SR 94-62 Dated 09/94

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

SR SUMMARY

This SR releases several Food Stamp Program changes as a result of the Mickey Leland Childhood Relief Act (OBRA 1993, Public Law 103-66). Changes include:

• Excluding high school students' earnings through age 21;

• Basing the dependent care deduction on the age of the dependent and raising the allowable maximum amount for the dependent care deduction;

• Allowing legally binding child support payments made to a non-household member as a deduction;

• Raising the fair market vehicle resource exclusion from $4500 to $4550;

• Excluding vehicles used to carry fuel or water;

• Excluding earned income tax credit lump sum payments as a resource for 12 months;

• Excluding homeless vendored payments;

• Simplifying the household definition;

• Allowing children of drug addicts and alcoholics in residential treatment centers to qualify for food stamps; and

• Eliminating proration of benefits for households who are reopened after having a one month break or less than a one month break in receipt of benefits.

This SR also addresses:

• Treatment of certain utility reimbursements made by the Department of Housing and Urban Development (HUD) and the Farmers Home Administration, and

• EMS changes that have been made as a result of the revised policy.

POLICY

Elementary and High School Students' Earnings

The earnings of full time elementary and high school students other than caseheads and parents are excluded through age 21. Previously this income exclusion applied only to students age 18 and under.

Dependent Care Deduction

There are two allowable dependent care maximum deduction amounts based on the dependent's age:

• Up to age two, the maximum is $200 per month for each child.

• For age two and older, the maximum is $175 per individual.

Legally Binding Child Support Payments Made to a Non-Household Member

Deduct legally binding child support payments made to a non-household member only in the net income and benefit computations. Court ordered child support payments and Division of Human Services administrative orders established by IV-D are legally binding.

• If repayment of an arrearage is also included in the court or administrative order, the amount paid toward the arrearage is also allowed as a deduction.

• If the child support order changes and the participant has been paying a higher or lower amount, a benefit adjustment must be made at the next recertification to accommodate the change.

Fair Market Vehicle Resource Exclusion

The fair market vehicle resource exclusion used to determine the household's resources has increased from $4500 to $4550.

Vehicles Used to Carry Fuel or Water

Exclude as a resource the vehicle used to carry the primary source of heating fuel or water for home use regardless of its value even if the household has another way to carry fuel or water.

Example: If a household has a workable furnace with oil heat, but chooses to heat with wood instead due to financial reasons, exclude the vehicle used to transport the wood.

A statement from the household verifying the use of the vehicle is sufficient. District Offices must use their judgment in determining if the vehicle is appropriate for transporting fuel or water.

Example: A motorcycle may not be appropriate to carry wood.

Lump Sum Earned Income Tax Credit Payments

Exclude lump sum earned income tax credits as a resource for 12 months from receipt if the individual receiving the payment:

• Was a food stamp recipient at the time of payment, and

• Participates continuously during the 12 month period.

A household meets the continuous participation requirement if there is no more than a 30 day break in eligibility. Households that reapply or are recertified after a 30 day break in eligibility will have the resource counted.

Homeless Vendor Payments

Exclude third party vendor payments made on behalf of a homeless household for transitional housing. Previously, the exclusion was limited to 50% of the maximum AFDC shelter allowance.

Revised Household Definition

The food stamp household definition has been revised as noted below.

• Children age 21 and under living with their parents cannot be separate households unless:

- They are married and living with their spouses and/or living with their children, and

- Purchase and prepare food separately.

Previously, children age under age 18 who lived with their parents and purchased and prepared food separately were not allowed to be separate household members unless they had parental control over their minor children living in the household. Previous policy did not allow separate household status for married children under age 18.

• Children under age 18 under the parental control on an adult household member other than a parent, cannot be separate households.

Exception: A foster care child under age 18 under the control of an adult household member other than a parent the does not have to be a household member and can be considered a boarder

• Adult children over age 21 who live with either their parents or their siblings can be separate households provided they purchase and prepare food separately. Previously, to be granted separate household status, the sibling had to be elderly or disabled or age 18 or over and have parental control of minor children living in the household. This restriction has been removed.

Separate household status is still available to the elderly and disabled who reside with others and who are unable to prepare their own meals.

Children of Drug Addicts and Alcoholics

Children of parents who are regular participants in drug or alcohol, treatment programs are now eligible for food stamps if:

• They reside at the treatment center with their parents, and

• The program is administered by a private nonprofit organization or institution approved by FNS to accept coupons.

Previously, only the parents themselves were eligible.

Elimination of Proration of Benefits for Certain Recertifications

Proration of benefits has been eliminated for eligible households that are reopened after having a break in benefits of one month or less than one month.

Example: If a household received stamps in May, and the household applied and was determined eligible for June, that household would be entitled to a full allotment for June.

Utility Reimbursements Made by the Department of Housing and Urban Development (HUD) and the Farmers Home Administration (FHA)

Some households that incur utility costs for heating or cooling separately from rent are entitled to utility reimbursements made by the Department of Housing and Urban Development (HUD) and the Farmers Home Administration (FHA).

• These payments are considered energy assistance payments, and are excluded as income. HUD or FHA utility costs which are reimbursed are not deductible as an expense.

- Any costs that the household incurs in excess. of the reimbursed payment can be claimed as a deduction.

• A household that incurs utility expenses in excess of the HUD or FHA reimbursement is entitled to claim the appropriate utility standard or actual costs, whichever is higher.

Verification

The policy changes described in this SR fall into three broad categories: income, resources, and assistance group composition. Verification of these areas is consistent with established verification procedures found in Parts 211 (Composition of Assistance Groups), 413. (Resources), and 509 (Income).

Revised Form 445, Income Computation Worksheet, And Its Instructions

Form 445, Income Computation Worksheet, and its instructions have been revised to include a step for the legally binding child support payments made to a non-household member. All subsequent steps have been renumbered. The revisions have been made to the "Deductions" and "Allotment Calculations" sections of each form since the change affects only the amount of net income and benefits, but not gross income eligibility. A copy of the revised form and its instructions is attached for reference. District Offices were sent an initial supply of Form 445 on August 29, 1994. Printed copies should be available from Stock Control in mid October. Old copies of the form must be recycled or destroyed. Refer to the Certificate of Destruction on the last page of this SR.

SYSTEM CHANGES

The following changes will be made to food stamp programming effective October 1, 1994:

• The dependent care deduction will be revised to include two dependent care maximum allowable deduction amounts based on the dependent's age. EMS will allow a $200 maximum deduction for children under age 2 when a child care deduction code of 541 549 is entered. EMS will allow a $175 maximum deduction for dependents age 2 and older when a child care deduction code of 581-589 is entered.

• When the student status code in Field 1-25 is E of F (full time student) and new earned income code 1 00 (excluded student earnings - FS) is entered, EMS will exclude the income of full time secondary FS students through age 21.

• Effective October 1, 1994, EMS and TSM will be reprogrammed to allow the child support deduction for food stamp households that pay legally binding support to non-household members. Food stamp Income deduction code 525, court ordered child support, will also be reprogrammed. The TSM version of the food stamp income computation worksheet will also be revised.

PROCEDURES

Interim procedures are required, because revised policy is effective September 1, and EMS changes will not be programmed until the October mass change. District Offices will be unable to key changes affecting student income, dependent care or the child support deduction until after the October mass change. See the Implementation Procedures chart in this SR.

IMPLEMENTATION

All the changes described in this SR are effective September 1, 1994, and are to be applied to all initial applications, reported changes and recertifications on or after that date. If a child turns age two during a certification period, the District Office is not required to apply the lower child care deduction rate until the next recertification. See the Implementation Procedures chart in this SR.

CLIENT NOTIFICATION

The October Mass Change client letter (SR 94-69) will describe the policy changes addressed in this SR. A press release will also be issued to advise clients of the changes.

TRAINING

New hire training to be conducted in September will address the OBRA changes. If District

Offices determine that additional training is needed, they should contact their Regional

Administrators.

MANUAL PAGE CHANGES

This SR releases changes to the Family Assistance Manual, the Case Action Order Handbook and the Forms Manual.

Family Assistance Manual

Part 161 has been revised to show that benefits are no longer prorated for households that reapply or are certified in the month following the end of their prior recertification period.

Part 211 now reflects the revised policy on household composition and who can claim separate household status.

Part 409 has been revised to include the increased fair market vehicle exclusion, and the exclusion of vehicles used to carry fuel or water.

Part 511 excludes lump sum earned income tax credit payments for 12 months when the payments are received by a continuous food stamp participant, homeless vendor payments in entirety, HUD and FHA utility reimbursements, and the earnings of full time secondary students through age 21.

Part 61 1 has been revised to reflect the changes in the dependent care deduction and to allow the deduction of legally binding child support payments made to non-household members. Part 611 also explains when to prorate benefits.

Part 701 now allows the children of addicts and alcoholics who live with their parents at treatment centers access to the food stamp program.

Case Action Order Handbook

ITEM A.1 has been revised to reflect the new policy on proration of benefits for certain recertifications. Current TSM procedures have also been added.

ITEM C has been revised to show that income deduction code 525 (child support-court ordered) is also used in the Food Stamp Program. Page 25 of ITEM C now contains two columns of income deduction codes. Previously the right column was missing due to a printing error.

New earned income code 100 has been added to ITEMS C and 1.

Forms Manual

Revised Forms 445 and 445(i) have been added to the Forms Manual.

POSTING INSTRUCTIONS

This SR must be retained in front of Part 611 of the Family Assistance Manual until November 1. It may then be obsoleted.

DISTRIBUTION

This SR only will be distributed according to the narrative SR distribution list for the Family Assistance and Forms Manuals and the Case Action Order Handbook. This SR and manual pages will be distributed to holders of the Family Assistance and Forms Manuals and the Case Action Order Handbook.

OES/SJC:s

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CERTIFICATE OF DESTRUCTION

I hereby certify that all copies of Form 445 , SR 86-20/May 1986 have been destroyed.

Office Manager:______________________________ District Office:______________________

Note: Return this certificate to Stock Control at State Office upon receipt of revised Form 445, SR 94-62/September 1994.

IMPLEMENTATION PROCEDURES 9/1-10/30/94