SCCA program eligibility. The purpose for verification is designed to prevent and/or identify fraudulent misrepresentation and under/overpayments. Income verification must be completed before a case can be opened. Adequate verification requires that the applicant/recipient presents sufficient information so the child care worker can make accurate calculations that reflect the applicant/recipient’s current income or to accurately determine an average monthly income in those cases where income fluctuates significantly. It is important for the applicants/recipients to understand they are certifying the accuracy of the information when they sign the application. The child care worker must assist the applicant or household in obtaining verification as needed. The child care worker must have every check stub received during the base period month. If every check stub is not available, the child care worker must accept any reasonable documentary evidence if the verification adequately proves the information provided on the application. Child care workers must provide detailed documentation of why the child care worker used what they used. Note: Do not verify the county residency, citizenship, or age of the child as it is not a requirement for SCCA. Refer to Chapter 4 for additional information.

A. There are four main sources of verification that can be used when determining eligibility.

1. Electronic Verifications (the work number) are the best tool for calculating gross monthly income. In addition to showing the name of the employer, the date of pay and gross income earned, this document can provide other valuable information which helps the child care worker make an accurate calculation.

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Electronic Verification (OVS) is required for all unearned income types. Electronic matching is the primary income verification source for income received through Social Security, Division of Employment Services (DES), Unemployment Insurance Benefits (UIB), and the Work Number. Child care workers must use OLV/OVS for verification and explore unearned and/or benefit income using the verification hierarchy.

There may be times when OLV/OVS may yield insufficient results from the online data request. If this occurs, it is because there is no social security number (SSN) of a household member. The child care worker can ask the applicant/recipient for SSNs to aid in online verification. However, it must be made clear that providing a SSN remains optional and services will not be denied for an applicant who refuses to provide a SSN. Refer to Chapter 4 regarding SSNs and the application process.

Social Security numbers may be needed for: • child only cases and • when the online verification results in insufficient date. Note: Only pursue other verification methods if there is a discrepancy or if electronic verification is not available or representative.

Refer to the following job aids: SCCA Job Aid- Requesting and Viewing Online Data (OVS) SCCA Job Aid- Adding-Editing the Social Security Number SSN SCCA Job Aid- Registering Persons

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2. Documentary evidence for income verification includes items such as but not limited to wage stubs or award letters. Documentary evidence may be provided in person, by mail, or through an authorized representative. The applicant or the household has primary responsibility for providing documentary evidence to support statements on the application and to resolve any questionable information. If the applicant/recipient is unable to furnish source documents, the DSS/LPA must have the applicant/recipient’s written permission authorizing the child care worker to contact the necessary individuals, employers, or agencies to verify income. The child care worker documents in the case notes which verification method was used and why previous method was not used. When documentary evidence cannot be obtained or is insufficient to make eligibility determination or determination of the correct benefit level, collateral contact may be necessary.

3. A collateral contact is a person knowledgeable enough about the information needed to provide an accurate statement of verification. Examples of acceptable collateral contacts may include employers, social service agencies, migrant service agencies, who can be expected to provide accurate third-party verification. The DSS/LPA is responsible for obtaining verification from acceptable collateral contacts.

4. The recipient’s written statement is acceptable in some circumstances unless otherwise questionable. The following circumstances include but are not limited to i. Receiving recurring cash contributions paid to the parent, or ii. Child support that is not paid pursuant to a written agreement or court- ordered arrangement.

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The recipient’s written statement should be the last resort after all other attempts to obtain verification have been exhausted. The child care worker must enter detailed documentation as to why the recipient's statement is being used and why other methods were not used.

Note: The DSS/LPA must assist the applicant or household in obtaining verification as needed.

X. VERIFICATION OF INCOME TYPES

The applicant/recipient’s income is the “evidence” used to determine eligibility. The family applying for SCCA must meet income eligibility requirements to be approved for services unless the service is available without regard to income (to support care needed for CPS or CWS). In all instances, child care workers must document verification of income. Refer to Chapter 04: Application, Eligibility Determination and Documentation.

Verification of all income is required at: 1. application, 2. annual redetermination, 3. if there is an increase in income that exceeds 85% SMI (this should NOT include irregular income fluctuations), 4. if a recipient voluntarily reports a change in employment and allows a decrease in income.

A. Income Types and the Verification Hierarchy

The following lists the verification methods and hierarchy for each of the standard income types. The verification methods are in descending order when electronic verification is not available or is not the most current.

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1. Standard Earned Income- Wages, Salaries, Tips (including Contract Income, pay advances, work-study, longevity pay etc.).

i. Verify the most recent representative pay. ii. Verify the client’s status, rate of pay, and average hours worked with employer, either verbally or in writing. iii. Accept client’s statement as the last possible verification method if unable to obtain from a third party.

2. Special Earned Income- Rentals, Royalties, Self-Employment i. Income tax return or tax forms a. Tax returns provided by the applicant/recipient are an acceptable form of verification. b. (1099) verification for Self-Employment Note: For contracted employees that have a 1099, it can be accepted if skillful interviewing is completed to support the DSS/LPA accepting the 1099. Skillful interviewing and documentation should include: • How many months does the 1099 cover? • Does the client perform any other contract work that the presented 1099 does not cover? • Does the income reported on the 1099 meet the gainful employment standard? ii. Business records a. Business records provided by applicant/recipient are an acceptable form of verification. This may include but is not

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limited to the following: • Business accounting records or statements from an outside accountant (generally compiled based on information provided by the applicant/recipient). • Ledger books or bookkeeping records, including those maintained by the applicant/recipient or an employee, either paper or in software programs such as Quicken. • Lease agreements that are maintained by the applicant/recipient. Note: For expenses, verification must indicate the date the expense was paid, to whom it was paid, and the purpose of the expense. iii. Signed statement of a financial institution, bank, or real estate agent.

iv. Applicant Statement

At application, the applicant’s written statement of income may be accepted AS A LAST ALTERNATIVE only if no business or current tax records are available and the applicant has not previously been informed of the requirement to keep business records. Applicant's written statement is acceptable for gross receipt income only rather than net income after operating expenses. The applicant's statement cannot be accepted for operational expenses. If a recipient does not keep good records, the child care

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worker can provide the applicant/recipient the Verification Form for Self- Employment Income and Expenses Attachment 2 to verify income. Note: If an applicant/recipient has just started a new business, the applicant/recipient’s statement of income may be accepted as a last alternative only if no business or tax records are available. If the child care worker must accept the applicant’s statement of gross income, the reason the applicant has no business records must be documented. In addition, the child care worker must advise the applicant/recipient that at redetermination, it will be necessary to provide adequate business records to establish and verify income to continue to receive services.

3. Child Support Received The amount of child support received or must be verified through: i. Online verification system (ACTS) ii. Provision of the separation agreement or divorce decree, if up to date a. Child Support Services b. Clerk of Court iii. Signed statement of the caretaker when the income is received directly to the income unit as a last possible verification method. a. The child care worker should obtain the written statement from the non- custodial parent before taking the applicant / recipient’s statement of child support.

b. If the non-custodial parent refuses to cooperate and provide verification of child support, the information should be documented in the case narrative/notes and allow the applicant/recipient to

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sign a statement verifying the amount of child support received for the base period. The applicant/recipient is not required to prove he/she does not receive child support.

4. Child Support Paid Out The amount of child support paid out must be verified through: i. Documentary evidence • Pay stubs showing the child support deductions; or • Statement from the Child Support office documenting amount payments made.

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For additional information regarding policy described in this chapter please refer to:

SCCA Manual: Chapter 4 Application and Eligibility Chapter 5 Establishing Plan of Care Maximum Income Eligibility FPL & SMI Chart-

NC FAST Job Aids: SCCA-85% SMI Phase-Out Reference Guide SCCA-Change of Circumstance Evidence and Alignment Reference Guide SCCA-Change of Circumstance Job Aid SCCA-Decision details and Change of Circumstance Reference Guide SCCA-Eligibility Decision Results Reference Guide SCCA-Foster Care Job Aid SCCA-Graduated Phase-Out SCCA-Joint Custody Job Aid for step-by-step instructions self-employment in NCFAST. SCCA-Reactivate a case in pending closure status. SCCA-Recertification SCCA-Employment, Self-Employment, and Income Evidence Job Aid SCCA-Service plan Reference Guide SCCA-Tasks Reference Guide SCCA-Unearned Income Evidence SCCA-Using FNS Evidence as verified SCCA Evidence

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I. CHAPTER OVERVIEW Subsidized Child Care Assistance (SCCA) is provided to families with a demonstrated need for care and who meet the current income eligibility criteria based on the income unit. Within this chapter, policy and requirements for the SCCA program include income eligibility, the household income unit, self-employment, sources of income, assessing monthly income, calculation of income, base periods, child support, deductions & disregards. Additionally, this chapter provides policy as it pertains to the types of countable and non-countable income used to determine eligibility. The SCCA Program requires that all information is accurately entered in North Carolina Families Accessing Services through Technology (NC FAST). II. INCOME ELIGIBILITY Individuals who need child care assistance must qualify based on income. The gross monthly income must not exceed the state’s maximum income eligibility limit for the number and age of persons in the income unit. The following income limits apply: A. With Regard to Income At the time of initial application, income eligibility for children served in the SCCA program must be compared to: i. 200% of the federal poverty level for children ages 0-5 and for all children with special needs. ii. 133% of the federal poverty level for all children ages 6-12 who do not have special needs. At the time of the redetermination, the family income must be compared to: i. 200% of the federal poverty level for children ages 0-5 and for all children with special needs.

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ii. 133% of the federal poverty level for all children ages 6- 12 who do not have special needs. iii. 85% State Median Income (SMI).

If income is less than 85% SMI but exceeds the federal poverty limits of 133% or 200%, a graduated phase out period of 12 months is given during which services continue with an adjustment of the parental fee. The graduated phase out period shall begin the day after the certification period ends.

A recertification packet is not mailed to children in graduated phase out. In situations where one child is in graduated phase out while the other children are eligible for continued services, the child in graduated phase out is not eligible to recertify and the remaining eligible children will receive a recertification packet.

If the income exceeds 85% SMI at redetermination, a ten (10) work day notice is issued to terminate services if there are more than ten (10) work days left in the current certification period. If there are less than ten (10) work days left in the certification period, the case will terminate at the end of the certification period.

If a recipient reports a decrease in income during the graduated phase out period and the reduced income is at or below the appropriate FPL, the child care worker must process this as a change in circumstance in NC FAST and decrease the income. This will also decrease the parental fee, which is appropriate.

The child care worker will react to the reported decreased income as a change in circumstance and will not complete a new application. Subsidized child care services shall continue through the end of the 12- month certification period. NC FAST will recognize that the family is

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no longer in graduated phase out and a recertification packet will be mailed to the recipient at the end of the 12-month certification period.

B. Without regard to Income There are certain situations in which SCCA is available without regard to income. Those situations include: 1. Children who need child care assistance to support child protective services in order to remain in his/her own home. 2. Children who need child care assistance and meet eligibility for child welfare services. 3. Children receiving foster care services who are in the custody of a county department of social services (DSS) and have been placed with an adult other than their parents or in a licensed foster home. Refer to the SCCA FPL & SMI Chart and Chapter 11 regarding Redeterminations. III. DEFINING INCOME UNIT FOR DETERMINING ELIGIBILITY

When the amount of income available to an individual is a condition of eligibility for subsidized child care assistance, it is necessary to determine the number of persons in the individual’s income unit and the amount of the gross monthly income available to that income unit. Therefore, it is necessary to define the term “income unit” to assess whose income must be included when eligibility is determined. The term “income unit” shall apply to persons who live in the same household and who, according to North Carolina law, are responsible for the financial support of the child whose eligibility for child care assistance is being determined. Also considered in this determination are individuals who would normally be part of the unit but are temporarily absent from the home.

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NOTE: The household unit for families who are receiving benefits from the Food and Nutrition Services (FNS) program may differ from the income unit for child care assistance. The child care worker should ask the parent questions to clarify any differences.

A. Responsible Adult

The applicant/recipient is the person or persons with whom the child lives and who has the primary responsibility for the care and well- being of the child. However, a child may live with an adult who is responsible for his/her care but is not financially obligated for the support of the child, such as a grandparent, that may have custody of a child.

Legal custody or court-ordered custody does not act to terminate parental rights and therefore does not relieve parents of financial obligation to their child. According to North Carolina General Statute, parents’ financial obligations toward their children are relieved when an order of adoption or termination of parental rights is entered by the court. Couples who are not legally married may claim to be common-law marriage partners; however, common-law marriage is not legally recognized in North Carolina. Marriage must be solemnized as required by law in order for individuals to be considered spouses under the definition of family. However, if both parents (biological or adoptive) of a child in need of child care assistance reside in the same household, both are members of the income unit and both incomes are counted for the purpose of determining eligibility.

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The following are defined income units for the purpose of determining eligibility and parental fees for child care assistance:

NOTE: This list is not an exhaustive list.

1. Biological and adoptive parents and their minor children under the age of eighteen. Married parents including stepparents shall be included in the income unit with his/her spouse when the children in need of care include their biological, adoptive, and step children.

i. An 18-year-old is only included in the income unit if he/she is still attending high school and is scheduled to graduate before age nineteen.

2. A child who lives with both parents and one parent is in college or serving in the military forces in a different locale. The parent in college or serving in the military is included in the income unit and their income is counted. This is an income unit of (3).

3. A child who lives with grandparents, due to the absence of the parent who is in college or serving in the military forces in a different locale. The parent’s income must be counted. The grandparents can request child care for the child due to the absence of the child’s parent and because they also meet the need criteria. The parent in college or serving in the military is included in the income unit. 4. A minor parent (under the age of 18) and his or her children. If the parents of a minor parent apply for child care subsidy for another child of theirs, the minor parent is counted in the parents’ income unit. The grandchild, however, is not. The parents, the minor parent, and their other minor children are included in the parents' income unit.

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5. A child who lives with a responsible adult who is not the biological or adoptive parent is considered a child only income unit. If the child has siblings, they are also included in the income unit.

6. Children in foster care will be the case head in their own case and the staff designated by DSS will sign the application, rights and responsibilities and the voucher. With sibling groups, the youngest child will be the case head. If the family is divided, each child will be their own case head.

B. Child Protective Services (CPS), Child Welfare Services (CWS), and Foster Care (FC) Income Units:

When the income unit involves CPS, CWS, or FC, SCCA is provided to children receiving child protective services without regard to the family’s income and parental fees are not assessed.

1. CPS When a recipient applies for child care assistance based on CPS, the recipient will be given 12-months of eligibility. The child must be receiving child protective services and must need child care in order to remain in his/her own home.

When a CPS application is being processed, the child care worker must collect and verify income information from the responsible adult and enter the income into NC FAST to establish a parental fee. The parental fee is waived until the need for CPS ends. Once the CPS need ends, the parental fee can be assessed to the family.

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If the income information is not collected from the family at the time of eligibility determination, a parental fee cannot be assessed to the family until the next redetermination at the end of the 12-month certification period. If the income information cannot be collected and verified o the application and subsequent services should continue without the income information.

2. CWS When a CWS application is being processed, and the applicant is the child’s biological or adoptive parent, the child care worker must collect and verify income information and enter the income into NC FAST to establish a parental fee.

The parental fee will be waived until the need for CWS ends. Once the CWS need ends, the parental fee can be assessed to the family. If the income information is not collected from the family at the time of eligibility determination, a parental fee cannot be assessed to the family until the next redetermination at the end of the 12- month certification period. If the income information cannot be collected and verified, the application and subsequent services should continue without the income information.

When CWS is the need type to support implementation of

permanent placement and the family is adopting the child, CWS can

no longer be the need type once the adoption final. The adoptive

parents become financially responsible for the child and the CWS

need type ends.

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3. FOSTER CARE (FC)

When an application for child care assistance is completed for a child in foster care , the income of the foster parent(s) is not counted. If the foster child receives any income such as social security benefits, the child’s income is disregarded and a parent fee is not assessed.

C. Non-parent Caretaker Income Unit:

When the parent of the child receiving subsidy does NOT live in the home with the child:

1. The non-parent caretaker and the caretaker's spouse and child(ren) are not included in the income unit. 2. The non-parent caretaker and his/her spouse must meet the need criteria. 3. The income of the non-parent caretaker is NOT counted in the calculation of income to determine eligibility for the child. Income is only counted for biological and adoptive parents. Child care workers should verify if the non-parent caretaker is employed. 4. If a non-parent caretaker applies and receives services, and CWS is not involved, i. the child care need may be employment, or a need other than CWS. ii. the non-parent caretaker remains the case head. iii. the income unit will be the child(ren) only.. Income of the child(ren), such as but not limited to, social security survivor benefits and child support continues to be counted and the parental

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fee is assessed on the child(ren)’s income alone Refer to Chapter 4 and 5 for information regarding CPS, CWS & FC. D. Joint Custody Income Unit

Joint custody is when an applicant/recipient shares physical custody of a child. When an applicant/recipient shares physical custody of a child and both applicants/recipients need child care assistance, each applicant/recipient applies separately for SCCA, and each applicant/recipient has their own child care case and service plan based on their individual need for SCCA.

At initial application, child care workers must inquire if the family has joint custody. Child care workers are encouraged to ask joint or split custody questions when completing a thorough interview.

Each parent can complete an application for the period of time the child resides in his/her home. Each application is reviewed separately as each parent must meet eligibility. Each parent shall pay the corresponding parental fee even if the child is with the same child care provider. The joint custody application is largely similar to a traditional application with the exception of changes to the plan of care evidence.

If the parents reside in separate counties, each parent will apply in the county where the parent resides. For example. One parent is in County A and the other parent is in County B.

Refer to Chapters 4 and Chapter 5 regarding Income Unit and Plan of Care and the NC FAST Joint Custody Job Aid.

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IV. SOURCES OF INCOME

Although all sources of income must be considered in the base period month the household receives the income, not all income is counted in the family’s gross monthly income when determining eligibility for child care assistance.

A. Countable Income The following are sources of income which must be counted when determining eligibility for child care assistance:

1. Gross earned wages or salaries (earnings received for work performed as an employee), including: i. wages, ii. salaries, iii. commissions, iv. tips, v. piece-rate payments, vi. cash bonuses earned, before any deductions such as for taxes, bonds, pensions, and union dues; vii. pay for leave including sick, vacation, or holiday leave should be counted when it is paid at the regular rate of pay and covers the time when the applicant/recipient would typically work. If the applicant/recipient worked during a holiday at a higher rate of pay, the child care worker should assess if this pay is representative.

Note: Child care workers should not count mileage or per diem when listed on a recipient’s pay stub.

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2. Gross income from taxable self-employment income after deductions made for business expenses and any other expense that is deductible for purposes of federal or state tax returns;

3. Social Security benefits (includes social security pensions, survivors’ benefits for both children and adults, and permanent disability insurance payments).

4. Dividends, interest (on savings or bonds), income from estates or trusts, royalties, adjusted gross rental income on houses, stores or other property. Adjusted gross rental income is defined as the rental income remaining after allowable expenses, such as mortgage interest, property taxes, insurance, maintenance, and repairs, have been deducted. Rental assistance provided by an organization on a regular basis.

5. Pensions and annuities paid directly by an employer or union or through an insurance company.

6. Workers’ compensation.

7. Unemployment insurance benefits (UIB).

8. Alimony (includes court ordered payments as well as voluntary payments and may include regular payment of bills such as rent and utilities).

9. Child support, direct or indirect (includes payments made to the applicant/recipient or to the court based on terms of an agreement and may include payments such as rent, utilities, insurance, etc.). Note: Do not use Food and Nutrition Services (FNS’s) conversion of child support income since the FNS

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conversion requirement is based on frequency of pays.

10. Pensions paid to veterans or survivors of deceased veterans.

11. Compensation for veterans with a disability of at least 10% because of injuries or disease that occurred or were aggravated during active military service.

12. Veteran Affairs (VA) Caregiver's Stipend Program VA provides a stipend to caregivers of a veteran injured after September 11, 2001. This is a nontaxable income to the caregiver.

13. On-the-Job Training (OJT) payments.

14. Work Force Investment Act (WIA) payments made to an adult. Previously referred to as the Job Training Partnership Act (JTPA).

15. AmeriCorps stipend (living allowance).

16. Armed Forces pay (only the amount taxable, such as base pay). 17. Work release payments.

18. Cherokee Tribal Per Capita Income paid to adult family members.

19. Work-study payments, if the income is from a program not administered under Title IV of the Higher Education Act or the Bureau of Indian Affairs and is paid directly to the applicant/recipient or responsible adult.

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20. Recurring (ongoing) payments paid directly to the applicant/recipient. Recurring payments is income received at regular intervals and may be scheduled at various frequencies. In instances of recurring payments, the child care worker must average the income for the period it covers to reflect the applicant/recipient's regular monthly income accurately.

Child care workers must document the average monthly amount on the application for Child Care in NC FAST. Examples of recurring contributions include: (Note this is not an exhaustive list).

i. longevity pay, ii. profit sharing, iii. bonuses

B. Non-countable Income Although the income is non-countable, the non-countable income should be addressed in case narrative as non-countable. For example (sale of personal assets). The following are sources of income that are NOT counted when determining eligibility for SCCA:

1. Work First Family Assistance (WFFA). 2. Supplemental Security Income (SSI). 3. Non-recurring lump sum payments are received as a one-time payment and are not on a regular basis. Lump sum payments are usually large, single payments made at a particular time. These payments are considered non-recurring. Examples of a non- recurring payment include: (Note this is not an exhaustive list). i. severance pay, ii. social security benefits back-pay, iii. workers’ compensation, iv. alimony (one-time lump sum),

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v. holiday bonuses from employers (if not recurring), and vi. HUD. 4. Foster care assistance payments.

5. Adoption Assistance payments.

6. Payments/trust funds under the Indian Claims Commission.

7. Payments from the Alaska Native Claims Settlement Act.

8. Income from sale of personal assets (stocks, bonds, house, car, and insurance).

9. Bank withdrawals.

10. Money borrowed.

11. Tax refunds.

12. Gifts or contributions. (These are non-recurring gifts or contributions, e.g., gifts for birthdays, holidays, occasional monetary contributions, purchase of diapers, clothing, etc.).

13. Other (non-recurring) in-kind donations from non-legally responsible adults. In-kind donations which are not in the form of direct cash payments to applicant/recipients. This may include food, clothing, furniture contributions, in-kind military benefits, and vendor payments. Does not include instances when individuals use their business to pay for such types of items.

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14. Emergency Assistance (EA), Low Income Energy Assistance Program (LIEAP), Crisis Intervention Program (CIP), General Assistance, Progress Energy’s Energy Neighbor Fund payments, and other similar energy programs.

15. Section VIII housing subsidy.

16. Capital gains.

17. Value of food stamp benefits allotted under the Food Stamp Act of 1977.

18. Free and reduced lunch program.

19. Any and all food subsidy programs.

20. Relocation/Acquisition Act payments.

21. Earnings of a dependent child under 18 years of age, unless the dependent child is also a minor parent of a child needing child care.

22. Loans, grants (including Pell or Carl Perkins grants), scholarships, and money received through job training programs.

23. Home produce utilized for household consumption.

24. Volunteers in Service to America (VISTA) earnings.

25. Payments received as Earned Income Tax Credits or Dependent Care Credits.

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26. All subsidized housing and housing allotments, paid directly to the landlord, including military housing allotments.

27. Money received from an employer as an employee benefit for child care.

28. Work-study payments, if the income is from the College Work- Study Program administered under Title IV of the Higher Education Act or the Bureau of Indian Affairs. (Likewise, if the income from college work-study goes directly to the college, it is not counted as income.) For applicants/recipients that receive Wage$, the income is not counted even though it is taxable and a 1099 is issued.

29. Reimbursement for expenses incurred in connection with employment or education are not countable when determining eligibility for child care assistance. Examples of employment related expenses that are not countable include but are not limited to mileage, medical, per diem, phone calls, travel, and lodging. Examples of reimbursements for educational expenses such as tuition and fees.

30. Social Security benefits should not be counted if the beneficiary does not have access to the benefits. For example, if a teenage parent applies for her own child and receives Social Security benefits, but the teenager’s mother is the payee, the Social Security benefits are countable for the teenager’s mother who is the payee but not for the teenager in her own child care case. The same principle applies if the payee is someone outside of the household and the beneficiary does not have access to the funds.

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31. BAH/BAS portion of Armed Forces pay is not countable. All other Armed Forces pay is not countable as long as the soldier is serving in a combat/hot zone.

32. Veterans Benefits such as: a. VA Aid and Attendance additional monthly pension benefit administered by the Department of Veterans Affairs that may be available to war time Veterans and surviving spouses who have in-home care or who live in nursing homes or assisted-living facilities. b. VA Aid to the Homebound is an additional monthly pension benefit administered by the VA when a person is substantially confined to their immediate premises because of permanent disability. c. VA Reduced Improved Pension The Improved Disability Pension provides a monthly benefit to certain low-income veterans. d. VA Unreimbursed Medical Expenses Reimbursement from VA for medical bills that the veteran has paid. e. Veterans Administration Educational Assistance Program and GI Bill Income received by veterans for educational expenses.

V. SELF-EMPLOYMENT Self-employment income is the gross income from taxable self-employment income after deductions from allowable business expenses. Self-employment income may be received annually or monthly, or it may fluctuate, as in a seasonal self-employment activity. To determine if an individual is self- employed, the individual’s work situation must be evaluated. An individual is self-employed when he or she is working in their own business, trade, or profession, not for an employer. A self- employed person generally exercises control over how the business will be conducted, not just

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the product. Self-employment includes but is not limited to selling recyclables, babysitting, roomer/boarder income, rental income, farm income, cosmetologist, carpenter, and income earned by an individual working as a consultant or independent subcontractor, such as Door Dash, Instacart & Uber drivers. Independent subcontractors are considered self-employed as they are issued a 1099 if they have earned more than $600.00 in the year. Independent subcontractor applicants must be able to provide proof of steady, consistent work hours and wages earned to calculate income. Note: If Social Security and income taxes are being withheld by an employer, the individual is not self-employed. • If eligibility is being determined before that year's tax filing deadline, then use the previous year's tax returns if representative. • If eligibility is being determined after that year's tax filing deadline, then use the tax return for the most recent year if representative. • If the federal tax return for most recent year is not available, then use quarterly tax statements if representative. • If quarterly tax statements are not available, the child care worker must use: i. Business accounting records, bookkeeping records such as ledger books, or records maintained by the applicant. ii. Information from the verification forms for Self-Employment Income and Expenses (Attachment 2) to be completed by the applicant/recipient. Applicants/recipients can be liable for paying self-employment tax even if they receive social security benefits.

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When the applicant/recipient indicates a net loss from the business, the child care worker must discuss how current living expenses are being met to determine what other income is available to the family. If client's statement is taken, the information must be recorded in the case narrative (or case notes in NC FAST). The child care worker may accept the applicant/recipient’s statement as verification only if: 1. The applicant/recipient cannot obtain the verification from any source, i.e., the source refused to provide verification or cannot be located, and 2. The statement is not questionable. Do not accept the statement if the applicant/recipient refuses or simply fails to provide verification of income.

A. Newly Self-Employed Recipients

In a household with a newly formed business (in operation for less than 12 months), the income must be averaged over the amount of time the business has been in operation. The child care worker must document the month and year that the new business was started. If a recipient becomes self-employed during their eligibility period, the child care worker should consider any income that has been received at the time that the new self-employment is reported. If the recipient reports they have become self-employed, but no earnings have been received due to the business being new, the child care worker must thoroughly document why no self-employment income is being counted. Refer to the Verifications section for information regarding verifying self-employment.

B. Temporary Loss of Profit

"Loss of Profits” means a financial loss caused to the business activity through the interruption of operations or through additional costs incurred for the sole

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purpose of avoiding or minimizing such interruption. The business or activity is expected to be continued but no profit is realized due to temporary circumstances beyond the control of the applicant/recipient.

If an applicant experiences a temporary loss of profit:

1. At application, if the applicant has been self-employed longer than 12 months and reports they do not have any self-employment earnings, therefore not gainfully employed, the applicant is not eligible since their gross income ($0) divided by minimum wage results in zero gainfully employed hours. The applicant will have to reapply once gainfully employed. If the applicant has been self-employed for less than 12 months and is not gainfully employed, refer to section V.D. Gainful Employment.

2. If a self-employed applicant/recipient reports a temporary loss of profit during the certification period, the child care worker must assess whether this decrease is a normal seasonal variation in business earnings (e.g., lower income during winter for a lawn care business) or an unexpected situation such as illness-related absence from work. If the decrease is normal, it is considered in the income assessment during the 12-month base period, and no adjustments are made to the case. However, if the decrease is unexpected and abnormal, the child care worker must end date the income, discuss how current living expenses are being paid, and explore other potential income sources for the family. The child care worker must advise the applicant/recipient to notify the child care worker within 10 business days of resuming the business activity.

3. If the applicant/recipient reports a temporary loss of profit from their self- employment at recertification but plans to resume earnings, the temporary loss of profit is factored into the 12-month base period for self-employment. The 12-month base period accounts for the fluctuating nature of self- employment income, including temporary loss of profit. The child care

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worker should review and average the past 12 months of earnings and expenses from business records, the self-employment verification form or the previous year tax return, if representative, to calculate the income and level of care.

4. In any temporary loss of profit situation, the child care worker must document the case thoroughly. Refer to X. Verification of Income Types

C. Calculation of Self-Employment and Operational Expenses 1. Tax Forms When an applicant/recipient submits a tax form (Schedule C, Schedule K, etc.) as verification of self-employment, the child care worker must determine the gross income amount from the tax form. The child care worker must then determine the total expenses claimed on the tax form and deduct that total from the gross income amount to determine the countable self-employment income. If expenses claimed on the tax form are less than 20% of the gross income, the applicant/recipient will receive the automatic 20% deduction.

NOTE: Tax forms must be filed with the IRS in order to be accepted as verification of self-employment.

For example: An applicant/recipient is self-employed and provides a Form 1040 Schedule C tax form as verification.

Part I Income

1 Gross Receipts or sales. $341,840 2 Returns and allowances

3 Subtract line 2 from $341,840

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line 1 4 Cost of goods sold (from line 42) $85,310 5 Gross profit. Subtract line 4 from line 3. $256,530 6 Other income

7 Gross income $256,530

In this example, since there are “cost of goods sold” on line 4, the “gross income” on line 7 is less than “gross receipts” or sales on line 1. Line 1 should be used as the gross income amount for SCCA. The amount on line 4 for cost of goods sold should be added to the expenses from Part II of Schedule C. The child care worker must use the expenses from the deductions section on Part II of the Form 1040 Schedule C document.

In this example, the total expenses on line 28 of Part II of the Form 1040 Schedule C are $212,235 (not pictured in the chart above). The child care worker will need to add “cost of goods sold” from line 4 of Part I ($85,310) to the total expenses from Part II ($212,235). $85,310 + $212,235 = $297,545 total allowable expenses.

$341,840 gross receipts minus $297,545 total allowable expenses = $44,295 countable self-employment income.

If a Schedule C form is submitted for verification of self-employment, the child care worker should carefully review Part I - Income to determine the gross income to be counted. On the Schedule C form, if there is income listed on line 6 of Part I for "Other Income", this will result in line 7, "Gross Income", being higher than line 1, "Gross Receipts or Sales". In this case the "Gross Income" from line 7 should be considered the gross income for SCCA purposes. If there is an amount listed on line 4 for "Cost

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of goods sold", this will result in line 7 being less than line 1. In this case, the higher amount on line 1 should be used as gross income, as the Cost of Goods sold on line 4 should be considered an expense. The child care worker should use the higher amount from either line 1 or line 7. If there are costs of goods sold, this amount should be used as an expense deduction (along with expenses from Part II) as shown in the example above.

2. Expenses Operational expenses are the cost of carrying on a trade or business. To be deductible, an operational expense must relate to or pertain to a trade or business and be both ordinary and necessary. An ordinary expense is one that is common and accepted in the trade or business. A necessary expense is one that is helpful and appropriate for the trade or business.

A deduction from gross income receipts of a business will be allowed for the ordinary and necessary expenses required for the operation of the business. The individual is automatically eligible for the 20%, which is automated in NC FAST once the child care worker enters the Gross Receipts Evidence. If the recipient has operational expenses greater than the standard 20% deduction, the operational expenses must be verified to be considered a deduction from self-employment income. If a self- employed individual provides their income taxes, the child care worker must use that as expense verification to offer more than 20% deduction, if applicable. Child care workers must enter correct and accurate information into NC FAST. If the applicant/recipient requests an expense deduction greater than the standard 20%, the applicant/recipient must provide verification of the expenses and the worker must enter the expenses in the Expense Evidence in NC FAST. If Expense Evidence is entered in NC FAST that exceeds

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20%, NC FAST will deduct the higher expense amount. If the applicant/recipient is determined ineligible from gross receipts income with the 20% standard deduction, the child care worker must ask the applicant/recipient if he/she would like the option to deduct actual expenses. When both parents are self-employed in a two-parent household, each self-employed parent can receive a deduction for self-employment expenses. The 20% automatic expense deduction will be applied to each self-employment. If expense evidence is entered for expenses greater than 20%, the greater amount will be deducted. If one self-employed parent has multiple self-employments, each self-employment and associated expenses is entered separately in NC FAST. For actual expenses, the worker must use expenses reported on the Expense Section on Federal tax documents, or the recipient may provide actual receipts for expenses. Operational expenses must be carefully reviewed to determine the actual level of income available to the family. Operational expenses include business expenses and any other expense that is deductible for purposes of federal or state tax returns. Operational expenses include but are not limited to: 1. Taxes required to operate the business. 2. Licenses, commissions, and permit fees. 3. Rent payments (not for home-based businesses, except that part allowed as a deduction by the IRS). 4. Insurance associated with operating the business (fire, liability, theft, storm, health insurance for employees, Unemployment Insurance, and workmen’s compensation costs). 5. Labor costs including wages and contract labor.

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6. Maintenance and repairs associated with the business. 7. Cost of products, materials and supplies required to operate the business. 8. Business-related transportation costs as allowed by the IRS. 9. Utilities costs associated with the business. 10. Interest on business debts, including mortgages and loans; necessary for producing income. 11. Actual unreimbursed food costs to provide meals as part of the business, such as licensed child care providers or elder care. 12. Accounting, advertising, and legal costs associated with the business. 13. Telephone expenses, including local and long-distance service, fax, and internet, if the telephone line is used exclusively for business. 14. Depreciation (a reduction in the value of an asset with the passage of time, due in particular to wear and tear. Depreciation deductions: account for the gradual loss in value of assets over time, such as furniture and equipment used in child care, allowing providers to spread these costs over the assets’ useful life.) For more information on self-employment expenses, please refer to the links below: https://www.irs.gov/instructions/i1040sc 2023 Instructions for Schedule C https://www.irs.gov/forms-pubs/about-publication-334 Publication 334, Tax Guide for Small Business https://www.irs.gov/forms-pubs/about-publication-587 Publication 587, Business Use of Your Home (Including Use by Daycare Providers).\

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D. Gainful Employment

Gainful employment is defined as making at least minimum wage. Recipients/applicants who are employed, including self-employment, must be gainfully employed. Applicants who have been self-employed for 12 months or longer must be evaluated for gainful employment. Child care workers must determine the number of gainful employment hours to establish the level of care.

Newly self-employed individuals shall receive 12-months of eligbility to allow time to establish gainful employment. At redetermination, newly self-employed applicants/recipients must have established minimum wage. Child care workers must document that they reviewed the gainful employment requirements with applicants/recipients. The recipient is required to report changes in accordance with Recipient Rights and Responsibilities.

1. If the recipient has been in business for less than 12 months at initial application, the recipient shall receive 12 months eligibility and gainful employment will be re-evaluated at redetermination. At redetermination, if gainful employment has not been established in the initial 12 months of eligibility, gainful employment hours must be re-evaluated to determine level of care.

2. If a recipient becomes self-employed during their eligibility period, the eligibility period dates must remain the same. If the recipient has not been self-employed for 12 months at the time of redetermination, recipient shall receive another 12 months of eligibility to determine gainful employment. Gainful Employment shall be re-evaluated at the following redetermination. Eligibility cannot be reviewed prior to the

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end of the 12-month eligibility period. Refer to Employment, Self- Employment, and Income Evidence Job Aid.

If the gross amount is less than minimum wage based on the hours the applicant/recipient states they work, the number of hours will be determined by taking the gross income and dividing it by the current minimum wage to determine gainful employment hours in determining level of care.

If the income is $0, it would be considered “No income” and the gainful employment policy should be followed. These hours are used to determine the gainful employment hours for determining the level of care and parental fee.

If a self-employed client applies and voluntarily provides their tax information, the child care worker can accept the tax forms (generally a Schedule C) as verification of their Self-Employment income and the child care worker must use that as verification of their income.

To determine the Level of Care, the child care worker uses gross income (before deductions) to determine level of care.

For example: The initial gross $17,761/12 = $1480.08/$7.25 = 204.15 hours per month/4 = 51.04 hours per week. The applicant/recipient is eligible for up to full time care.

Refer to Chapter 5 for information regarding Level of Care.

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VI. CHILD SUPPORT When assessing child support, child care workers must determine if the child support is received or paid out. The base period for child support, and alimony when received is the three months prior to the month of application or redetermination (date received in agency) if representative.

The base period when child support is paid out is one month prior to the month of application or redetermination (date received in agency) if representative.

Child support is a payment made by a non-custodial parent which is available to meet the child’s basic needs. It may be paid voluntarily, under a court order or enforced in compliance with a state agreement under Title IV-D. Child support includes both direct and indirect payments. When budgeting child support income, a child is defined as 1. Any individual under the age of 18 or 2. Any individual age 18 and 19, if attending high school full time. Child support income belongs to the child. Child support evidence must be entered under the child’s name. If the child is included in the SCCA income unit, the child support income must be budgeted regardless of whether the child receives child care services or not. When there are siblings in the income unit NC FAST will count child support for both children. There is only one assistance unit created. Applicant/recipients whose children are not receiving child support should be encouraged to seek the assistance of the local Child Support Services Office in obtaining child support payments from the child’s non-custodial parent(s). However, seeking assistance from Child Support Services shall not be a condition of eligibility for receiving child care assistance. The child care worker should try to obtain a written statement from the non- custodial parent before taking recipient's statement of child support as a last resort.

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When assessing child support, child care workers must first determine if the child support is received or paid out. A. Child Support Received Child support payments received are counted in the family’s total gross monthly income. These payments may appear to be fluctuating income and/or irregular income. The child care worker will use the amounts that the applicant/recipient receives, NOT the amount that the non-custodial parent is obligated to pay. If child support is received, the base period is three (3) months prior to the month of application or redetermination (date received in agency) if representative. The child care worker must review the payments issued during the 3-month period to determine the number of representative payments and then average the amount received over a period of three (3) months. If child support payments are received weekly, child care workers are not to convert the weekly payments to a monthly payment. Child care workers must calculate the sum of all child support payments received in the three (3) month base period and take the average by dividing the sum by three (3).

If child support received is based on a new order, and no payments have been received yet, do not project. A new order with payment in the base period requires the child care worker to divide by last three months.

1. Lump Sum Child Support Payments Lump sum child support payments shall be disregarded unless the recipient states they only receive child support income via lump sum payments. If a recipient reports receiving child support income only via lump sum payments, the child care worker will use a 12-month base period (prior to the month of application or redetermination if representative), add the total child support payments received (regular

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payments and lump sum/tax intercept payment) from the 12 months together and average (divide by 12). Document the case record to support the decision to document the case record to support the decision to use a 12-month average. The following are examples of child support lump sum payment types; however, this is not an exhaustive list.

ii. One-time, nonrecurring lump sum payments

iii. Recurring lump sum payments

iv. Tax intercepts, payments received as a result of tax refund intercept.

2. Child Support received for Minor Parent (s) If major mother/father receives child support for his/her child who is a minor mother/father, the amount of child support that the major mother receives for the minor mother is only counted as income when determining the minor mother’s eligibility for child care assistance. If a minor parent applies for SCCA for his/her child and the minor’s parent receives child support for the minor parent, the child support is not counted in the minor parents’ case for the child. B. Child Support Paid Out When an applicant/recipient whose income is used in determining eligibility for child care assistance pays out any amount of child support, that amount is deducted from the amount of countable gross monthly income for determining eligibility. If child support is paid out, the base period is one (1) month prior to the month of application or redetermination (date received in agency) if representative. Child care workers need to use the one-month base period.

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If a recipient voluntarily reports that child support is being paid out during the certification period, the base period is the month prior to the month the change was reported. Refer to section XIV. Verifying Income below regarding verifying child support paid out. Child Support Expense evidence must be entered into NC Fast to reflect the amount being paid out and the frequency; for example, if $100 is paid out and reflected on biweekly check stubs from the base month, the Child Care Expense evidence would reflect the amount of $100 with a frequency of biweekly. Refer to the Income Clarification Chart Regarding Certain Categories of Countable and Non-Countable Income for the SCCA Program. C. Types of Child Support

1. In-Kind donations paid to the parent or directly to the creditor on the parent’s behalf by the non-custodial parent is countable income. Child care workers must use the 3-month base period.

2. Countable child support payments made by the non-custodial parent to the creditor / vendor on behalf of the applicant/responsible adult include: i. rent, mortgage payments, ii. utilities, iii. vehicle payments, and iv. payments for insurance other than health/medical insurance. v. school tuition, camps, lessons, and afterschool activities

3. Non-countable items purchased by the non-custodial parent includes: i. diapers, ii. clothes, and iii. baby food.

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4. Terminated child support income i. If a child support order terminates,

a. Child Care Workers must count child support payment(s) in the last month received. The date the last child support payment was received is the date used to end date the child support income.

ii. If the non-custodial parent is no longer making child support payments, but the child support order has not terminated

a. The child care worker must use the 3-month base period to calculate the countable child support income i. If the new average of child support income is higher than the current child support income, the child support income must not increase and shall stay the same. ii. If the new average of child support income is lower than the current child support income, the child support income entered must reflect the lower amount.

NOTE: Recipients are responsible for reporting any changes in child support payments. Child care workers must review both the mandatory and optional reporting requirements with recipients to ensure accurate reporting of child support payments received and any cessation of such payments.

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VII. DEDUCTIONS AND DISREGARDS

Deductions and disregards are any dollar amount that is or may be deducted from countable income. It can come in the form of money, property, or services. Child care workers will act by excluding or deducting from the countable income. The deduction may vary by household. If the child care worker deducts or excludes any amount, the total amount excluded must be less than the dollar limit that applies.

Allowable deductions include but are not limited to:

A. Child Support When adding the child support expense deduction, the collection fee for child support monies is to be included in the calculation of the child support expense deduction. Example: using the client’s pay stubs which will show child support deductions and calculate the average monthly expense based on pay frequency. For example, client is paid weekly, child support expense deduction showing on pay stub per pay period is $ 75.00/ $ 50.00 /$ 80.00/ $ 75.00 = $280.00/4=$70.00 weekly average. $70.00 X 4.3= $301.00 per month. Child Support Expense evidence must be entered into NC Fast to reflect the amount being paid out and the frequency. For example, if $100 is paid out and reflected on biweekly check stubs from the base month, the Child Care Expense evidence would reflect the amount of $100 with a frequency of biweekly. Refer to Chapter 7 Attachment 1: Clarification Regarding Certain Categories of Countable and Non-Countable Income Chart.

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B. Self-Employment

Refer to the list under section above, V.C. Calculation of Self-Employment and Operational Expenses.

C. Cafeteria or Health Benefit and Employer Sponsored Benefit Plan Income

The type of cafeteria or health benefit plans offered by employers will vary. When the income of an applicant/recipient has both health benefit income and health benefit deductions reflected on the pay stub, the cost of medical, dental and vision insurance premiums are deducted from the countable gross monthly income to determine income eligibility. The child care worker reviews the pay stub or other documentation from the applicant/recipient or employer which reflects health benefit income in the earnings/gross income and deduction sections.

One of the following criteria will determine if the income from the health benefit is countable. 1. The health benefit income is countable if benefits such as medical, dental, or vision deductions are not reflected on the pay stub or other documentation. This is not an exhaustive list. In instances where the employer pays a one-time annual benefit to employees who elect to purchase insurance from another source other than the employer, the lump sum is countable and divided over the months covered by the benefits.

2. If benefit is deducted by the employer, the health benefit income is non-countable. If the recipient received funds in hand to purchase benefit, then the child care worker must count the income.

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i. The health benefit income is partially countable if the benefit deduction amounts are less than the benefit dollars listed in the gross income section. When this occurs, the benefit dollars that are not utilized for medical, dental or vision insurance are countable. ii. The health benefit income is not countable if the deductions equal or exceed the benefit dollars in the gross income section. If health care benefits do not meet the criteria, child care staff should contact their Subsidy Services Technical Assistance Consultant to determine the deductions and countable income.

D. Medical Expenses

When an applicant/recipient states they have out-of-pocket medical expenses, those medical expenses that exceed more than 10% of the gross monthly income must be considered by the LPA/DSS for the purpose of reducing the parental fee, not in determining basic income eligibility. Medical expenses include payments to medical providers, the purchase of prescriptions, and post taxed medical insurance only. To determine the amount of the decrease that is reasonable, the LPA/DSS must:

1. Verify the medical expense that is paid in the base period only. Verification may include a billing statement from the provider showing the amount due after insurance coverage; or proof of the amount covered and uncovered expenses from all insurance carriers.

2. Deduct only the amount of the total medical expenses from the gross income.

3. The parental fee assessed will be reduced by subtracting the amount of

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documented medical expenses that exceeds more than 10% of the gross income. Once the medical expenses have been entered in NC FAST, there should be a reduction in the parental fee.

Refer to Chapter 8 for additional information regarding parental fees and Medical Expenses.

E. Alimony When an applicant/recipient pays out alimony, the amount paid out is deducted from the countable gross monthly income for determining eligibility. The base month for alimony being paid out is one month prior to the month of application or redetermination.

VIII. ASSESSING MONTHLY INCOME FOR DETERMINING ELIGIBILITY

When assessing monthly income, the determination of countable monthly gross income is based on: • The assessment of the family income that is anticipated during the twelve- month period following the date of application (this includes the child care worker asking questions to ascertain the recipient’s financial situation). • Consideration of all sources of income and determining what income is counted for the eligibility for SCCA, • Verification of all employment, and all sources of countable income, • Allowing and verifying child support payments that are received or paid out, and • Making accurate calculations. When the family actively receives benefits from FNS, the child care worker’s first step is to access the most current FNS income information from NC FAST since the income information shown in NC FAST has been verified. The following types of income that can be deemed from FNS include:

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• Earned Income, and • Unearned Income (excluding child support) The child care worker must complete the guided interview using the information obtained from FNS. The childcare worker cannot require the applicant to provide additional income information. However, if the applicant voluntarily provides more current information, the new information must be verified following SCCA policy. In the following situations, income is NOT deemed from FNS: • Non-representative income • Lottery or gambling winnings • Self-Employment Income • Child Support

At the time of application, and redetermination, the child care worker must emphasize to the recipient the importance of reporting changes. The child care worker must use the Recipient Responsibilities for Subsidized Child Care Assistance NC FAST-20009 form, when reviewing the reporting requirements with the applicant/recipient. Refer to Chapter 13 regarding Recipient Rights and Responsibilities. A. Base Periods & Special Base Periods

The base period report for initial applications is the month prior to the month the initial application is received in the agency. The base period for recertification applications is the month prior to when the recertification application is received in the agency. Refer to Chapter 7 Attachment 3: Application, Recertification & Base Periods Guide

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1. Base periods Are the periods of time that are the basis for determining income eligibility. The base period establishes a set period for child care workers to create a “snapshot” of a budget unit’s income and for which income must be verified. The base period should be an accurate representation of the income the household is expected to have available during the certification period.

The following are static base periods used for representative income:

One Month: The base period for most income is the month prior to the month of application or redetermination if representative. Three Months: The base period for child support, spousal support, and alimony is three months prior to the month of application or redetermination if representative. Calculate by adding the income from the three months together and divide it by 3 to obtain a monthly average.

Twelve Months: If the income is received annually or from self-employment, the base period is 12- months. Refer to section V. SELF-EMPLOYMENT

When the child care worker is assessing a family for application or recertification, the above base periods must be discussed. Documentation requested from the recipient shall be based on the above base periods. For the majority of representative income, a 1- month base period is used.

NOTE: When child support is received a 3-month base period is used.

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Refer to the Chapter 7 Attachment 3: Application, Recertification & Base Periods Guide for reference.

2. Special Base Periods Certain types of income require special base periods, particularly if the income is not stable or the income fluctuates. Income that fluctuates significantly should be averaged in such a way that child care assistance will not be interrupted, and the family can anticipate and budget for the parental fee that remains unchanged throughout the eligibility period. This method of calculating income must be used sparingly and carefully.

i. Non-representative income is income from the base period that is received irregularly, has changed, or terminated, and cannot be reasonably expected to be available to the recipient’s household during the certification period.

a. If reported income is not representative, the child care worker must determine which budgeting method is the most representative estimate of the budget unit’s income over the certification period. The child care worker must provide detailed documentation of what was used for representative income and why it was used.

B. Determining Representative Income

The following steps must be used for determining income when non- representative income is in the base period: 1. Explore alternative budgeting methods for averaging income. The child care worker may consider one of the following or other alternative budgeting methods:

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i. an average income of the three months prior to application, ii. an average of six months prior to application, or iii. an average that includes three months prior to the application and three months of anticipated future income.

If the child care worker uses an alternate budgeting method, the worker must document why the base period is not representative and how the child care worker determined what is representative. Include the calculations in the documentation.

2. Project using the best available information about the number of hours, rate of pay, and frequency of pay expected to be received over the certification period.

i. Nonrepresentative income includes new income that was not previously available to the household but is now or will be available to the household during the certification period. New income can include the following but is not limited to:

• New employment. • Increase / Decrease in rate of pay. • New position with same employer. • Increase/ Decrease in work hours.

If the new income provided is representative, use the appropriate base period income to average gross income.

ii. If new income is not representative due to the household not receiving a full month’s income, it may be necessary to project income for future months. Project income by using the best available information about the number of hours, rate of pay, and frequency of pay expected to be received over the certification period.

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C. Calculation of Income The computation of gross monthly income is made based on an assessment of the family’s income that is available during the appropriate based period. It includes asking questions to ascertain the client’s situation, considering all sources of income, determining what income is counted for the eligibility for child care services, verifying all sources of countable income, and making accurate calculations. If pay stubs are not available due to the applicant/recipient being newly employed, the DSS/LPA should not delay the approval of the application. Income that is anticipated by someone who is newly employed is based on an employer’s statement (either by telephone, written statement, or a wage verification form) that indicates the rate of pay and the number of hours for each pay period the applicant/recipient is scheduled to work. The calculation of earned income must be clear and can be explained by one of the following: • An explanation in the case narrative. • Handwritten notes on the application (DCDEE-0456). • A calculator tape for income which should be uploaded as an attachment in NC FAST. • Any unusual circumstances that the child care worker considers in calculating income must be documented in detail in the case narrative.

1. Alternative Budgeting Method- If income is not representative, child care workers must provide detailed documentation of why the child care worker used what they used and detailed documentation of why the budget was calculated differently.

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2. Calculating Regular ongoing income: Income that the household has been or expects to receive on a regular, ongoing basis. This income can fluctuate across pay periods, so the child care worker should use all representative (full) pay received in the base period to average gross income across pay periods to determine the amount of gross income available to the household for each pay period. i. Calculation: averaging the representative income to establish an accurate representation of the income expected to be received each pay period. ii. Determine the total gross income for each pay stub received during the base period. iii. Determine the number of pay dates. iv. Divide the total gross income by the number of pay dates; do not round.

If the base period contains a pay period of $0 that is representative of the regular ongoing pay use $0 in your averaging.

If the $0 pay is not representative, then do not use that pay period and thoroughly document the reason the income is not representative in the case notes.

The following formula is used to convert average incomes to a monthly amount: • If received weekly, multiply by 4.3 • If received biweekly, multiply by 2.15 • If received semi-monthly, multiply by 2 • If received quarterly, divide by 3 • If received monthly, use the monthly gross • If received semi-annually, divide by 6

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• If received annually, divide by 12

The monthly income amount is entered on the application in NC FAST.

3. Calculating Terminated income:

Income the household has previously received that has terminated or will terminate during the certification period.

If terminated income is reported prior to the receipt of the last pay, the last pay received is counted and the end date shall reflect the date the last pay is received.

For example: Recipient reports terminated employment on 03/13/2024. The recipient’s last pay check is expected on 03/29/2024. The last pay received on 03/29/2024 is counted and the income is end dated on 03/29/2024.

If terminated income is reported after the last pay has been received. The income shall be end dated the date the recipient reports the terminated income.

For example: Recipient reports terminated employment on 04/15/2024. The recipient’s last pay check is expected on 03/29/2024. The last pay received on 03/29/2024 is counted and the income is end dated on 04/15/2024.

Client statement regarding terminated income is accepted unless it is questionable. If client statement is questionable, child care workers should request verification and must document why verification of terminated income has been requested.

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IX. VERIFICATIONS Verifications are used to support evidence in the determination of SCCA program eligibility. The purpose for verification is designed to prevent and/or identify fraudulent misrepresentation and under/overpayments. Income verification must be completed before a case can be opened. Adequate verification requires that the applicant/recipient presents sufficient information so the child care worker can make accurate calculations that reflect the applicant/recipient’s current income or to accurately determine an average monthly income in those cases where income fluctuates significantly. It is important for the applicants/recipients to understand they are certifying the accuracy of the information when they sign the application. The child care worker must assist the applicant or household in obtaining verification as needed. The child care worker must have every check stub received during the base period month. If every check stub is not available, the child care worker must accept any reasonable documentary evidence if the verification adequately proves the information provided on the application. Child care workers must provide detailed documentation of why the child care worker used what they used. Note: Do not verify the county residency, citizenship, or age of the child as it is not a requirement for SCCA. Refer to Chapter 4 for additional information.

A. There are four main sources of verification that can be used when determining eligibility.

1. Electronic Verifications (the work number) are the best tool for calculating gross monthly income. In addition to showing the name of the employer, the date of pay and gross income earned, this document can provide other valuable information which helps the child care worker make an accurate calculation.

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Electronic Verification (OVS) is required for all unearned income types. Electronic matching is the primary income verification source for income received through Social Security, Division of Employment Services (DES), Unemployment Insurance Benefits (UIB), and the Work Number. Child care workers must use OLV/OVS for verification and explore unearned and/or benefit income using the verification hierarchy.

There may be times when OLV/OVS may yield insufficient results from the online data request. If this occurs, it is because there is no social security number (SSN) of a household member. The child care worker can ask the applicant/recipient for SSNs to aid in online verification. However, it must be made clear that providing a SSN remains optional and services will not be denied for an applicant who refuses to provide a SSN. Refer to Chapter 4 regarding SSNs and the application process.

Social Security numbers may be needed for: • child only cases and • when the online verification results in insufficient date. Note: Only pursue other verification methods if there is a discrepancy or if electronic verification is not available or representative.

Refer to the following job aids: SCCA Job Aid- Requesting and Viewing Online Data (OVS) SCCA Job Aid- Adding-Editing the Social Security Number SSN SCCA Job Aid- Registering Persons

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2. Documentary evidence for income verification includes items such as but not limited to wage stubs or award letters. Documentary evidence may be provided in person, by mail, or through an authorized representative. The applicant or the household has primary responsibility for providing documentary evidence to support statements on the application and to resolve any questionable information. If the applicant/recipient is unable to furnish source documents, the DSS/LPA must have the applicant/recipient’s written permission authorizing the child care worker to contact the necessary individuals, employers, or agencies to verify income. The child care worker documents in the case notes which verification method was used and why previous method was not used. When documentary evidence cannot be obtained or is insufficient to make eligibility determination or determination of the correct benefit level, collateral contact may be necessary.

3. A collateral contact is a person knowledgeable enough about the information needed to provide an accurate statement of verification. Examples of acceptable collateral contacts may include employers, social service agencies, migrant service agencies, who can be expected to provide accurate third-party verification. The DSS/LPA is responsible for obtaining verification from acceptable collateral contacts.

4. The recipient’s written statement is acceptable in some circumstances unless otherwise questionable. The following circumstances include but are not limited to i. Receiving recurring cash contributions paid to the parent, or ii. Child support that is not paid pursuant to a written agreement or court- ordered arrangement.

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The recipient’s written statement should be the last resort after all other attempts to obtain verification have been exhausted. The child care worker must enter detailed documentation as to why the recipient's statement is being used and why other methods were not used.

Note: The DSS/LPA must assist the applicant or household in obtaining verification as needed.

X. VERIFICATION OF INCOME TYPES

The applicant/recipient’s income is the “evidence” used to determine eligibility. The family applying for SCCA must meet income eligibility requirements to be approved for services unless the service is available without regard to income (to support care needed for CPS or CWS). In all instances, child care workers must document verification of income. Refer to Chapter 04: Application, Eligibility Determination and Documentation.

Verification of all income is required at: 1. application, 2. annual redetermination, 3. if there is an increase in income that exceeds 85% SMI (this should NOT include irregular income fluctuations), 4. if a recipient voluntarily reports a change in employment and allows a decrease in income.

A. Income Types and the Verification Hierarchy

The following lists the verification methods and hierarchy for each of the standard income types. The verification methods are in descending order when electronic verification is not available or is not the most current.

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1. Standard Earned Income- Wages, Salaries, Tips (including Contract Income, pay advances, work-study, longevity pay etc.).

i. Verify the most recent representative pay. ii. Verify the client’s status, rate of pay, and average hours worked with employer, either verbally or in writing. iii. Accept client’s statement as the last possible verification method if unable to obtain from a third party.

2. Special Earned Income- Rentals, Royalties, Self-Employment i. Income tax return or tax forms a. Tax returns provided by the applicant/recipient are an acceptable form of verification. b. (1099) verification for Self-Employment Note: For contracted employees that have a 1099, it can be accepted if skillful interviewing is completed to support the DSS/LPA accepting the 1099. Skillful interviewing and documentation should include: • How many months does the 1099 cover? • Does the client perform any other contract work that the presented 1099 does not cover? • Does the income reported on the 1099 meet the gainful employment standard? ii. Business records a. Business records provided by applicant/recipient are an acceptable form of verification. This may include but is not

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limited to the following: • Business accounting records or statements from an outside accountant (generally compiled based on information provided by the applicant/recipient). • Ledger books or bookkeeping records, including those maintained by the applicant/recipient or an employee, either paper or in software programs such as Quicken. • Lease agreements that are maintained by the applicant/recipient. Note: For expenses, verification must indicate the date the expense was paid, to whom it was paid, and the purpose of the expense. iii. Signed statement of a financial institution, bank, or real estate agent.

iv. Applicant Statement

At application, the applicant’s written statement of income may be accepted AS A LAST ALTERNATIVE only if no business or current tax records are available and the applicant has not previously been informed of the requirement to keep business records. Applicant's written statement is acceptable for gross receipt income only rather than net income after operating expenses. The applicant's statement cannot be accepted for operational expenses. If a recipient does not keep good records, the child care

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worker can provide the applicant/recipient the Verification Form for Self- Employment Income and Expenses Attachment 2 to verify income. Note: If an applicant/recipient has just started a new business, the applicant/recipient’s statement of income may be accepted as a last alternative only if no business or tax records are available. If the child care worker must accept the applicant’s statement of gross income, the reason the applicant has no business records must be documented. In addition, the child care worker must advise the applicant/recipient that at redetermination, it will be necessary to provide adequate business records to establish and verify income to continue to receive services.

3. Child Support Received The amount of child support received or must be verified through: i. Online verification system (ACTS) ii. Provision of the separation agreement or divorce decree, if up to date a. Child Support Services b. Clerk of Court iii. Signed statement of the caretaker when the income is received directly to the income unit as a last possible verification method. a. The child care worker should obtain the written statement from the non- custodial parent before taking the applicant / recipient’s statement of child support.

b. If the non-custodial parent refuses to cooperate and provide verification of child support, the information should be documented in the case narrative/notes and allow the applicant/recipient to

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sign a statement verifying the amount of child support received for the base period. The applicant/recipient is not required to prove he/she does not receive child support.

4. Child Support Paid Out The amount of child support paid out must be verified through: i. Documentary evidence • Pay stubs showing the child support deductions; or • Statement from the Child Support office documenting amount payments made.

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For additional information regarding policy described in this chapter please refer to:

SCCA Manual: Chapter 4 Application and Eligibility Chapter 5 Establishing Plan of Care Maximum Income Eligibility FPL & SMI Chart-

NC FAST Job Aids: SCCA-85% SMI Phase-Out Reference Guide SCCA-Change of Circumstance Evidence and Alignment Reference Guide SCCA-Change of Circumstance Job Aid SCCA-Decision details and Change of Circumstance Reference Guide SCCA-Eligibility Decision Results Reference Guide SCCA-Foster Care Job Aid SCCA-Graduated Phase-Out SCCA-Joint Custody Job Aid for step-by-step instructions self-employment in NCFAST. SCCA-Reactivate a case in pending closure status. SCCA-Recertification SCCA-Employment, Self-Employment, and Income Evidence Job Aid SCCA-Service plan Reference Guide SCCA-Tasks Reference Guide SCCA-Unearned Income Evidence SCCA-Using FNS Evidence as verified SCCA Evidence

Subsidized Child Care Assistance Program Policy Manual Chapter 8. Parent Fee

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I. CHAPTER OVERVIEW The applicant/recipient who is deemed eligible may be required to pay a portion of the cost of child care through a parent fee. A parent fee is assessed if countable income is received for the household including a child(ren)’s unearned income such as child support payments, and or social security benefits (SSA). This chapter describes who must pay a parent fee, how parent fees are assessed and special circumstances that may affect the parent fee. II. WHEN PARENT FEES ARE NOT ASSESSED Parent fees are not assessed for child care assistance when one of the following apply: A. Child care assistance is provided in conjunction with a child protective services plan to enable the child to remain in his/her own home. B. Assistance is needed to support child welfare services as described in Chapter 5: Establishing Need and a Plan of Care.

C. Children who are receiving foster care services need child care assistance. The foster children must be in the custody of the county department of social services and:

1. Residing in a licensed foster care home, or

2. Placed with an adult other than their parents.

III. WHEN PARENT FEES ARE ASSESSED Applicants/recipients who qualify for child care assistance based on their countable income must pay a portion of their child care costs. This parent fee is set at 10% of the family’s gross monthly income, when applicable. If an applicant/recipient wants to check whether they meet the financial eligibility criteria and estimate their potential parent fee, they can use the SCCA FPL/SMI/Parent Fee Table available on the division’s website.

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All applicants/recipients who are required to pay a parent fee will pay 10% of their gross monthly income. Once the parent fee is assessed, the applicant/recipient is responsible for paying the parent fee directly to the child care provider. Parent fees for new applicants are effective on the first day the child attends care. Any decrease in a parent fee is to be effective on the first day of the month when the decrease is reported. The parent fee is assigned to the youngest child on the child care case when there is more than one child receiving child care. Example: A change is reported to the worker in February, but the worker did not make the change until March. The decrease should start in February. When an applicant/recipient is deemed income eligible through Food and Nutrition Services (FNS), the parent fee is calculated from the verified gross monthly countable income. When a provider is paid based on a blended rate, the parent fee will be 83% of the full-time parent fee. The parent fee for a 75% and 50% plan of care is 75% of the full-time parent fee. The parent fee will apply for the entire eligibility period. IV. RESPONSIBILITIES REGARDING PARENT FEE A. Responsibilities of the Department of Social Services (DSS) / Local Purchasing Agency (LPA) 1. When subsidized child care is approved, the DSS/LPA must notify the provider and applicant/recipient in writing as to the amount of the Parent fee to be collected from the recipient using the Child Care Voucher (DCD-0446) or Child Care Action Notice (DCD-0450). 2. The LPA must give the applicant/recipient a clear explanation of the Parent fee policy, located on the Rights and Responsibilities NC FAST 20009, the specific charges imposed, and the recipient’s responsibility for payment. 3. Any change in the amount of the Parent fee must be made known to the provider and recipient using the Child Care Action Notice (DCDEE-0450). However, the parent fee cannot increase due to an increase in income or change in the Plan of Care.

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4. Collection of past due parent fees are limited to 1 month prior to the provider’s request for termination of services. Refer to Section C., 3 below regarding termination of child care arrangements when Parent fees are not paid. 5. When a recipient contacts the DSS/LPA and requests to end care or change child care providers, the child care worker must contact the child care provider to ensure there are no past-due parent fees.

If the child care worker attempts to contact the provider but the provider cannot be reached, the child care worker must document all attempts to contact the provider prior to issuing a new voucher. 6. When a provider contacts the DSS/LPA to report unpaid parent fee and requests to terminate services, the child care worker must issue a Child Care Action Notice to terminate the Plan of Care according to Chapter 11 III.B.2. ii. of the SCCA Policy Manual and must document the case of the amount of unpaid Parent fee and the reason why the Plan of Care is being terminated. If the provider confirms unpaid fees but does not wish to terminate, the caseworker must document the amount owed, the provider’s decision to continue services and any payment arrangements, if known. Child care expenses affect the Work First, FNS and Medicaid benefits a family is eligible to receive; therefore, the child care worker should notify the Work First, FNS and Medicaid unit(s) of any parent fee assessed, the effective date and any changes in the parent fee. A copy of the Child Care Voucher (DCDEE-0446) or Child Care Action Notice (DCDEE-0450) can serve as the means of notification. B. Responsibilities of the Applicant/Recipient

1. The applicant/recipient is responsible for paying the Parent fee for child care assistance directly to the child care provider. Recipients may voluntarily report changes. Voluntary reporting made

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by the recipient should be entered into NC FAST by the child care worker if the change decreases the parent fee or increases the recipient’s subsidy. Refer to Chapter 11 Responding to Eligibility Changes and redetermination for recipient required and voluntary reporting.

2. The applicant/recipient can negotiate with the provider a parent fee payment plan that best suits the applicant’s/recipient’s needs. The applicant/recipient and the provider may agree upon an individual plan for collecting parent fee payments at less than monthly intervals. 3. Should an applicant/recipient choose a provider who charges more than the subsidy rate the LPA has authorized, the applicant/recipient may pay the difference between the provider’s charge and the rate paid by the LPA. If the applicant/recipient is unable or unwilling to pay the difference in this situation, another provider must be selected by the recipient. There may be cases where providers charge the applicant/recipient additional fees for activities not included in the normal program of child care. These additional charges may include:

i. Enrollment or registration fees when the fees are not paid using county funds; ii. Fees for arriving late to pick up the child or for late payment of the fee; or

iii. Special fees for activities such as swimming or dance lessons.

NOTE: The LPA is not responsible for these separate fees charged to recipients. C. Responsibilities of the Provider

1. Providers are solely responsible for the collection of parent fees. The provider must collect the parent fee from the recipient on a regular basis and apply the same policy for non-payment of

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parent fees to private paying recipients and parents receiving subsidies.

If there are unpaid parent fees, the provider must indicate the amount of unpaid parent fees. The recipient is only responsible for paying one month of unpaid parent fees to receive a new voucher. Any additional months that the provider has not collected any outstanding parent fees will not be considered when issuing a new voucher. Only the parent fee amount is considered when there are unpaid parent fees. Additional charges from the provider, such as late fees, are not included when issuing a new voucher.

2. When a provider consents to a repayment arrangement, it is the provider’s responsibility to collect payments. Upon notification that a repayment arrangement has been made, the recipient is issued a new voucher. However, if the recipient later fails to complete the entire repayment agreement, the recipient’s voucher continues and the voucher is not revoked. 3. If an applicant/ recipient has failed to pay their monthly parent fee, the provider must notify the LPA of the unpaid fees, and the following guidelines must be followed:

i. The provider must indicate the amount that is unpaid immediately and may request that services be terminated for non-payment of parent fee. The unpaid parent fee is limited to one month. Any additional months the provider has not collected the parent fee from the family will not be held against the family in order to obtain a new voucher. ii. If the provider requests the termination of the Plan of Care, the child care worker must issue a Child Care Action Notice (DCD-0450) to both the recipient and provider, indicating that the arrangement is being terminated at the provider’s request for failure to pay parent fee. One month of parent fee must be paid in full or satisfactory arrangements made between the recipient and provider for repayment before

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a voucher for another provider can be issued. iii. The provider must notify the LPA that a repayment agreement has been developed and that a payment plan with the parent and/or the outstanding one-month balance has been paid in full. When the LPA is notified, services may continue.

iv. The provider must give the recipient a dated receipt for payment of the parent fee, as payment is received. Receipts should include the period that the payment covers and the type of payment (such as child care, registration, parent fee, outstanding balance, etc.). v. The provider must retain copies of these receipts for at least three (3) years, and they may not be destroyed until authorized by DCDEE or the LPA. Recipients should be encouraged to retain receipts as well; in case they need to verify that the fee has been paid for a month. If there is no repayment agreement and the parent has not paid the parent fee, the LPA must document in the record the reason services are terminated and the amount of the unpaid parent fee. The provider or recipient must submit verification when the parent fee are paid.

V. DETERMINATION OF THE PARENT FEE AMOUNT Parent fees are the same across the state for all types of child care arrangements. The parent fee is 10% of the gross monthly income. To ensure the parent fee does not exceed 10% of gross monthly income, the child care worker must multiply the gross monthly income by .10 and round down to the nearest dollar to determine the monthly amount the applicant is responsible for paying. For example, if the parent fee calculation results in $234.75, the parent fee is rounded down to $234. To determine the daily fee, divide the parent monthly fee by 21.67. The daily parent fee rates are rounded to the nearest cent. A Parent fee is assessed if countable income is received. It is based on the family’s gross income.

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There is one (1) parent fee for the applicant/recipient receiving subsidized child care assistance, regardless of the number of children in care and regardless of the hours of care needed. The parent fee will follow the child with the highest level of care needed. If multiple children have the highest level of care, the parent fee is assessed to the youngest child. In cases wherein the parent fee exceeds the cost of care, services cannot be authorized. An exception to this would be when more than one (1) child is in care and the total cost exceeds the parent fee; the parent fee will be divided between or among the children. If the parent fee exceeds all the children’s cost of care, the case is ineligible. When the total cost for before and/or after school care exceeds the parent fee, the recipient can request services for teacher workdays and holidays, and care must be authorized if the daily provider payment rate exceeds the daily parent fee amount. When the recipient requests services for summer and/or track out care only, care must be authorized if the monthly payment rate exceeds the monthly parent fee amount. The family should not be placed on the child care waiting list. The case can be suspended until the child attends.

A. PARENT FEE FOR FULL-TIME OR PART-TIME CARE

Full-time payment for part-time care will now be available for applicant/recipient in limited situations. This should only be utilized when a child’s need for care is part-time but there is either no available part-time care for the child or the available care would not meet the needs of the child. The Parent fee for Applicant / Recipient who receive part-time care with full-time pay shall remain at 75% of the Parent fee. The details of these situations must be documented in the case narrative. 1. When the child is enrolled in the same child care arrangement and the care averages 32 or more hours per week, the parent is charged the full-time 100% parent fee. Calculate the parent fee based on 10% of the family’s gross monthly income regardless of the number of children in care or the number of hours care is needed.

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2. When the child is enrolled in the same child care arrangement and care averages 1 through 31 hours (3/4 time) per week, the parent fee is 75% of the full-time fee.

For example:

i. Full Time, 100%: 32 – 55 hours per week. Recipients will pay full time parent fee at 100%. ii. Blended Rate: Child attends facility year-round (during the school year as well as summer and school closings). Child attends before and/or after care and full time on school closure days and during summer/track out. Recipients will pay blended rate fee at 83%.

iii. 75% – 18 – 31 hours per week. Recipients will pay a three-quarter time fee at 75%.

iv. 50% 0 – 17 hours per week. Recipients will pay a part- time fee at 75%.

NOTE: Error messages will alert you upon entry of parent fee amounts for part-time care that are not 75% of the full- time parent fee. These are error messages because the Parent fee must be verified. For example, the parent fee is less than 75% of the full-time fee, and the parent fee exceeds 75% of the full-time fee.

B. PARENT FEE WITH GRADUATED PHASEOUT A 12-month Graduated Phase Out period occurs when, at recertification, a family’s gross countable monthly income exceeds Federal Poverty Levels of 133% for school age children or 200% for preschool age children and children with special needs and is at or below the federal income threshold of 85% State Median Income. During the Graduated Phase Out, Parent fee will increase to reflect the family’s new reported income. At recertification, the family’s income shall be compared to 85% State Median Income (SMI). If the income is

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less than 85% SMI but exceeds the Federal Poverty Level (FPL) limits, the child will be given a Graduated Phase Out period of 12-months during which child care subsidy services continue with adjustment of the Parent fee.

A Child Care Action Notice (CCAN) will be sent to notify recipients and providers of the increase in the Parent fee due to new reported income. When the family’s income exceeds 85% SMI at recertification, a ten (10) workday notice will be issued to terminate services. For applicants determined ineligible with less than 10 workdays remaining, care may continue until the current certification end date.

C. PARENT FEE FOR PARTIAL MONTHS 1. There may be times when the child care worker must assess a Parent fee for child care that begins or ends in the middle of the month. For example, when a child starts after the 1st of the month (starts on the 15th), NC FAST will calculate a prorated parent fee amount if the Plan of Care starts after the 1st of the month.

2. The following situations describe how parent fees are determined when child care assistance is needed for part of a month. i. When the monthly parent fee amount and the beginning date are entered, NC FAST will automatically assess the parent fee. ii. When child care assistance is terminated during a month, a partial month Parent fee must be assessed for the number of days care is needed. NC FAST will calculate the Parent fee based on the number of days that care was needed. iii. When there is a hardship and the child attends a partial month, please refer to the Exemption Evidence Job Aid. Hardship cases occur when the child is expected to be absent from care for more than ten (10) days in a service month due to identified situations. Parents are required to

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contact their child care worker to discuss their situation and provide information. The worker then determines if this is an approved hardship and approves the Provider payment for these days. Refer to Chapter 16, page 6, Item 2, Hardship Cases and Unusual Circumstances.

NOTE: The full-time monthly and daily parent fee should be shown on the voucher.

D. PARENT FEE WITH DIFFERENT PLANS OF CARE

Sometimes varying child care arrangements are needed because of different work schedules. When a parent/responsible adult work schedule is unusually long, two types of child care arrangements or extra hours of care in the same arrangement may be needed. In either situation, the child care worker assesses the Parent fee based on 10% of the family’s monthly gross income.

There may be instances where the Plan of Care creates a need to change between two providers. A parent/responsible adult may work a varying work schedule of both daytime and nighttime hours. Some months, the daytime arrangement is used more, and other months, there is more need for nighttime care. In this situation, the child care worker will select the facility/provider where care is required for the most hours to collect the parent fee rather than trying to split the Parent fee between providers. For example, a child may need 50% care at one provider and 50% care at another provider to cover the parent’s long shift which covers 1st and 2nd shift. Additionally, if a child needs 50% care at one facility and 75% care at another, or 75% care at one facility and 75% care at another, the parent fee would be assessed at 100%. Manually adjust to assess the 100% parent fee at the facility that provides the highest level of care. If both facilities provide equal levels of care, the worker will select one of the facilities to receive the 100% parent fee.

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VI. PARENT FEE ADJUSTMENTS IN NCFAST Parent fees for child care are based on the family’s ability to pay and are not intended to discourage Applicant / Recipient from using needed services.

A. Manual Parent Fee Adjustment

Adjustments are made to parent fees and levels of care during a recipient’s 12-month certification period in order to align with changes occurring in cases. These adjustments are made in order to benefit the family when there is a change to ensure that they receive the appropriate level of service, that their parent fee is appropriate and to ensure that these changes occur in a timely manner.

NC FAST adjusts parent fees and level of care changes automatically based on changes made to cases within the system. There are some situations in which adjustment of the parent fee or level of care change in NC FAST does not align per current policy. To ensure that these adjustments do align correctly based on current policy; functionality is available within NC FAST to manually adjust parent fees when the system does not align the changes per policy. The child care worker must review the Update Parent Fee Screen to access and to accept or adjust the update if correct.

1. Update Parent Fee Screen

The Update Parent Fee decision screen is automatically populated when a new decision is assessed. The child care worker must review the Update Parent Fee Screen to review and to accept or adjust the update if correct.

2. Manual Parent Fee Adjustment

The manual parent fee adjustment functionality should only be used in the following scenarios:

• Child is beginning or ending school. • Immediate change of child care providers (can be due to

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emergency situation).

• Parent fee is not applied to correct child. • When there is more than one PDC created, only the higher parent fee is assessed, and the worker must make a manual adjustment on the lower parent fee to $ 0. For example: A mother and her boyfriend apply for SCCA for their mutual child and her child. The boyfriend’s income is countable for their mutual child but not her child. When NC FAST creates two PDCs for each child, each PDC will have a parent fee. Only the higher parent fee is assessed. The worker must adjust the lower parent fee in the other PDC to $0. • When a child has two Plans of Care due to needing care at two different providers during the same time- period, the parental fee is assessed at 100%. For example: The parent works 16-hour shifts and utilizes a separate provider for 1st shift care and 2nd shift care. The child needs 50% care at one facility and 50% at another. Additionally, if a child needs 50% at one facility and 75% care at another, or 75% care at one facility and 75% care at another, the parent fee is assessed at 100%. Manually adjust to assess the 100% parental fee at the facility that provides the highest level of care. If both facilities provide equal levels of care, the worker will select one of the facilities to receive the 100% parental fee.

Child care workers should refer to the SCCA Job Aid Update Parent Fee and the SCCA Job Aid Manual Adjustment Job in order to make necessary changes when one of the above-mentioned scenarios occurs. This functionality should not be used to resolve defects or any other issues unless it has been approved by DCDEE. There are additional options in NC FAST for making manual parent fee adjustments, but these should ONLY be used if the child care worker is given direct guidance from DCDEE. If additional scenarios are approved by DCDEE, this will be communicated to child care workers by DCDEE and NC FAST communications.

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B. Parent Fee Adjustments when the Plan of Care or Eligibility Changes, Including Recertification Whenever the applicant/recipient countable monthly income increases during a certification period, calculate the income outside of NC FAST. The income calculated outside of NC FAST is compared to 85% SMI, if under 85% SMI, then document the increased income in the case notes. The parent fee cannot increase during a 12-month certification period due to changes in income or a change in the level of care. When a recipient reports a decrease in their gross monthly income, the parent fee must be reduced to reflect the reported decreased income. The worker must recalculate and enter the income and decrease the parent fee. A reduction in parent fee is made on the first day of the month when the change is reported. 1. Parent Fee Reinstatement

i. Reinstatement is the action of restoring the assessed parent fee at the initial application or recertification. There are times a parent fee is reinstated after change is reported. If the parent fee decreases during the 12-month eligibility period, the parent fee can be reinstated to the amount that was initially assessed at the most recent application or recertification. The reinstated parent fee cannot exceed the initial parent fee assessed at most recent application or recertification.

ii. At recertification, the child care worker assesses the parent fee based on the family’s income and the parent fee can be increased on the first day of the month following the 10- business day notice upon recertification processing.

The following are instances (but not exhaustive) when the parent fee is to be reinstated: • Refer to Ch.5, III. Sec. E&F: Child Care to Support Child Protective Services/Child Welfare Services when an active case has a CPS/CWS referral that ends

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during the certification period and the income was obtained at initial application. • Refer to Chapter 11, Section C. item 3: Temporary Changes when an applicant/Recipient reports new income after a job search/job loss, or when a Level of Care change is reported back to the initial higher level of care at the beginning of the certification period.

If the recipient later reports a new change in income that is higher than the income assessed at initial application or recertification; the parent fee can only be reinstated up to the parent fee amount assessed at application or most recent recertification. At the annual recertification, the income and parent fee can increase on the first day of the month following the 10-work day notice. C. Parent Fee Adjustments for Child Care Benefits

Money from a child care benefit is counted as part of the allowable cost of care. Money from the benefit is first applied to the parent fee; any remaining amount is subtracted from the amount the LPA pays to the child care facility/provider. The child care worker must document this information into NC FAST and add an explanation in the comments section of the voucher or action notice. If the parent/responsible adult is employed by a child care facility who offers an employee discount, the discount is not considered when determining parent fees and payments. • When an employer benefit is less than the parent fee, the applicant/recipient pauses the benefit amount to help pay the assessed fee amount.

• The voucher/action notice would show the actual parent fee amount calculated in NC FAST.

• When an employer benefit is more than the parent fee, the applicant/recipient will use the benefit to pay the parent fee. The remaining benefit amount is then subtracted from the allowable cost of care in NC FAST. The applicant/recipient would pay the entire

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benefit directly to the child care facility/provider. The child care worker must document this information in NC FAST and add an explanation in the comments section of the voucher or action notice.

D. Parent fee Adjustments for High Medical Expenses

An applicant/recipient with large medical expenses may find the payment of a parent fee more of a hardship than other applicants/ recipients of similar size and income. To help in this situation, the family’s gross income upon which the parent fee is assessed will be reduced by subtracting the amount of documented medical expenses paid in excess of 10% of that gross income. Medical expenses are considered only in relation to the payment of Parent fee, not in determining basic income eligibility. Information provided by the applicant/recipient about the family’s medical expenses must be verified and documented in the case record.

1. One-Time Medical Adjustment

A one-time medical adjustment can be given when a applicant/recipient pays a high medical expense for one month. The excess medical expenses are deducted from the gross monthly income and the Parent fee for the upcoming month is reduced. Thereafter, the Parent fee goes back to the amount assessed prior to the adjustment.

Example: One Time Medical Adjustment. The applicant/recipient has household income of $3000 per month. The 10% Parent fee would be $300 effective 1/1/2023. The applicant/recipient has a one-time medical expense of $400 that she will pay in full in January 2023. $400 - $300 Parent fee = $100. For the month of January 2023, $100 is reduced from her $3000 income = $2900 x .10 = $290 Parent fee for January 2023 and then Parent fee goes back to $300 for February 2023 and ongoing.

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2. Medical Expense Spread Over Several Months:

When an applicant/recipient pays high medical expenses for more than one- month, medical adjustments can be spread over several months. The excess medical expense is deducted from the gross monthly income for the months in which there are high medical bills. The parent fees are also reduced for those months.

Example: Medical Expense Spread Over Several Months: The applicant/recipient has HH income of $3000 per month. 10% Parent fee would be $300 effective 1/1/2023. The applicant/recipient had a hospital stay in the fall of 2022 and are making monthly payments to the hospital of $400 per month for the next 4 months. $400 - $300 Parent fee = $100. For the months of January - April 2023, the Parent fee will be reduced to $290 per month. ($3000 - $100 excess medical expense = $2900 x .10 = $290). Then it will return to $300 per month Parent fee for the remainder of the certification period.

Refer to Chapter 7 for additional information regarding Medical Expenses.

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For additional information regarding policy described in this chapter please refer to: SCCA Manual Refer to Chapter 5 Establishing a Need, Level, and Plan of Care Refer to Chapter 7 Family Definition and Determining Income Eligibility Refer to Chapter 9 Recipient Choice and Voucher Procedures Refer to Chapter 16 Payment Policies SCCA Job Aids SCCA Job Aid - Manual Parent Fee Adjustments SCCA Job Aid - Split Parent fee SCCA Job Aid - Tasks Reference Guide SCCA Job Aid – Update Parent Fee