SR 97-03 Dated 02/97

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

SUMMARY

This SR releases major changes to the TANF program, formerly called AFDC, which reflect a combination of state law and rules, and federal welfare reform legislation. Systems changes are also discussed. Revised FAM Chapters 100, 300, 400, 500, 600, 700 and 900 are released by this SR. Policy changes include:

• Elimination of the disregard of the first $50 of direct or remitted child support for TANF financial assistance and related medical assistance cases.

• Elimination of the gross income and needs tests for financial assistance.

• A new simplified eligibility test and benefits calculation:

- For applicants: a 20% employment expense disregard to determine eligibility instead of the $90 employment expense disregard;

- For recipients: a continuing 50% earned income disregard instead of the time limited $30 and 1/3 to determine benefit amounts. Applicants who pass the eligibility test above, and those applicants who have received TANF financial assistance in at least one of the last six months, also receive the 50% earned income disregard.

• 20% disregard of gross earned income as an employment expense disregard applied to TANF related medical assistance only cases (not including PL cases which continue to get a $90 employment expense disregard).

• Exclusion of the value of one vehicle per adult assistance group member, regardless of ownership, for TANF financial assistance, TANF-related medical assistance, and Extended Medical Assistance (EMA) eligibility determination.

Note: One vehicle per adult assistance group member is also excluded in determining food stamp eligibility for open TANF financial assistance and EMA cases.

• Elimination of the equity value of life insurance as a resource for TANF financial assistance and related medical assistance cases.

• Elimination of the *three out of the last six months" criterion for EMA eligibility any time assistance closes due to increased earned income.

Note: All other current EMA policies, including required filing of Quarterly Reports and use of the 185% of poverty income limits for the second 6 months still apply.

• Implementation of a 25% payment standard reduction for failure to cooperate with child support and establishment of this sanction as the &g sanction taken (work sanctions would be applied to the reduced grant).

Note: under this policy, the needs of the non-cooperating adult are no longer removed for cases being sanctioned for child support noncooperation.

• Exemption from the 60 month time limit on receipt of TANF-funded assistance for families containing a member who is or has been the victim of domestic or sexual violence.

BACKGROUND

This policy represents a major change in public welfare philosophy. With this policy begins a philosophical shift from emphasis on helping the poor through entitlements to viewing welfare as temporary support and promoting economic independence. New Hampshire's efforts reflect a nationwide trend towards enabling people to achieve self-sufficiency by using a variety of means to help them obtain and maintain employment. To this end, the Department requires participants to look for and accept employment, and supports employment by providing basic education, job skills training, child care and transportation assistance, 12 month extended medical coverage with no specified minimum time on assistance, family support, case management, and work incentives. Simplified eligibility requirements will allow Department staff to concentrate on helping people find jobs. In addition, simplified earned income calculations allow an individual to retain more income from earnings with no phasing out of the incentives over time, and allows the individual to know immediately what the impact will be if they obtain employment. The new approach stresses independence over dependence and makes ft more advantageous to work than to collect benefits.

POLICY

New policy is described below, including a comparison between old and new eligibility methodology or criteria where appropriate.

Elimination Of The $50 Child Support Disregard For TANF Financial and Medical Assistance Recipients

Old Policy

If child support payments were made directly to the individual, the first $50 of an assistance group's total monthly child and spousal support income was subtracted from the assistance group's total monthly income when determining eligibility and the amount of benefits. If the monthly child support was remitted to the Department, individuals received a child support passthrough check for up to the first $50.

New Policy

The $50 child support disregard has been eliminated. The full amount of direct child support will be counted as unearned income in determining eligibility and amount of benefits. The full amount of remitted support will be counted as unearned income in determining financial assistance and medical assistance-only eligibility, but not counted in determining benefit amount for financial assistance.

Note: Child support passthrough checks for support remitted to the Department were eliminated as of the December checks, which included current support payments made as of November 30, 1996. OCS will continue to send passthrough checks to certain households to reflect support payments made in a timely manner but not processed by New Hampshire OCS until December 1 or later.

New Eligibility and Benefit Computation Methodology

A new eligibility and benefit computation methodology was developed to simplify the eligibility determination process and to provide an enhanced financial incentive for recipients to find and keep jobs. To simplify eligibility determination, the gross income and needs tests were eliminated and earned income disregards and employment expense disregards were replaced with a flat percentage deducted from gross earned income. These changes are described below.

Old Policy

Under previous eligibility determination policy, an applicant 's total gross income was first compared to ft Gross Income Limits. If the applicant passed the Gross Income Test, the Needs Test then compared the applicant's adjusted income to the Standard of Need. Applicants who passed the Needs Test, or were open AFDC or received money payments in any one of the last 4 months, were subject to the Eligibility Test in which their net income plus unearned income minus all deductions was compared to the payment standard. If the result was less than the Payment Standard, the individual's grant was determined. Individuals with earned income were allowed a $90 employment expense disregard plus a $30 and 1/3 earned income disregard for four months, then only $30 for the next eight months. The earned income disregard phased out at the end of 12 months of employment. Eligibility for AFDC-related MA was determined using similar methodology with the exception that no earned income disregard was allowed.

New Policy

Elimination of $90 and $30 and 1/3 Disregard

The $90 employment expense disregard and the $30 and 1/3 earned income disregard have been eliminated for all TANF financial assistance and TANF-related medical assistance-only cases (with the exception of Poverty Level groups). In the computation of countable deemed income and lump sum income, the $90 employment expense disregard has been replaced by the 20% earned income disregard.

Eligibility Test

For applicants for financial assistance who have not received financial assistance in any one of the last six months and who have earned income, subtract 20% of each applicant individual's gross earned income as a disregard. Deduct the child/dependent care disregard. Add in countable unearned income. From this, give all allowable deductions and disregards, such as court-ordered support payments, training expenses, or allocated income. The result is the assistance group's net income. Compare net assistance group income to the payment standard for the assistance group. If net income is above the payment standard for group size, process for MA-only eligibility.

Note: Elimination of the gross income test means that the earnings of children who are students are now fully excluded. Prior to this SR, they were excluded for 6 months, then counted in the gross income test for the subsequent 6 months. Manual tracking of student income is also no longer required.

Determination of Financial Assistance

If net case income is below the payment standard for group size, repeat the above process except apply a 50% earned income disregard to each applicant individual's gross earned income to determine the benefit amount.

Current [recipients or Individuals Who Received Assistance in the Last Six Months

Current TANF recipients as of 2/l/97 with earned income, or applicants who received assistance in any one of the previous six months, are automatically given the 50% earned income disregard to determine eligibility and benefit amount. There is no 20% earned income disregard eligibility test for current recipients.

TANF Related MA Only Eligibility Determination

For TANF-Related MA only eligibility, individuals with earned income are given an employment expense disregard of 20% of gross earned income. If found eligible for medical assistance, they continue to receive the 20% employment expense disregard for as long as they have gross earned income. MA only recipients are not eligible for the 50% earned income disregard allowed employed financial assistance recipients.

Deemed Income

For TANF cases in which income is deemed, such as from ineligible parent to minor casehead, allow 20% of gross earned income as an employment expense disregard.

Lump Sum Income

To determine the countable amount of lump sum income for TANF financial assistance cases, allow 20% of gross earned income as the employment expense disregard.

Exception: Poverty Level medical assistance cases continue to receive the $90/month employment expense disregard.

Exclusion of One Vehicle Per Adult Assistance Group Member for AP Households

Old Policy

For financial assistance cases, policy excluded the equity value of one registered vehicle up to $1500. Any additional value was counted as a resource. This policy was counter-productive and may have created employment barriers because families could not obtain, or were forced to dispose of, reliable transportation to meet AFDC resource requirements.

New Policy

• One vehicle per adult assistance group member, regardless of value or ownership, is excluded as a resource for TANF financial assistance, TANF-related Medicaid-only, and EMA cases. This policy replaces the limited $1500 exclusion of one vehicle's equity value in previous policy.

• Vehicles belonging to children in the assistance group may be excluded so long as the number of vehicles excluded does not exceed the number of adult assistance group members.

EXAMPLE

A parent and 17 year old child apply for financial assistance. The only vehicle in the household belongs to the child. Because there is one adult in the assistance group, one vehicle may be excluded regardless of ownership. The value of the child's vehicle is not counted toward the resource limit for financial assistance.

• The exclusion is also given when determining related food stamp eligibility for TANF financial assistance and EMA households. For all other TANF MA-Only households, the exclusion only applies to Medicaid eligibility. Treat all vehicles for associated food stamp cases according to current food stamp resource policy.

• If the related food stamp household also contains non-TANF members, the vehicles of those members are counted according to current food stamp policy.

Note: vehicles of excluded or disqualified TANF household members continue to be excluded for TANF and related food stamp cases so long as the individual remains in the home.

• Count the full equity value of any TANF assistance group's nonexcluded vehicles.

EXAMPLE

The parent in the previous example later obtains a vehicle. Because there is only one adult member, only one of the two vehicles in the household may be excluded. The assistance group may choose which vehicle to exclude, and the full equity value of the remaining vehicle is applied toward the appropriate resource limits.

Elimination of the Equity Value Of Life Insurance as a Resource - Financial and Medical

Old Policy

The equity value of life insurance owned by the assistance group was counted as a resource in determining eligibility.

New Policy

The equity value of life insurance policies is no longer counted when determining eligibility for assistance. This change will reduce time spent verifying life insurance equity values for resource eligibility determinations.

Elimination Of "Three Out of The Last Six Months" Criterion For EMA Eligibility

Old Policy

If a household received AFDC financial assistance in at least 3 of the 6 months immediately preceding termination of financial assistance due to increased hours or income from employment, or loss of 30 and 1/3 earned income disregards, ft could become eligible for up to 12 months of EMA without completing a new application.

New Policy

Otherwise eligible households who lose financial assistance eligibility due to increased hours of employment or increased income from employment can receive up to 12 months of EMA regardless of how long they received TANF before qualifying for EMA.

25% Grant Sanction For Failure To Cooperate With Child Support - (Financial Assistance)

Old Policy

When an individual refused to cooperate with child support requirements, the parent/caretaker relative was removed from the payment standard and treated as an excluded parent/caretaker relative, unless good cause could be shown. Financial assistance for which the children were eligible was made to a protective payee.

New Policy

When a parent fails to cooperate with support requirements without good cause, the payment standard for the case is reduced by 25% in determining eligibility and grant amount. This is always the first sanction taken.

EXAMPLE

Case size of three with no income, and shelter greater than $243. Case head will not identify father of second child. Good cause is not found. Payment standard for group size of three is $550. The 25% reduction in payment standard is applied as follows: $550 x 25% = $137.50. $550 - $137.50 = $412.50. Round down, resulting in a new payment standard for the household of $412. All subsequent income eligibility computations are based on this figure.

• Food stamp benefits must not be allowed to increase when failure to comply with the requirements of a means-tested assistance program results in a reduction in financial assistance. See SR 96-51 posted to the Family Assistance Manual.

• When calculating recoupment amounts for overpayment on cases being sanctioned for child support and/or any other reason, such as noncooperation with work requirements, determine the 1 0% repayment amount based on the payment standard before any sanctions are applied.

Exemption to the 60 Month Lifetime Limit on Receipt of TANF Financial Assistance Due to Domestic Violence

Old Policy

SR 96-54 released a federally-mandated 60 month time limit on receipt by adults of any financial assistance funded by TANF (including Emergency Assistance). Only months in which a benefit was actually received are counted toward the 60 month limit. The limit does not apply when the recipients are minor children or someone other than the head of household or his/her spouse.

New Policy

Families which include an individual who has been, or is being, battered or subjected to extreme cruelty, may be exempt from the 60 month time limit. "Battered or subjected to extreme cruelty means the individual has been subjected to:

• physical acts that resulted in or threatened to result in physical injury to the individual;

• sexual abuse;

• sexual activity involving a dependent child;

• being forced as the caretaker relative of a dependent child to engage in nonconsensual sexual acts or activities;

• threats of, or attempts at, physical or sexual abuse;

• mental abuse; or

• neglect or deprivation of medical care.

Note: District Offices are not required to track receipt of benefits against the 60 month limit, nor to document or verify any exemptions from the limit. The above exemption, and others that will follow In the future, will only become relevant at the time an individual has received 60 months of financial assistance under TANF. This policy is being released at this time so that District Offices can advise applicants and recipients of the exemption.

Clients who have been, or are currently, in a domestic or sexual violence situation should be encouraged to notify their case technician or NHEP Team of this fact.

Verification

Any claims for exemption due to battering or extreme cruelty must be verified and properly documented in the case record. Acceptable verification includes, but is not limited to:

• Court, medical, criminal, child protective services, social services, psychological or law enforcement records;

• A written statement from a public or licensed private social agency; or

• Sworn statements from an individual(s) other than family members with knowledge of the circumstances.

FORMS REVISIONS

The following informational brochures and forms are released by this SR:

Form 77a, New Hampshire's Temporary Assistance to Needy Families Program (formerly Now Hampshire AFDC PROGRAM), has been revised to describe new requirements for eligibility and participation in the New Hampshire Employment Program (NHEP) and the Family Assistance Program (FAP). It references the 25% penalty for non-cooperation with child support and the 60 month lifetime limitation on receiving TANF financial assistance. It also explains the simplified computations for determining eligibility and grant amounts for TANF.

Form 771, Lump Sum Payments, replaces AFDC with TANF throughout.

Form 819, AFDC Unemployed Parent (AFDC-UP) Worksheet, formerly AFDC Unemployed Parent (AFDC-UP) Worksheet, is a step-by-step evaluation sheet which enables the District Office to determine if the initial deprivation requirement of unemployment is met for a TANF Unemployed Parent case. Changes were primarily cosmetic, replacing AFDC with TANF and removing a reference to the "PAM." Form 819(i), Instructions, was not affected and consequently is not being reissued at this time.

Welfare reform changes will impact literally every form associated with the AFDC program. Most of these forms will only require the substitution of "TANF" for "AFDC" and will be updated with new terminology at reorder.

PROCEDURES/SYSTEMS CHANGES

MASS CHANGE

A mass change will be run the night of 1/31/97 to recalculate income eligibility for currently open cases. Cases selected for recalculation include AFDC financial assistance cases (Category 2, Types 1 and U) and AFDC-related MA only cases (Category 2, types 0, 2, V. W, B, C, D, K) with gross earned income; all AFDC-AP and MA-only cases with child support income codes 121 or 123; and all AFDC cases with "2" in field A21 (child support sanction). Cases affected by the mass change recomputations will receive a Notice of Decision. The reason message for the NOD reads as follows:

THE AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC) PROGRAM HAS BEEN REPLACED WITH THE TEMPORARY ASSISTANCE TO NEEDY FAMILIES (TANF) PROGRAM. BECAUSE TANF COMPUTES YOUR INCOME DIFFERENTLY, THERE MAY BE CHANGES TO THE BENEFITS RECEIVED BY YOUR FAMILY. THE COMPUTATION SECTION BELOW SHOWS HOW WE HAVE FIGURED YOUR INCOME UNDER THE NEW LAW. COMPARE THE FIGURES UNDER THE "OLD" AND NEW COLUMNS TO SEE WHAT HAS CHANGED. SEE ENCLOSED LETTER FOR MORE INFORMATION. SR 97-3

Turnaround 801's annotated with MASS CHANGE will be generated for all recomputed cases. The IS display will be updated accordingly. Advance notice periods will be assigned according to usual mass change criteria. A letter summarizing the new income and resource policies will be mailed to all cases which do not receive a NOD.

Elimination Of The $50 Child Support Disregard For TANF Financial Assistance and Related Medical Assistance Recipients

With the effective date of this SR, the full amount of child support payments will be used to determine eligibility for financial assistance under TANF and for all related medical assistance cases. EMS has been reprogrammed to include the full amount of child support paid directly to the family in both the eligibility and grant computations. Continue to enter on Line 1-3 the full amount of child support received as reported by the client.

New Eligibility and Benefit Computation Methodology

EMS has been reprogrammed to use the new eligibility and benefits computations beginning when the Mass Change is run 1/31/97. Cases with earned income that are opened on or after February 1, 1997, will have the following computations applied.

Note: These computations are not applied to foster care cases or to refugees who do not meet AP/MA categorical requirements.

In general, EMS first checks whether the individual is an applicant or recipient. An applicant is someone who has not had eligibility within six months of the application month. A recipient is currently open or has had eligibility in at least one of the six months prior to the application month. EMS calculates earned income disregards separately for each individual.

For applicants

When child support goes directly to the client (Code 123)

Group size of 3 with shelter at maximum

1. EMS computes net earned income for each individual with earnings by subtracting 20% from gross earned income, then subtracting child care disregards coded on the I-line.

$500

- 100 (20% of $500)

$400

-$200 total child care disregard)

$200 (net earned income)

2. EMS computes countable unearned income by adding up the unearned income amounts from all open individuals.

$75 + $75 (direct child support 9 1 and #2) = $150 (countable unearned income)

3. Net earned income and unearned income are added together

$200 + $150 = $350 (Other deductions subtracted from this amount)

$350 - $50 (Code 564, other deduction) = $300 net income

4. Not income is compared to the payment standard for the group size

Payment standard for Group Size of 3 $550

Net income        $300

5. If the net income is equal to or below the payment standard, net income is recomputed using a 50% earned income disregard for each individual, then subtracting child care disregards coded on the individual's I-line.

$500

-$250 (50% of $500)

$250

-$200 (total of codes 541 and 542)

$ 50 (net earned income)

6. EMS then computes the unearned income for the case by adding up the unearned income amounts from all open individuals

$75 (direct child support #1)+$75 (direct child support #2) a $150 (countable unearned income)

7. Net earned and unearned income are then added together

$50 (net earned income)+$150 (countable unearned income) = $200

Other deductions are subtracted from this amount.

$200 - $50 (other deductions - Code 564) = $150 net income

8. EMS determines the grant amount by subtracting net income from the payment standard

$550 (payment standard) - $1 50 (net income) = $400 grant

When child support is remitted to the Department (Code 121)

Group size of 3 with shelter at maximum

1. EMS computes net earned income for each individual with earnings by subtracting 20% from gross earned income, then subtracting child care disregards coded on the I-line.

$500

-$100 (20% of $500)

$400

-$200 (total child care disregard)

$200 (net earned income)

2. EMS computes case net earned income by adding up the unearned income amounts from all open individuals.

$75 + $75 (remitted child support # 1 and #2) = $150 (countable unearned income)

3. Net earned income and unearned income are added together

$200 + $150 = $350. (Other deductions subtracted from this amount)

$350 - $50 = $300 net income

4. Net income is compared to the payment standard for the group size.

Payment standard for Group Size of 3 $550

Net Income       $300

5. If net income is below the payment standard, EMS recalculates the case using 50% earned income disregard, subtracting child care disregards, to get net earned income. Net earned and unearned income are added together.

$500 - $250 (50% of $500) = $250

$250 - $200 (child care disregards) = $50 net earned income

$50 (net earned income) + 0 (no countable unearned income: child support is remitted) = $50

6. Any other deductions are subtracted from this figure. $50 - $50 = $0 (net income)

7. The grant amount is determined by subtracting the net income from the payment standard

$550 - $0 = $550 grant amount

For financial assistance and EMA recipients

Recipients of financial assistance or EMA have no initial test using the 20% disregard. EMS will compute not earned income using the 50% earned income disregard.

When Child Support Is Remitted to the Department (Code 121) or Goes Directly to the Client (Code 123)

Financial assistance recipients (or individuals who have received assistance in any one of the past six months) are given the 50% earned income disregard automatically. After net earned income is determined, EMS computes countable unearned income, including any code 123 (direct child support) amounts (remitted child support, code 121, is not countable unearned income in grant determination). Net earned income and unearned income are then added together. Any other deductions are taken, resulting in net income. Net income is compared to the payment standard. If equal to or below the payment standard, the system subtracts net income from the payment standard to determine the grant amount.

Using the previous example for a household receiving TANF financial assistance:

Recipient's Child Support Is Remitted

1. $500 - $250 (50% of $500) = $250

2. $250 - $200 (child care disregards) = $50 net earned income

3. $50 (net earned income) + 0 (countable unearned income-child support is remitted) = $50

Any other deductions are subtracted from this figure. $50 - $50 c $0 (net income)

4. The grant amount is determined by subtracting the net income from the payment standard $550 - $0 = $550 grant amount

Recipient Receives Child Support Directly

(Steps 1 and 2 identical for both)

3. $50 (net earned income) + $150 (countable unearned income-direct child support) = $200

Any other deductions are subtracted from this figure. $200 - $50 = $150 (net income)

4. The grant amount is determined by subtracting the net income from the payment standard $550 - $150 = $400 grant amount

TANF-Related MA Only Eligibility Determination

Cases denied financial assistance, or individuals who want medical assistance but not financial assistance, will be recomputed for medical assistance-only eligibility. The computation described below applies only to eligibility for Cat. 2, Case Types 0, 2, V, W, B, C, and D.

EMS will subtract 20% of gross earned income as an employment expense disregard. All other aspects of the computation will remain unchanged. Applicants and recipients are treated alike.

Example: Applicant for TANF-Related MA

Group size of 3 with shelter at maximum

1. $800 - $160 (20% of $800) = $640

2. $640 - 200 (child care) = $440 (net earned Income)

3. $440 + $150 (Unearned Income-direct or remitted child support) = $590

4. $590 - $50 (other deduction) = $540 net income

5. Net income is compared to the payment standard for a group size of three - $550. The family is categorically eligible for medical assistance under TANF.

If income was above the payment standard but below the PIL for the group size ($652), the family would be medically needy for medical assistance.

RESOURCE CHANGES: Life Insurance and Vehicle Exclusion

Procedures For Coding Life Insurance and Excluded Vehicles on EMS

New Applications

For TANF applicants with insurance, do not enter life insurance equity value (code 722).

For TANF financial assistance and related Medicaid-only applicants with vehicles:

• Determine which vehicle(s) are exempt from the resource test. If the assistance group has more than one vehicle per adult member, allow the assistance group to choose which vehicle(s) will be excluded.

• Enter the countable food stamp value of any excluded vehicle(s) as code 809 (SS Resource) on the individual's I-line. Currently, amounts entered as code 809 are excluded from all resource tests. Note: EMS treatment of code 809 will be changed at a later date so that amounts coded as 809 will count as a resource for Food Stamps if the individual is no longer receiving TANF financial assistance or EMA.

• If the TANF assistance group also has a nonexempt, countable vehicle(s), enter the full equity value on that individual's I-line as code 762.

Related food stamp cases

• Vehicles excluded for TANF financial assistance or EMA cases are also excluded from any food stamp resource tests for assistance group members only.

• Vehicles excluded for TANF MA-only cases are not excluded for food stamps. Enter any countable food stamp value as code 763.

• The value of vehicles of household members not included in the TANF assistance group are treated for food stamp eligibility according to food stamp policy. Continue to enter these values as code 7(53.

Include verification of ownership and registration in the case file.

Currently Eligible Cases - Life Insurance and Vehicles

Neither resource change affects current eligibility for cases. If a subsequent change in resources will cause the case to close, review resource computation, remove any life insurance equity values (code 722), remove the 762 and 763 resource codes of any excluded vehicle(s), and reenter excluded vehicle values as directed above using code 809. If the case is then below the resource limit, it will remain open.

Exception: Life insurance equity values remain a countable resource for non-categorically eligible Refugee Assistance cases. Therefore, for any of these cases, District Offices must enter the equity value of life insurance as resource code 805, Other Resource AP/MA.

Life Insurance Report

In early February, Code 722 amounts still remaining on cases will be removed by State Office. District Offices will be sent a Systems Memo explaining this action and a report of all affected cases.

Vehicle Reports

State Office will send out a one-time report of all TANF-AP, related Medicaid-only, or EMA cases that have a 762 or 763 code so that cases may be changed immediately if necessary. Otherwise, District Offices will receive a monthly report of cases containing codes 762 and 763 (but without code 809) that are due for redetermination so that resource amounts can be corrected at that time.

Until EMS reprogramming of the 809 code is complete, a monthly report listing individuals open for food stamps, with resources coded 809, and NOT open for TANF-AP, related Medicaid-only, or TANF-EMA will be sent to District Offices with instructions to review the cases and, if appropriate, delete the code 609 and enter the countable value of the vehicle for food stamps as code 763. District Offices will be notified when the revised EMS treatment of the 609 code is complete.

NOTE.- Treatment of vehicle codes 762 (AP) and 763 (FS) has not changed.

Elimination Of The "Three Out of The Last Six Months" Criterion For EMA Eligibility

EMS will be reprogrammed to calculate EMA eligibility when a case is closing due to increased earnings by checking for receipt of assistance in at least one rather than three out of the last six months. This change will only impact cases which close due to increased hours or earnings after the effective date of this SR.

25% Grant Sanction For Failure To Cooperate With Child Support

For documented cases of failure to cooperate with child support, EMS has been reprogrammed to reduce the assistance group's payment standard by 25%. Calculations are shown in the following example:

Group size of two. Non-cooperating Parent. Net income of $200.

$481 (payment standard for group size of 2) - 25% =

$361 (adjusted payment standard to reflect failure to cooperate)

-200 = (net income)

$161 (grant amount)

Effective with this SR, any case coded with a "2" in the Child Support field (A-21) will be subject to the new 25% child support sanction computation. Prior to this SR, cases coded "2" in this field caused the casehead's needs to be removed from the grant calculation. This will no longer occur.

NOTE: Due to the change in sanction policy, H-lines directing financial assistance grant payments to protective payees are not longer required. District Offices should close these H-lines on sanctioned cases at the next recertificatfon or any time an action is taken on the case.

New Codes and Reason Messages for Cases Sanctioned for Child Support noncooperation

District Offices must use override procedures described In CAOHS, Section F, page 10, paragraph (a), using the new codes below, to issue correct Notices of Decision to TANF cases sanctioned for child support non-cooperation.

To Implement the child support sanction as the only case action:

• Enter "2" in field A21;

• Enter new override code 422 infield Bl7. The following NOD message will be generated:

BECAUSE YOU DID NOT COOPERATE WITH CHILD SUPPORT REQUIREMENTS, YOUR ASSISTANCE PAYMENT STANDARD HAS BEEN REDUCED BY 25%. ANY OTHER SANCTIONS WILL BE APPLIED TO THE NEW REDUCED PAYMENT STANDARD. TO AVOID THIS REDUCTION YOU MUST BEGIN COOPERATING OR SHOW GOOD CAUSE FOR NOT COOPERATING. FOR MORE INFORMATION, CONTACT YOUR CASE TECHNICIAN. FAM CHAPTER 300

Note: Where possible, this should be the only transaction on the case at that time.

To Implement the child support sanction in combination with other case actions:

• Enter "2" in field A21;

• Make other required changes;

• Use new override code 423 in field B17. The following new NOD message will be generated:

BECAUSE YOU DID NOT COOPERATE WITH CHILD SUPPORT REQUIREMENTS, YOUR ASSISTANCE PAYMENT STANDARD HAS BEEN REDUCED BY 25%. OTHER CHANGES TO YOUR CASE HAVE ALSO BEEN MADE. THE COMPUTATION SECTIONS BELOW SHOW HOW YOUR BENEFITS HAVE BEEN AFFECTED.

Change On Procedures for Sanctioning AP Cases for Noncooperation with Medical Support

A State Office memo dated September 22, 1995, detailed policy and procedures for the application of sanctions to MA-Only individuals who refuse to cooperate with requirements to obtain and enforce medical support orders and establish paternity. The sanction was the same as for AP, i.e., removal of the noncooperating adult from the MA-Only case. Page 2 of the memo states that, "This penalty cannot be applied to any individual who is receiving AFDC financial assistance, because he or she is automatically eligible for Medicaid by receipt of financial assistance." That policy has not changed, and recipients of financial assistance under TANF are considered categorically eligible for Medicaid.

Therefore, effective with this SR and until further notice, no financial assistance recipient sanctioned for noncooperation with child support as above is to be concurrently sanctioned for noncooperation with medical support requirements. Any financial assistance cases in which the noncooperating parents group member codes for financial and medical assistance are currently "D" due solely to a noncooperation penalty must have those group member codes changed to "A" prior to 2/l/97. A report listing cases in which the casehead was coded "DD" was sent to all District Offic6s with instructions to review these cases and, if coded *DD' solely due to noncooperation with child support, to change group member codes as above. Current Medicaid-only cases sanctioned for noncooperation with medical support requirements are not affected by this policy.

Note: Cases in which the casehead is removed from the AP and MA cases for other reasons, such as receipt of SSI or APTD, are not affected by this procedure. However, continue to enter "2" in field A21 of the TANF financial assistance case if required by policy; the payment standard penalty will be applied to the TANF financial assistance case whether or not the parent is included.

Preventing a Food Stamp Increase When Imposing the 25% Sanction

To prevent food stamp benefit from increasing when a financial assistance sanction is imposed (See SR 96-51), the difference between the payment standard without the sanction and the payment standard after the sanction is entered on EMS as code 307 (FS-other income). Cases sanctioned under AFDC policy usually showed amounts for code 307 that reflected the difference (usually $60-$70) made by removing the sanctioned individual's needs from the grant.

Prior to the 1/31/97 TANF mass change, all noncooperation cases were changed to put the sanctioned individual's needs back into the case so that the 25% calculation would be made on the household's full payment standard and the food stamp benefit amounts recalculated accordingly.

In addition, a memo was sent to all District Offices directing them to manually calculate the difference between the payment standards before and after the 25% sanction, and enter the new sanction amount as code 307 (keying a "Do in field A50 to suppress both the NOD and Advance Notice Period) by 1/31/97, the cut-off for the February, 1997 food stamp major run. A report was sent to District Offices with a printout of all cases sanctioned for child support noncooperation so that those cases could have correct code 307 amounts entered prior to the food stamp cut-off date. This is necessary to prevent overissuances of food stamps to sanctioned households.

EMS programming is being developed to automate this process. When programming is complete, District Offices will be notified. Until then, code 307 amounts must be manually computed and entered by case technicians.

When There Are Additional Sanctions

According to new policy, the child support sanction will be applied first; additional sanctions are then applied to the reduced payment standard:

Example

Group size of two. Parent also not cooperating with NHEP. Net income of $200.

$481 (payment standard for group size of 2) - 25% ($120) =

$361 (adjusted payment standard to reflect failure to cooperate with Child Support)

- 67 ($481-$414 NHEP sanction removing non-cooperating members needs)

$294

- 200 (net income)

$ 94 (new grant amount with both child support and NHEP sanctions imposed)

As of 2/l/97, EMS will automatically compute the 25% reduction in the payment standard for Child Support, and then will identify any individuals being sanctioned for noncompliance with work requirements and apply the needs removal sanction.

Note: When reviewing these cases, if the case has both a Child Support sanction and an additional sanction, take both sanctions into account when determining the code 307 amount. In the above example, the amount entered as code 307 would be $187 ($120 25% child support sanction + $67 NHEP sanction).

NOD Changes

The AFDC-AP and AFDC-MA only Notices of Decision have been revised to reflect new policy and show now computations. For both action and reason messages, TANF has replaced AFDC.

TSM Screens

TSM screens have been changed as follows:

• IC contains a field called "Train Ded". The earned income disregard amount will show here. Depending on whether the individual is an applicant or recipient, the figure will reflect either 50% or 20% of gross earned income. If the case is denied for financial assistance and opens as MA only, the 20% amount will be used.

• IK has fields that show the begin and end dates for $30 and 1/3. These will no longer be displayed.

Elimination of $30 and 113 Reports

Effective in January, the "$30 and 1/3 duration expired" run and its report will no longer be generated. There was no January $30 and 1/3 run.

Elimination of Student Earnings Report

Because the gross income test is no longer applied, the annual Student Earnings Report has been eliminated.

IMPLEMENTATION

Unless otherwise noted, policy changes must be implemented as of the effective date of this SR.

Rollback Procedures

For cases opened 2/l/97 or later with rollback for eligibility periods prior to the effective date of this SR, first determine if the case would have been resource eligible Using previous resource policy. If the case would have been resource eligible, process the case normally; EMS will determine financial eligibility using the new income and resource policies regardless of eligibility effective date. If the case would not have been resource eligible for periods prior to 2/l/97, set the effective date of eligibility no earlier than 2/l/97.

Forms

District Offices may use current stocks of Form 819, AFDC Unemployed Parent (AFDC-UP) Worksheet, and Form 77i, LUMP Sum Payments, until depleted. When the revised versions of Form 77i and Form 819 are back from print, initial supplies will be sent to each District Office. A temporary supply of revised Form 77a, New Hampshire’s Temporary Assistance to Needy Families Program, was distributed to District Offices on January 31, 1997. As soon as Form 77a is received, begin using the new version and recycle any remaining copies which refer to "AFDC". Full distribution of the revised pamphlet should occur within one month. At that time, complete the Certificate of Destruction attached to this SR and send to Stock Control.

CLIENT NOTIFICATION

As directed in SR 96-54, Case Technicians must inform individuals of the new 60 month lifetime limit on receipt of TANF-funded assistance at application or at redetermination. A sample message, which may be read to applicants and recipients, was provided in SR 96-54. Form 800, released 2/l/97 (SR 97-4), has also been updated to include information on the 60 month limit. A brochure describing the 60 month limit, its ramifications, and exemption conditions, is being developed and will be released in a future SR. In addition, individuals must be informed of exemptions from the 60 month limit, including for battering or extreme cruelty.

A series of notices explaining TANF changes were mailed early in January and with the January 15 and January 30, 1997 payroll checks. A client letter (see attached) will be sent with the Mass Change run on January 31, 1997 adjusting benefits to reflect TANF income and resource policy. In addition, press releases will be sent to major news outlets in and around the State. A special notice (attached) was also sent to any household currently being sanctioned for non-cooperation with child support.

TRAINING

A draft of this SR was circulated among selected OES State Office staff and to all District Office Supervisors. Questions and comments were solicited and changes incorporated as needed. District Office Supervisors were given training on these changes in January, 1997; no additional special training is planned for the income and resource policy changes related to welfare reform. Questions may be addressed to regional administrators on an individual basis.

MANUAL PAGE CHANGES

In addition to changes related directly to this SR, some additional technical corrections were made to FAM pages. These include replacing AFDC with TANF on any page released by this SR, correcting "Child Day Care" with "Child Care" and adding an EXCEPTION under Vehicles Needed to Carry Fuel or Water (FAM 400) which reflects a recent federal clarification modifying the exclusion of these vehicles.

POSTING INSTRUCTIONS

This SR may be destroyed after its contents have been noted and its posting instructions carded out.

DISTRIBUTION

This SR will be distributed according the SR narrative distribution list. The SR and pages will be distributed to all holders of the Family Assistance and Forms Manual. Printed copies of the forms will be distributed to all holders of the Forms Manual.

OES/MGD/s

CERTIFICATE OF DESTRUCTION

I hereby certify that all copies of Form 77a /SR 93-44/July 1993 have been destroyed.

Office Manager:____________________________ District Office:_________________________

NOTE: Return this certificate to Stock Control at State Office after the instructions in this SR have been carried out.