340:40-7-12. Excluded income sources
Only the income listed in this Section is excluded in determining a household's eligibility for a child care benefit. No other income is excluded.
(1) Lump sum payments. One-time lump sum payments are excluded as income. Recurring lump sum payments are excluded as a countable income source unless specifically mentioned, per Oklahoma Administrative Code (OAC) 340:40-7-11.
(2) In-kind income. In-kind income is excluded as income. In-kind income is defined as any gain or benefit that is not in the form of money paid directly to the household. This includes non-monetary or in-kind benefits, such as meals, clothing, public housing, or produce from a garden. • 1
(3) Money received from the sale of property. Money received from the sale of property, such as stocks, bonds, or a house or car is excluded. This exclusion does not apply when the person is engaged in the business of selling such property. • 2
(4) Bank or trust account withdrawals. Money withdrawn from a bank or trust account is excluded as income even when used to meet current living expenses.
(5) Capital gains. The proceeds from the sale of capital goods or equipment are excluded.
(6) Household income for certain children adopted through Oklahoma Human Services (OKDHS). All household member's income is exempt for the adopted child only when conditions in (A) through (F) are met. • 3 The:
(A) parent applying for benefits adopted the child through OKDHS or a federally-recognized Indian tribe, as defined by the Federal and Oklahoma Indian Child Welfare Acts; • 4
(B) adoptive parent applying for benefits must provide: • 5
(i) a fully executed Form 04AN002E, Adoption Assistance Agreement, listing child care as an adoption assistance benefit for the child;
(ii) Form 04AN033E, Post Adoption Child Care Referral;
(iii) the Final Decree of Adoption; and
(iv) a form of identity;
(C) adoptive parent and child are Oklahoma residents;
(D) child is 5 years of age and younger. When a child turns 6 years of age during the 12-month eligibility period, household income remains exempt until the next renewal;
(E) child is 6 years of age and older and meets the definition of a child with disabilities, per OAC 340:40-7.3.1. When the child continues to require child care after he or she turns 13 years of age, the client must provide a statement from a licensed health care professional verifying the child is physically or mentally incapable of self-care, as age appropriate, before further care is approved, per OAC 340:40-7-3. An updated medical statement is required annually at renewal. When a child with disabilities turns 19 years of age during an eligibility period, the child remains eligible until the next renewal date; and
(F) adoptive parent meets an allowable need factor and provides proof, per OAC 340:40-7-7 and OAC 340:40-7-8. • 6 In a two-parent family, both parents must meet an allowable need factor.
(7) Household income when at least one child attends an Early Head Start-Child Care Partnership (EHS-CCP) grant program or an Oklahoma Early Childhood Program (OECP). The household income is exempt for all children in child care when at least one child attends an EHS-CCP grant program or an OECP and the household meets the income threshold, per OKDHS Appendix C-4, Child Care Eligibility/Copayment Chart. • 7
(8) Children's earnings. The earnings of a person 17 years of age and younger who is considered a child in the case are excluded as long as the child attends school regularly. The exclusion continues to apply during temporary interruptions in school attendance due to semester or vacation breaks, provided the child's enrollment resumes following the break. When the child is a minor parent and the payee, the minor parent's earnings are treated as adult income. • 8
(9) Irregular income. Any income received too infrequently or irregularly to be reasonably anticipated is not counted unless it exceeds $30 per calendar quarter.
(10) Reimbursements. Reimbursements for past or future expenses not exceeding actual expenses are excluded. • 9
(11) Tax refunds. Exclude federal or state income tax refunds including Earned Income Tax Credit (EITC) payments. • 10
(12) Money received for third parties. Money received and used for the care and maintenance of a third party who is not a household member is excluded.
(13) Loans. All loans, including loans from private as well as and commercial institutions, are excluded as income. When the household states someone is loaning the household money to meet expenses, both parties are required to sign a statement indicating the payment is a loan and must be repaid. When the household states it receives loans on a recurrent or regular basis from the same source, the lender must sign an affidavit stating the payments are loans that must be repaid or that payments will be made in accordance with an established repayment schedule.
(14) Grants. Grants obtained and used under conditions that preclude their use for current living costs are excluded.
(15) Educational assistance. Educational assistance is excluded as income and includes, but is not limited to:
(A) work study;
(D) educational loans when payment is deferred; and
(E) veterans' education benefits.
(16) Stipends. Stipends paid to students participating in the Indian Vocational Education Program through the Carl D. Perkins Vocational and Applied Technology Education Act are excluded as income.
(17) Service Corps of Retired Executives (SCORE) and Active Corps of Executives (ACE). Payment for supportive services or reimbursement for out-of-pocket expenses made to volunteers serving as foster grandparents, senior health aides, senior companions, and to persons serving in SCORE and ACE is excluded as income.
(18) Government rent or housing subsidies. Rent or housing subsidies provided by government agencies that are received in-kind or in cash for rent, mortgage payments, or utilities are excluded as income.
(19) Foster care payments. Foster care payments received for a foster child in state or tribal custody are excluded as income.
(20) Title IV E of the Social Security Act or State Adoption Subsidy. Federal- or state-funded adoption subsidy payments made to adoptive parents are excluded as income.
(21) Victims of Crime Act of 1984. Payments made from the crime victims' compensation program as amended in Section 1402 of the Victims of Crime Act of 1984 and Section 10602 of Title 42 of the United States Code (42 U.S.C § 10602) are excluded as income.
(22) Family Support Assistance Payment Program. Family Support Assistance Payment Program payments paid to persons by OKDHS Developmental Disabilities Services are excluded as income.
(23) Vendor payments. Vendor payments made directly to the household's creditors, a person, or an organization providing a service to the household, are excluded as income unless a court order or other legally binding agreement specifies the money is to be paid directly to the client. • 11
(24) Money received by another household for a household member.
(A) When a child with countable income spends part of the month in two separate households, the worker only considers the portion of the child's income received by the household applying for or receiving a child care benefit as countable income and excludes the remainder. • 12
(B) When a minor parent is the payee and lives with a parent or caretaker, child support received for the minor parent is considered income for the parent or caretaker and not considered for the minor parent's child care benefit.
(25) Money deposited into or withdrawn from a qualified Oklahoma Achieving a Better Life Experience (ABLE) Program account. Money deposited into or withdrawn from a qualified ABLE Program account, in Oklahoma or in any other state, owned by the account's designated beneficiary and established to pay for qualified disability expenses (QDE), is excluded from income or resource consideration, per Sections 4001.1 through 4001.5 of Title 56 of the Oklahoma Statutes and the ABLE Act of 2014 (26 U.S.C. § 529A). A person may have only one ABLE account.
(A) The client must provide documents to verify the account meets exemption criteria before the funds are excluded. Once the client verifies that the savings or trust account is a valid ABLE account, no further account information is required. • 13
(B) Another individual's contribution to an ABLE account is excluded unless the contribution exceeds the annual federal gift tax exclusion amount, per 26 U.S.C. § 2503(b). Any money deposited in the account in the calendar year that is in excess of the annual federal gift tax exclusion amount is considered as a countable resource in the amount deposited.
(C) An ABLE account distribution retained after the month of receipt is excluded in any month when spent on a QDE. Money withdrawn for reasons other than to pay a QDE is considered as a countable resource for the withdrawal month.
(D) A QDE is any expense related to the individual's blindness or disability and made for his or her benefit. A QDE includes, but is not limited to:
(iv) employment, training, and support;
(v) assistive technology;
(vii) prevention and wellness;
(viii) financial management and administrative services;
(ix) legal fees;
(x) ABLE account oversight and monitoring;
(xi) funeral and burial; and
(xii) basic living.
(26) Income excluded by federal law. Income excluded by federal law is defined as:
(A) payments received under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
(B) payments received:
(i) under the Alaska Native Claims Settlement Act, Public Law (P. L.) 92-203, § 21(a);
(ii) under the Sac and Fox Indian Claims Agreement, P.L. 94-189;
(iii) from the disposition of funds to the Grand River Band of Ottawa Indians, per P.L. 94-540;
(iv) from the Indian Claims Commission to the Confederated Tribes and Bands of the Yakima Indian Nation or the Apache Tribe of the Mescalero Reservation, per P.L. 95-433;
(v) under the Maine Indian Claims Settlement Act of 1980 to members of the Passamaquoddy and the Penobscot Nation, P.L. 96-420;
(vi) by an individual as a lump sum or a periodic payment via the Cobell Settlement, per the Claims Resolution Act of 2010, P.L. 111-291; or
(vii) by members of the Navajo and Hopi Tribes for relocation assistance, per P.L. 93-531;
(C) any payment to volunteers under Title II, Retired and Senior Volunteer Program, Foster Grandparents and others, of the Domestic Volunteer Services Act of 1973, P.L. 93-113 as amended. Payments under Title I of that Act, Volunteers in Service To America, University Year for Action, and Urban Crime Prevention Program, to volunteers are excluded only when the monthly amount, converted to an hourly rate, is less than the Oklahoma minimum wage; • 14
(D) income derived from submarginal land of the United States held in trust for certain Indian tribes, per P.L. 94-114, Section 6;
(E) Indian per capita payments distributed from judgment awards and trust funds made, per Section 2 of P.L. 98-64, 25 U.S.C. §§ 117b and 1407. For this paragraph's purposes, per capita is defined as each tribal member receiving an equal amount. Interest or investment income accrued on such funds while held in trust, or any purchases made with judgment funds, trust funds, interest, or investment income accrued on such funds, is excluded. Any per capita payments, headrights of the Osage tribe, income from mineral leases, or other tribal business ventures are excluded as long as the payments are paid per capita. Any interest or income derived from the funds after distribution is considered as any other income. The per capita exclusion applies per person rather than per family;
(F) income individual Indians receive up to $2,000 per year that is derived from leases or other uses of individually-owned trust or restricted lands, is not counted as income. The income exclusion applies to calendar years beginning January 1, 1994. Any remaining disbursements from the trust or restricted lands are considered income;
(G) allowances, stipends, earnings, compensation in lieu of wages, grants, and other payments made for participation in the Workforce Innovation and Opportunity Act (WIOA) or other federally-funded workforce training program to persons of all ages and student status. On-the-job training income paid to persons 19 years of age and older is considered as countable earned income, per OAC 340:40-7-11(b)(4); • 15
(H) payments, allowances, or earnings to persons participating in the AmeriCorps State and National program, the AmeriCorps National Civilian Community Corps program authorized under the National and Community Service Act, 1990 42 U.S.C. § 12637(d), and other payments to volunteers authorized by the National and Community Service Trust Act of 1993, P. L. 103-82, 42 U.S.C. §§ 12571, et seq., and administered by the Corporation for National and Community Service;
(I) payments or allowances made under any federal law for the purpose of energy assistance, Low Income Home Energy Assistance Program (LIHEAP), and utility payments and reimbursements made by the Department of Housing and Urban Development (HUD) and the Farmers Home Administration (FmHA);
(J) the mandatory salary reduction amount for military service personnel used to fund the G.I. Bill;
(K) benefits from State and Community Programs on Aging, per Title III and Title V of the Older Americans Act of 1965 as amended by P.L. 114-144, Older Americans Act Reauthorization Act of 2016. Each state and various organizations receive Title V funds. • 16 These organizations include:
(i) Experience Works;
(ii) National Council on Aging;
(iii) National Council of Senior Citizens;
(iv) American Association of Retired Persons Foundation;
(v) United States (U.S.) Forest Service;
(vi) National Association for Spanish Speaking Elderly;
(vii) National Urban League;
(viii) National Council on Black Aging; and
(ix) National Council on Indian Aging;
(x) Asociación Nacional Pro Personas Mayores;
(xi) Associates for Training and Development, Inc.;
(xii) American Samoa;
(xiii) Easter Seals, Inc.;
(xiv) Goodwill Industries International, Inc.;
(xv) Institute for Indian Development;
(xvi) National Able Network;
(xvii) National Asian Pacific Center on Aging;
(xviii) National Caucus and Center on Black Aged, Inc.;
(xix) National Older Worker Career Center;
(xx) Operation A.B.L.E. of Greater Boston, Inc.;
(xxi) Senior Service America, Inc.;
(xxii) SER-Jobs for Progress National, Inc.;
(xxiii) Workplace, Inc.; and
(xxiv) VANTAGE Aging;
(L) payments made from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement In Re Agent Orange Product Liability Litigation, M.D.L. No. 381 (E.D.N.Y.);
(M) payments received under the Civil Liberties Act of 1988. These payments are made to persons of Japanese ancestry who were detained in internment camps during World War II;
(N) payments made from the Radiation Exposure Compensation Trust Fund as compensation for injuries or deaths resulting from exposure to radiation from nuclear testing and uranium mining;
(O) payments a Supplemental Security Income recipient receives that are necessary for the fulfillment of a Plan for Achieving Self-Support approved under Section 1612(b)(4)(A)(iii) or 1612(b)(4)(B)(iv) of the Social Security Act;
(P) payments made to persons because of their status as victims of Nazi persecution under P.L. 103-286;
(Q) payments made for the Experimental Housing Allowance Program under Annual Contributions Contracts entered into prior to January 1, 1975, per Section 23 of the U.S. Housing Act of 1937 as amended;
(R) monetary allowances provided to certain children of Vietnam War veterans, per Chapter 18 of Title 38 of the United States Code;
(S) federal funds distributed by Federal Emergency Management Assistance (FEMA) due to a disaster or emergency to persons directly affected by the event, per the Robert T. Stafford Disaster Relief and Emergency Assistance Act, P.L. 93-288 as amended, 42 U.S.C. § 5155(d). This exclusion also applies to comparable disaster assistance provided by states, local governments, and disaster assistance organizations. For payments to be excluded, the disaster or emergency must be declared by the President of the United States;
(T) the food benefit allotment value under the Food and Nutrition Act of 2008;
(U) the supplemental food assistance value under the Child Nutrition Act of 1966 and the special food services program for children under the National School Lunch Act of 1970, both as amended, per Omnibus Budget Reconciliation Act of 1981; and
(V) income a member of the United States Armed Forces receives, per 37 U.S.C. Chapter 5 and, per 273.9(c)(20) of Title 7 of the Code of Federal Regulations that is:
(i) received in addition to the service member's basic pay during combat deployment;
(ii) received as a result of the service member's deployment or service in an area designated as a combat zone as determined per Executive Order or P.L.; and
(iii) not received by the service member prior to the service member's deployment to or service in a federally designated combat zone.
INSTRUCTIONS TO STAFF 340:40-7-12
1. Refer to Oklahoma Administrative Code (OAC) 340:40-7-11(c)(5) for court-ordered benefits.
2. Refer to OAC 340:40-7-11(b)(2) to address self-employment income.
3. (a) When required conditions are met, per OAC 340:40-7-12(6), no income is considered for the child. The worker codes the adoptive parent in the Family Assistance/Client Services (FACS) Household Tab as 'Income and Resources not Considered for Benefit Computation – Individual not Included.' The worker must document in Family Assistance/Client Services FACS Case Notes why the income is excluded.
(b) When required conditions are not met, per OAC 340:40-7-12(6), all household income is considered for the child, per OAC 340:40-7-6, and care may be approved for any need factor met, OAC 340:40-7-7 and 340:40-7-8.
(c) When the adopted child meets required conditions, per OAC 340:40-7-12(6), and other children in need of care are in the home that do not meet the required conditions, separate cases must be established. Refer to OAC 340:40-5-1 Instructions to Staff (ITS) # 17 for separate case coding instructions.
4. The parent meets this condition by providing a copy of the Final Decree of Adoption.
5. When the parent does not have Form 04AN002E, Adoption Assistance Agreement, or Form 04AN033E, Post Adoption Child Care Referral, the parent contacts Child Welfare Services Post Adoption Services to obtain the forms.
6. OAC 340:40-7-8 describes type of proof required for each need factor. The worker must document proof provided and hours approved in FACS Case Notes.
7. (a) The household must be determined income eligible prior to exempting the income. The worker enters the entire household income in the "total diverted income" field E47 on the FACS Child Care tab to exclude the income. Refer to Quest article "Early Head Start – CCP Grant Facilities" for a list of Early Head Start-Child Care Partnership (EHS-CCP) grant programs.
(b) When the child stops attending an EHS-CCP grant program or an Oklahoma Early Childhood Program, the worker removes household income from the "total diverted income" field E47 on the FACS Child Care tab, per Oklahoma Human Services Appendix B-2, Deadlines for Case Actions, advance notice deadlines.
8. For this provision's purposes, an elementary or secondary student also includes someone attending high school equivalency classes, provided the student's state or local school district recognizes, operates, or supervises the program.
9. (a) Examples are reimbursements for:
(1) job or training related expenses, such as travel, per diem, uniforms, and transportation to and from the job or training site. When these expenses are not reimbursements, they are not deductible;
(2) out-of-pocket expenses volunteers incur in the course of volunteer activity;
(3) medical or dependent care; and
(4) services provided by Title XX of the Social Security Act.
(b) When a reimbursement including a flat allowance covers multiple expenses, it is not necessary to identify each expense as long as none of the reimbursement covers normal living expenses. The worker counts the amount of the reimbursement that exceeds the actual incurred expenses. The worker does not consider a reimbursement to exceed actual expenses unless the provider or household indicates the amount is excessive.
10. (a) When the client receives advance federal earned income tax credit (EITC) payments in his or her payment, the advanced payment is excluded as income.
(b) Effective November 1, 2016, Section 2357.43 of Title 68 of the Oklahoma Statutes is revised to eliminate the Oklahoma EITC.
11. (a) To be considered an excluded vendor payment, the payment must not be made in lieu of directly paying the household back for money owed. Examples of vendor payments excluded as income are payments:
(1) a friend, employer, agency, church, relative, or former spouse makes directly to a vendor for household expenses, such as writing a check to the landlord for rent;
(2) an employer makes directly to the landlord or financial institution for the household's rent or mortgage, in addition to paying regular wages;
(3) made to a third party instead of the household when the payment arrangement is specified in a court order or other legally binding agreement; or
(4) allowances the Department of Housing and Urban Development (HUD) or the United States Department of Agriculture Rural Housing Service makes directly to mortgage holders, landlords, or utility providers.
(b) An example of a vendor payment considered as income occurs when a court directs a non-custodial parent to pay $400 in child support to the client, but the non-custodial parent pays $200 to the client and $200 directly to the landlord for rent. The worker counts $400 as unearned income because the payment to the landlord was made using money owed to the household. When the court order directs the non-custodial parent to make a payment directly to a vendor, the payment is excluded as income.
12. This may occur in certain joint or shared custody situations. When one parent receives the child's Temporary Assistance for Needy Families (TANF) benefit or a Supplemental Security Income (SSI) payment and does not give a portion of the income to the other parent, it is not counted as income for the other parent. When the parent gives a portion of the income to the other parent, only the portion available to each parent is considered as income for that parent.
13. (a) The Oklahoma State Treasurer is responsible for certifying an Achieving a Better Life Experience (ABLE) account. The program is Oklahoma STABLE and is administered through a partnership with Ohio's STABLE Accounts. ABLE account rules state:
(1) only persons whose disability was established before 26 years of age can set up ABLE accounts and one account is allowed per person;
(2) there is no limit to the number of persons who can contribute to the ABLE account; and
(3) upon the ABLE participant's death, qualified disability expenses (QDE) and funeral expenses may be paid from the account. All remaining funds in the account must be paid to the state Medicaid agency to repay costs of care the participant received up to the amount Medicaid paid since ABLE account establishment of the ABLE account.
(b) Once the client provides documents that verify the account is a valid ABLE account, no further account verification is required. At application and renewal, the worker asks the client if the ABLE account is still open and if he or she believes the deposits in and expenditures from the account are in compliance with the terms and requirements of that particular 529 account. When the client answers yes, no further inquiry is needed.
14. Income from this source is excluded in determining food benefit eligibility even when the volunteer receives payment equal to or more than minimum wage, per OAC 340:50-7-22(5)(H).
15. Examples include, but are not limited to, income received from Youthbuild, Summer Youth, Job Corps, and paid classroom training. For the income to be excluded, it must be paid by a federally-funded workforce training program.
16. In Oklahoma, Title V funds for older Americans are administered by:
(1) Oklahoma Human Services Aging Services through the Senior Community Service Employment Program (SCSEP). SCSEP is a community service and work-based job training program for older Americans. Services are provided by the:
(A) Association of South Central Oklahoma Governments;
(B) Oklahoma Economic Development Authority; and
(C) Grand Gateway Economic Development Association; and
(2) National Grantee Easter Seals. Services are provided by the American Association of Retired Persons project sites in Oklahoma City, Tulsa, and McAlester.