Dependent Care Costs 430-05-55-25

(Revised 04/01/08 ML3136)

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Households must verify current month dependent care expenses at initial application and recertification. The maximum deduction for dependent care is $200 per month for each child under the age of two and $175 per month for all other dependents. If greater amounts are entered, TECS will automatically reduce them. TECS will also automatically change the deduction to $175 for the benefit month the child turns two years of age.  A deduction for care of a child or other dependent is allowed when necessary for a household member to:

• Accept or continue employment.

• Seek employment.

• Attend training or pursue education preparatory to employment.

The portion of child care expenses that will be reimbursed are not allowable.

 

Dependent care expenses will be allowed only if the service is provided by someone outside the food stamp household.   

 

Example:

Grandma, mom and child are all one food stamp household.  Grandma is providing child care for the child and receiving a Child Care Assistance payment of $300.  Mom is paying out of pocket expenses to grandma of $50.  The $300 Child Care Assistance payment is counted as earned self-employment income to grandma.  The $50 mom is paying grandma out of pocket is not counted as income to grandma and is not allowed as an expense for mom.   

 

When the child care expense is greater than the child care assistance payment, the out-of-pocket child care expense incurred by the household is an allowable child care deduction up to the food stamp maximums.   

 

Example:

The child care expense for one child is $250 and child care assistance reimburses the household $100 that is applied toward that child care bill, for food stamp purposes:

1. Disregard as income the $100 child care assistance payment.
2. Allow a child care deduction in the amount of $150 ($250 total child care expense incurred minus the $100 child care payment).

If a TANF household chooses the option of receiving a work related child care disregard from the TANF grant, food stamps will count the amount of the TANF grant as unearned income and allow the household a deduction for child care expenses up to the maximum.

 

At application, anticipated expenses for the first two months are allowed as a deduction based on verification from the provider, information from the household, and the worker’s prudent judgement.

 

When a child care assistance application is pending, allow the entire child care expense as a deduction up to the maximum until the certificate has been issued and the first child care assistance billing form is received.  When the certification has been issued and the billing form is received, the worker must act on the change based on the change reporting or simplified reporting requirements.  Adequate notice is required as the household signs the billing form.

 

Examples:

1. Ongoing simplified reporting household applies for Child Care Assistance and is issued a certificate on August 5, however no billing form has been received. The entire child care expense continues to be allowed for September as a deduction as a child care billing form was not received.  The household provides a child care billing form on September 17. Since the household’s out of pocket cost based on the sliding fee scale will result in a decrease in benefits, the entire child care expense continues to be allowed until recertification.   
2. New application for simplified reporting Food Stamp household and Child Care Assistance.  

If the Child Care Assistance certificate is issued and the billing form received prior to authorizing the Food Stamp case, the out of pocket costs based on the sliding fee scale are allowed as a deduction for Food Stamps.

 

If the Food Stamp case is authorized prior to the Child Care Assistance certificate being issued and/or the billing form being received, the entire out of pocket cost continues to be allowed.  Once the certificate is issued and the billing form received, the household’s out of pocket cost based on the sliding fee scale will result in a decrease.  The entire child care expense continues to be allowed until recertification.  

3. Ongoing change reporting household applies for Child Care Assistance and is issued a certificate on August 5, however no billing form has been received. The entire child care expense continues to be allowed as a deduction for September as a child care billing form was not received. The household provides a child care billing form on September 5. The household’s out of pocket cost based on the sliding fee scale must be anticipated for October.  

 

At recertification if the household anticipates no changes in child care expenses, use base month or current month verified expenses. If not anticipating a change and household fails to provide verification of base month or current month, no deduction is allowed.

 

For ongoing cases, if a change is anticipated and it will result in an increase in food stamp benefits, it must be verified before it can be allowed.

 

For change reporting households, if an anticipated change results in a decrease in benefits the change must be allowed and verified at the next recertification.  

 

For simplified reporting households, changes resulting in a decrease must not be acted on until recertification.  Changes are not acted on at six month report unless the household reports a change on the six month report form.

 

If the household reports a change that results in an increase in benefits and does not provide verification, verification must be requested using F417 - Incomplete Six Month Report or F418 - Incomplete Six Month Report After Non-Filing.  If not provided, the previously reported and verified expense continues to be allowed at the previously verified amount and the case is not closed.

 

If the household reports a change that results in a decrease in benefits on the six-month report, the change must be acted on without verification.  Verification must be provided at recertification.

 

Examples:

1. On September 13, the household reports an expected change in dependent care costs on the six-month report form that will result in an increase in benefits, but does not provide verification.  The worker sends the F418 – Incomplete Six Month Report After Non-Filing allowing the household 10-days to provide verification.  

If the household provides the verification, the changes must be acted on to increase or decrease benefits.  

 

If the household fails to provide the verification within 10-days, the previously reported and verified expense continues to be allowed at the previously verified amount and the case is not closed.

2. On September 5, the household reports an expected change in dependent care costs on the six-month report form that will result in a decrease in benefits, but does not provide verification.

The change must be acted on without verification.  Verification must be provided at recertification.

 

If the household fails to complete a redetermination for child care assistance, the entire out-of-pocket costs must be anticipated.