FOOD STAMP MANUAL REVISION #5:

Section 1115.010.00 page 1115-2
Section 1115.035.20 pages 1115-30-31
Section 1115.035.35 page 1115-40
Section 1115.070.00 pages 1115-60-61
Section 1130.030.17 page 1130-11
Section 1140.005.00 page 1140-1

Legally-Binding Child Support

The regulation added a legally enforceable separation agreement to the types of agreements that make child support legally binding.  A legally enforceable separation agreement is a contract between the parties that is enforceable through court action.

Allowable Deductions

Child support arrearage payments are an allowable deduction if legally obligated.  The legal obligation can be an initial order or agreement that was never fulfilled or it can be a new order or agreement that requires payment of arrearages.

The regulations clarify that a legally binding child support payment is allowable if it is to or for a non-household member.  This means the deduction continues if:
 

• the child returns to the home of the child support payer but the payer is legally obligated to continue child support payments to the other parent,

• the child moves back and forth between parents, or

• the payer has a continuing obligation to make arrearage payments to the Child Support Enforcement agency or court after the child returns to the home of the payer.

Do not allow the child support deduction if the payer and the individual to whom child support is paid live in the same household.

Amount of the Deduction

The amount of the child support deduction cannot exceed the amount that is legally obligated.  If a household member pays both current child support and an arrearage, both are allowed if both have an order or agreement that establishes an obligation to pay.

Vendor Payments and Health Insurance as a Deduction

Legally obligated child support can be in the form of vendor payments as well as cash.  Examples of this are rent, utilities and medical expenses paid by a noncustodial parent to a third party or to the household in which the child resides.  The payer cannot be a member of the food stamp household receiving the vendor payments.  Include vendor payments in the child support deduction.

Health insurance obtained by a noncustodial parent for the child can also be included in the child support deduction.  Only the amount for the child(ren) covered by the order is deductible.  The premium for health insurance may vary with the type of coverage and the nature of the obligation.  Allow an amount that is reasonable.

Reporting Changes

Households must report at recertification changes in the legal obligation or actual amount paid.

During the certification period, households must report changes in their legal obligation.  Examples of changes are:  no longer having to pay because the child is now living with the payer or a change in the amount ordered to be paid.

Households do not have to report, during the certification period, fluctuations in the actual amount paid.  However, if the household does report a change in the amount paid, staff must act on the change.

Verification

Verify the legal obligation, the amount of the obligation and the actual amount paid at initial certification.  Verify changes in the legal obligation and the amount paid at recertification or when reported.  Verify questionable or inconsistent information. 
Do not pend or deny an application because the household fails to provide child support expense verification.  If the child support expense cannot be verified, complete the budget without allowing the child support deduction.

Certification Periods

Give households without a record of regular child support payments no more than a 3-month certification.  Give a certification period of no more than 6 months to households with a record of child support payments.

Manual Revision

The Food Stamp Manual is updated with the new policies.  Attached is the hard copy of the revised pages.

Form Revisions

The FS-1, IM-2 and IM-145 are being revised to obtain the necessary information about child support expenses.  In the meantime, staff must remember to ask about child support paid in the form of vendor payments and health insurance.

• Read and discuss this memorandum with staff.

 
• Apply the revised policy immediately.

 
• File the revised manual pages in the hard copy of the Food Stamp Manual.

1115.010.00    Unearned INCOME
IM-#10   February 16, 1999

Unearned income includes, but is not limited to, the following.

 1. IM/PA:  includes payments received from federally-aided IM/Public Assistance programs, such as Temporary Assistance, SAB and SSI programs, or other assistance programs based on need.

  If the assistance is a vendor payment (given to a third party on behalf of the household), still consider it unearned income unless the type of vendor payment is specifically listed under income exclusions.

 2. Annuities and Pensions:  payments received as an annuity; pension, retirement, or disability benefit; veterans, worker's, or unemployment compensation; strike benefits; or benefits received under Social Security Programs.

 3. Foster Care Payments:  Count Foster Care payments made to the household for foster children or adults included as household members in their entirety.  Also count as income Foster Care payments made to children ages 16 and up to assist in making the transition to an independent living arrangement.

 4. Support or Alimony:  support (including arrearages) and/or alimony payments made directly to the household from non-household members and refunds to a Temporary Assistance/food stamp household by DCSE.

 5. Educational Income:  only that portion of non-excluded educational income (including educational loans with deferred payments) remaining after deducting allowable school expenses.

 6. Government Programs:  payments received from non-excluded government-sponsored programs that can be construed to be a gain or benefit.

 7. Earned or unearned income of excluded household members.

a. Excluded for an IPV or failure to comply with work registration/METP component activities such as voluntary job quit, failure to comply with 18 to 50 year old work requirements, voluntary reduction in work effort, noncompliance with FUTURES, etc.  The budget for the remaining household includes all countable

income belonging to the excluded member.  The excluded member's income and expenses are counted in determining the earned income standard, medical, dependent care,

budget agreed upon monthly installments.

b. Fluctuating:  Claimant can choose to budget in the month billed, or average over the certification period (claimant can request a change in budgeting method once during the certification period).

c. Changes:  Factor changes that can be anticipated and verified into the expense calculation.

 2. One Time Expenses

  a. Pays or intends to pay at billing:  Claimant can choose to budget in the month billed or average over the certification period (claimant can request a change in budgeting method once during the certification period).

  b. Takes out a loan:  Budget the monthly payment on the principal; do not include interest.

  c. Establishes payment plan/pays installments:  Budget the monthly payment amount if the plan was established before the due date of the bill.  Installments may be formal or informal agreements.

  d. Renegotiation of payments:  Budget the new amount if the originally agreed upon amount is not past due.  Budget the originally agreed upon amount if the payment is past due.

 3. TPL (medical expenses involving third party reimbursement are not considered past due until 30 days after the third party reimbursement is verified).

  a. Spenddown:  Budget expenses as billed or anticipated until claimant meets spenddown.  After meeting spenddown, budget allowable expenses not covered by Medicaid.  The claimant has the option to have expenses incurred prior to spenddown and expenses not covered by Medicaid averaged over the certification.

  b. Other (insurance, Medicare, QMB):  Wait until amount paid by third party is verified.  Then, budget the allowable expense not covered by the third party. Budget based on the type of expense and method of payment.

1115.035.20      Child Support Deduction
IM-#10   February 16, 1999

Deduct the actual amount of legally binding child support the

household is paying to or for non-household members from the household's income.  This means the deduction continues if:

• the child returns to the home of the child support payer but the payer is legally obligated to continue child support payments to the other parent,

 
• the child moves back and forth between parents, or

• the payer has a continuing obligation to make arrearage payments to the Child Support Enforcement agency or court after the child returns to the home of the payer.

Legally binding means there is a court order (signed by a judge), an administrative order (signed by the Director of Child Support Enforcement) or legally enforceable separation agreement requiring the child support payment.  A legally enforceable separation agreement is a contract between the parties that is enforceable through court action.

For the purpose of this deduction, child support includes current payments, arrearages, vendor payments (rent, utilities, medical expenses) and health insurance.  The amount of the child support deduction cannot exceed the amount that is legally obligated.  Health insurance premiums may vary with the type of coverage and the nature of the obligation.  Allow an amount that is reasonable.  If necessary, prorate the health insurance premium.

Before allowing the deduction, verify the legal obligation, the amount of the legal obligation and the actual amount of child support paid.  Do not pend or deny an application because the household fails to provide child support expense verification.  If the child support expense cannot be verified, complete the budget without allowing the child support deduction.

1115.035.25      Shelter Cost
IM-#1    January 15, 1999

Food stamp households, including the homeless, incurring shelter expenses receive a shelter deduction. 

Consider each individual in a DMH apartment placement as an individual food stamp household.  Allow a prorated share of the shelter expenses such as rent and the appropriate utility standard for each household.
 

1115.035.25.05        Allowable Shelter Costs 
IM-#1     January 15, 1999

Shelter costs consist of the costs of home ownership or rent, utilities (heating and cooking fuel, electricity, water and sewer, and

1115.035.30.20        Deduction Conversion to Monthly Amount

Convert expenses billed less than monthly into a monthly amount.  Multiply the expense amount billed weekly by 4.333 and expenses billed every two weeks by 2.166 to determine monthly deductions.
 

1115.035.35      Net Income and Benefit Level Calculation
IM-#10   February 16, 1999

To determine net monthly food stamp income, use the exact dollars and cents for income, income deductions, excess shelter costs, and medical expenses.  Round the monthly net food stamp income.  Round down net monthly income calculations that end in 1 through 49 (such as $103.19 = $103.00).  Round up net monthly income calculations that end in 50 through 99 (such as $130.70 = $131.00).

Use the following steps to determine the household's monthly net income:

 1. Add the total monthly unearned income of all household members, minus income exclusions and the total gross monthly income earned by all household members (including any net self-employment income), minus earned income exclusions.

 2. Net Monthly Earned Income:  Multiply the total gross earned income by 20 percent, subtract that amount.

 3. Farm Loss:  Subtract farm loss.

 4. Standard Deduction:  Subtract the standard deduction.

 5. Dependent Care Deduction:  Subtract monthly dependent care expenses limited to $200 per child under 2 and $175 for each dependent age 2 or over.

 6. Excess Medical Deduction:  If the household is entitled to an excess medical deduction, subtract the portion of medical expenses which exceeds $35.

 7. Child Support Deduction:  Subtract the monthly amount of legally-binding child support the household is paying to or for non-household members.

 8. Determining Excess Shelter Cost:  Subtract excess shelter cost up to the maximum allowed.

 9. Result:  Monthly adjusted net income. 

 1. Income from the boarders includes all direct payments to the household for room and meals, including contributions to the household for part of the household's shelter expenses.  Shelter expenses paid directly by the boarders to someone outside the household are not counted as income to the household.  Such a payment is considered a vendor payment and excluded as income.

 2. Cost of doing business.  After determining the income received from the boarders, exclude that portion of the boarder payment that is a cost of doing business.  The cost of doing business is equal to:

  a. the cost of the Thrifty Food Plan for a household size equal to the number of boarders, or

  b. the actual documented cost of providing room and meals, if the actual costs exceed the appropriate Thrifty Food Plan.

   If the actual costs are used, deduct costs of providing room and meals to boarders.  EXAMPLE:  The roomer or boarder may live in separate living quarters and utilities for the roomer/boarder may be on separate utility meters, thus utility costs for the roomer/boarder can be verified.  Also, it may be possible to verify cost of meals for a boarder if the boarder is on a special diet and the household can present verification of the actual cost of meals provided.

 3. Deductible expenses.  Include the net income from self-
employment with other earned income when the 20 percent earned income deduction is computed.

1115.070.00    INCOME FROM Disqualified Members
IM-#10   February 16, 1999

1. During the period of time a household member is disqualified or ineligible for failure to obtain or refusal to provide an SSN or due to temporary or undocumented immigrant status, determine eligibility and benefits of any remaining household members as follows.

 a. Income:  count a pro rata share of the income of the ineligible member as income to the remaining members.  Calculate the pro rata share by subtracting the allowable exclusions from the ineligible member's income and dividing the income amount among all the household members, including the ineligible member(s).  Count all but the ineligible member(s)'s share as unearned income to the remaining house-

hold members.

EXAMPLE:  Mr. G was disqualified for failure to provide an SSN and reapplied for food stamps on 3/10.  His household consists of his wife and two children and himself.  He earns $400 per month, which must be divided by the number of persons in the household (4).  Mr. G's pro rata share is $100, not counted as income.  The remaining $300 is the pro rata share for the three remaining household members and is counted as unearned income.

 b. Deductible expenses:  Apply the 20 percent earned income deduction to the prorated income attributed to the household if the income was earned income by the ineligible member. That portion of the household's allowable shelter, child support and dependent care expenses that are either paid by or billed to the ineligible member are divided evenly among the household members, including the ineligible member(s).  The pro rata share for the qualified household members is counted as a dependent care, child support or shelter expense.

  NOTE:  If the ineligible person is the only elderly/disabled person in the household, do not allow medical expenses in excess of $35.

 c. Eligibility and benefit level:  Do not include the ineligible member(s) when:  determining the household's size for purposes of assigning an allotment to the household; comparing the household's net monthly income with the income eligibility standards; or comparing the household's resources with the resource eligibility limits.

NOTE:  If the disqualified person is the only elderly/ disabled person in the household, both the gross and net income tests apply.

a. Income:  Count all earned or unearned income of the disqualified member in its entirety to the remaining household members. 

b. Deductible expenses:  The entire household's allowable expenses (including expenses of the disqualified member) continue to apply to the remaining household members.  Expenses include the earned income deduction, medical, dependent care, child support and excess shelter deductions.

1130.030.10      All Household Members are Included in an IM Grant  (Cash Assistance under Temporary Assistance or GR)
IM-#68  June 17, 1998

Households in which all members receive cash assistance under Temporary Assistance or GR may have certification periods of up to 12 months, if no one in the household has earned income or the budget does not result in zero net income.  If any member, not elderly or disabled, has earned income or the budget results in zero net income, give the household a three-month certification.

For other households, whenever possible, set the certification period to expire in the month the cash assistance face-to-face reinvestigation is due.  If the certification period assigned matches the IM reinvestigation date, complete the food stamp recertification timely even if the IM reinvestigation is not done timely.

Cash assistance reviews are completed every six months.  When a cash assistance review falls within the certification period, assess whether changes discovered during the Temporary Assistance review affect food stamp issuance.
 

1130.030.15      Households with All Members Disabled or Elderly
IM-#68  June 17, 1998

The length of certification for households in which the only earned income belongs to elderly or disabled household member(s) depends on the stability and predictability of the household's circumstances.  Certify households with unstable unearned income and unpredictable circumstances from one to 12 months.  Certify elderly/disabled HOUSEHOLDS WITH VERY STABLE (EARNED OR UNEARNED) INCOME FOR 24 MONTHS, provided other household circumstances are expected to remain stable. Households certified for 24 months must have a mid-certification review.

1130.030.17      Households Receiving a Child Support Deduction
IM-#10   February 16, 1999

Give households without a record of regular child support payments no more than a three-month certification.  Give a certification period of no more than six months to households with a record of child support payments.
 

1130.030.20      Homeless, Seasonal Farm Worker, and Migrant Households
Certify homeless, seasonal farm worker, and migrant households for one to three months.

1140.000.00  INTERIM CONTACTS

Changes occur in household circumstances during the certification period.  Households are required to report certain changes.  Others are discovered at an IM reinvestigation, elderly/disabled mid-certification review, or from other sources.  Act on all changes.  Verification, necessary action, and the time frame for action depend on the type of change and its effect on eligibility and benefits.
 

1140.005.00    CHANGE IN CIRCUMSTANCES
IM-#10   February 16, 1999

Household Reporting Requirements

Households must report:

 1. Changes in gross monthly unearned income of more than $25 (changes in IM grants are not required to be reported).

  A household is required to report changes of more than $25 in gross monthly unearned income regardless of the fact that gross income includes an averaged/converted source of income.

 2. The following changes in earned income:

  a. a change in base rate of pay (EXAMPLE:  $5.10 per hour to $5.25 per hour OR $220 per week to $225 per week);

  b. any permanent change in hours worked that can be expected to continue (EXAMPLE:  employee knows number of hours worked will increase or decrease for a period of time; this does not include normal fluctuations in hours worked);

  c. becoming employed or losing employment; or

  d. a change in the source of earned income.

 3. Changes in any source of income.

 4. Changes in the number of people in the household.

 5. Changes in residence, and the resulting changes in shelter costs.

 6. Changes in the legal obligation to pay child support.

 7. Acquisition of a vehicle.

 8. Resources reaching or exceeding $2,000.