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COMMENT DUE DATE:  

March 3, 2017

DATE: 

February 1, 2017

Laura Brown, Policy Liaison 405-521-4396

Dena Thayer, Programs Administrator 405-521-4326

RE:  

APA WFs 16-03, 16-08, and 17-11

It is very important that you provide your comments regarding the DRAFT COPY of policy by the comment due date. Comments are directed to *STO.LegalServices.Policy@okdhs.org

The proposed policy is  Permanent .  This proposal is subject to Administrative Procedures Act

It is important that you provide your comments regarding the draft copy of policy by the comment due date.Comments are directed to STO.LegalServices.Policy@okdhs.org.The proposed policy is permanent.

SUBJECT:CHAPTER 40. CHILD CARE SUBSIDY PROGRAM

Subchapter 1. General Provisions

340:40-1-2 through 340:40-1-3 [AMENDED]

340:40-1-5 [AMENDED]

Subchapter 3. Initial Application

340:40-3-1 [AMENDED]

Subchapter 7. Eligibility

340:40-7-3 [AMENDED]

340:40-7-5 through 340:40-7-9 [AMENDED]

340:40-7-11 through 340:40-7-12 [AMENDED]

Subchapter 9. Procedures Relating to Case Changes

340:40-9-1 through 340:40-9-2 [AMENDED]

Subchapter 13. Child Care Rates and Provider Issues

340:40-13-3 [AMENDED]

340:40-13-5 [AMENDED]

(Reference WFs 16-03, 16-08 and 17-11)

SUMMARY:The proposed revisions to Chapter 40, Subchapter 1 amend the rules to: (1) add the Child Care Development Block Grant of 2014 to the legal authority for the Child Care Subsidy Program; and (2) update terminology.

The proposed revisions to Chapter 40, Subchapter 3 amend the rules to:(1) rename expedited eligibility processing to presumptive eligibility processing; (2) expand the reasons for an initial 30-calendar day approval; (3) clarify eligibility requirements prior to approval and before further care is approved; (4) update terminology regarding request, application, and certification dates to match systems fields; (5) clarify that the child care interview may be completed over the phone and must be completed prior to determining the applicant eligible; (6) add required 12-month eligibility period; (7) add information that application approval is subject to available funding; (8) clarify when a new application is needed following a denial; (9) add legal and policy cites; (10) update a form name; and (11) simplify and clarify terminology.

The proposed revisions to Chapter 40, Subchapter 7 amend the rules to:(1) allow a child to remain eligible for child care until renewal when the child reaches the maximum allowable age during an eligibility period; (2) add an eligibility requirement that household resources may not exceed $1,000,000 to qualify for subsidized child care; (3) add resource types; (4) add a definition for a person acting in the role of a spouse; (5) remove gender information when considering whether to count the income of an adult non-relative living in the child care household; (6) add definition for acting in the role of a spouse; (7) simplify and clarify the eligibility process when parents share custody of the child; (8) add Supplemental Nutrition Assistance Program (SNAP) Education and Training (E&T) activities as an allowable need factor; (9) remove job search as an allowable need factor; (10) remove court-ordered community service hours as a non-allowable need factor for child care subsidy; (11) allow child care to remain open until renewal, when after initial approval, the client begins new employment with an employer who refuses to pay the client at least minimum wage; (12) allow child care to remain open until renewal when the client is not making at least minimum wage and has been self-employed or working for an employer paying wages based on commission or another performance measure for less than one year; (13) add qualifications to when child care is approved for a person working from home; (14) remove job search as meeting the employment need factor for child care subsidy for clients who lose employment or complete an education or training program; (15) change proof of progress and attendance requirements from when requested or as a class ends to at renewal for the training and education need factors; (16) remove the requirement to provide proof of initial education or literacy level testing results when child care is requested to participate in high school equivalency, literacy, or adult basic education (ABE) classes; (17) change the time frame for not approving further child care, to at renewal when the client is not making satisfactory progress or stops attending training or education during an eligibility period; (18) add approval requirements for the SNAP E&T need factor and time frame for discontinuing child care when the client stops participating; (19) update Temporary Assistance for Needy Families (TANF) related subsidized child care to:(a) remove limited approval period for TANF clients waiting to enter an approved TANF Work activity and TANF applicants in job search, (b) include child care for a child included in a child only TANF benefit, and (c) include time frame for discontinuing child care when the client stops meeting a need factor; (20) for protective or preventive child care:(a) reorder information, (b) remove the face-to-face interview requirement, (c) add reasons protective or preventive child care may be approved, (d) add definition of homeless and when a homeless family or a family that experienced a natural disaster may be approved for child care, and (e) clarify procedures to request approval for more than 30-calendar days of care; (21) remove the requirement that a minor parent must pursue child support for his or her own child; (22) update terminology regarding a non-relative adult considered a household member to remove gender information and use the term acting in the role of a spouse; (23) add information that a person in non-cooperation status with Child Support Services (CSS) at application must verify cooperation before approval; (24) change the requirement to close child care when a client fails to cooperate with CSS during an eligibility period from 10-calendar days to not approving further care at renewal; (25) change the requirement to pursue identified potential income from 90-calendar days to before the next child care renewal; (26) change the requirement to close child care when the client does not pursue potential identified income, accept a pay raise, or decreases work hours or pay rate to decrease or avoid a family share copayment during an eligibility period to not approving further care at renewal; (27) remove no longer applicable information regarding calculation of self-employment income from a new source; (28) remove gender information and update terminology regarding a non-relative adult; (29) change the time frame regarding when a client must take action to become the payee for a Social Security Administration (SSA) benefit when appropriate; (30) allow an eligible child adopted through the Oklahoma Department of Human Services (DHS) to remain eligible for child care with a household income exemption until renewal when the child turns 6 years of age during an eligibility period; (31) update and simplify language and terminology; (32) add, remove, and update policy and legal cites; (33) change self-employment business expense computations; (34) clarify that excess benefit allowances are considered earned income; (35) add clarifying information regarding loans; (36) exclude all educational income; (37) exclude from income and resource consideration money deposited into or withdrawn from a qualified Achieving a Better Life Experience (ABLE) Program account per state statute and federal regulations; and (38) update a legal cite.

The proposed revisions to Chapter 40, Subchapter 9 amend the rules to:(1) change the child care renewal time frame from six months to no earlier than 12 months from the date of approval or last renewal unless the client applies for food benefits before the next renewal; (2) remove the requirement for a face-to-face interview at renewal for the protective or preventive need factor; (3) clarify information regarding income changes and advance notice procedures when child care benefits decrease; (4) add effective dates for different types of closure actions; (5) clarify that a new child care application based on the adoptive parent's income is not required until renewal when a child adopted through DHS turns 6 years of age during an eligibility period; (6) add a policy cite; and (7) update terminology and simplify language.

The proposed revisions to Chapter 40, Subchapter 13 amend the rules to: (1) remove information regarding when eligibility stops because of a child's age as it is duplicated in another section and is not rate related; (2) update a form name; (3) remove the reference to contracting with out-of-state providers; (4) remove the Oklahoma State Bureau of Investigation background investigation as a procedure for obtaining child care contracts; (5) add clarifying language that Adult and Family Services Child Care Subsidy staff will provide written notice when approving care to be provided at a different site; (6) remove the requirement for providers to maintain copies of manual claims and daily attendance records and to make them available to DHS upon request; and (7) update and simplify language and terminology.

PERMANENT APPROVAL:Permanent rulemaking is requested.

LEGAL AUTHORITY:Director of Human Services; Section 162 of Title 56 of the Oklahoma Statutes (O.S. 56 § 162); Title 45 of the Code of Federal Regulations (C.F.R.) Parts 98 and 99; and Public Law 113-186, the Child Care and Development Block Grant of 2014.

Rule Impact Statement

To:Programs Administrator

Legal Services - Policy

From:Jim Struby, Director

                Adult and Family Services

Date:January 3, 2017

Re:CHAPTER 40. CHILD CARE SUBSIDY PROGRAM

Subchapter 1. General Provisions

OAC 340:40-1-2 [AMENDED]

Subchapter 3. Initial Application

OAC 340:40-3-1 [AMENDED]

Subchapter 7. Eligibility

OAC 340:40-7-3 [AMENDED]

OAC 340:40-7-5 through 340:40-7-9 [AMENDED]

OAC 340:40-7-11 through 340:40-7-12 [AMENDED]

Subchapter 9. Procedures Relating to Case Changes

OAC 340:40-9-1 through 340:40-9-2 [AMENDED]

Subchapter 13. Child Care Rates and Provider Issues

OAC 340:40-13-3 [AMENDED]

(Reference WF 16-03)

Contact:Laura Brown 405-521-4396

A.Brief description of the purpose of the proposed rule:

Purpose. The proposed revisions to Chapter 40, Subchapter 1 amend the rules to:(1) add the Child Care and Development Block Grant Act (CCDBG) of 2014 Public Law (P.L.) 113-186to the legal authority for the Child Care Subsidy Program; and (2) update terminology.

The proposed revisions to Chapter 40, Subchapter 3 amend the rules to:(1) rename expedited eligibility processing to presumptive eligibility processing, expand the reasons for an initial 30-calendar day approval, and clarify eligibility requirements prior to approval and before further care is approved; (2) update terminology regarding request, application, and certification dates to match systems fields; (3) clarify that the child care interview may be completed over the phone and must be completed prior to determining the applicant eligible; (4) add required 12-month eligibility period; (5) add information that application approval is subject to available funding; (6) clarify when a new application is needed following a denial; (7) add legal and policy cites; (8) update a form name; and (9) simplify and clarify terminology.

The proposed revisions to Chapter 40, Subchapter 7 amend the rules to:(1) allow a child to remain eligible for child care until renewal when the child reaches the maximum allowable age during an eligibility period; (2) add an eligibility requirement that household resources may not exceed $1,000,000 to qualify for subsidized child care; (3) add resource types; (4) add a definition for a person acting in the role of a spouse; (5) remove gender information when considering whether to count the income of an adult non-relative living in the child care household; (6) add definition for acting in the role of spouse; (7) simplify and clarify the eligibility process when parents share custody of the child; (8) add Supplemental Nutrition Assistance Program (SNAP) Education and Training (E&T) activities as an allowable need factor; (9) remove job search as an allowable need factor; (10) remove court-ordered community service hours as a non-allowable need factor for child care subsidy; (11) allow child care to remain open until renewal, when after initial approval, the client begins new employment with an employer who refuses to pay the client at least minimum wage; (12) allow child care to remain open until renewal when the client is not making at least minimum wage and has been self-employed or working for an employer paying wages based on commission or another performance measure for less than one year; (13) add qualifications to when child care is approved for a person working from home; (14) remove job search as meeting the employment need factor for child care subsidy for clients who lose employment or complete an education or training program; (15) change proof of progress and attendance requirements from when requested or as a class ends to at renewal for the training and education need factors; (16) remove the requirement to provide proof of initial education or literacy level testing results when child care is requested to participate in high school equivalency, literacy, or adult basic education (ABE) classes; (17) change the time frame for not approving further child care, to at renewal when the client is not making satisfactory progress or stops attending training or education during an eligibility period; (18) add approval requirements for the SNAP E&T need factor and time frame for discontinuing child care when the client stops participating; (19) update TANF related subsidized child care to: (a) remove limited approval period for TANF clients waiting to enter an approved TANF Work activity and TANF applicants in job search, (b) include child care for a child included in a child only TANF benefit, and (c) include time frame for discontinuing child care when the client stops meeting a need factor; (20) for protective or preventive child care: (a) reorder information, (b) remove the face-to-face interview requirement, (c) add reasons protective or preventive child care may be approved, (d) add definition of homeless and when a homeless family or a family that experienced a natural disaster may be approved for child care, and (e) clarify procedures to request approval for more than 30-calendar days of care; (21) remove the requirement that a minor parent must pursue child support for his or her own child; (22) update terminology regarding a non-relative adult considered a household member to remove gender information and use the term acting in the role of a spouse; (23) add information that a person in non-cooperation status with Child Support Services (CSS) at application must verify cooperation before approval; (24) change the requirement to close child care when a client fails to cooperate with CSS during an eligibility period from 10-calendar days to not approving further care at renewal; (25) change the requirement to pursue identified potential income from 90-calendar days to before the next child care renewal; (26) change the requirement to close child care when the client does not pursue potential identified income, accept a pay raise, or decreases work hours or pay rate to decrease or avoid a family share copayment during an eligibility period to not approving further care at renewal; (27) remove no longer applicable information regarding calculation of self-employment income from a new source; (28) remove gender information and update terminology regarding a non-relative adult; (29) change the time frame regarding when a client must take action to become the payee for a Social Security Administration (SSA) benefit when appropriate; (30) allow an eligible child adopted through the Oklahoma Department of Human Services (DHS) to remain eligible for child care with a household income exemption until renewal when the child turns 6 years of age during an eligibility period; (31) update and simplify language and terminology; and (32) add, remove, and update policy and legal cites.

The proposed revisions to Chapter 40, Subchapter 9 amend the rules to:(1) change the child care renewal time frame from six months to no earlier than 12 months from the date of approval or last renewal unless the client applies for food benefits before the next renewal; (2) remove the requirement for a face-to-face interview at renewal for the protective or preventive need factor; (3) clarify information regarding income changes and advance notice procedures when child care benefits decrease; (4) add effective dates for different types of closure actions; (5) clarify that a new child care application based on the adoptive parent's income is not required until renewal when a child adopted through DHS turns 6 years of age during an eligibility period; (6) add a policy cite; and (7) update terminology and simplify language.

The proposed revisions to Chapter 40, Subchapter 13 amend the rules to: (1) remove information regarding when eligibility stops because of a child's age as it is duplicated in another section and is not rate related; and (2) update terminology and a form name; and (3) simplify language.

Strategic Plan impact.The proposed rules achieve the DHS goal of complying with the CCDBG of 2014, P.L. 113-186, while continuously improving systems and processes.

Substantive changes.

Subchapter 1. General Provisions

Oklahoma Administrative Code (OAC) 340:40-1-2 is amended to:(1) add the CCDBG of 2014 to the legal authority for the Child Care Subsidy Program; and (2) update terminology

Subchapter 3. Initial Application

OAC 340:40-3-1 is amended to: (1) rename expedited eligibility processing to presumptive eligibility processing, expand the reasons for an initial 30-calendar day approval, and clarify eligibility requirements prior to approval and before further care is approved; (2) update terminology regarding request, application, and certification dates to match systems fields; (3) clarify that the child care interview may be completed over the phone and must be completed prior to determining the applicant eligible; (4) add required 12-month eligibility period; (5) add information that application approval is subject to available funding; (6) clarify when a new application is needed following a denial; (7) add legal and policy cites; (8) update a form name; and (9) simplify and clarify terminology.

Subchapter 7. Eligibility

OAC 340:40-7-3 is amended to:(1) allow a child to remain eligible for child care until renewal when the child reaches the maximum allowable age during an eligibility period; and (2) update terminology.

OAC 340:40-7-5 is amended to:(1) add an eligibility requirement that household resources may not exceed $1,000,000 to qualify for subsidized child care; (2) add resource types; (3) add legal cite; (4) update terminology; and (5) simplify language.

OAC 340:40-7-6 is amended to: (1) remove gender information when considering whether to count the income of an adult non-relative living with the child care household; (2) add a definition for a person acting in the role of a spouse; (3) remove no longer valid policy cite; and (4) simplify and clarify eligibility process when parents share custody of the child.

OAC 340:40-7-7 is amended to:(1) add SNAP E&T activities as an allowable need factor; (2) remove job search as an allowable need factor and a no longer applicable policy cite; (3) remove court-ordered community service hours as a non-allowable need factor for child care subsidy; and (4) simplify and update terminology.

OAC 340:40-7-8 is amended to: (1) allow child care to remain open until renewal when, after initial approval, the client begins new employment with an employer who refuses to pay the client at least minimum wage; (2) allow child care to remain open until renewal when the client is not making at least minimum wage and has been self-employed or working for an employer paying wages based on commission or another performance measure for less than one year; (3) add qualifications to when child care is approved for a person working from home; (4) remove job search as meeting the employment need factor for child care subsidy for clients who lose employment or complete an education or training program; (5) change proof of progress and attendance requirements from when requested or as a class ends to at renewal for the training and education need factors; (6) remove the requirement to provide proof of initial education or literacy level testing results when child care is requested to participate in high school equivalency, literacy, or ABE classes; (7) change the time frame for not approving further child care to at renewal when the client is not making satisfactory progress or stops attending training or education during an eligibility period; (8) add approval requirements for the SNAP E&T need factor and time frame for discontinuing child care when the client stops participating; (9) update TANF related subsidized child care to: (a) remove limited approval period for TANF clients waiting to enter an approved TANF Work activity and TANF applicants in job search, (b) include child care for a child included in a child only TANF benefit, and (c) include time frame for discontinuing child care when the client stops meeting a need factor; (10) for protective or preventive child care:(a) reorder information, (b) remove the face-to-face interview requirement, (c) add reasons protective or preventive child care may be approved, (d) add definition of homeless and when a homeless family or a family that experienced a natural disaster may be approved for child care, and (e) clarify procedures to request approval for more than 30-calendar days of care; (11) remove no longer applicable policy cite; and (12) simplify and update language and terminology.

OAC 340:40-7-9 is amended to: (1) remove the requirement that a minor parentmust pursue child support for his or her own child; (2) update terminology regarding a non-relative adult considered a household member to remove gender information and use the term acting in the role of a spouse; (3) add information that a person in non-cooperation status with CSS at application must verify cooperation before approval; (4) change the requirement to close child care when a client fails to cooperate with CSS during an eligibility period from 10-calendar days to not approving further care at renewal; (5) change the requirement to pursue identified potential income from 90-calendar days to before the next child care renewal; and (6) change the requirement to close child care when the client does not pursue potential identified income, accept a pay raise, or decreases work hours or pay rate to decrease or avoid a family share copayment during an eligibility period to not approving further care at renewal.

OAC 340:40-7-11 is amended to:(1) remove no longer applicable information regarding calculation of self-employment income from a new source; (2) remove gender information and update terminology regarding a non-relative adult; (3) remove duplicative on-the-job training information; (4) change the time frame regarding when a client must take action to become the payee for a SSA benefit when appropriate; and (5) update a legal cite.

OAC 340:40-7-12 is amended to:(1) allow an eligible child adopted through DHS to remain eligible for child care with a household income exemption until renewal when the child turns 6 years of age during an eligibility period; and (2) update a legal cite.

Subchapter 9. Procedures Related To Case Changes

OAC 340:40-9-1 is amended to: (1) change the child care renewal time frame from six months to no earlier than 12 months from the date of approval or last renewal unless the client applies for food benefits before the next renewal; (2) remove the requirement for a face-to-face interview at renewal for the protective or preventive need factor; (3) add a policy cite; and (4) simplify language and update terminology.

OAC 340:40-9-2 is amended to:(1) clarify information regarding income changes and advance notice procedures when child care benefits decrease; (2) add effective dates for different types of closure actions; and (3) clarify that a new child care application based on the adoptive parent's income is not required until renewal when a child adopted through DHS turns 6 years of age during an eligibility period.

Subchapter 13. Child Care Rates and Provider Issues

OAC 340:40-13-3 is amended to:(1) remove information regarding when eligibility stops because of a child's age as it is duplicated in another section and is not rate related; (2) update terminology and a form name; and (3) simplify language.

Reasons. The proposed revisions are necessary to comply with provisions in the CCDBG Act of 2014, as stated in this section.

To comply with the 12-month minimum eligibility period provision in the CCDBG Act of 2014, the following revisions are being made:

a 30-calendar day presumptive eligibility period is established for uncertain situations in which a complete eligibility determination was not made;

all child care renewals are set at 12- month intervals;

children turning the maximum eligibility age during an eligibility period continue to receive assistance until the child care renewal is due;

clients that stop meeting a need factor during the 12-month eligibility period are allowed to continue using child care until the renewal is due unless the need factor is based on SNAP E&T activities or TANF related activities;

the 90-calendar day job search period when employment is lost or education or training is completed is removed because clients remain eligible until renewal;

after certification, a client's cooperation with CSS or in pursuing potential income is not reviewed until the renewal is due to determine cooperation status;

a child adopted through DHS who turns 6 years of age during an eligibilityperiod is allowed to remain eligible without consideration of the adoptiveparent's income until the renewal is due; and

effective dates for different types of closure actions are added.

To comply with the resource eligibility provision per the CCDBG Act of 2014, the $1,000, maximum resource limit is added to rules.

Reasons for protective or preventive child care are expanded to include situations in which families are homeless or experience a natural disaster to comply with provisions in the CCDBG Act of 2014.

The proposed revision to add information that application approval is subject to available funding is made to inform clients, staff, and providers of this possibility.

The proposed rules throughout the subchapters are amended to make policy easier to understand for clients, staff, child care providers, and the public, less error prone for staff, to ensure benefits are issued properly and renewed appropriately.

Repercussions.If the proposed revisions are not implemented by the federal deadline of September 30, 2016, Oklahoma will not meet CCDBG Act of 2014 requirements and may result in financial penalties to DHS.

Legal authority. Director of Human Services; Section 162 of Title 56 of the Oklahoma Statutes; CCDBG Act of 2014, P.L. 113-186; and Title 45 of the Code of Federal Regulations Parts 98 and 99.

Permanent rulemaking is requested. Emergency rules were approved by the Governor on September 29, 2017 to meet the federal deadline for implementation of the CCDBG Act of 2014, P.L. 113-186.

B.A description of the classes of persons who most likely will be affected by the proposed rule, including classes that will bear the costs of the proposed rule, and any information on cost impacts received by the Agency from any private or public entities:The classes of persons most likely to be affected by the proposed rules are DHS staff, clients applying for or receiving subsidized child care benefits, and child care providers.

C.A description of the classes of persons who will benefit from the proposed rule:The classes of persons who will benefit are DHS staff, clients applying for or receiving subsidized child care benefits, and child care providers.

D.A description of the probable economic impact of the proposed rule upon the affected classes of persons or political subdivisions, including a listing of all fee changes and, whenever possible, a separate justification for each fee change: The revised rules have a positive economic impact on the clients receiving child care subsidy benefits and their children by allowing them to receive 12 months of continued eligibility and care from the same child care provider.Providers will continue to receive subsidy for children who previously became ineligible due to loss of the parent’s need factor.Allowing children to remain on subsidy for 12 months allows payment stability for providers.

E.The probable costs and benefits to the Agency and to any other agency of the implementation and enforcement of the proposed rule, the source of revenue to be used for implementation and enforcement of the proposed rule and any anticipated effect on state revenues, including a projected net loss or gain in such revenues if it can be projected by the Agency:The revised rules will result in enhanced delivery of services to positively impact children and families.The estimated cost for implementation of the proposed rules is $2,750,000, which is covered by federal funds and mandated by the CCDBG Act of 2014, P.L. 113-186.The probable DHS cost of printing and distributing the rules is estimated to be less than $20.

F.A determination whether implementation of the proposed rule will have an impact on any political subdivisions or require their cooperation in implementing or enforcing the rule:The proposed rules do not have an economic impact on any political subdivision, nor will the cooperation of any political subdivisions be required in implementation or enforcement of the rules.

G.A determination whether implementation of the proposed rule will have an adverse economic effect on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act: There are no anticipated adverse effects on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act.

H.An explanation of the measures the Agency has taken to minimize compliance costs and a determination whether there are less costly or nonregulatory methods or less intrusive methods for achieving the purpose of the proposed rule: There are no less costly or nonregulatory methods or less intrusive methods for achieving the purpose of the proposed rules as the revisions are required by the CCDBG Act of 2014.

I.A determination of the effect of the proposed rule on the public health, safety, and environment and, if the proposed rule is designed to reduce significant risks to the public health, safety, and environment, an explanation of the nature of the risk and to what extent the proposed rule will reduce the risk:The proposed rules protect the health and safety of children by allowing children to remain eligible for subsidized child care for 12 months when the parent or caretaker loses a need factor during the eligibility period.

J.A determination of any detrimental effect on the public health, safety, and environment if the proposed rule is not implemented:If the proposed rule revisions are not implemented, DHS will be non-compliant with federal requirements that may result in penalties further exacerbating limited child care funding and increasing safety risks to children who lose stable and licensed child care.

K.The date the rule impact statement was prepared and, if modified, the date modified:Prepared June 22, 2016; modified July 22, 2016; modified August 24, 2016; modified January 3, 2017.

 

Rule Impact Statement

To:Programs Administrator

Legal Services - Policy

From:Jim Struby, Director

                Adult and Family Services

Date:January 3, 2017

Re:CHAPTER 40. CHILD CARE SUBSIDY PROGRAM

SUBCHAPTER 7. ELIGIBILITY

OAC 340:40-7-12 [AMENDED]

(Reference 16-08)

Contact:Laura Brown, 405-521-4396

A.Brief description of the purpose of the proposed rule:

Purpose.The proposed amendments to Chapter 40, Subchapter 7 amend the rule to:(1) add clarifying information regarding loans; (2) exclude all educational income; and (3) exclude from income and resource consideration money deposited into or withdrawn, from a qualified Achieving a Better Life Experience (ABLE) Program account per federal and state regulations.

Strategic Plan impact.

The proposed amendments achieve the Oklahoma Department of Human Services (DHS) goal of continuously improving systems and processes.

Substantive changes.

 

Subchapter 7. Eligibility

Oklahoma Administrative Code (OAC) 340:40-7-12 is amended to:(1) add clarifying information regarding loans; (2) exclude all educational income; and (3) exclude from income and resource consideration money, deposited into or withdrawn from a qualified ABLE Program account per federal and state regulations.

Reasons.The amendments are proposed in order to comply with legislation effective January 1, 2017, regarding Oklahoma ABLE Program accounts.Educational income is excluded and treatment of loans is clarified to align with proposed Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families (TANF) changes.

Repercussions.If the proposed amendments are not implemented, rules will not comply with legislation and staff may consider funds deposited into or withdrawn from qualified ABLE Program accounts as countable income in error.

Legal authority. Director of Human Services; Sections 162 and 4001.1 through 4001.5 of Title 56 of the Oklahoma Statues; Section 529A and 2503 of Title 26 of the United States Code, and Public Law 113-186, Child Care and Development Block Grant of 2014.

Permanent rulemaking approval is requested.This rule will be submitted as an emergency rule by January 13, 2017 with an effective date of March 1, 2017 to comply with Statute that was effective January 1, 2017. It is also included in the permanent rulemaking to prevent it expiring before the next permanent rulemaking time period.

B.A description of the classes of persons who most likely will be affected by the proposed rule, including classes that will bear the costs of the proposed rule, and any information on cost impacts received by the Agency from any private or public entities: The classes of persons most likely to be affected by the proposed amendments are child care applicants, recipients, and DHS staff.The affected classes of persons will bear no costs associated with implementation of the amendments.

C.A description of the classes of persons who will benefit from the proposed rule: The classes of persons who will benefit are child care applicants, recipients, and DHS staff.

D.A description of the probable economic impact of the proposed rule upon the affected classes of persons or political subdivisions, including a listing of all fee changes and, whenever possible, a separate justification for each fee change:The amendments do not have an economic impact on the affected entities.There are no fee changes associated with the amended rules.

E.The probable costs and benefits to the Agency and to any other agency of the implementation and enforcement of the proposed rule, the source of revenue to be used for implementation and enforcement of the proposed rule and any anticipated effect on state revenues, including a projected net loss or gain in such revenues if it can be projected by the Agency:The probable DHS cost of printing and distributing the rules is estimated to be less than $20.The revised rules will result in enhanced delivery of services to households applying for or receiving Child Care Subsidy and may decrease DHS errors.

F.A determination whether implementation of the proposed rule will have an impact on any political subdivisions or require their cooperation in implementing or enforcing the rule:The proposed amendments do not have an economic impact on any political subdivision, nor will the cooperation of any political subdivisions be required in implementation or enforcement of the rule.

G.A determination whether implementation of the proposed rule will have an adverse economic effect on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act:There are no anticipated adverse effects on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act.

H.An explanation of the measures the Agency has taken to minimize compliance costs and a determination whether there are less costly or nonregulatory methods or less intrusive methods for achieving the purpose of the proposed rule:There are no less costly or nonregulatory methods or less intrusive methods for achieving the purpose of the proposed amendment.

I.A determination of the effect of the proposed rule on the public health, safety, and environment and, if the proposed rule is designed to reduce significant risks to the public health, safety, and environment, an explanation of the nature of the risk and to what extent the proposed rule will reduce the risk:Implementation of the proposed amendments may reduce health risks for families with qualified ABLE Program accounts.

J.A determination of any detrimental effect on the public health, safety, and environment if the proposed rule is not implemented:If the proposed amendments are not implemented, health risks may not be reduced for persons with qualified ABLE Program accounts.

K.The date the rule impact statement was prepared and, if modified, the date modified:Prepared December 5, 2016; modified January 3, 2017.

 

Rule Impact Statement

To:Programs Administrator

Legal Services - Policy

From:Jim Struby, Director

                Adult and Family Services

Date:January 3, 2017

Re:CHAPTER 40. CHILD CARE SUBSIDY PROGRAM

Subchapter 1. General Provisions

OAC 340:40-1-3 [AMENDED]

OAC 340:40-1-5 [AMENDED]

Subchapter 7. Eligibility

OAC 340:40-7-11 through 340:40-7-12 [AMENDED]

Subchapter 13. Child Care Rates and Provider Issues

OAC 340:40-13-5 [AMENDED]

(Reference WF 17-11)

Contact:Laura Brown 405-521-4396

A.Brief description of the purpose of the proposed rule:

Purpose.The proposed amendments to Chapter 40, Subchapter 1 amend the rules to update terminology.

The proposed amendments to Chapter 40, Subchapter 7 amend the rules to:(1) change self-employment business expense computations; (2) clarify that excess benefit allowances are considered earned income; (3) add clarifying information regarding loans; (4) exclude all educational income; and (5) update a legal cite.

The proposed amendments to Chapter 40, Subchapter 13 amend the rules to:(1) remove the reference to contracting with out-of-state providers; (2) remove the Oklahoma State Bureau of Investigation background investigation as a procedure for obtaining child care contracts; (3) add clarifying language that Adult and Family Services (AFS) Child Care Subsidy staff will provide written notice when approving care to be provided at a different site; (4) remove the requirement for providers to maintain copies of manual claims and daily attendance records and to make them available to the Oklahoma Department of Human Services (DHS) upon request; and (5) update language and terminology.

Strategic Plan impact. The proposed amendments achieve the DHS goal of continuously improving systems and processes.

Substantive changes.

Subchapter 1. General Provisions

Oklahoma Administrative Code (OAC) 340:40-1-3 and 340:40-1-5 are amended to update terminology.

Subchapter 7. Eligibility

OAC 340:40-7-11 is amended to:(1) change self-employment business expense computations; (2) clarify that excess benefit allowances are considered earned income; and (3) update a legal cite.

OAC 340:40-7-12 is amended to:(1) add clarifying information regarding loans; (2) exclude all educational income; (3) update a legal cite.

Subchapter 13. Child Care Rates and Provider Issues

OAC 340:40-13-5 is amended to:(1) remove the reference to contracting with out-of-state providers; (2) remove the requirement to provide an Oklahoma State Bureau of Investigation (OSBI) background investigation report to obtain a child care contract; (3) add language that AFS Child Care Subsidy staff will provide written notice when approving care to be provided at a different site; (4) remove the requirement for providers to maintain copies of manual claims and daily attendance records and to make them available to DHS upon request;and (5) add clarifying language and update terminology.

Reasons. The proposed amendments provide clear and concise rules for DHS staff, clients and providers.

The proposed amendment to change how self-employment business expenses are computed and exclude all educational income are made to align with proposed Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) changes.

The proposed amendment to remove reference to contracting with an out-of-state child care provider is removed because the last out-of-state provider with a contract in effect since January 1, 2010, stopped contracting with DHS.

The proposed amendment removes the child care provider requirement to submit an OSBI background investigation report because it is a duplication of effort and an added expense for the child care provider.The child care provider must submit a Federal Bureau of Investigation (FBI) fingerprint check that includes an OSBI background investigation report, to Child Care Services before receiving a child care license.

The proposed amendment to remove the requirement that the provider maintain copies of manual claims and written attendance records reduces the administrative burden and eliminates a duplication of effort for providers since DHS already maintains all manual claims and records attendance via the electronic benefit transfer system.

Repercussions.If the proposed amendments are not implemented, SNAP and Child Care Subsidy income rules will not agree causing errors and client confusion.

If the proposed child care contracting amendment is not implemented, the administrative burden on child care providers will not be eased and providers will be required to pay for an FBI fingerprint check for licensing and an OSBI background investigation report for contracting.

Legal authority. Director of Human Services; Section 162 of Title 56 of the Oklahoma Statutes; Title 45 of the Code of Federal Regulations (CFR) Parts 98 and 99; Public Law 113-186, Child Care and Development Block Grant of 2014.

Permanent rulemaking approval is requested.

B.A description of the classes of persons who most likely will be affected by the proposed rule, including classes that will bear the costs of the proposed rule, and any information on cost impacts received by the Agency from any private or public entities: The class of persons most likely to be affected by the proposed rules are DHS staff, child care applicants and recipients, and child care providers applying for or having a subsidy contract.

C.A description of the classes of persons who will benefit from the proposed rule: The classes of persons who will benefit are DHS staff and clients applying for or receiving subsidized child care benefits and child care providers.

D.A description of the probable economic impact of the proposed rule upon the affected classes of persons or political subdivisions, including a listing of all fee changes and, whenever possible, a separate justification for each fee change:The proposed rules will benefit child care providers by eliminating the need to pay for an additional background check.

E.The probable costs and benefits to the Agency and to any other agency of the implementation and enforcement of the proposed rule, the source of revenue to be used for implementation and enforcement of the proposed rule and any anticipated effect on state revenues, including a projected net loss or gain in such revenues if it can be projected by the Agency:The probable DHS cost of printing and distributing the rules is estimated to be less than $20.The cost associated with these revisions are federally funded, there are no costs to the State.The proposed rules will result in enhanced delivery of services to positively impact clients and families by eliminating duplicative requirements for child care providers that receive child care subsidy payments.

F.A determination whether implementation of the proposed rule will have an impact on any political subdivisions or require their cooperation in implementing or enforcing the rule:The proposed rules do not have an economic impact on any political subdivision, nor will the cooperation of any political subdivisions be required in implementation or enforcement of the rules.

G.A determination whether implementation of the proposed rule will have an adverse economic effect on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act:There are no anticipated adverse effects on small business as provided by the Oklahoma Small Business Regulatory Flexibility Act.

H.An explanation of the measures the Agency has taken to minimize compliance costs and a determination whether there are less costly or nonregulatory methods or less intrusive methods for achieving the purpose of the proposed rule:There are no less costly or nonregulatory methods or less intrusive methods for achieving the purpose of the proposed rules.

I.A determination of the effect of the proposed rule on the public health, safety, and environment and, if the proposed rule is designed to reduce significant risks to the public health, safety, and environment, an explanation of the nature of the risk and to what extent the proposed rule will reduce the risk:

The proposed rules bring income rules for Child Care Subsidy and SNAP into alignment and eliminate a duplication of effort for child care providers.The changes do not affect public health, safety, and environment.

J.A determination of any detrimental effect on the public health, safety, and environment if the proposed rule is not implemented:The proposed rules will have no detrimental effect on public health, safety, and environment.

K.The date the rule impact statement was prepared and, if modified, the date modified:Prepared May 11, 2016; modified July 25, 2016; modified January 3, 2017.

SUBCHAPTER 1. GENERAL PROVISIONS

340:40-1-3. State Plan for child care the Child Care Subsidy Program

Revised 7-1-049-1-17

The Oklahoma Department of Human Services (OKDHS) (DHS) administers the State Plan covering the child care subsidy program for the Child Care Subsidy Program.The Division of DHS Child Care Services is responsible for directly administering and implementing all programs funded by the Child Care and Development Fund in collaboration with the Adult and Family Support Services Division, Field Operations Division, Finance Division and Administration, and Office of the Inspector General.

340:40-1-5. Disclosure of information

Revised 10-1-009-1-17

Federal Per federal and state laws and the Oklahoma Department of Human Services rules and regulations, adopted by the Oklahoma Commission for Human Services restrict the use or disclosure of information concerning applicants or recipients of child care services Child Care Subsidy program benefits is restricted to purposes directly connected with the program administration of the program.¢ 1

INSTRUCTIONS TO STAFF

Revised 10-1-009-1-17

1.See OAC Refer to Oklahoma Administrative Code 340:65-1-2 and 340:65-3-4(f)(1) for Adult and Family Services program guidance in determining what information must be safeguarded as well as when and how information can may be disclosed.

SUBCHAPTER 7. ELIGIBILITY

340:40-7-11. Sources of income considered

Revised 10-1-1510-01-169-1-17

(a) Sources of income considered.Income may be received periodically or at irregular intervals.All income, unless specifically excluded per Oklahoma Administrative Code (OAC) 340:40-7-12, is considered in determining monthly gross income.Income is classified as earned or unearned income.¢ 1

(b) Earned income.Earned income means total money earned by a person through the receipt of wages, salary, commission, or profit from activities in which the person is engaged as self-employed or as an employee.¢ 2Temporary disability insurance payment(s) and temporary worker's workers' compensation payments are considered as earned income when payments are employer-funded and the person remains employed.

(1) Wages.Wages include total money earned for work performed as an employee including armed forces pay, commissions, tips, piece-rate payments, longevity payments, and cash bonuses before any deductions are made, such as taxes, bonds, pensions, union dues, credit union payments, and or cafeteria plans are subtracted.¢ 3

(A) Countable wages for military personnel include any allowance included on the earnings statement, such as the Basic Allowance for Housing (BAH) and the or Basic Allowance for Subsistence (BAS).

(B) Only the portion of the cafeteria plan the client controls, including any excess benefit allowance payments, is counted as income.¢ 4

(C) Reimbursements for expenses, such as a uniform allowance or transportation costs, other than daily commuting, are subtracted from the gross income.

(D) Payments made for annual leave, sick leave, or severance pay are considered earned income during the month such income is received whether paid during employment or at termination of employment.

(E) Wages that are garnished or diverted and paid to a third party are also counted as income.

(2) Self-employment.Self-employment income is considered calculated based on procedures listed in this subsection.¢ 5

(A) Persons considered self-employed.A person is considered self-employed when:

(i) he or she declares himself or herself to be self-employed;

(ii) there is an employer/employee relationship and the employer does not withhold income taxes or Federal Insurance Contributions Act (FICA), even when required to do so by law; or

(iii) the employer withholds taxes and the person provides proof he or she files taxes as self-employed.

(B) Records used and income calculation.The worker uses the records described in (i) through (iii) of this subparagraph to calculate income.When the person reports a loss instead of a profit on the business, the worker does not deduct the loss from other household income.

(i) When the person filed a federal income tax return for self-employment income for the most recent year, whether the person's income is derived from his or her own business or from working for an employer, the worker uses the net gross self-employment income shown on the person's federal income tax return, subtracts 50 percent of the income for claimed business expenses, and divides the income by 12 or the number of months the business has been in existence existed or the person started work working for the employer, when less than 12 months.The worker verifies the person's start date with the employer when the person states he or she has not worked for the employer for at least 12 months.

(ii) When the person did not file an income tax return for the most recent tax year for his or her own business, the worker calculates self-employment income using the person's business records for the last 12 months or the number of months the business has been in existence existed when less than 12 months.When the client declares he or she has business expenses, the worker subtracts 50 percent of the gross self-employment income to arrive at the net profit.

(iii) When the person works for an employer, did not file a federal tax return as self-employed, and receives earnings from an employer, the person must provide proof of the last 12 months of income from the employer.The worker divides the gross income by 12 or the number of months the person has worked for the employer to determine monthly income.When the person declares he or she has business expenses, the worker subtracts 50 percent of the gross self-employment income before dividing the income by the applicable number of months to determine monthly income.

(C) Profit sharing.Households who operate S corporations, general or limited partnerships, or limited liability companies may receive profit sharing that is reported on the household's personal income tax return.When a household member:

(i) actively participates in the operations, the income from profit sharing is considered part of the household's self-employed earned income; or

(ii) does not actively participate in the operations, the income from profit sharing is considered part of the household's unearned income.

(D) Monthly self-employment income.Self-employment income received on a monthly basis is normally averaged over a 12-month period.When the averaged amount does not accurately reflect the household's actual monthly circumstances because the household has experienced a substantial increase or decrease in income, the worker calculates the self-employment income based on anticipated earnings.¢ 6

(E) Seasonal self-employment.Self-employment income intended to meet the household's needs for only part of the year is averaged over the period of time it is intended to cover.¢ 7

(F) Annualized self-employment income.Self-employment income that represents a household's annual support is averaged and annualized over a 12-month period, even when the income is received in a short time period.

(i) If When the average annualized amount does not accurately reflect the person's actual monthly circumstances because the person experienced a substantial increase or decrease in income, the worker calculates the self-employment income on anticipated earnings.

(ii) The worker does not calculate self-employment income on the basis of prior earnings, such as income tax returns, when an increase or decrease of business has occurred.¢ 6

(I)(iii) When the person has received the self-employment income for less than 12 months, the worker averages the income is averaged over the applicable number of months and projects the monthly amount projected for the coming year.

(II) When the person has received the self-employment income for a short time and there is insufficient data to make a reasonable income projection, the worker does not consider income from this source until the renewal is due.At the renewal, the worker averages income over the number of months received until a full year's information is available.¢ 8

(G) Income from rental property.Income from rental property is considered self-employment income.¢ 9

(H) Income from room and board.Payments from roomers or boarders are considered self-employment when the roomer or boarder is paying pays a reasonable amount.When the roomer or boarder is an adult non-relative opposite sex individual (ANROSI) acting in the role of a spouse, OAC 340:40-7-6(b)(4) applies.¢ 10

(3) On-the-job training.Earned income from regular employment for on-the-job training (OJT) is considered as earned income.This includes OJT provided under Sections 204(b)(1)(c) or 264(c)(1)(A) per Section 3(44) of the Workforce Investment Innovation and Opportunity Act (WIOA) for persons 19 years of age or and older.¢ 11

(4) Workforce Investment Act (WIA).Income earned in OJT positions provided under Section 134 of WIA is considered earned income for persons who are 19 years of age and older.On-the-job training provided must be full-time positions, and there must be a contract between WIA and the employer for each individual position.This does not include classroom or institutional training and institutional training or intern assignments sponsored by WIA WIOA, even when an hourly amount is paid for such training.Refer to per OAC 340:40-7-12(25)(G) for other types of excluded WIA income.

(5)(4) Title I payments of Domestic Volunteer Services Act.Payments under Title I of the Domestic Volunteer Services Act of 1973 as amended per [P.L. Public Law 93-113] are considered income unless excluded per OAC 340:40-7-12.

(6)(5) Earnings of children.Earned income of a minor parent is treated as adult earned income.Earnings of other children 17 years of age and younger who are under the parental control of an adult household member are excluded per OAC 340:40-7-12.¢ 12

(c) Unearned income.Unearned income is income a person receives for which the person does not put forth any daily, physical labor.Types of income listed in paragraphs (1) through (10) of this subsection are considered unearned income.¢ 13

(1) Assistance payments.Assistance payments include state means-tested programs, such as Temporary Assistance for Needy Families (TANF), including Supported Permanency benefits, State Supplemental Payment (SSP) to the aged, blind, or disabled, and Refugee Resettlement Program (RRP) cash assistance.¢ 14

(2) Pensions, disability, and Social Security benefits.Annuities, pensions, retirement benefits, disability benefits from either government or private sources, or Social Security survivor benefits are considered unearned income.

(A) When a minor child receiving Social Security benefits no longer lives with the payee receiving the Social Security benefits, only the portion of the child's Social Security benefit used to meet the minor child's needs is considered income.This may include cash given directly to the minor child or money paid to a third party for room and board for the minor child.

(B) The parent or caretaker or, when appropriate, theminor child must take action to become the payee within 90 calendar days the 12 month eligibility period per OAC 340:40-7-9(d).When the parent, caretaker, or minor child does not take action is not taken within 90 calendar days by renewal, the worker counts the total Social Security benefit as income.

(3) Supplemental Security Income (SSI). SSI is considered unearned income.¢ 15

(4) Unemployment and workers' compensation.Income from unemployment insurance benefits or workers' compensation is counted as unearned income.

(5) Child support, court-ordered or third party paid child care, and alimony.Child support, child care payments, and alimony payments, whether court-ordered or voluntary, made directly to the household from non-household members are counted as unearned income.¢ 16

(A) When a child care payment is paid directly to the child care provider, it is not considered income for the client.

(B) When the absent parent reports he or she is paying a portion of the client's family share copayment to the child care provider, the only action taken by the worker is to record this in the case record.

(C) When the absent parent or another third party, such as an employer, is making a payment to the provider in addition to the client's copayment, it is considered as an additional copayment that must be met before the Oklahoma Department of Human Services (DHS) makes a subsidy payment to the provider.¢ 17

(D) Any other payment made to a third party for a household expense must be considered as income when a court order directs the payment be made to the household.Payments for medical support are excluded.

(6) Veterans Veterans' compensation, pensions, or military allotments.Annuities, pensions, disability Disability compensation, military allotments, servicemen dependent allowances, and similar payments are considered unearned income.¢ 18

(7) Contributions.Appreciable contributions recurrently received in cash are considered unearned income except when the contribution is not made directly to the client.To be appreciable, a contribution must exceed $30 per calendar quarter per person.

(8) Dividends, interest, minerals, and royalties.Dividends, interest income, income from minerals, royalties, and similar sources are considered unearned income.When income from these sources is received irregularly or in varied amounts, it is averaged over 12 months.Income from royalties is treated as unearned, self-employment income, subject to (b)(2) of this Section.

(9) Lump sum payments.Recurring lump sum payments, including income from earnings, are averaged over the period they are intended to cover.¢ 19

(10) Irregular income.Income received irregularly but in excess of $30 per quarter is considered income unless it is from an excluded income source specifically mentioned at OAC 340:40-7-12.Countable irregular income is averaged over 12 months.¢ 20

INSTRUCTIONS TO STAFF 340:40-7-11

Revised 10-1-169-1-17

1.(a) When a child is adopted through the Oklahoma Department of Human Services (DHS), refer to Oklahoma Administrative Code (OAC) 340:40-7-12(6) to determine whether to exempt household income for the child.

(b) When a child attends an Early Head Start-Child Care Partnership grant program, refer to OAC 340:40-7-12(7) to determine whether to exempt household income.

(1) All sources of income must be considered and the client determined eligible per DHS Appendix C-4, Child Care Eligibility/Copayment Chart, prior to exempting the household income.

(2) To exempt income when determined eligible, the worker enters all household income in the "total diverted income" field E47 on the Family Assistance/Client Services (FACS) Child Care Tab.

2.When the client does not earn at least minimum wage, refer to OAC 340:40-7-8(a) to determine if the client meets the need factor for employment.

3.The worker averages wages over a minimum of the last 30-calendar days unless wages are not indicative of future earnings.Refer to OAC 340:40-7-13 for information on computing income.The worker records income information in the FACS Interview Notebook under the Income tab.

4.When a person receives the employer adds money to the employee's gross income as a benefit allowance from the person's employer to pay for a reimbursable expense, such as insurance, the worker counts the regular gross earnings plus any excess money left after deducting the insurance cost or other reimbursable expense from the benefit allowance.This may occur For example, when a person:

(1) is given receives a $300 benefit allowance to purchase insurance and uses the entire amount to purchase the insurance.None, none of the benefit allowance is counted as income;

(2) is given receives a $300 benefit allowance but only purchases $280 in insurance.The, the worker counts theremaining $20 given to the client as an excess benefit allowance is counted as income; or

(3) has an option of purchasing insurance and would receive with a $300 benefit allowance if when purchasing insurance was purchased, but the person elects not to purchase the insurance.In this situation, the employer makes or receiving $150 of the $300 benefit allowance available as cash.The when not purchasing insurance, the worker counts the $150 is as an excess benefit allowance and is counted as income, when the person chooses not to purchase insurance; or

(4) receives any excess benefit allowance at the end of the year instead of monthly, the worker excludes the one-time payment as income as it is considered a non-recurring lump sum payment per OAC 340:40-7-12(1).

5.(a) Capital gains income is excluded as income for subsidized child care benefits.Refer to OAC 340:50-7-30(b)(1) for food benefits.

(b) Persons who own an interest in a corporation do not qualify for the business expense deduction as they do not have individual business expenses.

(c) Self-employment income tax return forms include, but are not limited to:

(1) Form 1040 with Schedule C for sole proprietors and some limited liability companies;

(2) Form 1065 with Schedule 8865 K-1 for partnerships;

(3) Form 1120-S with Schedule K-1 for S corporation; and

(4) Form 1040 with Schedule F for farmers.

(d) The worker documents in FACS Case Notes how the countable income was calculated.

6.(a) When the client states that his or her income has increased or decreased, the worker uses whatever income is representative of future earnings to determine the family share copayment.

(b) When the client has not received income from the self-employment income source, no income is considered per OAC 340:40-7-10 until the client receives income.When the client has not received income, refer to OAC 340:40-3-1(b) for 30-calendar day presumptive eligibility processing.

(c) To average the income and expenses for self-employment income received for less than a full year, the worker divides the total income by the number of months received.For example, when the client receives self-employment income from February 18 to the application month of November, the worker averages the income for nine months, from February through October.It is correct to count the first month the client receives income through the last complete month when computing an annualized figure for a new self-employment income.

(d) The worker documents in FACS Case Notes how income was calculated and why the full 12-month average was not used.

7.(a) This may occur when a person is self-employed only during the summer months and works as an employee for someone else during the rest of the year, the worker averages the self-employment income only for the summer months.

(b) When this income is from a new source and no income has been received, income is not counted from this source until income is received.When the client had this same seasonal business the prior year, the worker anticipates income for the first month based on the prior year's income records unless it is not representative.The worker records documentation about how income is calculated in FACS Case Notes.

8.(a) When the person is considered self-employed as a contract laborer, receives a set salary that does not vary, and has been employed for a period of time where sufficient data is available from the employer to make a reasonable income projection, but not sufficient to annualize income, earnings are anticipated by multiplying the amount received by the appropriate conversion factor.For example, the client starts a new self-employment contract labor job and he or she works 40 hours per week at $10 per hour.He or she has received two weekly checks in the amount of $400 each.The month is not over, but the employer states the person will continue to be paid $400 per week.It is correct to use $400 X 4.3 to anticipate the person's monthly income.

(b) At renewal, the worker averages the income over the number of months received until a full year's information is available.

9.Income from rental property is considered self-employment income whether the client or an outside source manages the property.There is no minimum number of hours the client must manage the property for the income to be considered self-employment.

10.For a client to declare someone is paying room and board rather than being a roommate, the client must own or be buying the home separately from the tenant.Food benefit rules differ per OAC 340:50-5-1 and 340:50-7-30(9).

11.This provision does not apply to household members 18 years of age and younger under the parental control of another adult household member, regardless of school attendance.For the purpose of this provision, earnings include monies paid under the Workforce Innovation and Opportunity Act and monies paid by the employer.

12.A child turning 18 years of age is considered an adult for child care purposes.When the child is a sibling to the child needing subsidized child care benefits, the 18 year old sibling's income is not counted.Refer to OAC 340:40-7-6 regarding household composition and income consideration, and OAC 340:50-5-1 regarding who must be included in a household for food benefits.

13.Refer to OAC 340:65-3-4 regarding ways to verify and document unearned income.

14.Recipients of these assistance programs are predetermined income eligible with a zero family share copayment for the subsidized child care benefits per OAC 340:40-7-1.

15.(a) A recipient of Supplemental Security Income (SSI) is predetermined eligible with a zero family share copayment for subsidized child care benefits per OAC 340:40-7-1.

(b) The worker considers the SSI income in determining the family share copayment for other household members.The child receiving SSI is not counted as a child in DHS subsidized care when determining income eligibility and the family share copayment per DHS Appendix C-4, Child Care Eligibility/Copayment Chart, for the other children.

(1) The only exception is when it makes a difference if the other children are income eligible for child care per OAC 340:40-7-1(1)(B)(ii).

(2) For example, a client with $2925 in household income is income eligible for two children in care, but not for one child in care.When the client needs child care for one child receiving SSI and one child who does not and the household income is between $2426 and $2925, paying a family share copayment for both children may be less costly than paying the full cost of care for one child.

(c) The child is counted as a family member in determining household size.

16.(a) The worker obtains copies of any established court orders.

(1) When the client states he or she receives any of these types of income, the worker speaks to the person providing this assistance or obtains a written statement from the person regarding dates and amounts of all payments made within the last 60-calendar days.

(2) When the client receives sporadic or varying amounts of support, the worker may average income over a longer period of time and document his or her reasoning in FACS Case Notes.

(b) To determine if these payments are paid through Child Support Services, the worker uses the Information Management System (IMS) and enters Social Security number (SSN) space and the client's SSN to find the family group number (FGN).The worker enters CSML space FGN to display the "case status monitoring list"."The worker tabs down to the custodial parent (CP) who is the payee for the child care benefit, types KI1 next to the CPs name, and presses enter to view a list of payments received.For an explanation of the FGN enter M space CSMLDATA; and for information on using transaction KI1, enter M space KI1.

(c) The worker codes child support income on the child for whom it is being received when the child is considered a household member.When the client receives child support for a child not included in the household, it is coded as a contribution to the client.Refer to OAC 340:40-7-12(12) when child support income is received for the care and maintenance of a third party.

(d) When the absent parent pays a portion of the client's family share copayment and the client receives food benefits, the portion the absent parent pays is not considered a dependent care cost for the Supplemental Nutrition Assistance Program (SNAP), per OAC 340:50-7-31(b)(4).

(e) The worker excludes money paid directly to household expenses that are not court-ordered.Refer to OAC 340:50-7-29(c)(3) for information on how this income is considered for SNAP.

17.(a) When someone outside of the client's home pays a portion of the child care cost directly to the child care provider and states this money is in addition to the client's family share copayment, the worker enters this additional copayment in the FACS Eligibility Notebook under the Child Care tab, "Court-ordered" field E55.When a dollar amount is entered in field E55, DHS does not make a payment to the child care provider until the family share copayment and the additional copayment is first applied to the cost of care.

(b) The worker sends Form 08MP038E, Client Notice of Action Taken, to the client and the provider notifying them that an additional copayment is being paid by someone other than the client in addition to the client's family share copayment.

(c) When the person stops paying the additional copayment, the worker removes the additional copayment from the "Court-ordered" field E55 and emails Form 10EB004E, Report of Electronic Benefits Transfer (EBT) Child Care Payment Adjustments, to the email address on the form to request an adjustment to the provider's pay.

18.Military benefits considered educational assistance are excluded.

19.(a) Non-recurring lump sum payments are excluded as income per OAC 340:40-7-12.

(b) Examples of recurring countable lump sum payments include gambling winnings received on a consistent basis where the client has an established gambling pattern, earnings received less often than monthly, sporadic payments of child support, or dividend payments.

20.An example of irregular income is gambling winnings that are received on a consistent basis where the client has an established gambling pattern.

CHAPTER 40. CHILD CARE SUBSIDY PROGRAM

Subchapter 7. Eligibility

340:40-7-12. Sources of excluded income

Revised 10-1-16 3-1-17

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 as a countable source of income.

(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 a 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 Department of Human Services (DHS).The income of all household members is exempt for a child only when conditions in (A) through (E) are met.¢ 3The:

(A) child was adopted through DHS or a federally-recognized Indian tribe, as defined by the Federal and Oklahoma Indian Child Welfare Acts, by the parent applying for benefits;¢ 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 of Oklahoma;

(D) child is 5 years of age or younger.When a child turns 6 years of age during the 12-month eligibility period, household income remains exempt until the next renewal; and

(E) adoptive parent meets an allowable need factor as defined in per OAC 340:40-7-7 and OAC 340:40-7-8 and provides proof.¢ 6In 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 (EHS-CC) Partnership grant program.The household income is exempt for all children in care when at least one child attends an EHS-CC Partnership grant program and the household meets income guidelines per DHS Appendix C-4, Child Care Eligibility/Co-payment Copayment Chart.¢ 7

(8) Earnings of children.Earnings Exclude the earnings of a person 17 years of age and younger who is considered a child in the case is excluded as long as the child is attending 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 is in excess of $30 per calendar quarter.

(10) Reimbursements.Reimbursements for past or future expenses not exceeding actual expenses are excluded.¢ 9

(11) Tax refunds.Federal Exclude federal or state income tax refunds, including the state and federal Earned Income Tax Credit (EITC), and advance payments of federal EITC are excluded.¢ 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 commercial institutions, are excluded as income.Verification the income When the household states someone is loaning the household money to meet expenses, a statement signed by both parties is required indicating the payment is a loan is required and must be repaid.When the household states it receives loans on a recurrent or regular basis from the same source, the lender must signan 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 when receipt is contingent upon the student regularly attending school.

(A) Examples of educational assistance include as income and includes, but is not limited to:

(i)(A) work study;

(ii)(B) scholarships;

(iii)(C) fellowships;

(iv)(D) educational loans when payment is deferred; and

(v)(E) veteran's veterans' education benefits.

(B) The educational assistance must be intended to offset the costs of education and expenses as identified by the institution, school, program, or other grantor.¢ 10

(C) When the educational assistance is not intended to be a reimbursement and is a gain to the client, it is considered income.¢ 11

(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 of out-of-pocket expenses made to volunteers serving as foster grandparents, senior health aides, or senior companions, and to persons serving in SCORE and ACE is excluded as income.

(18) Government rent or housing subsidies.Government rent or housing subsidies by government agencies received in-kind or in cash for rent, mortgage payments, or utilities is 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 per Section 10602 of Title 42 of the United States Code (42 U.S.C § 10602) are excluded as income.[42 USC 10602]

(22) Family Support Assistance Payment Program.Family Support Assistance Payment Program payments paid to persons by the DHS Developmental Disabilities Services are excluded as income.

(23) Vendor payments.Vendor payments made directly to the household's creditors, or 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.¢ 1211

(24) Money received by another household for a household member.

(A) When a child spends part of the month in two separate households and receives countable income, the worker considers the portion of the income received by the household applying for or receiving a child care benefit as income and excludes the remainder.¢ 1312

(B) When a minor parent is the payee and lives with one of his or her parents 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 per Sections 4001.1 through 4001.5 of Title 56 of the Oklahoma Statutes or a qualified ABLE Program account set up in any other state per the ABLE Act of 2014 (26 U.S.C. § 529A) is excluded as income when the client:¢ 13

(A) provides documents to verify the account meets exemption criteria;

(B) verifies money deposited in the account does not exceed 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 countable income in the amount deposited; and

(C) verifies withdrawals from the account were used to pay qualified disability expenses.Money withdrawn for reasons other than to pay qualified disability expenses is considered as income for the month of withdrawal.

(25)(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) by members of the Confederated Tribes 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]; or

(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];

(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 if when the monthly amount, when 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, Sec. Section 6];

(E) Indian per capita payments distributed from judgment awards and trust funds made pursuant to per P.L. 98-64.Also excluded is any 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.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 up to $2,000 per year received by individual Indians, which 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 as income;

(G) allowances, stipends, earnings, compensation in lieu of wages, grants, and other payments made for participation in the Workforce Investment Innovation and Opportunity Act (WIA) (WIOA) or other federally funded workforce training program to persons of all ages and student status with the exception of income paid to persons 19 years of age and older for on-the-job training.This income is treated as any other earned income.Refer to per OAC 340:40-7-11(b)(4);¢ 15

(H) payments, allowances, or earnings to persons participating in programs under Title I of the National and Community Service Trust Act of 1993.Title I includes three Acts:Serve-America, The Community Service, Schools and Service-Learning Act of 1990, the American Conservation and Youth Service Corps Act of 1990, and the National and Community Service Act.Most of the payments are made as a weekly stipend or for educational assistance.The Higher Education Service-Learning Program and the AmeriCorps Umbrella Program come under this Title.This includes AmeriCorps income;

(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 amount of the mandatory salary reduction of military service personnel used to fund the G.I. Bill;

(K) all funds paid to persons under the Community Service Employment Program under Title V,. P.L. 100-175].This program is authorized by the Older Americans Act.Each State state and various organizations receive some Title V funds.These organizations include:

(i) Experience Works, formerly Green Thumb;

(ii) National Council on Aging;

(iii) National Council of Senior Citizens;

(iv) American Association of Retired Persons;

(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;

(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 for the fulfillment of a Plan for Achieving Self-Support under Title XVI of the Social Security Act;

(P) payments made to persons because of their status as victims of Nazi persecution;

(Q) payments made for the Experimental Housing Allowance Program under Annual Contributions Contracts entered into prior to January 1, 1975, under per Section 23 of the U.S. Housing Act of 1937 as amended;

(R) monetary allowances provided to certain children of Vietnam War veterans as described in per Chapter 18 of Title 38 of the United States Code (USC);

(S) federal funds distributed by Federal Emergency Management Assistance (FEMA) due to a disaster or emergency to persons directly affected by the event.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 value of the food benefit allotment under the Food and Nutrition Act of 2008; and

(U) the value of supplemental food assistance 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 by the per Omnibus Budget Reconciliation Act of 1981.

INSTRUCTIONS TO STAFF 340:40-7-12

Revised 10-1-163-1-17

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 all five conditions required per OAC 340:40-7-12(6) are met, no income is considered for the child.The worker codes the adoptive parent in the 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 being excluded.

(b) When all five conditions required per OAC 340:40-7-12(6) are not met, all household income is considered for the child per OAC 340:40-7-6 and care may be approved for any need factor met in OAC 340:40-7-7 and 340:40-7-8.

(c) When the adopted child meets all five conditions required per OAC 340:40-7-12(6) and other children in need of care are in the home that do not meet the conditions, separate cases must be established.Refer to OAC 340:40-5-1 Instructions to Staff (ITS) # 16 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 Application Agreement, or Form 04AN033E, Post Adoption Child Care Referral, the parent contacts Child Welfare Services (CWS) 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.

(b) When the child stops attending an Early Head Start-Child Care Partnership grant program, the worker removes household income from the "total diverted income" field E47 on the FACS Child Care tab per Appendix B-2, Deadlines for Case Actions, advance notice deadlines.

8.For purposes of this provision, an elementary or high school secondary student also includes someone attending General Educational Development (GED) high school equivalency classes, provided the GED program is recognized, operated, or supervised by the student's state or local school district.

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.If When these expenses are not reimbursements, they are not deductible;

(2) out-of-pocket expenses incurred by volunteers in the course of their 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 does not have to be separately identified 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.Exempt student income includes:

(1) any money from Title IV of the Higher Education Act including federal or state work study;

(2) educational assistance funded through the Department of Veterans Affairs (VA), such as the Montgomery GI Bill;

(3) grants;

(4) scholarships;

(5) subsidized and unsubsidized Stafford loans;

(6) federal PLUS loans;

(7) TRIO grants;

(8) Robert C. Byrd Honors Scholarship Program;

(9) Bureau of Indian Affairs (BIA) student assistance;

(10) money from the Carl D. Perkins Vocational Education Act, such as the Native American Career and Technical Education Program (NACTEP); and

(11) Workforce Investment Act (WIA).

(a) When the client receives advance payments of the federal earned income tax credit (EITC) 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 state EITC.

11.Student income that is not exempt includes:

(1) money paid directly to the student and not sent through the bursar's account other than funds listed in ITS # 10 of this Instruction;

(2) institutional work study; or

(3) money intended as an incentive for school attendance or grades rather than the school expenses.

12.(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) made by a friend, employer, agency, church, relative, or former spouse making payments directly to a vendor for household expenses, such as writing a check to the landlord for rent or utilities directly to the landlord or utility company.To be considered an excluded vendor payment, the payment must not be made in lieu of directly paying the household back for money owed;

(2) a payment made by an employer directly to the landlord or financial institution for the household's rent or house by an employer mortgage, in addition to paying regular wages, is excluded;

(3) payments specified by a court order or other legally binding agreement to go directly made to a third party rather than instead of the household are excluded as income as they are not otherwise payable to the household when the payment arrangement is specified in a court order or other legally binding agreement; or

(4) payments or allowances made by the Department of Housing and Urban Development (HUD) or by the Farmers Home Administration (FmHA) directly to mortgage holders, landlords, or utility providers are vendor payments and excluded as income.

(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.

1312.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 give a portion of the income to the other parent, it is not counted as income for the other parent.If When the parent gives a portion of the income to the other parent, only that 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.Rules regarding an ABLE account include:

(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) no limit to the number of persons who can contribute to the ABLE account; and

(3)upon the death of an ABLE participant, every dollar remaining in the account must be paid to the state Medicaid agency to repay costs of care received by the participant during life.

(b) At application and renewal, the client must provide proof from the financial institution of the dates and amounts of money deposited into and withdrawn from the ABLE account in the last 12 months.Any amount in excess of the annual federal gift tax exclusion amount is countable income.The current gift tax exclusion amount is $14,000 per calendar year.The client must verify, preferably from the financial institution, that any funds withdrawn were used for qualified disability expenses.Funds withdrawn and not used for qualified disability expenses are considered as income for the month of withdrawal.

(c) Qualified disability expenses means any expenses related to the eligible individual's blindness or disability and approved under Internal Revenue Code (Section 529A of Title 26 of the United States Code) that are made for the benefit of an eligible individual who is the designated beneficiary, including, but not limited to, expenses for:

(1) education;

(2) housing;

(3) transportation;

(4) employment, training and support;

(5) assistive technology and personal support services;

(6) health, prevention and wellness, financial management and administrative expenses;

(7) legal fees;

(8) oversight and monitoring; and

(9) funeral and burial expenses.

14.Per OAC 340:50-7-22(5)(H), this income from this source is excluded in determining food benefit eligibility even when the volunteer receives payment equal to or more than minimum wage.

15.There are numerous programs for which income is excluded.Some common examples Examples include, but are not limited to, income received from Youthbuild, Summer Youth, Job Corps, and paid classroom training.For less common examples the income to be excluded, the worker must determine if the program is it must be paid by a federally-funded workforce training program.

SUBCHAPTER 13. CHILD CARE RATES AND PROVIDER ISSUES

340:40-13-5. Child care provider contracts

Revised 10-1-159-1-17

(a) Criteria.A child care provider facility owner and the Oklahoma Department of Human Services (DHS) director or designee must have a current sign Form 08CC001E, Child Care Provider Contract, signed by the owner of the facility and the Oklahoma Department of Human Services (DHS) Director or designee before DHS pays for out-of-home child care services.By signing the contract, the provider agrees to not take into account a person's race, color, religion, sex, national origin, or disability in deciding which children to accept in the child care program or in how services are provided to them.Age may be a factor only to the extent that certain services are designed for a particular age group.

(1) Written complaints of noncompliance with the assurance in (a) of this Section may be made to the DHS Director or to the Secretary of Health and Human Services, Washington, D.C., 20201.

(2) Local Child Care Services (CCS) licensing staff provides initial contract information about contracts for child care facilities.The provider contacts Adult and Family Services (AFS), Child Care Subsidy staff to request a contract.

(3) Child care contracts are valid for a maximum of one year.Contracts may be renewed at the sole option of DHS for successive one year terms, under the same terms and conditions, unless the child care provider or DHS gives written notice of its intent not to renew to the other party at least 30 calendar days prior to the expiration of the current term per (g) of this Section.

(b) License and star status for child care centers and homes.DHS does not contract with child care providers located out-of-state unless the provider had a contract in effect on January 1, 2010.Child care providers may only obtain a DHS contract after they are licensed or permitted.

(1) A child care center provider requesting a contract must have a license or permit and a one plus or higher star status.

(2) A child care home provider requesting a contract must have a license or a permit.

(A) When licensed, the child care home provider must have a star status of one star or higher.

(B) When on permit, the child care home provider must have a star status of one star plus or higher.

(c) Procedure for obtaining child care contracts.The procedures in (1) through (5) of this subsection are used to obtain child care contracts.

(1) CSS licensing staff gives the child care provider a publication DHS Publication 07-12, "Obtaining a Contract with OKDHS for Child Care Subsidy Payments" and instructs the provider to contact AFS Child Care Subsidy to obtain a DHS child care contract with DHS.¢ 1

(2) When contacted by the owner of a child care facility, AFS Child Care Subsidy staff explains to the owner or person authorized to sign the contract that he or she must provide documents listed in (A) through (E) (C) of this paragraph before signing a contract.Documents include a copy of:

(A) the owner's Social Security card;

(B) the owner's Oklahoma State Bureau of Investigation (OSBI) background investigation report unless a National Criminal History Result Information report is on file with DHS;¢ 2

(C) a document from the Internal Revenue Service (IRS) verifying the employer identification number (EIN) for a child care center provider and a home provider who is not a sole proprietor; and

(E)(C) the certificate of completion of the required online "Orientation to Child Care Subsidy Contracts" training.¢ 1

(3) Once the owner provides the required documents, AFS Child Care Subsidy staff sends Form 08CC001E to the provider and explains that the earliest date a contract is valid is the date of approval by the DHS Director or designee.

(4) The owner or person authorized to sign the contract signs and returns the contract to AFS Child Care Subsidy.

(5) AFS Child Care Subsidy staff processes the contract request for approval or denial.

(A) When approved, AFS Child Care Subsidy staff assigns a contract number and sends a copy of the signed contract back to the provider.¢ 32

(B) When denied, AFS Child Care Subsidy staff sends a denial letter to the provider advising of the denial.¢ 4

(d) Changes the provider must report.Form 08CC001E informs child care providers of changes they must report to AFS Child Care Subsidy no less than 30-calendar days prior to the effective date of any changes.When the provider fails to report the anticipated change timely and a new contract is needed, a gap may occur in the child care subsidy payment to the provider.Changes that must be reported include:

(1) collaborations or agreements;

(2) change of ownership;

(3) change of legal business entity;

(4) change in facility status;

(5) legal name change;

(6) plan to stop caring for children; and

(7) reduction of star status.

(e) Changes that require a new contract.A new contract is required when changes listed in (1) through (3) of this subsection occur.¢ 53

(1) Change in ownership.A change in ownership occurs when the owner of a child care center or child care home changes.

(2) Change of legal business entity.A change of legal business entity is a change from one legal business entity type to another.Refer to Appendix L-7, Ownership Proof Chart, for a list of legal business entity types.

(3) Change in facility status.A change in facility status occurs when a child care home changes to a child care center or a child care center changes to a child care home.

(f) Providing care at a different site than is authorized.When the child care provider signs the child care contract, he or she agrees to provide care only at the physical address designated in the contract.

(1) In certain circumstances After obtaining prior written approval from AFS Child Care Subsidy staff, a child care center provider owning more than one child care center may be authorized to move children receiving subsidized child care benefits and the point-of-service (POS) machine to an alternate center.The provider must receive prior written approval from AFS Child Care Subsidy staff authorizing him or her to move the children and the point-of-service (POS) machine to the alternate site for a designated period of time.

(2) AFS Child Care Subsidy staff may approve provide written approval when (1)(A) through (4)(D) of this subsection paragraph are met.

(1)(A) The same owner or legal business entity operates the alternate site.

(2)(B) The alternate site is licensed and contracted at the same star level and the provider has adequate licensed capacity at the alternate site.

(3)(C)There is a legitimate business reason for providing care in another location.

(4)(D) The provider advises AFS Child Care Subsidy staff how he or she is ensuring parents are aware their children are being cared for at a different location.

(g) Renewal of child Child care contracts contract renewal.Contracts Child care contracts may be renewed at the sole option of DHS for successive one-year terms, under the same terms and conditions, unless DHS makes changes to Form 08CC001E.The child care contract is not renewed when:

(1) the provider or DHS gives written notice of its intent not to renew to the other party at least 30-calendar days prior to the expiration of the previous contract term.; or

(2) A contract is not renewed when a provider during the contract renewal period, the provider fails to:

(A) complete required contract training; or

(B) to provide any other information or documents requested during the contract renewal period.

(h) Contract violations.When By signing the child care provider signs contract, Form 08CC001E, the child care provider agrees to abide by the terms of the contract.When local county staff becomes aware a provider is violating the terms of the contract, he or she sends an email emails the circumstances to AFS Child Care Subsidy staff advising of the circumstances.¢ 64Local county staff may also complete Form 19MP001E, Referral Form, to report the violation to the Office of Inspector General.Examples of contract violations include, but are not limited to:

(1) discriminating against persons seeking services by charging a discriminatory rate or violating a person's rights as listed in the Civil Rights Act of 1964 as amended, the Rehabilitation Act of 1973 as amended, or the Americans with Disabilities Act of 1990, as amended;

(2) failing to maintain a drug-free workplace;

(3) operating over licensed capacity;

(4) possessing or swiping a client's electronic benefit transfer (EBT) card;

(5) knowing a client's EBT personal identification number (PIN);

(6) refusing unlimited access by a parent or caretaker to the areas of the facility used for child care during the hours of operation;

(7) failing to ensure the parent or caretaker records accurate time and attendance information on the POS machine.During the school year when a child is approved for a blended unit type or any time part-time care is approved, the parent or caretaker is only required to enter one swipe per day to record attendance because the number or hours the child attends does not affect provider payment;

(8) charging a client receiving subsidized child care more than the DHS rate for days and hours within the client's child care plan;¢ 75

(9) charging a client receiving subsidized child care an allowable fee when not charged to non-DHS participants;¢ 86

(10) failing to post all of the facility's rates and fees;

(11) charging or requiring a client to swipe attendance for days and hours outside of client's child care plan when those days and hours are a requirement of the provider, not a choice of the client;¢ 75

(12) failing to advise and provide DHS a completed copy of any collaboration or agreement the provider enters into within 30-calendar days of signing the collaboration or agreement.This includes agreements with Head Start, Early Head Start, public schools, or any other programs receiving state or federal or state funding;

(13) claiming or receiving payment from DHS for any hours of care the provider is not charging all parents for care because provider receives federal or state or federal funds for those hours.Refer to Oklahoma Administrative Code (OAC) 340:40-5-1(7) for policy on regarding collaborations;

(14) claiming payment for care given for any hours in an unlicensed collaborative classroom;

(15) moving the children from the agreed upon location shown in the contract and claiming for services at the other location without prior, written approval from AFS Child Care Subsidy staff;

(16) moving the POS machine without receiving prior, written approval from AFS Child Care Subsidy staff per subsection (f) of this Section;

(17) failing to inform DHS of a change in facility status, legal business entity, or ownership of the business at least 30-calendar days in advance of the change;

(18) failing to inform DHS in writing within 10-calendar days of any person who has an ownership or controlling interest in, or is an agent or managing employee of the child care business, who has been was convicted of a criminal offense related to such person's involvement under Titles XVIII, XIX, or XX of the Social Security Act;

(19) not maintaining copies of manual claims filed during the last three years;

(20) not maintaining daily written attendance records that include in and out times for the last three years;

(21) refusing to make available to DHS all business records that document proper fiscal and program management by the provider within an hour of request by any DHS representative;

(22) failing to allow full access to the facility's premises and personnel to investigate a complaint;

(23)(20) failing to report the income from the child care business within 10-calendar days to his or her AFS worker if when receiving benefits;

(24)(21) claiming payment for care given by a home provider for an employee's child.Refer to OAC 340:40-5-1(7);

(25)(22) subcontracting services to another provider; and or

(26)(23) breaching the contract signed by the provider with the DHS EBT contractor.

(i) Cancellation of child care provider contracts.AFS Child Care Subsidy staff initiates the cancellation by issuing a notice to the provider.When AFS cancels a contract, all open child care authorizations for the provider close automatically.¢ 97Contracts may be cancelled:

(1) with cause.The effective date of cancellation is 13-calendar days after AFS Child Care Subsidy staff mails the notice.This allows three-calendar days for mailing time.The notice must contain a reference to the grounds for cancellation including the specific contract provision(s) that was violated; or¢ 108

(2) without cause.The effective date of cancellation is 33-calendar days after AFS Child Care Subsidy staff mails the notice.This allows three-calendar days for mailing time.¢ 119

INSTRUCTIONS TO STAFF 340:40-13-5

Revised 10-1-159-1-17

1.(a) Contracting processes are facilitated by Adult and Family Services (AFS) Child Care Subsidy staff located at the Sequoyah building.When a child care provider requests a child care contract from county office staff, the provider is referred to AFS Child Care Subsidy.

(b) Required provider training must be completed online at www.OKDHS.org.From the home page, the provider clicks on "How do I apply for a child care provider contract?" to access the Child Care Provider Contracts web page.Under "online services," the provider clicks on "Orientation to Child Care Subsidy Contracts" to view the training, pass the proficiency test, and print the certificate of completion.The date on the certificate of completion must be within dated no earlier than 30-calendar days of before the date the owner signs the contract.

2.(a) When the provider has fingerprint results on file with the Licensing Records Office (LRO), AFS Child Care Subsidy staff who have been fingerprinted for access and review can view the results.When the provider does not have fingerprint results on file with LRO, the provider must provide a copy of his or her Oklahoma State Bureau of Investigations (OSBI) background check to AFS Child Care Subsidy staff.An existing OSBI background check is accepted when issued within the past 12 months.The OSBI background check must be a name based search and include all search results and dispositions.

(b) The AFS Child Care Subsidy programs manager may waive the requirement for a federally recognized tribe that has a cooperative agreement with Child Care Services (CCS).

3.(a) AFS Child Care Subsidy staff notifies the new contracted provider and county director at the local county office of the new contract number and approval date for the contract.

(b) County staff accesses information about contracted child care providers by using transaction PCI on IMS.Enter PCI space and the contract number.The PCI screen gives has information about the child care provider, such as the provider's name, location, mailing address(es), contract begin date, star status, and the owner's name.When the contract number is unknown, the worker obtains the number by using the PCX transaction or Child Care Locator.

(1) To use PCX the worker enters PCX space and up to the first eight letters of the child care center name or child care home provider's first name.The PCX transaction displays the names of all child care providers beginning with those letters.County staff enters PCI next to the contract number on the list displayed to obtain information about the provider.To view instructions and filter options for these transactions, enter M space and the transaction code.Example: M space PCX.

(2) The Child Care Locator is available on the InfoNet under DHS by clicking on the Tools and Resources tab.The worker clicks on Child Care Locator, chooses the county where the facility is located, and enters the name of the facility for a child care center or the first and last name of the owner for a child care home.

4.AFS Child Care Subsidy staff notifies the county director by email that the provider's contract request was denied.

53.DHS Child Care Services (CCS) and AFS staff work together to avoid or reduce any gap in the child care subsidy payment.A gap in the child care subsidy payment may occur when the new owner does not submit a new contract and all required verifications to AFS Child Care Subsidy staff at least 30-calendar days prior to the ownership or business entity change.

64.(a) AFS Child Care Subsidy staff evaluates the circumstances and whether the willingness of the provider agrees to stop the practice.Depending on the circumstances, AFS staff may:

(1) decide no further action is needed;

(2) initiate a corrective action plan;

(3) request that county office staff completes Form 19MP001E, Referral Form, to start an investigation; or

(4) decide to cancel the child care provider's contract.

(b) When AFS Child Care Subsidy staff recommends completion of Form 19MP001E, county staff:

(1) enters as much detail as possible about the violation on the form including:

(A) the name of the person reporting the violation;

(B) the content of the allegation; and

(C) a telephone phone number for the person reporting the violation; and

(2) attaches any written documentation supporting the allegation to Form 19MP001E.

(c) When a client reports a violation, the client may provide a written statement, instead of completing Form 08MP001E, explaining the circumstances.

75.(a) When the provider requires all children be in attendance by a certain time every morning regardless of the client's work or school schedule, the provider must not charge the client for those additional hours.

(1) Reasons the provider may give for this requirement, include limiting disruptions to program content so all children participate fully in the quality content of the child care program or reduce provider transportation costs.

(2) For example, when the client's work or school schedule does not begin until 11:00 a.m., but the provider requires attendance by 9:00 a.m., the client must swipe attendance by entering a previous in for 11:00 a.m. on the POS point-of-service machine when the child is picked up at the end of the day.

(b) When the client chooses to drop the child off earlier or leave the child later at the child care provider earlier than the approved plan of service hours or leaves the child later for personal reasons, the provider may charge the client for the additional hours.

86.Some examples Examples of non-allowable fees are vacation fees when a child is absent or termination fees when the child stops attending the facility.

97.When DHS cancels a provider contract, AFS Child Care Subsidy staff sends an email regarding contract cancellation proceedings to:

(1) CCS;

(2) Legal Services;

(3) Financial Services Finance and Administration Electronic Payment Systems (EPS) Unit;

(4) Office of Inspector General (OIG);

(5) Child Welfare Services (CWS); and

(6) the Oklahoma State Department of Education, Child Care Food Program; and

(7) the local county director where the provider is located.

108.When DHS cancels a contract with cause, the reason is included in the provider's cancellation letter.The provider is advised his or her the DHS child care subsidy contract ends 13-calendar days from the date AFS Child Care Subsidy staff mails mailed the notice to the provider.

119.(a) When DHS cancels a contract without cause and the child care facility was recently audited or investigated by DHS OIG, the cancellation letter includes:

(1) a reminder of the OIG audit or investigation and finding that he or she met the criteria was met for contract cancellation; and

(2) information advising the provider his or her the DHS child care subsidy contract ends 33-calendar days from the date AFS Child Care Subsidy staff mails mailed the cancellation letter to the provider.

(b) Reasons a contract might be cancelled following an OIG audit or investigation include violations listed at per (h) of this Section.

(c) Other Additional reasons a provider contract may be cancelled without cause include, but are not limited to, when:

(1) CCS staff revokes the provider's child care license;

(2) persons with previous contract cancellations following an OIG audit or investigation become owners, authorized representatives, or materially involved in the business of a new facility at the same address;

(3) the provider has an outstanding overpayment debt with DHS either as a client or as a provider;

(4) the provider receives benefits as a DHS client and his or her benefits close due to a finding of fraud or willful misrepresentation;

(5) it comes to the attention of AFS Child Care Subsidy staff that a provider was convicted of a felony verified by OSBI or the Oklahoma Supreme Courts Network (OSCN), or fingerprint rap-back;

(6) it comes to the attention of AFS Child Care Subsidy staff that a provider was debarred, suspended, disqualified, proposed for debarment, or declared ineligible by any federal department or agency, or convicted of a fraud-related crime;

(7) the provider is convicted of food benefit trafficking;

(8) the provider requests cancellation of the contract;

(9) the ownership of a facility changes;

(10) a one star center provider no longer has open child care authorizations;

(11) the provider commits a contract violation brought to the attention of AFS Child Care Subsidy staff and refuses to correct it; or

(12) the provider shows a history of non-compliance with DHS policies and procedures.

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