340:10-3-28. Lump sum payments
Lump sum payments received from any source are considered as income.Changing a resource from one form to another is not considered a lump sum payment. • 1
(1) Recurring lump sum payment.A recurring lump sum payment is a payment received from any source on a regular basis.A recurring lump sum payment, including income from earnings, is averaged over the period it is intended to cover beginning with the month received.
(A) Examples of recurring lump sum payments include income from surface or mineral rights, oil and gas production, or cash winnings resulting from an established pattern of gambling. • 2
(B) When, after averaging, the monthly income from the lump sum payment is in excess of the Temporary Assistance for Needy Families (TANF) cash assistance benefit, per Oklahoma Department of Human Services (DHS) Appendix C-1, Maximum Income, Resource, and Payment Standards, Schedule IX, the worker denies the application or closes the TANF benefit for the next effective month, per DHS Appendix B-2, Deadlines for Case Actions.The income is considered available for the period of time it is intended to cover, even when it is depleted in less time.
(C) When an applicant receives a recurring lump sum payment before applying for TANF, any amount remaining at application after income averaging is considered as a resource. • 3
(2) Nonrecurring lump sum payment.A nonrecurring lump sum payment is any money the client receives one time or that he or she does not expect to receive regularly from that source.Retirement benefits received at time of retirement in a lump sum are considered as a resource in the month received.The worker calculates how receipt of a nonrecurring lump sum affects the recipient's continued eligibility for TANF per the lump sum rule at (5) of this Section.
(A) Examples of nonrecurring lump sum payments considered as income include, but are not limited to:
(i) retroactive Veterans' (VA) or Social Security benefits or worker's compensation payments;
(ii) insurance settlements or death benefits;
(iii) personal injury awards or settlements;
(iv) monetary inheritances or gifts;
(v) cash winnings from gambling or the lottery that are not the result of an established pattern of gambling; and
(vi) wage bonuses or one-time earnings.
(B) When a TANF recipient is approved for Supplemental Security Income (SSI) and receives a retroactive, lump sum SSI payment, it is not counted as income or a resource for the month received and the following month.The amount remaining in the second month after the month received is a countable resource.
(C) When a nonrecurring lump sum payment is from a disregarded income source per OAC 340:10-3-40, it is not counted as income.
(D) Refer to OAC 340:10-3-5(a)(9) for lump sum payments considered as resources.
(E) Refer to OAC 340:10-10-7 when DHS Child Support Services receives a lump sum child support payment.
(3) Worker responsibilities.The worker explains the information contained on Form 08TA006E, Important Notice About the Effect of Lump Sum Payments on TANF Benefits, to ensure he or she has knowledge of the effect of lump sum receipt on eligibility, asks the client to sign the form, and provides a copy to the client. • 4When the worker:
(A) learns from a client or a third party that the assistance unit received or expects to receive a lump sum payment, the worker is responsible for informing the recipient of the lump sum rule per (5) of this Section within five-calendar days; • 5
(B) has sufficient information to compute the ineligibility period, the worker provides the client with Form 08TA007E, Lump Sum Termination or Denial Notice. • 6
(4) Allowable deductions.Allowable deductions are expenses earmarked in the settlement or award to be used for a specific purpose.Examples include payment of a court judgment, including attorney fees and costs directly related to the lump sum settlement or paying medical or funeral expenses for an immediate family member.For earned income received in a lump sum, work related expenses and one-half of the remainder are allowed as deductions for each month the earned income accumulated per OAC 340:10-3-33.
(5) Lump Sum Rule.When a member of the TANF cash assistance unit receives a nonrecurring lump sum payment, it may cause the assistance unit to become ineligible for TANF for a number of future months.This is called the Lump Sum Rule.The effect the lump sum payment on the assistance unit's eligibility for TANF is calculated by:
(A) subtracting allowable deductions from the lump sum payment, per (4) of this Section;
(B) adding the remaining lump sum payment to all other countable monthly income.This includes any non-excluded child support payments received by Child Support Services per OAC 340:10-10-7(b)(2).It does not include the TANF benefit; and
(C) dividing the income by the monthly TANF need standard for the assistance unit's family size to determine the number of months the assistance unit is ineligible for TANF.Refer to Oklahoma Department of Human Services Appendix C-1, Schedule IX for the TANF need standard per family size.
(6) When the Lump Sum Rule does not apply.The Lump Sum Rule does not apply:
(A) to an applicant when the applicant:
(i) receives the lump sum payment prior to the application date.In this instance, any amount remaining on the application date is considered a resource; or
(ii) reports receipt of the lump sum payment within 10-calendar days of receipt and requests the TANF application be denied;
(B) to a recipient when:
(i) he or she anticipates receipt of the lump sum and requests the TANF benefit be closed prior to the anticipated lump sum receipt month;
(ii) he or she reports receiving the lump sum payment within 10-calendar days of receipt and repays the TANF cash assistance payment for the receipt month within 10-calendar days of timely reporting receipt of the lump sum payment; • 7
(iii) the lump sum payment is less than the TANF cash assistance payment.In this instance, the lump sum payment is considered as income in the receipt month.The worker completes an overpayment referral per 340:65-9 unless the recipient repays the TANF payment in the amount received; • 7or
(iv) the person who expects to receive a lump sum payment is not required to be included in the assistance unit per OAC 340:10-3-56 and has his or her needs removed prior to receiving the lump sum payment;
(C) when the lump sum was received and the ineligibility period was determined by another state prior to the person establishing residence in Oklahoma; or
(D) when the lump sum payment is received by a stepparent not included in the TANF cash assistance unit.When this occurs, the stepparent's countable income including the lump sum is computed per OAC 340:10-3-57(e)(1) for the receipt month.Any portion of the lump sum income retained after the receipt month represents a resource to the stepparent per OAC 340:10-3-57(e)(2).
(7) Ineligibility period.The worker closes the TANF benefit and starts the ineligibility period for the next advance notice effective date per DHS Appendix B-2, Deadlines for Case Actions, and sends the client Form 08TA007E. • 8The ineligibility period applies to all persons included in the assistance unit at the time the lump sum is received.This includes those required to be included and those that may be included per OAC 340:10-3-56.The lump sum payment is considered whether depleted or not until the ineligibility period expires or is shortened per (8) of this Section.Any income remaining is treated as other income received in the first month following the ineligibility period.
(8) Shortening the ineligibility period.The ineligibility period may be recalculated and shortened when a member of the assistance unit verifies and informs the worker that one or more circumstances described in (A) through (D) of this subsection occurred.Circumstances may include when: • 9
(A) the cash assistance unit's family size increases;
(B) the lump sum becomes unavailable due to circumstances beyond the person's control.Examples may include when:
(i) someone steals all or part of the lump sum;
(ii) a natural disaster occurs and the assistance unit uses all or part of the lump sum to replace items lost in the disaster;
(iii) the assistance unit uses the lump sum to pay overdue rent or late mortgage payments owed at the time the lump sum is received; or
(iv) the assistance unit uses the lump sum to pay overdue utility bills owed at the time the lump sum is received;
(C) a member of the TANF assistance unit owes or becomes responsible for and pays for an immediate family member's medical or funeral expenses; or
(D) the person uses the lump sum to enhance employment.Examples include:
(i) buying or repairing a car to keep or look for employment;
(ii) paying moving expenses to relocate for better job opportunities; or
(iii) buying necessary clothing for job search or employment.
1.An example of changing a resource from one form to another is converting personal property to cash.
2.(a) The worker may verify oil and gas income by seeing the person's production check stub or by contacting the oil and gas company.When an assistance unit member receives new income from oil and gas production, the worker accepts the available verification and averages the income over the period of time intended to cover.
(b)The worker may verify cash winnings by seeing the assistance unit member's Form(s) 1099 from the gambling establishment(s) or by contacting the establishment(s).The worker annualizes income from cash winnings over a 12-month period even when the income is received over a period of time shorter than 12 months.
3.For example, the applicant receives $600 from mineral rights every quarter.The applicant received the last payment in April and applied in May.At the time of application, the applicant had $300 left from the last payment.After averaging, the worker counts $200 per month as income.The remaining $100 is considered a resource.
4.(a) During the application and renewal interviews, the worker must ask the applicant or recipient if any assistance unit member received a lump sum payment during the application or renewal month or anticipates receiving a lump sum in the future.When the applicant or recipient indicates he or she anticipates receipt of a lump sum payment, the worker informs him or her how he or she may avoid application of the lump sum rule per (6)(A) or (B) of this Section and receive free legal advice.
(b) The worker verbally explains the information contained on Form 08TA006E, Important Notice About the Effect of Lump Sum Payments on TANF Benefits, including:
(1) examples of one time money considered as lump sum payments;
(2) the lump sum rule and how it affects TANF receipt and other benefits;
(3) the assistance unit's reporting responsibilities;
(4) how the ineligibility period is figured and how it may be shortened; and
(5) the importance of reporting anticipated receipt of a lump sum payment.
(c) The worker images and files a copy of Form 08TA006E in the case record and gives the applicant or recipient the signed and dated original.
5.Informing the applicant or recipient of the lump sum rule includes verbally explaining the information contained on Form 08TA006E and how to obtain free legal advice.
6.When possible, the worker verbally explains the information included on Form 08TA007E, Lump Sum Termination or Denial Notice, to the applicant or recipient and provides him or her with information and assistance to apply for other benefits.The worker images a copy of Form 08TA007E to the case record.
7.When the recipient wants to repay the TANF cash assistance, the worker informs the recipient that he or she may repay the money by a personal check, money order, or cashier's check made payable to the Oklahoma Department of Human Services in the amount of that month's benefit or the lump sum amount when less than the TANF cash assistance payment.After receiving the payment, the worker:
(1) sends a memo to the Adult and Family Services (AFS) TANF explaining the recipient received a lump sum payment for a certain month and requesting the attached payment be applied to the recipient's case name and number for the month of lump sum receipt;
(2) documents the lump sum receipt and case action in the Family Assistance/Client Services (FACS) Case Notes; and
(3) gives the recipient a copy of the memo and the check or money order as a receipt, when appropriate.
8.The worker calculates the ineligibility period beginning with the next effective month following receipt of the lump sum regardless of whether the recipient reports the lump sum timely.When the recipient does not report the lump sum timely, the worker completes an overpayment referral, per OAC 340:65-9-1(c) for the number of months the recipient ineligibly received TANF.In examples (1) through (3) of this Instruction, the recipient receives the lump sum on April 3rd and the worker calculates the ineligibility period from May 1st through January 31st.
(1) The recipient timely reports lump sum receipt on April 11th.The worker closes the TANF benefit effective May 1st.No overpayment exists.
(2) The recipient untimely reports the lump sum receipt on May 28th.The worker closes the TANF benefit on July 1st and writes an overpayment for the months of May and June.
(3) The recipient does not report lump sum receipt.The worker discovers the lump sum on November 11th while completing the TANF benefit renewal.The worker closes the TANF benefit effective December 1st and
9.When the worker decides to recalculate and shorten the ineligibility period, the worker must provide a detailed explanation of the circumstances in FACS Case Notes and image applicable documents in the case record.