PROPOSED RULEMAKING
DEPARTMENT OF
PUBLIC WELFARE
[55 PA. CODE CH. 183]
Income
[31 Pa.B. 4172] The Department of Public Welfare (Department), under the authority of sections 201(2) and 403(b) of the Public Welfare Code (code) (62 P. S. §§ 201(2) and 403(b)), intends to amend the regulations to read as set forth in Annex A. Section 201(2) of the code gives the Department the authority to promulgate regulations. Section 403(b) of the code provides that the Department will establish rules, regulations and standards consistent with the code, and whenever possible, establish rules, regulations and standards for General Assistance (GA) consistent with those established for Aid to Families with Dependent Children (AFDC), now replaced by Temporary Assistance for Needy Families (TANF). The incorporation of this proposed rulemaking is predicated upon provisions in the act of May 16, 1996 (P. L. 175, No. 35) (Act 35), which govern eligibility for cash benefits and provisions in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) (Pub. L. 104-193), which permit states to design their own TANF programs consistent with Federal requirements. The proposed rulemaking affects the TANF program and the Commonwealth's GA program.
Purpose
The purpose of this proposed rulemaking is to promulgate the provision in section VI(A)(6) in the TANF State Plan as published at 27 Pa.B. 342 (January 18, 1997) and at section VI(A)(7) in the current TANF State Plan as published at 29 Pa.B. 5658 (October 30, 1999). This provision counts lump sum payments as income in the month of receipt and as a resource in subsequent months.
Background
Act 35 provided the framework for the Commonwealth's welfare reform plan which included changes to both the State-funded GA program and the Federal AFDC program. On August 22, 1996, the President signed into law PRWORA, which eliminated the open-ended entitlement program known as AFDC and created a block grant program, TANF, that allows states to provide time-limited cash assistance to needy families under programs that are state-designed. While PRWORA sets forth specific requirements for states to follow, such as establishing work requirements and time limits on the receipt of cash assistance, states have the unprecedented opportunity to design and operate cash assistance programs that are tailored to meet the needs of the people they serve.
The incorporation of this proposed rulemaking is predicated upon provisions in Act 35 which govern eligibility for cash benefits and provisions in PRWORA, which permit states to design their own TANF programs consistent with Federal requirements. The flexibility provided by PRWORA allows the Department to proceed with the lump sum change in this proposed rulemaking.
Need for Proposed Rulemaking
This proposed rulemaking is needed to incorporate into Chapter 183 (relating to income) the provision in section VI(A)(6) in the TANF State Plan as published at 27 Pa.B. 342 and at section VI(A)(7) in the current TANF State Plan as published at 29 Pa.B. 5658. The proposed rulemaking is being prepared for promulgation as proposed rulemaking to ensure sufficient opportunity for public review and comment prior to implementation.
Summary of Requirements
The proposed amendment to § 183.105(4) (relating to increases in income) specifies that lump sum payments are counted as income only in the month of receipt and as a resource in subsequent months. Under current policy, the effects of lump sum payments on cash assistance benefits are calculated using a formula that often results in ineligibility for cash assistance for entire budget groups over an extended period of time. The formula assumes that the lump sum will be available to meet basic living needs and does not take into account that a family, that is, budget group, may need to use the funds for other valid purposes. For example, a family may need to purchase a vehicle for employment or move into better housing. Allowing for the expenditure permits a family to strengthen its financial situation and improve its general standard of living, which can help propel the family to greater self-sufficiency. To this extent, the proposed change in lump sum policy is consistent with the Department's overall goal of welfare reform, which is to design programs that promote and encourage self-sufficiency.
Affected Individuals and Organizations
This proposed rulemaking affects applicants/recipients of TANF and GA cash benefits who receive lump sum payments such as insurance settlements, delayed wages, lottery winnings and the like. Lump sum payments are no longer calculated in a manner that establishes a defined period of ineligibility. Lump sum payments are considered income in the month of receipt. If the lump sum income (after allowable deductions) exceeds the monthly assistance grant, the budget group is ineligible for assistance in that month. The budget group must verify that any funds remaining in subsequent months do not exceed the appropriate resource level for the category of assistance.
Fiscal Impact
Commonwealth: The State will incur an estimated annual cost of $346,000. This estimate represents an additional 12 months of eligibility for 136 GA clients at an average monthly cost of $205 per client. The estimate assumes that clients will spend down the resource limit in 1 month.
Public Sector: No other government entity will incur any costs or realize any savings.
Private Sector: No private sector entity will incur any costs or realize any savings.
Paperwork Requirements
This proposed rulemaking will moderately decrease the paperwork requirements associated with the eligibility process. Eligibility calculations associated with the receipt of lump sum payments will no longer require the determination of a defined period of ineligibility.
Effective Date
The proposed rulemaking is effective upon publication in the Pennsylvania Bulletin as final-form rulemaking.
Sunset Date
There is no sunset date. The Department conducts periodic reviews of the GA program in accordance with section 403(e) of the code. TANF regulations are also reviewed through the Department's Quality Control and Corrective Action review process.
Public Comment Period
Interested persons are invited to submit written comments, suggestions or objections regarding the proposed rulemaking to the Department of Public Welfare, Edward Zogby, Director, Bureau of Policy, Room 431, Health and Welfare Building, Harrisburg, PA 17120, (717) 787-4081 within 30 days after the date of publication of this proposed rulemaking in the Pennsylvania Bulletin. All comments received within 30 calendar days will be reviewed and considered in the preparation of the final-form rulemaking. Comments received after the 30-day comment period will be considered for any subsequent revisions of this proposed rulemaking.
Persons with a disability may use the AT&T Relay Service by calling (800) 654-5984 (TDD users) or (800) 654-5988 (Voice users).
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on July 23, 2001, the Department submitted a copy of this proposed rulemaking to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Health and Human Services and the Senate Committee on Public Health and Welfare. In addition to submitting the proposed rulemaking, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Department in compliance with Executive Order 1996-1, ''Regulatory Review and Promulgation.'' A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, if IRRC has any objections to any portion of the proposed rulemaking, it will notify the Department within 10 days of the close of the Committee's review period. The notification shall specify the regulatory review criteria which have not been met by that portion of the proposed rulemaking. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Department, the General Assembly and the Governor of objections raised.
FEATHER O. HOUSTOUN,
SecretaryFiscal Note: 14-471. (1) General Fund; (2) Implementing Year 2000-01 is $346,000; (3) 1st Succeeding Year 2001-02 is $346,000; 2nd Succeeding Year 2002-03 is $346,000; 3rd Succeeding Year 2003-04 is $346,000; 4th Succeeding Year 2004-05 is $346,000; 5th Succeeding Year 2005-06 is $346,000; (4) 1999-00 Program--$311,394,000; 1998-99 Program--$259,688,000; 1997-98--$323,388,000; (7) Cash Grants; (8) recommends adoption. Funds are included in the budget for this purpose.
Annex A
TITLE 55. PUBLIC WELFARE
PART II. PUBLIC ASSISTANCE MANUAL
Subpart D: DETERMINATION OF NEED AND AMOUNT OF ASSISTANCE
CHAPTER 183. INCOME * * * * *
MONTHLY ASSISTANCE PAYMENT DETERMINATION § 183.105. Increases in income.
An increase in actual, deemed or estimated income of the budget group in a calendar month affects eligibility and the amount of the monthly assistance payment as follows:
* * * * * (4) If the increase in income is due to receipt of a lump sum [income], the following applies:
(i) [If the increase in lump sum income of the budget group or LRR other than the parent of an AFDC minor parent living with the budget group results in ineligibility, assistance is terminated no later than the payment month corresponding with the budget month in which the income was received. The budget group is ineligible for the number of full months for which the lump sum and other countable net income will meet the needs of the budget group and LRR whose lump sum income is counted. The standard of need--Appendix B, Table 1--used to determine the period of ineligibility is the one applicable to the county in which the budget group resides and is based on the number of persons in the budget group plus the LRR whose lump sum income is counted.] The amount of lump sum is counted as income in the month of receipt, if received by a member of the budget group or certain other household members such as an LRR, a parent of a TANF minor parent, a stepparent or a sponsor of an alien. The lump sum income deductions are applied, as specified in §§ 183.91, 183.93, 183.94, 183.95 and 183.98(1)--(3).
[(A) If the income calculated as remaining after the period of ineligibility is less than the monthly assistance payment, it is considered income only in the first month following the period of ineligibility.
(B) If the income calculated as remaining after the period of ineligibility is equal to or exceeds the monthly assistance payment, the budget 2group is ineligible for 1 additional month. The remainder is a resource, if available, in the month of reapplication.
(C) The period of ineligibility applies to an individual whose lump sum income is counted and those individuals who were receiving or applied for assistance during the month the lump sum income was received. Other individuals who did not receive or apply for assistance during the month the lump sum income was received and who subsequently apply may be eligible for a monthly assistance benefit.
(D) Advance notification of ineligibility includes the computation upon which the period of ineligibility is based. If the exact amount of the lump sum income received is unknown due to the refusal to provide this information, the budget group is determined to be ineligible due to failure to cooperate.]
(ii) [Recalculation of the period of ineligibility following the initial application of this subparagraph is required under certain circumstances. The recalculation may only shorten the period of ineligibility, not lengthen it. The grant may be restored at the end of the recalculated period of ineligibility upon reapplication, if the budget group is otherwise eligible for a grant. No retroactive benefits may be granted for any period of time prior to the date of the reapplication. Recalculations are made only under the following conditions:] If the lump sum income does not result in ineligibility, the increase in actual or deemed lump sum income in the month of receipt affects the assistance payment in the corresponding payment month.
[(A) When a member of the budget group leaves the family taking the remaining funds from the lump sum income and refuses to make the lump sum available to the rest of the family. The period of ineligibility for the remaining members is recalculated beginning with the month of the loss of these funds by the remaining members as follows:
(I) If funds which should be remaining are removed, the remaining members are eligible. If only part of those funds which should be remaining from the initial lump sum calculation are removed, the period of ineligibility is recalculated by dividing the funds which should be remaining, less the amount of funds removed, by the standard of need for the number of persons covered under the original lump sum calculation remaining in the household. The amount remaining is considered income under subparagraphs (i) and (iii).
(II) The original period of ineligibility is applied to the persons who left the household. The amount remaining is considered income under subparagraphs (i) and (iii). The period of ineligibility is applied whether or not the members later return to the household.
(B) When a natural disaster or other life or health threatening event over which the budget group has no control necessitates expenditure of the balance of the lump sum income. This clause applies only when, prior to the event, the budget group was using the lump sum income to meet 2 essential needs and there are no other income or resources sufficient to meet the needs resulting from the event.
(C) When medical expenses are incurred and paid for a member of the budget group, which are for medically necessary surgery or medical care to treat a congenital condition, serious illness or traumatic injury, if medical needs were not taken into account in determining the initial period of ineligibility; the needs cannot be met by other income or resources; and, the lump sum income was being used to meet the essential needs of the budget group.
(D) If the budget group is unable to verify the cost of essential needs, such as shelter, clothing and food, allow for basic living needs under the standard of need levels for the size of the budget group in recalculating the period of ineligibility.]
(iii) [The amount of lump sum income received by the nonassistance stepparent, parent of an AFDC minor parent or sponsor of an alien remaining after disregards as defined in §§ 183.91, 183.93 and 183.98(1)--(3) (relating to LRR, parent of an AFDC minor parent and stepparent deductions; sponsor deductions; and unearned income and lump sum income deductions) is considered only in the month of receipt under § 183.71(b) (relating to gross income test) and paragraphs (2) and (3). A portion retained by the stepparent or parent of an AFDC minor parent subsequent to the month of receipt is a resource to that person and is not to be considered in determining eligibility for a budget group unless actually made available to them. A portion retained by the sponsor subsequent to the month of receipt is a resource to the alien in subsequent months.] When the lump sum is received by a budget group member or LRR living in the household, other than a parent of a TANF minor parent, any portion of the lump sum that remains after the month of receipt is considered a resource under § 177.11 (relating to identification and verification of resources).
(iv) [An individual who receives GA and who is determined to be ineligible for a specified period due to receipt of lump sum income may apply for and receive AFDC during this period if otherwise eligible. Remaining lump sum income is considered a resource under Chapter 177 (relating to resources).] Any portion of the lump sum retained by the stepparent or parent of a TANF minor parent subsequent to the month of receipt is a resource to the stepparent or parent of the TANF minor parent and is not to be considered in determining eligibility for the budget group unless it is actually made available to the budget group.
(v) Any portion of the lump sum retained by the sponsor of an alien subsequent to the month of receipt is a resource to the alien in subsequent months, providing the alien's entry into the United States is within 3 years.
(vi) If the lump sum makes the budget group ineligible in the month of receipt, and the ineligibility is expected to last more than 1 month, assistance is terminated for the first payment date that can be reached either in the month of receipt or the following month after proper notice is provided as described in § 133.4 (relating to procedures). An overpayment occurs for cash assistance received during the months of ineligibility.
(vii) If the exact amount of the lump sum received is unknown because of a refusal to provide this information, the budget group is ineligible due to failure to cooperate under § 125.21(a) (relating to policy).
[Pa.B. Doc. No. 01-1415. Filed for public inspection August 3, 2001, 9:00 a.m.]
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