a. Verifying Hours of Work

As further discussed in section II.C. of this IFC, and specified in section 1902(xx)(2)(A) of the Act and § 435.552(a)(1), an applicable individual demonstrates community engagement for a month if the individual works for not less than 80 hours in that month, which includes work in exchange for money, work in exchange for goods or services (“in-kind” work), unpaid work other than community service, and any combination of the three. Under the requirement in section 1902(xx)(5) of the Act, States must attempt to verify community engagement compliance on an ex parte basis. To comply with this requirement, States must, at a minimum, attempt to verify compliance using the reliable information available to the State that the State relies upon to verify income to the extent these data sources provide information about hours worked. However, not all types of work can be verified using currently available financial data sources and, in some instances, the data returned may not include information regarding the number of hours worked. As such, States should also consider whether there are other available data sources that provide information pertaining to hours worked, including paid, unpaid, or in-kind hours and, if so, establish a connection with said data source(s) (unless doing so is not effective) in accordance with § 435.557(b)(1).

As explained in section II.C.8. of this IFC, if the monthly income is less than the applicable Federal minimum wage multiplied by 80 hours and the State does not have information regarding the number of hours worked, States have the option to apply an equivalency standard that allows the State to calculate the number of work hours for a month by dividing the individual's monthly income by the Federal minimum wage. For example, where the State is not able to verify that the applicable individual worked for at least 80 hours during the relevant month or had monthly income equivalent to working at least that number of hours for the month, the State may derive the number of hours worked from the monthly income and use the calculated estimate to combine with other qualifying hours to demonstrate community engagement under section 1902(xx)(2)(E) of the Act and § 435.552(e). We recognize that States will be using the individual's MAGI-based income for their MAGI-based household when converting monthly income to hours worked. In these ( printed page 33399) circumstances, the State must use a reasonable method to allocate hours between members of the household. In addition, this option must only be used when the monthly income is less than the applicable Federal minimum wage multiplied by 80 hours and the State does not have information regarding the number of hours worked by an applicable individual.

If the State cannot verify work hours using reliable information available to the State (including, at State option, using the equivalency standard described in the preceding paragraph) or the reliable information available to the State is not reasonably compatible with the information provided by an applicable individual, the State must seek information from the individual to verify work hours. Beginning on January 1, 2028, when States are unable to verify work hours using reliable information available to the State, States must require documentation when such documentation is reasonably available, and must establish a process to accept other information when there is no reasonably available documentation, as described in section II.I.3. of this IFC.