SR 05-20 Dated 02/05

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

SUMMARY

This SR releases changes to the self-employment activity requirements for individuals participating in the New Hampshire Employment Program (NHEP).

BACKGROUND

The purpose of these policy changes is to lessen some of the restrictions currently in place regarding self-employment in the NHEP and allow more people to take advantage of the flexibility that self-employment can offer in gaining financial independence. These policy revisions were a direct result of anecdotal feedback from field staff that self-employment policies sometimes placed unnecessary obstacles on certain individuals who had initiative and the drive to succeed and would benefit from the self-employment activity.

POLICY

Individuals who are self-employed are no longer required to develop a business plan with an agency specializing in self-employment information and guidance prior to being placed in the NHEP self-employment activity. Additionally, no time restrictions are placed on how long an individual may participate in self-employment.

FIELD GUIDANCE

Since policy has now lessened many restrictions regarding self-employment, NHEP Employment Counselor Specialists (ECS) will have more flexibility in case-managing self-employed individuals. While the business plan is no longer a requirement before placing an individual in the self-employment activity, it is nevertheless a valuable resource and should be added under "Other" as a participant action step to the individual’s Employment Plan (EP), if deemed appropriate by the ECS. Since the individual is considered to be engaged in an employment activity, the cost of the business plan can be paid as an allowable support service under "Education & Training Fees." Recommendations from the agency reviewing the business plan should be incorporated as participant action steps into the EP. If the business plan has not been deemed viable by the agency, or the business plan represents only viable part-time employment, the ECS should develop an EP with the individual that requires other steps the client may take to become self-sufficient, instead of, or in addition to, the self-employment.

Although there is no longer a time restriction on how long self-employment can continue, ECS must continue to monitor and evaluate the individual’s progress in self-employment. Factors to be considered include:

§   months on the TANF 60-month lifetime limit clock;

§   hours worked in self-employment;

§   net profits;

§   length of time involved in self-employment;

§   measurable progress over time toward the goal of transitioning off TANF financial assistance; and

§   other participant or family issues.

To monitor and evaluate the individual’s progress in self-employment, the ECS can request bookkeeping accounts or monthly statements from the individual outlining the hours worked per week, gross income received, current records of business receipts and expenses, and the most recent tax statements. Clients may already provide this information to their Family Services Specialist at the District Office, but perhaps not on a monthly basis. Requiring monthly statements will allow the ECS to monitor measurable progress in self-employment.

If the ECS, in the course of case-management, determines that insufficient progress is being made toward the goals of the EP, other activities should be explored with the individual.

Example: An NHEP recipient has been self-employed as a house painter and dry wall installer since 1986. As part of his EP, he was referred to an agency specializing in self-employment to develop a business plan, but he never completed the plan. The recipient’s Schedule C from his 2003 tax return shows a monthly net profit of $139.42. He did not provide a copy of his 2004 tax return. The recipient claims to be working 20 hours weekly, but is unwilling to increase his hours as dictated by his EP. He is at month 48 of his TANF clock. How should this case be handled?

Answer: The NHEP recipient has failed to:

§   provide current information from his 2004 tax return to evaluate his most recent year of self-employment;

§   increase his hours from 20, and is therefore not meeting the full participation requirement of 30 hours; and

§   follow through with obtaining a viable business plan as directed by his EP.

The recipient is non-compliant with his EP in several areas and must be issued a notice of non-compliance followed by a sanction, if all noncompliance factors are not remedied.

Additionally, TANF policy and rules dictate that the Employment Plan must be reviewed and updated, if needed:

§   at each individual contact;

§   whenever changes in activities or services occur;

§   whenever the individual is failing to make satisfactory progress in an activity; and

§   whenever the individual requests a review.

Since the recipient has been engaged in this self-employment business activity for 19 years and his monthly net profit in 2003 is $139.42, an amount that cannot sustain his family, it is clear that he is not making satisfactory progress in his self-employment activity. Since he is at month 48, he now has only 12 months to work with the ECS to find employment that will help him become self-sufficient. The ECS must review and update the EP. Although the recipient can certainly continue the self-employment activity, the activity cannot continue to count towards NHEP hourly work participation requirements. To meet the 30-hour participation requirement, the ECS should explore other activities with the recipient, such as an AWEP or paid employment. To the extent possible, the recipient’s preferences can be taken into consideration when updating the EP. However, if the recipient does not agree to the changes in the EP, the ECS has the final authority to require the EP changes. If the recipient refuses to sign the updated EP, the ECS should document the incident in "Individual Notes" on New HEIGHTS, but the expectations that the recipient comply with the revised EP remain unchanged. If the recipient then fails to follow through with the updated EP (e.g., does not increase employment hours or find an AWEP position, etc.), the ECS must issue another notice of non-compliance.

NEW HEIGHTS CHANGES

There are no New HEIGHTS changes associated with this policy change. Self-Employment was previously added as an activity in New HEIGHTS in 2004.

POLICY MANUAL REVISIONS

Revised Family Assistance Manual Topics

Section 808.39   NHEP Activities: Employment

IMPLEMENTATION

The policy released in this SR was effective February 1, 2005.

CLIENT NOTIFICATION

No special client notification occurred.

TRAINING

NHEP Field Support Managers will update workers with the new policy.

DISPOSITION

This SR may be destroyed or deleted after its contents have been noted and the revised manual topics released by this SR have been posted to the On-line manuals.

DISTRIBUTION

This SR will be distributed according to the electronic distribution list for Division of Family Assistance policy releases. This SR, and revised On-Line Manuals, will be available for agency staff in the On-Line Manual Library, and for public access on the Internet at http://www.dhhs.nh.gov/DHHS/DFA/LIBRARY, effective September 1, 2005.

This SR, and printed pages with posting instructions, will be distributed under separate cover to all hard copy holders of the Family Assistance Manual.

DFA/clr:s