Par.1.	Material Transmitted and Purpose – Transmitted with this Manual Letter are changes to Service Chapter 430-05 – Food Stamp Policy Manual.  This incorporates changes made with IM’s 4964 – Day Care Meal Expenses, 4966 – Amended FS Standard, Thrifty Food Plan & Income Eligibility Level Changes, 4970 – AMENDED 11-10-05 – Mandating the Use of FACSES for Verification of CS Income, IM 4974 – FS Increase in the Mandatory Utility Standard for Heating and IM 4975 - Self Employment Income Tax Guidelines.

Par. 2. Effective Date – This manual letter is effective for all new applications and recertifications received on or after March 2006.  For ongoing cases the change must be made when the case is next reviewed or at the next recertification, whichever occurs first.

430-05-20 Application Processing

1.	430-05-20-50-05 – Benefit Availability.  Removed the last sentence in the first paragraph, as the processing timeframe for expedited cases is dependent on whether or not the household has an EBT card.  

	Benefit Availability 430-05-20-50-05

An eligible household must be provided with an appointment for EBT card issuance, PIN selection, and training by the date benefits must be made available. The household must be able to transact benefits on or before the seven or 30-day timeframe expires. The case must be worked on the 6th day for expedited cases and on the 29th day for regular cases. 

Whenever a household fails to attend an EBT card issuance/training session before eligibility is determined, the household must be notified when benefits are available but card issuance/training must occur before the household can access benefits.

2.	430-05-20-50-10 – Timeframes.  Changed the expedited information and added a link to opportunity to participate as expedited timeframes are dependent on whether or not the household has an EBT card.  

	Timeframes 430-05-20-50-10

Households requesting, but not entitled to, expedited service must have their applications processed according to 30-day processing standards.

For households entitled to expedited services, benefits must be made available to the household no later than the 7th calendar day following the date an application is filed.

If the household is not eligible for the program for the month of application but is eligible for the program and is entitled to expedited services for the following month, the household must be provided an opportunity to participate within 7 days from the date of application or the 1st working day of the 2nd month, whichever is later.

The worker must process an expedited application on the 6th calendar day to ensure benefits are credited into the household’s EBT account by the 7th day.  The county must issue an EBT card to the household no later than the 7th calendar day.  The worker must process an expedited application to ensure the household has the opportunity to participate within the expedited timeframes.  

Example:
A household applies on May 10.  May 11 is day one of the seven-day count.  The application must be processed by May 16 so that benefits are available to the household on the 7th day, which is May 17.

If an unsigned application is received, a telephone interview is conducted, and the application must be mailed to the household for signature, the mailing time involved is not counted in the expedited service timeframe. Mailing time includes only the days the application is in the mail to and from the household and the days the application is in the household’s hands pending signature and mailing.  The first day of the expedited count is the calendar day following receipt of a signed food stamp application.

3.	430-05-20-50-15 – Expedited Processing Standards.  Changed item number one of the expedited criteria to include countable liquid assets.  

		Expedited Processing Standards 430-05-20-50-15

County application procedures must be designed to identify households eligible for expedited service at the time the household requests assistance.  The household cannot waive its right to expedited service.

If any of the following apply, the household is entitled to expedited services:

1.	Households with less than $150 in countable gross monthly income when their countable liquid assets do not exceed $100.
2.	Migrant or seasonal workers who are destitute and countable liquid assets do not exceed $100.

3.	Households who have combined countable gross monthly income and countable liquid assets that are less than the household’s monthly rent or mortgage and the appropriate mandatory utility standard.

4.	430-05-20-60-30 – Gross Income.  Added additional information on the verification of income at initial application for clarification. Gross Income 430-05-20-60-30
		1.	The unearned income for all household members must be verified.
Exception:
Client statement of the household’s interest or dividend income from all sources when it is paid out and is $50 or less per month ($600 or less per year) is acceptable, unless questionable.
		2.	Gross earned income must be verified for the following individuals:
a.	Age 18 and older.
b.	Age 16 and older if not attending school at least halftime.

If the person or organization providing the income has failed to cooperate with the household and the worker, and all other sources of verification are unavailable, the worker must determine an amount based on the best available information provided by the household. The worker must document the attempt to verify income and the income used.

Actual income from the month of application to the date of interview must be verified and documented. Income for the remainder of the month must be established and documented based on client information and prudent person judgment. This may include using verification of last month's income if that is what the household anticipates for the first month of the certification period.

If all income for the month of application is available prior to the interview date, that income must be used for the month of application.  

Documentation must explain how the worker arrived at the amount of income used.
	
5.	430-05-20-100 – Notice Requirements.  The F107 – Expedited FS Application notice was removed from the list of approval notices.  As explained in the TECS update on 06/06/2005, this notice as ended 5/31/05 as it does not include a budget.  If an expedited application is approved without waiving the interview and verifications, the F102 – Initial Food Stamp Application approval notice must be sent.  

	Also, updated the name of the F230 notice to include Tribal NEW. The change to the notice was made in the title and throughout the notice effective July 1, 2005.  An e-mail notification to counties and state staff was also sent on July 1, 2005.    

	Notice Requirements 430-05-20-100

When appropriate send the following notices:
 
Pending

F301 - Application Pended - Additional Information
F302 - Application Pended - Over 30 Days Old 
F303 - Application Pended - Other Reasons
F304 - Separate FS Household/Pended Application
 
Approvals

F101 - Expedited FS App. Waived Interview/Verification
F102 - Initial Food Stamp Application
F105 - Expedited FS Application - Migrants
F107 - Expedited FS Application 
 
Denials

F201 - PI - Failure to Provide Information
F202 - IN - Failure to Complete Interview Process
F203 - RS - Residency
F205 - CI - Application Denied - Alien Status
F206 - CI - Application Denied/Alien Status (8/22/96)
F207 - EI - Excess Income
F208 - EA - Excess Assets
F209 - FA - Application Denied - Fraud Action
F210 - RW - ABAWDS Work Requirements Non-Compliance Denial
F213 - OT - Denial - Other Reasons
F214 - AW - Denial - Application Withdrawn
F220 - AS - Receiving Assistance in Another State
F222 - RW - Work Registration Denial
F223 - OJ - Head of Household Voluntary Quit/Denial
F224 - SE - Student Eligibility Criteria - 1 Person HH
F225 - BE - BEST Non-Compliance Denial
F226 - SH - Separate Food Stamp Household
F227 - DR - Denial Due to Drug Disqualification
F229 - RW - Application Denied - Disqualifying Transfer
F230 - FP – JOBS/Tribal NEW Non-Compliance FS Denial
F231 - ZB - Application Denied - Zero Benefit
F240 - PI - TANF Information and Referral Service Denial
F241 - QC - QC Review Non-Compliance Denial
	
	430-05-25 Household Composition
	6.	430-05-25-35 – Non-Household Members.  Added residents of Burdick Job Corp to residents of a public institution in item number four.  
		4.	Residents of a public institution. Including those in prison, jail, work release, state hospital, developmental centers and those on approved leave that have not been discharged and residents of the Burdick Job Corp. (OU)
			
			The State Office will perform a computer match comparing the TECS active food stamp caseload with the Social Security Administration's State Verification and Exchange System (SVES) and the ND Department of Corrections Listing of Inmates Incarcerated file to determine if any currently participating individuals have been incarcerated. The State Office will notify a worker of any match. 
430-05-30 Households with Special Circumstances
7.	430-05-30-30 – Companion Household.  This section was revised to incorporate AMENDED IM 4966 – Food Stamp Standard, Thrifty Food Plan and Income Eligibility Level Changes. 
		Companion Household 430-05-30-30
	
An elderly and disabled individual living with another household because they are unable to purchase and prepare their own meals may be granted separate household status. The companion household is the household the elderly and disabled household member lives with.

Gross Monthly Income Limits for Companion Households
Verification of monthly gross income for both the companion household and the elderly and disabled household member must be verified. The gross income of the companion household must meet the following gross income limits for their appropriate household size without regard to the elderly and disabled household member. If the gross income of the companion household is within the gross income limits, eligibility and level of benefits is based solely on the elderly and disabled household members income and assets. 

Example:
An elderly and disabled individual lives with another household consisting of mom, dad and two children. In determining eligibility for the elderly and disabled individual the worker must verify the gross monthly income of dad, mom and two children and compare that to the gross income limit for a family of four based on the table ($2,592 2,661). If gross monthly income for the family of four is $2,592 2,661 or less, then eligibility and level of benefits for the elderly and disabled individual is based solely on the elderly and disabled individual’s income and assets.

HH Size	Maximum
Income	HH Size	Maximum Income	
1	$ 1,281 1,316 	5	$ 3,030 3,109	
2	1,718 1,765	6	3,467 3,558	
3	2,155 2,213	7	3,904 4,006	
4	2,592 2,661	8	4,341 4,454	

	Each Additional Member	+438 +449	

8.	430-05-30-55-15 – Treatment of Expenses (Self-Employment). The reimbursement amounts used in the Child and Adult Care Food Program were updated to the current amounts.  This supersedes IM 4694.
		Also, under allowable expenses, the expense for the principal portion of payments on income producing real estate and capital assets, equipment, machinery, and other durable goods was clarified to include the purchase price.  

Day Care Meal Expenses
Reimbursement, which may include the food stamp household’s own children, is available to providers who are registered or licensed. The reimbursement is not counted as income and is not an allowable deduction.

Some of the programs are:
•	Heartland
•	Nutrition for North Dakota Day Care Children
•	Dakota Nutrition

Households that are not reimbursed that derive income from day care may elect one of the following methods of determining the cost of meals provided to individuals. The household's choice must be clearly documented in the casefile.
1.	Actual documented cost of meals.
2.	A standard daily amount of $5.00 per individual regardless of the number of hours of care provided. 
3.	Current reimbursement amounts used in the Child and Adult Care Food Program. These are:

Breakfast	$1.04 1.06	
Lunch	1.92 1.96	
Supper	1.92 1.96	
Snacks	.57 .58	

A maximum of two meals and one snack, or two snacks and one meal can be claimed per child, per day.

		Allowable Expenses
	The principal portion of the purchase price of payments on income producing real estate and capital assets, equipment, machinery, and other durable goods.  
Verification of the principal amount must be obtained from a source such as the sales contract that states the amount of the monthly/yearly payments on the income producing property or capital asset. The principal portion is not shown on the tax forms, as it is not a deductible expense for income tax purposes.
9.	430-05-30-55-40 – Self-Employment Income Tax Guidelines.  Added the 2005 self-employment worksheets and tax forms.  This supersedes IM 4975.
	430-05-40 Work Requirements for Participation
	10.	430-05-40-30 – Voluntary Quit.  Added to item number one for clarification.
		Voluntary Quit 430-05-40-30
	
When an individual quits or loses a job through their own actions or reduces their work effort voluntarily and after the reduction is working less than 30 hours per week, the worker must explore whether the voluntary quit provisions apply. The voluntary quit provisions do not apply to individuals exempt from the work requirements, other than individuals exempt due to employment of 30 hours per week or receiving weekly earnings at least equivalent to the federal minimum wage currently in effect multiplied by 30 hours. 

When a household files an application for participation, or when a participating household reports the loss of a source of income or a reduction in hours, the worker must determine:
1.	If the quit or reduction in hours occurred within 30 days prior to the date of initial application, anytime prior to the certification of the initial application or anytime during the certification period.  
2.	If the individual was a mandatory work registrant at the time of the quit or reduction in hours.
3.	If the individual was hired for employment of 30 hours or more per week (can be averaged), regardless of the length of employment or if the individual received weekly earnings at least equivalent to the federal minimum wage currently in effect multiplied by 30 hours.  
Example:
A mandatory work registrant was hired to work 30 hours per week. The individual quit the second day of employment without good cause. This would be considered a voluntary job quit. 
4.	If the quit was without good cause.
	430-05-45 Assets
	11.	430-05-45-10-20 – Excluded Vehicles.  Added additional wording to item number one to clarify the exclusion of a vehicle that is used for income producing purposes.
		
		Excluded Vehicles – 430-05-45-10-20		

The worker must first determine if a vehicle is excluded. When a vehicle is excluded, neither the fair market value nor the equity value is applied. 

Unlicensed vehicles on an Indian Reservation that does not require tribal members to license vehicles are treated as licensed vehicles. They must be coded as UV on the VEHI screen with the appropriate TECS exclusion code under the EXT T/P column.

The entire value of any licensed vehicle will be excluded only if the vehicle is (the appropriate TECS codes on the VEHI screen under the EXT T/P column are listed):
1.	Used for income producing purposes such as but not limited to a taxi, truck, a fishing boat, a vehicle used for deliveries, to call on clients or customers, or required by the terms of employment. (PI)
Exception:
Vehicles are not excluded if they are used only for commuting to and from work.
12.	430-05-45-10-30 – Determining Equity Value.  Added a reminder to item number two to change the coding when a child turns age 18.  
		2.	Any other vehicle a household member under the age of 18 (or an ineligible alien or disqualified household member under age 18) uses to commute to:
			a.	Employment. (WS)
			b.	Training or education which is preparatory to employment, including high school education. (WS)
			c.	Seeking employment in compliance with job search. (LW)

This equity exclusion applies during temporary periods of unemployment to a vehicle which a household member under the age of 18 drives to commute to and from employment.

The WS or LW code must be changed to AM the month following the month the child turns age 18, unless the vehicle is excludable.  

13.	430-05-45-10-40 – Determining Food Stamp Vehicle Value.  Added additional wording to the 1st Test: 430-05-45-10-20 EXCLUDED VEHICLES to clarify the exclusion of a vehicle that is used for income producing purposes.  Also, added a fourth test for unlicensed vehicles to the chart.  
		Determining Food Stamp Vehicle Values 430-05-45-10-40

When determining a vehicle’s value that will be applied to the countable asset limit, start with the first step. If the vehicle does not meet any of the definitions in the first step, go to the second, etc.:
	
1st Test: 430-05-45-10-20 EXCLUDED VEHICLES – Vehicles are excluded from the asset limit:

Vehicle Definition	TECS Code	
*Licensed vehicle is income producing or required by the terms of for employment	PI	
*Licensed vehicle necessary for long distance travel essential to employment (other than commuting)	PI	
*Licensed vehicle used by a migrant to follow the job stream	MT	
*Vehicle used as a home	HO	
*Licensed vehicle used to transport physically disabled individual	TR	
*Licensed vehicle used to carry primary source of heating fuel or water for home use	WF	
*Licensed vehicle if sale unlikely to produce significant return ($1500)	IA	
*Includes unlicensed vehicles on a reservation that do not require members to license vehicles.

2nd Test: 430-05-45-10-40 DETERMINING EQUITY VALUE – Vehicle’s fair market value above $4650 is applied to the asset limit:

Vehicle Definition	TECS Code	
Licensed vehicle for each adult household member	AM	
Licensed vehicle used by individual under age 18 for employment or training	WS	
Licensed vehicle used by individual under age 18 for seeking employment in compliance with job search	LW	

3rd Test: 430-05-45-10-35 FAIR MARKET VALUE VERSUS EQUITY VALUE – The greater of the fair market above $4650 or equity value is applied to the asset limit:

Vehicle Definition	TECS Code	
Licensed vehicle not excluded above	Uncoded	

	4th Test:  430-05-45-10-05 UNLICENSED VEHICLES – The equity value test applies to these vehicles.

Vehicle Definition	TECS Code	
Unlicensed vehicles or unlicensed vehicles on an Indian Reservation that require tribal members to license vehicles (use the appropriate vehicle code and a Y indicator in the UV field)	Uncoded	

	430-05-50 Income

14.	430-05-50-10-05 – Gross Income Standards.  This section was revised to incorporate AMENDED IM 4966 – Food Stamp Standard, Thrifty Food Plan and Income Eligibility Level Changes.

	Gross Income Standards 430-05-50-10-05

The following gross income eligibility standards reflect 130% of the Federal income poverty levels.

HH Size	Maximum Income	HH Size	Maximum Income	
1	$ 1,009 1,037  	9	$ 3,766 3,863	
2	1,354 1,390	10	4,111 4,217	
3	1,698 1,744	11	4,456 4,571	
4	2,043 2,097	12	4,801 4,925	
5	2,387 2,450	13	5,146 5,279	
6	2,732 2,803	14	5,491 5,633	
7	3,076 3,156	15	5,836 5,987	
8
	3,421 3,509
	Each additional
member	+ 345 +354

Gross monthly income is arrived at by adding the total countable gross monthly earned income of all household members to the total countable monthly unearned income of all household members.

15.	430-05-50-10-10 – Net Income Standards.  This section was revised to incorporate AMENDED IM 4966 – Food Stamp Standard, Thrifty Food Plan and Income Eligibility Level Changes.

	Net Income Standards 430-05-50-10-10

The following net income eligibility standards reflect 100% of the Federal income poverty levels.

HH Size	Maximum Income	HH Size	Maximum Income	
1	$ 776 798	9	$ 2,896 2,972	
2	1,041 1,070	10	3,161 3,244	
3	1,306 1,341	11	3,426 3,516	
4	1,571 1,613	12	3,691 3,788	
5	1,836 1,885	13	3,956 4,060	
6	2,101 2,156	14	4,221 4,332	
7	2,366 2,428	15	4,486 4,604	
8	2,631 2,700	Each additional member	+ 265 +272	

Net monthly income is arrived at by determining gross monthly income and then subtracting the following:
1.	20% of earned income.
2.	Standard deduction based on counting only eligible household members in determining household size as follows:
•	1 through 4 person household - $134.00
•	5 person household - $153.00 157.00
•	6+ person household - $175.00 179.00
3.	Allowable medical deductions in excess of $35 for elderly or disabled household members.
4.	Childcare and dependent care costs not to exceed $200 per month for each child under two, $175 per month for each other dependent.
5.	Child support paid.
6.	Shelter costs in excess of 50% of net adjusted income. Shelter costs deducted cannot exceed $388.00 400.00. 
Exception:
Households containing one or more eligible elderly or disabled members are not subject to the shelter deduction maximum of $388.00 400.00.  Households in which the only elderly or disabled members are excluded are subject to the shelter deduction maximum.

16.	430-05-50-15-10 – Income Anticipation.  This section was revised to incorporate AMENDED IM 4970 – Use of FACSES for Verification of Child Support Income.  Also, added an additional base month budgeting example to indicate when current month income should be used.
	
	Income Anticipation 430-05-50-15-10

Income already received or future income that can be reasonably anticipated, will be taken into account at the time of certification. If the amount or receipt of income is uncertain, that portion of the household's income that is uncertain will not be counted. That portion which can be anticipated with reasonable certainty is counted as income. 

In cases where the receipt of income is reasonably certain but the monthly amount may fluctuate, the household may elect to income average, if paid once or twice a month. 

In cases where income is received sporadically, the worker must use base month income, unless the household reports a change.

The worker must establish a history for a case when income is not received on a regular ongoing basis. History is defined as two months of known information. If a household has received income for two months, that income must be anticipated and counted prospectively. 

Examples:
On call income or child support received on an irregular basis.

Households must be informed to report all changes in the source of income or in the amount of income exceeding $50 unearned or $100 earned. 
Exception:

TANF grant changes.

Calculation:	Example: Documentation must support the amount of income used.	
March 20    $400.00
April 5         425.00
                 $825.00	a) Current income
Household initially applies on April 5 and is interviewed on April 9. At interview household provides March 5 check - $250.00 gross income, March 20 check - $400.00 gross income, and April 5 check - $425.00 gross income. During the interview household indicates that March 5 check is short hours due to inclement weather. Household anticipates May income to be the same as March 20 and April 5 checks. These two checks - totaling $825.00 gross income are used to determine April and May benefits. 	
April 5       $350.00
                        x2
                $700.00	b) Decreased income
Household reports a decrease in wages on April 5 and verifies the March 5 check - $500.00 gross income, March 20 check - $500.00 gross income, and April 5 check - $350.00 gross income. The household provides verification that the decrease in hours is ongoing due to the employer cutting back all employees’ hours.
Take April 5 check times two to anticipate May gross income of $700.00. The April 5 check verifies the decrease in hours unless the worker, using prudent judgement, believes it is necessary to obtain additional verification. 	
March 5      $300.00
March 20      450.00
                 $750.00	c) No change - Base Month
Household verifies actual March income and provides March 5 check - $300.00 gross income, March 20 check - $450.00 gross income, and April 5 check - $190.00. The household indicates March income is what they anticipate for the month of May. March income totaling $750.00 gross income is used to determine May benefits.	
April 5	$400.00
April 20	  600.00
		1000.00	d) No change – Current Month

Household verifies actual March and April income and provides March 5 check - $300.00 gross income, March 20 check - $450.00 gross income, April 5 check - $400.00 gross income and April 20 check - $600.00 gross income.  The household indicates no change in income.  April income totaling $1000.00 gross income is used to determine May benefits as it is the most current information.
	
April 5       $412.00
Divided by      5.15
              80 Hours

                   $5.40
                      x80
                $432.00

                $432.00
                        x2
                $864.00	d e) Increased income
Household provides March 5 check - $412.00 gross income, March 20 check - $412.00 gross income, and April 5 check - $412.00 gross income. The household reports a pay raise from $5.15 per hour to $5.40 per hour that will be reflected on April 20 paycheck. Household indicates no change in 40 hours per week. Take April hours from April 5 check times the new pay rate times two to anticipate May gross income of $864.00. 	

March 20    $400.00
April 5         425.00
                $825.00

March 5      $250.00
March 20      400.00
April 5         425.00
              $1,075.00
Divided by           3
                $358.33
                        x2
                $716.99

April 5       $425.00
April 20       280.00
                $705.00	e f) On-call income
Household initially applies on April 5 and is interviewed on April 9. At interview household reports on-call employment and provides March 5 check - $250.00 gross income, March 20 check - $400.00 gross income, and April 5 check - $425.00 gross income. During the interview household indicates that they do not have any idea of what, if any, earnings they will have on the April 20 check or for the month of May. The worker must question the applicant further regarding any hours worked since the last pay period, do they normally receive two checks each month, etc. 
Based on the information obtained in the interview and prudent worker judgment has the following options:
•	Take the two most current checks, March 20 check - $400.00 gross income and the April 5 check - $425.00 gross income and use them for April and May.
•	Total the three checks, March 5 - $250.00 gross income, March 20 check - $400.00 gross income and April 5 check - $425.00 gross income. Divide the total $1,075.00 by three to arrive at the average of $358.33. The average of $358.33 is multiplied by two for a total of $716.99. This amount is used for April and May. 
•	Information from the household indicates that the household anticipates the April 20 check will be approximately 40 hours at $7.00 per hour. The April 5 check - $425 gross income and the anticipated April 20 check of $280.00 gross income is used for April and May. 	
March 6     $175.00
March 13     115.00
March 20     210.00
March 27     166.00
               $666.00

               $666.00
Divided by          4
               $166.50

               $166.50
                       x5
               $832.50	f g) Extra paycheck
Household initially applies on April 5 and is interviewed on April 9. The household is paid weekly and verifies March earnings of March 6 check - $175.00 gross income, March 13 check - $115.00 gross income, March 20 check - $210.00 gross income, March 27 check - $166.00 gross income, and April 3 check - $195.00 gross income. The household anticipates April earnings to be the same as March and anticipates no changes for May. In reviewing the pay dates, the worker discovers the household will receive five checks in May. 
March verified gross income is $666.00 and is used when determining April benefits.
When calculating May benefits, the worker must take March earnings of $666.00 divided by the four checks received in March ($166.50) times five checks the household will receive in May ($832.50). This amount is used when determining May benefits. 	

17.	430-05-50-15-30 – Contract Income.  Added a paragraph and an example to address contracts that do not represent the household’s annual income.

	Contract Income 430-05-50-15-30

	Individuals who receive contract income that does not represent their annual income must have the income prorated over the period of time intended to cover.  

		Example:

A household reports in November that they entered into a coaching contract for the months of November, December, January and February.  The contract is for $2,000 with a one-time payment on February 15.  Since this contract does not represent the household’s annual income, the $2,000 must be prorated over 4 months.  The only month income of $500 would be anticipated and counted is for the benefit month of February.

Individuals who receive contract income which is renewable on a yearly basis or and is intended as their annual income must have this income averaged over a 12-month period. These individuals may include school employees (such as teachers, cooks, bus drivers, and janitors), share croppers, etc.

A contract for income must be written or implied and the salary amount identified in the contract must be for a set dollar amount, not an hourly or piece meal basis. Additionally, the salary must be paid based on the set dollar amount, not paid by how many hours were worked or the amount of work that was completed.

If the contract indicates an hourly wage and the employer verifies the contract is for a predetermined total salary amount, the income is considered contract income. If the contract indicates a predetermined total salary amount, but the individual is paid based on the number of hours worked or the amount of work that was completed, it is not contract income and is treated as normal earned income.
Example:
John signed a contract for 9 months as a school janitor and the contract states he will receive $9000 in monthly installments. John states the income is intended for his annual support:
If John is paid $1000 every month regardless of the hours he works, it is a true contract situation and we would budget $9000 by 12 months = $750 monthly.
However, if John’s monthly wages vary by the number of hours he works per month, it is not a true contract because John is being paid by the hour, not by the contract amount. (For example, one month his wage shows 160 hours x $6.25 per hour and 20 hours x $9.38 overtime, and the next month shows 100 hours x $6.25, and the pay is equal to the hourly rate.) John’s income would be budgeted as received in this situation, not annualized or averaged over the period of the contract.

Contract income that is intended for the individual’s annual income must be annualized over a 12 month period, even though predetermined non-work periods are involved or actual compensation is scheduled for payment during work periods only.

A food stamp applicant initially applies and has a new contract or an ongoing food stamp household that initially starts receiving contract income during participation in the program. In these instances, the worker must anticipate income and annualize, but not count any income until the budget month that the individual will actually receive a check. 
Example:
A household applies in June and has a contract to start teaching in August. The income from the contract must be annualized, however, the first month that any contract income would be counted is August for food stamp purposes.

Once the household is in a continuing cycle of income, the worker must annualize income expected and begin counting the monthly amounts the first month of participation.

Example:
In January, a household applies for food stamps and a teacher in the household has been under contract for the last year and receives contract income for the months of August through May. Starting with the benefit month of January, the contract income must be prorated over 12 month and 1/12 of it must be counted as income and used when calculating January benefits (the first month of participation).

Contract Renewal
The renewal process may involve signing of a new contract each year, may be automatically renewable, or, as in cases of school tenure, rehire rights may be implied and not require a written contract.

18.	430-05-50-20-10 – Unearned Income.  Changed the following items:

•	Added an exception under item 2i. Adoption Subsidies.  
		2.	Payments such as:
a.	Annuities - including IRAs and Keogh Plans
b.	Pensions - retirement or disability
c.	Veteran's benefits 
d.	Workforce Safety & Insurance
e.	Unemployment compensation 
f.	Social Security and SSI benefits
g.	Strike benefits
h.	Deemed income from a spouse in a nursing home to the spouse in the community.
i.	Adoption subsidies
			Exception:
Adoption subsidies that are reimbursements for child care while the responsible adult is working or seeking employment or for medical expenses are excluded.
j.	General Assistance
If child support or taxes are withheld from any of the above benefits, the gross amount must be counted.
If an overpayment is withheld from any of the above benefits, the net amount must be counted.
If there is a reduction in one income source due to the receipt of another income source, the net amount must be counted.

•	Changed item number three to clarify that rental property is considered self-employment income.  

3.	Ownership of rental property is considered a self-employment enterprise.  Gross income less the cost of doing business from rental property is counted as unearned income when a household member does not spend at least 20 hours a week managing the property. 

•	Added additional information to item number 9 to clarify how this payment is counted. 

9.	Payments to tribal members (residing on or off the reservation) from gaming proceeds.  These payments are not per capita payments and must be prorated over the period of time intended to cover. 

•	Added a new item 10 and renumbered the remaining items.  

10.	Recurring lump sum payments such as but not limited to inheritances and insurance settlements.  These payments must be prorated over the period of time intended to cover.  
	10. 11.	All gambling winnings.
	11. 12.	Cash donations received on a recurring basis.
Exception:
Cash donations based on need received from private non-profit charitable organizations that do not exceed $300 in a quarter.
Example:
A household receives $150 from a private non-profit organization in July, $100 in August, and $100 in September. That household would be entitled to an income exclusion of $150 for July, $100 for August, and $50 for September, for a total of $300.

•	Revised item 12 (which is now item 13) that addresses child support income to incorporate AMENDED IM 4970 – Use of FACSES for Verification of Child Support Income.  
	12. 13.	The full amount of child support, spousal support, or any other payments made directly to the household from non-household members.  
Child support payments are shown as income on UNIN in TECS next to the child the payment is intended for. Spousal support payment are shown as income on UNIN in TECS next to the person the payment is intended for.
The worker must verify the following:
a.	The amount of the legal obligation.
b.	The amount of child support received.
Verification can be obtained from:
a.	FACSES
b.	Child support stubs
c.	Documented collateral contacts
d.	Verification provided by the client from the child support website – www.childsupportnd.com
For ongoing cases with a North Dakota court order, verification must be obtained from FACSES.  For those households with an out-of-state court order, verification must be obtained using child support stubs or documented collateral contacts.  
Federal tax intercept payments are a non-recurring lump sum and are not counted as income.  They are not considered part of the payment history.  Federal tax intercept payments do not appear on the FACSES ledger.  
State and interstate state tax intercept payments are counted as income as these payment are applied to current child support.  State tax intercept payments do appear on the FACSES VIEW ledger.  
If child support income is received monthly or twice a month, it may be averaged if the household agrees to income averaging.  This must be documented in the casefile.
If child support is received via check, direct deposit or electronic payment card (EPC), the worker must allow three working days for posting to the financial account in determining when the income was received.  Day one of the three-day count is the check date on the check or the check date on the View Eligibility Ledger Detail screen in FACSES or the date on the check or child support statement for payments not processed through FACSES.  To get to the View Eligibility Ledger Detail screen in FACSES, put an X in the select (‘SEL’) column by a transaction on the View Eligibility Worker screen and enter. 
If child support is received as an annual payment, it is prorated over the period of time it is intended to cover (in this instance 12 months).
Based on discussion with the household and the verification provided, the worker must document the amount of child support income counted or not counted and why.
For any household that receives child support income either weekly or biweekly, unless the household actually receives each payment on the same day of each week or every other week, the worker must not anticipate an extra payment.  
If a household received child support income either weekly or biweekly, the extra payment from the base month must be converted when processing the benefit month.  
		Example:
Household receives child support income weekly.  The household, based on verification from FACSES, has not received payments on the same day of each week.  In September when processing benefits for October, the worker checks FACSES and determines that the household could receive five payments in October.  August verified child support income is used when determining eligibility and level of benefits for October.  
In November when processing December benefits, the worker checks FACSES and determines that the household did receive five payments in October.  However, the payments were not receive the same day of each week in October.  When determining eligibility and level of benefits for December, the worker must take the five payments receive in October divided by five times four to arrive at the amount of child support counted for December.  Five payments must not be anticipated for December, as the household will only receive four. 
		Initial Application
At application, child support income to the date of interview must be verified via FACSES and documented.  That amount must be counted along with what the household anticipates to receive for the remainder of the application month.  
If a household comes in for the interview at the end of the initial month, all child support received in the initial month must be counted.  The three working days allowed for posting to the financial account in determining when income is received does not apply to any payment(s) the household may have already received in the initial or second beginning month.  
When processing the second beginning month, the amount of child support income used in the initial month must be anticipated unless the household anticipates a change.
Recertifications
At recertification the worker must verify all income up to the date of interview.  If the household is interviewed in the last month of the certification, base month child support income must be used, unless the household reports an anticipated change.  If the household reports an anticipated change, verification of the change must be provided and is used.
If the household files a recertification in the last month of the certification period and is not seen until the month after the end of the current certification period, the worker must verify all income up to the date of interview. If all income for the first month of the new certification period is available prior to the interview date, that income must be used for the first month of the certification period.  
	Example:
A household is certified through January 31 and files a recertification application on January 26.  The  household is interviewed on February 10 and receives one child support payment at the beginning of each month.  The household received child support income on February 3.  The February 3 child support income must be used for the first month of the certification period (February).  
If all income for the first month of the new certification period is not available and the household cannot reasonably anticipate the amount of income for the first month of the new certification period, income from the last month of the certification period must be used.  If the household reports an anticipated change, verification of the change must be provided and is used.  
Example:
A household is certified through January 31 and files a recertification application on January 26.  The  household is interviewed on February 10 and receives two child support payments each month.  The household received child support income on February 14. The household anticipates receiving another child support payment in February, however, the amount is uncertain.   Child support income from the month of January must be used for the first month of the certification period (February).
If a household files a recertification application in the month following the end of their certification period, child support income to the date of interview must be verified via FACSES and documented.  That amount must be counted along with what the household anticipates to receive for the remainder of the application month.  
If a household comes in for the interview at the end of the initial month, all child support received in the initial month must be counted.  The three working days allowed for posting to the financial account in determining when income is received does not apply to any payment(s) the household may have already received.
Ongoing Cases
For ongoing cases, the most current month’s (base month) income as reflected on FACSES must be used to calculate eligibility and level of benefits, unless the household reports a change.  
	Examples:
1.	Household does not report any changes.  In processing benefits for the month of December, the worker checks FACSES and $200 in child support payments was received in October.  The $200 received in October is counted when calculating eligibility and level of benefits for December.
2.	Household does not report any changes.  In processing benefits for the month of December, the worker checks FACSES and no child support payments were received in October.  Zero child support is counted when calculating eligibility and level of benefits for December.
For a household that reports that they do not expect to continue to receive child support income, the worker must follow up on this reported change by sending the F442 requesting verification.  
If the household reports a change in child support income, does not provide verification of the change and the change is not reflected in FACSES, the worker must send the F442 and follow up on the reported change.  Benefits are authorized the same as the previous month if the household does not respond and provide verification.  

Exception:
If the household reports an anticipated change in the amount of child support they expect to receive that will result in a decrease in benefits, the change must be acted on without verification of it.  Verification must be obtained at the next recertification. 
 
Initial Application and Recertification
At initial application, if no child support payments have been received in the month of application or the two months prior to the month of application and the household anticipated receipt of none, no child support income is counted.  This must be documented.
If no child support payments have been received in the month of application or the two months prior to the month of application and the household anticipates receipt of child support income, the amount anticipated must be counted. This must be documented.
If the household has received a payment prior to the date of the interview in the application month, it must be counted along with what the household anticipates to receive for the remainder of the application month.  
If the household has two consecutive months of income, but no income to date in the application month, the worker must thoroughly explore with the household what they expect to receive and anticipate income based on the most current information available.  This must be thoroughly documented in the casefile.  History in this instance is two months income.  
If the household has income in one of the two months prior to the month of application and has received no income in the application month to the date of interview, the worker must thoroughly explore with the household what they expect to receive and anticipate income based on the documented discussion with the household.  
If the household received child support income in excess of the legal obligation in the month of application, (excess could include arrearages, interest or income withholding orders for individuals who are paid weekly or bi-weekly), it must be counted along with any anticipated income for the remainder of the month.
When processing the second beginning month, if the household has not received child support income in excess of the legal obligation and does not anticipate receiving child support in excess of the legal obligation, the legally obligated amount must be used.  This must be thoroughly documented in the casefile.
When processing the second beginning month, if the household has received child support income in excess of the legal obligation and there is a prior payment history (two prior consecutive months which could include the application month and the second beginning month), the child support income in excess of the legal obligation must be counted.
Examples:
1.	A household applies on October 15, and received child support income in excess of the $250 legal obligation in September and October in the amount of $300 each month. The $300 must be counted as income when calculating eligibility and level of benefits for both October and November as there is a prior payment history.  
2.	A household applies on October 15, and is not interviewed until November 12.  At the interview the household reports and verifies child support income in excess of the $250 legal obligation received in October and November in the amount of $300.  The $300 must be counted as income when calculating eligibility and level of benefits for both October and November.
Exception:
No two prior consecutive month history of child support payments in excess of the legal obligation is required for households who received child support income in excess of the legal obligation where the Child Support Enforcement Unit has calculated child support payments based on the obligor being paid weekly or biweekly.
If child support income is received sporadically, and there is no prior payment history (two prior consecutive months which could include the application month), child support income is not counted unless the household anticipates receipt of this payment.
Example:
A household applies for benefits on October 10, and reports no child support income.  In reviewing the payment history the household has not received any payment since May.  However, the household reports they expect to receive a payment in the amount of $200 yet this month as the obligor found employment and has been working for several weeks.  The $200 the household expects to receive must be counted as income.  
If child support income is received sporadically, and there is a prior payment history (two prior consecutive months which could include the application month), the most current child support income received must be counted, unless the household can substantiate that none will be received.
For households that receive child support income either weekly or bi-weekly, unless the household has a two prior month history (which could include the application month) of receiving a payment on the same day each week or every other week, the worker must not anticipate an extra check.
Ongoing Cases
For ongoing cases, the two prior consecutive months does not include the processing month.
If there is a two prior consecutive month history (which does not include the processing month) of child support income in excess of the legal obligation (excess could include arrearages, interest or income withholding orders for individuals who are paid weekly or bi-weekly), the most current child support income including the excess received must be counted.
Exception:
No two prior consecutive month history of child support payments in excess of the legal obligation is required for households who received child support income in excess of the legal obligation where the Child Support Enforcement Unit has calculated child support payments based on the obligor being paid weekly or bi-weekly.
For households that receive child support income either weekly or bi-weekly, unless the household has a two prior month history (which does not include the processing month) of receiving a payment on the same day each week or every other week, the worker must not anticipated an extra check.
For those households that submit a monthly change report form and verification of monthly child support income, if the household is not reporting or anticipating a change in child support income, base month verified child support income is used.  If the base month includes an extra child support check (3rd or 5th), it must be converted back to a non-extra check month (2 or 4).
For those households that simply drop off verification of monthly income including child support and do not report any changes, base month verified child support income is used.  If the base month includes an extra child support check (3rd or 5th), it must be converted back to a non-extra check month (2 or 4).
If the child support income is received monthly or twice a month and the household submits verification of child support received in the processing month, it must be used.
If the household reports a change in child support income and does not provide verification of the change, the worker must send F442 and follow upon the reported change. Benefits are authorized the same as the previous month if the household does not respond and provide verification.
If the household does not have any contact with the worker, the case continues using the last reported and verified amount.  
If the household reports an anticipated change in the amount of child support they expect to receive that will result in a decrease in benefits, the change must be acted on without verification of it.  Verification must be obtained at the next recertification.
If the household reports an anticipated change in the amount of child support they expect to receive and it will result in an increase in benefits, the household must provider verification of the anticipated change before it can be acted on.

19.	430-05-50-30 – Income Excluded by Federal Law.  Added a new number 10 to address HUD payments.  

10.	Department of Housing and Urban Development (HUD) vendor payments for rent or mortgage paid to landlords or mortgagor.  HUD Section 8 Housing Voucher Program payments that are paid to the household are also excluded. 	
	430-05-55 Deductible Expenses

20.	430-05-55-05 – Deductions.  This section was revised to incorporate AMENDED IM 4966 – Food Stamp Standard, Thrifty Food Plan and Income Eligibility Level Changes.

		Deductions are automatically allowed by TECS.

Standard Deduction
Standard deduction based on counting eligible household members in determining household size is as follows:
•	1 through 4 person household - $134.00
•	5 person household - $153.00 157.00
•	6+ person household - $175.00 179.00

21.	430-05-55-20 – Medical Expenses.  Changed the coding used for medical expenses a household is legally responsible for paying.

That portion of medical expenses in excess of $35 per month, excluding special diets, of an elderly (beginning in the month an individual turns age 60) or disabled household member are allowable after third party payments. These expenses must be reported and verified within 30 days of the billing date. Medical expenses include all allowable medical expenses made by a household for an individual who was an elderly or disabled household member immediately prior to dying or entering a hospital or nursing home, if the remaining household members are legally responsible for payment of the expenses.  In order for TECS to allow expenses for these individuals, the worker must calculate the deduction, subtract $35 and enter it in as a child support deduction on the NOMD screen.  The expense must be coded by the individual responsible for the medical expense on EXSA using the ME LR code.  

22.	430-05-55-20-20 – Allowable Medical Expenses.  Increased the cost of the medical expense deduction for the cost of transportation and lodging to obtain medical treatment or services.  This is a change in policy.  

13.	Reasonable cost of transportation and lodging to obtain medical treatment or services, including trips to a pharmacy, dental office, optometrist, etc. can be counted as a medical deduction up to the following amounts:

•	$ .31 $0.375 per mile for mileage

•	$45 $50 plus tax for in-state lodging

•	$75 $80 plus tax for out-of-state lodging.

23.	430-05-55-40 – Shelter Costs.  Revised this section to incorporate AMENDED IM 4966 – Food Stamp Standard, Thrifty Food Plan and Income Eligibility Level Changes and IM 4974 – FS Increase in the Mandatory Utility Standard for Heating.    

Also added an exception under item number three of listing of shelter costs that addresses shelter costs of an unoccupied home.  
Shelter Costs 430-05-55-40

	Monthly shelter costs in excess of 50% of net adjusted income after all other deductions are allowed, not to exceed $378 400.
Exception:
Households containing one or more eligible elderly or disabled members are not subject to the shelter deduction maximum of $388 400.  Households in which the only elderly or disabled members are excluded are subject to the shelter deduction maximum.

Only the most current bills can be used for verification of shelter costs. Past due amounts are not an allowable expense.  Only the billed amount can be allowed as a deduction.  

Example:
Household's monthly mortgage payment is $500 per month.  The household is paying $600 a month to pay the mortgage off sooner.  Only the $500 billed amount can be allowed as a shelter cost deduction.

Expenses need not be in the household’s name, but must be incurred by the household and the household must be expected to pay the expense. 

If a non-household member pays the household’s shelter costs directly to the provider on behalf of the household, the worker must determine if the payment is a loan.

If the payment is a loan, it is excluded from income and the expense is allowed as a shelter deduction.

If the payment is not a loan, it is excluded from income and the shelter deduction is not allowed.

When separate households share shelter expenses and one receives a payment for shelter expenses from the other, the payment is not counted as income. Each household is entitled to its actual share of the shelter costs as a deductible expense.

Example:
Tom and Bill are roommates claiming separate household status. Bill pays Tom $200 a month for his share of the rent and Tom pays the landlord the $400 monthly rent. The $200 paid to Tom is not counted as income and each is allowed their share of the rent ($200) as a deductible expense.

Shelter costs covered by an excludable reimbursement or vendor payment are not allowable deductions. 

Exception:
LIHEAP payments. 
Example:
The portion of rent paid by HUD is not allowed. 

Shelter costs include only the following:
1.	Rent. Is allowed only if the household is responsible to make a money payment to someone outside of the household.  If there is a separate identifiable rental fee for a garage, appliances, furniture, etc., it is not allowed. 
Exceptions:
1.	If an individual works in exchange for rent with no option to be paid, no income is counted and no rent expense is allowed.  
2.	If an individual works off part of the rent with no option to be paid, the amount that is worked off is not counted as income and the remaining amount is allowed as a rent expense.
The portion of rent paid by Housing Assistance Program (HAP) is not considered part of a household’s shelter expense.
If a certified group home resident has a single payment for room and meals, the amount of the payment that exceeds the Thrifty Food Plan (TFP) is a shelter expense. If a resident has a separate identifiable payment for room charges, that amount is used for the shelter deduction.
2.	Mortgage Payment (including both first and second mortgages). Payments on second mortgages and home equity loans are allowable shelter costs regardless of why the money was obtained or how it was used.
When the Farm Service Agency (FSA) has placed a moratorium on a household's mortgage payment, the deduction for a FSA mortgage payment is not allowed during the moratorium period. After the moratorium has ended, the recalculated amount is allowed.
3.	The shelter costs of an unoccupied home can be claimed if:
•	The home is unoccupied due to employment or training away from home, illness or abandonment caused by a natural disaster or casualty loss, and
•	The household intends to return to the home, and
•	The current occupants, if any, are not claiming the shelter costs for food stamp purposes, and
•	The home is not leased or rented during the absence of the household.

Exception:

A household is not entitled to any utility expenses for an unoccupied home.
4.	Condominium and association fees. 
5.	Mobile home lot rent.
6.	Property taxes, State and local assessments (if not included in the mortgage payment). The most current year’s incurred amount must be verified. Always use the full amount regardless of when the taxes are paid or if taxes are discounted due to early payment. Taxes need not be paid. Penalties or past due taxes from prior years are not allowable.
Property taxes that are billed yearly must be allowed as a one-time payment or averaged over 12 months.
7.	Homeowner Insurance (if not included in the mortgage payment). The most current year’s amount must be verified. Insurance need not be paid, only incurred. 
If the bill separates contents, liability and structure costs, only the amount for the structure can be allowed. If the bill does not separate these costs, the entire amount is allowed.
Service fees charged by the insurance company for households who choose to pay their insurance other than yearly are an allowable deduction. Late fees are not an allowable deduction. 
Renter insurance is not an allowable expense. Flood insurance is an allowable expense. 
Homeowners insurance billed yearly must be allowed as a one-time payment or averaged over 12 months.
8.	Utility expenses.  Households cannot claim actual utility expenses and are entitled to only one of the mandatory utility standards.  A household is not entitled to any utility expenses for an unoccupied home.

Households with a separate utility meter, even if the utility bill is not in their name, are entitled to one of the mandatory utility standards as long as they are expected to pay the utility bill.

Example:
A household is renting a home and is responsible for the heating costs; however, the bill is in the landlord’s name.  The landlord in turn gives the bill to the household each month for payment.  As the household is incurring the bill and there is a separate meter, the household is entitled to the standard utility allowance (HL SU).

Households that are billed by their landlord on the basis of individual usage or are charged a flat rate for utility costs separately from their rent are entitled to the appropriate standard.

Examples:

1.	An individual lives in an apartment where there is a separate meter for heating costs.  The utility bill is not in the food stamp household’s name, but the household incurs these expenses and is expected to pay the bill.  The household is entitled to the standard utility allowance (HL SU).
2.	An individual lives in a side-by-side duplex and there is only one meter for heating costs.  The owner of the duplex lives in one side and a food stamp household lives in the other side.  The landlord bills the food stamp household a flat rate of $200.00 per month separately from the rent for the heating costs.  The household is entitled to the standard utility allowance (HLSU).
If a household receives a HUD or FSA utility subsidy, the actual current utility bills must exceed the utility subsidy before the household is entitled to the appropriate standard.

Examples:
1.	A household is responsible for heating costs and the monthly HUD utility payment is $150.  The household’s actual utility bills are:
Heat	$100	
Electricity	$ 75	
Water/Sewer/Garbage	$ 35	
Telephone Standard	$ 38	
	$248	
As the actual utility bills exceed the HUD utility payment the household is entitled to the standard utility allowance (HL SU).

Actual Utility Bills	$248	
HUD Utility Payment	$150	
Allowable Expense	$  98	
If the utility expenses do not exceed the HUD utility payment the household is entitled to no mandatory utility standard.
2.	A household that is not incurring heating/cooling costs and is not eligible for LIHEAP receives a HUD utility payment of $15.  The household’s actual bills are:
Electricity	$ 40	
Telephone Standard	$ 38	
	$ 78	

Actual Utility Bills	$ 78	
HUD Utility Payment	$ 15	
Allowable Expense	$ 63	

As the actual utility bills exceed the HUD utility payment, the household is entitled to the limited utility allowance (LU SA)
If the HUD payment exceeds the actual utility bills, the household is entitled to no utility standard.
Exception:
If a household is planning to apply, has applied for, or is in receipt of LIHEAP, the actual bills do not need to be verified or exceed the payment.  
If a non-household or ineligible household member shares utility costs with eligible household members, the eligible household members are entitled to the appropriate standard.
If two or more separate households live together and share utility costs, each household is entitled to the appropriate standard.  
Example:
A household consists of three single individuals who purchase and prepare meals separately.  One of the three individuals applies for benefits.  All utility costs are shared.  The food stamp household is entitled to the appropriate standard.
a.	Standard Utility Allowance (HL SU):
Households responsible for heating/cooling costs or in receipt of LIHEAP including Tribal LIHEAP or renter/heat paid benefits are entitled to the full Standard Utility Allowance (HL SU on the EXSA screen) of $444.00 524.00 which includes all utility expenses.
Households planning to apply or those who have applied for LIHEAP are entitled to the HL SU.
Exception:
If the worker knows the household is not eligible for LIHEAP, the HL SU cannot be allowed.  This must be documented in the case file.
If a household received LIHEAP benefits in the last heating season and its circumstances have not changed, the worker can anticipate that LIHEAP benefits will be received in the next heating season and the HL SU must be allowed.
If a household received LIHEAP benefits in the last heating season, moves to a new residence where they have no heating/cooling costs, and are not eligible for a renter/heat paid benefit, the household loses entitlement to the HL SU.
If a household did not receive LIHEAP last year (either did not apply or was not eligible), and the worker can anticipate eligibility for LIHEAP for the upcoming season, the household is entitled to the HL SU.
When the cost of heat is included in the rent and the household is entitled to LIHEAP renter/heat paid benefits, the household is entitled to the HL SU.
Any households that have central utility meters and are charged only for excess heating or cooling costs are entitled to the HL SU year round.
Households that are charged only for excess heating or cooling costs are entitled to the HL SU year round.  
b.	Limited Utility Allowance (LU SA):
Households not entitled to the HL SU that incur at least two of the following utility expenses are entitled to the Limited Utility Allowance (LU SA on the EXSA screen) of $174.00 185.00.
Water
Sewer
Garbage
Electricity
Telephone - the household must incur the basic service fee for one telephone to be entitled to the telephone deduction.  The basic service fee for a cellular phone is allowable if that is the only phone the household has.
Example:
A household is renting an apartment and is responsible for electricity and telephone costs (no heating/cooling costs).  As the household is incurring these expenses, the household is entitled to the Limited Utility Standard (LU SA).
c.	Minimum Utility Standard (MU):
Households not entitled to the HL SU or LU SA that incur at least one of the following utility expenses are entitled to the Minimum Utility Standard (MU on the EXSA screen) of $82.00 93.00.
Water
Sewer
Garbage
Electricity
Example:
A household is renting an apartment and is responsible for electricity only (no heating/cooling costs).  As the household is incurring these expenses, the household is entitled to the Minimum Utility Standard (MU).
d.	Telephone Standard (TL):
Household not entitled to the HL SU, the LU SA, or MU that incur telephone expenses only are entitled to the Telephone Standard (TL on the EXSA screen) of $38.00. The household must incur the basic service fee for one telephone to be entitled to the telephone deduction.  The basic service fee for a cellular phone is allowable if that is the only phone the household has.  
9.	Charges for repair of a home that was substantially damaged or destroyed due to a natural disaster such as fire or flood that are not reimbursable.
Benefit Determination 430-05-60

24.	430-05-60-05 – Calculating Income and Benefit Level.  This section was revised to incorporate AMENDED IM 4966 – Food Stamp Standard, Thrifty Food Plan and Income Eligibility Level Changes.  

Calculating Income and Benefit Level 430-05-60-05
Calculating Income
To determine the household’s total countable income add the monthly countable gross earned income (including self-employment income) of all household members, minus the 20% deduction, to the monthly unearned income of all household members. 

Calculating Net Adjusted Income
To determine a household’s net adjusted income subtract the allowable deductions from the total countable income. The following deductions are allowed:
•	Farm loss offset
•	Standard deduction based on counting only eligible household members in determining household size.
•	1 through 4 person household - $134.00
•	5 person household - $153.00 157.00
•	6+ person household - $175.00 179.00
•	Medical costs over $35 for elderly/disabled household members.
•	Dependent care costs (not to exceed the authorized limit)
•	Child support paid to a non-household member 
•	Excess shelter costs

Calculating Benefit Level
To determine the household’s benefit level, subtract 30% of the net adjusted income from the Thrifty Food Plan for the appropriate household size. 

THRIFTY FOOD PLAN

H.H. Size	
Amount	
H.H. Size	
Amount	
1	$ 149 152	5	$592 601	
2	 274 278	6	  711 722	
3	 393 399	7	  786 798	
4	 499 506	8	  898 912	

	Each Additional Member	+112 114	

25.	430-05-60-10 – Initial Month Proration.  Updated the examples to incorporate AMENDED IM 4966 – Food Stamp Standard, Thrifty Food Plan and Income Eligibility Level Changes.  

The following are three examples calculating net income and benefit level for a household with a farm loss offset, a regular household, and a special household:

Farm Loss Offset
A husband, wife, and their three children are self-employed in farming and their net income is based on their tax return. Using a loss of $3575 and dividing by 12 months equals $297.92 monthly net loss. The wife is also employed and her monthly gross income is $506.42.

	Income and Deductions	
	Benefit Determination	
	
1.	Earned Income	$506.42	1.	Thrifty Food Plan	$592.00 601.00	
2.	Unearned Income	      0.00	2.	Net FS Income x 30%=	      0.00	
3.	Line 1 times 80%	 405.14	3.	Food Stamp Benefit	$592.00 601.00	
4.	Total Income	 405.14	

5.	Farm Loss Offset	-297.92	

6.	Standard Deduction	-153.00 157.00	

7.	Net Food Stamp Income	      0.00	

Regular Household
Household consists of husband, wife and their two children. The husband is employed full time and earns $1000 per month. The wife is employed part time with gross earnings are $267.75 per month. Anticipated child care is $126.00.

	
Income and Deductions	

Benefit Determination	
	
1.	Earned Income	$1267.75	1.	Thrifty Food Plan	$499.00 506.00	
2.	Unearned Income	0.00	2.	Net FS Income	442.30	
3.	Line 1 times 80%	1014.20	3.	Line 2 x 30%	132.69	
4.	Total Income	1014.20	4.	Food Stamp Benefit	366.00 373.00	
5.	Standard Deduction	-134.00	
			
6.	Line 4 minus Line 5	880.20		Excess Shelter 
Computation		
7.	Dependent Care	-126.00				
8.	Line 6 minus line 7	 754.20	1.	Total shelter costs	$689.00	
9.	Excess Shelter costs	-311.90	2.	50% of line 8	377.10	
10.	Net Food Stamp
Income 	 442.30	3.	Line 1 - Line 2	311.90	

Special Household

Household consists of an elderly husband and wife who receive $652.00 per month from SSA. There is no other income. Their total medical expenses are $195.80 per month. 

Income and Deductions	

Benefit Determination	
	
1.	Earned Income	0.00	1.	Thrifty Food Plan	$274.00 278.00	
2.	Unearned Income	$652.00	2.	Net FS Income	284.60	
3.	Total Income	652.00	3.	Line 2 x 30%	85.38	
4.	Standard Deduction	-134.00	4.	Food Stamp Benefit	188.00 192.00	
5.	Line 3 minus line 4	518.00	

6.	Medical Deductions	-160.80	
	Medical Deduction		
7.	Line 5 minus line 6	357.20	
			
8.	Excess shelter costs	-72.60		Total Medical	$195.80	
9.	Net Food Stamp
Income 	284.60		Minus $35	160.80	

Excess Shelter Computation	
1.	Total shelter costs 	$251.20	
2.	50% of line 7	  178.60	
3.	Line 1 minus line 2	    72.60	
	
Reporting and Processing Changes 430-05-65

26.	430-05-65-15-05 – Changes Resulting in an Increase in Benefits. Added an additional exception regarding child support alerts.

Changes Resulting in an Increase in Benefits 430-05-65-15-05	

Any change that results in an increase in benefits must be verified. When verification is not provided, F442 – Request for Additional Information must be sent allowing the household 10 days from the mail date of the notice to verify the reported change.
1.	If the household provides verification within the 10 day period, the worker must act on the reported change within 10 days and send the household the appropriate notice.
2.	If the household does not provide the verification within the 10 day period, the worker will receive an alert to send the F401 – Failure to Provide Information.  If the 10th day falls on a weekend or holiday, the F401 must not be sent until the next working day.  
a.	If it is prior to advance notice deadline, the F401 must be sent and the case will close at the end of the month.
b.	If it is after advance notice deadline, the F401 cannot be sent until the first working day of the following month. Benefits for the last month of the certification period are authorized the same as the previous month.
Exceptions:
1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.
2.	If the household has reported a change in expenses that results in an increase in benefits and fails to provide verification of the expense, the expense is not allowed and the case is not closed.
3.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

If the household provides the verification during the advance notice period, the worker has 10 days from the date the verification was provided to act and the case must not be closed.

27.	430-05-65-15-15 – Unclear or Insufficient Information to Make a Benefit Determination.  Added an additional exception regarding child support alerts.

Unclear or Insufficient Information to Make a Benefit Determination 430-05-65-15-15

Whenever a worker receives unclear or insufficient information from a household or the worker becomes aware of a change, the worker must pursue clarification and verification of household circumstances using the following procedures: 
1.	The worker must send F442 to the household clearly advising the household of the verification it must provide or the actions it must take to clarify its circumstances. The household must be allowed 10 days from the mailing date of F442 to respond and to clarify its circumstances either by telephone or by correspondence.
2.	If the household responds and provides sufficient information/verification, the worker has 10 days to act on the change and send the household the appropriate notice.
3.	If the household fails to provide sufficient information/verification within the 10-day period, the worker will receive an alert to send the F401.  If the 10th day falls on a weekend or holiday, the F401 cannot be sent until the next working day.
a.	If the household fails to provide sufficient information/verification regarding expense(s), the F401 is not sent and benefits are authorized without the unverified expense(s).
b.	If the household fails to provide sufficient information/verification other than expenses and it is prior to advance notice deadline the F401 must be sent and the case will close at the end of the month.
c.	If the household fails to provide sufficient information/verification other than expenses and it is after advance notice deadline, the F401 cannot be sent until the first working day of the following month. Benefits for the last month of the certification period are authorized the same as the previous month.
Exceptions:

1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

2.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

28.	430-05-65-15-20 – Action on Multiple Reported Changes.  Added that a 10-day advance notice is required if changes result in a decrease in benefits.   

		Action on Multiple Reported Changes 430-05-65-15-20

If a household reports multiple changes that result in an increase in benefits or the benefit determination is unclear, the changes must be verified.  If the household does not provide verification, the F442 – Request for Additional Information must be sent allowing the household 10 days from the mail date of the notice to verify the reported changes. 
1.	If the household provides verification within the 10 day period, the worker must act on the reported change within 10 days and send the household the appropriate notice.  If the changes result in a decrease in benefits, advance notice is required unless the change is signed by the household, then adequate notice is required.  
2.	If the household does not provide the verification within the 10 day period, the worker will receive an alert to send the F401 – Failure to Provide Information.  If the 10th day falls on a weekend or holiday, the F401 must not be sent until the next working day.  
a.	If it is prior to advance notice deadline, the F401 must be sent and the case will close at the end of the month.
b.	If it is after advance notice deadline, the F401 cannot be sent until the first working day of the following month. Benefits for the last month of the certification period are authorized the same as the previous month.
3.	If the household provides verification of one or more of the reported changes but not all of the changes and it is:
a.	Prior to advance notice deadline, the F401 must be sent and the case will close at the end of the month.
b.	After advance notice deadline, the F401 cannot be sent until the first working day of the following month.  The worker must act on all verified information within 10 days and send the appropriate notice.  If the changes result in a decrease in benefits, advance notice is required unless the change is signed by the household, then adequate notice is required.  The information that was reported but not verified is not acted on. 
Examples:
1.	On March 18 an individual reports a change in employment.  The worker sends the F442 on March 18 allowing the household 10 days to provide verification of the terminated source and new source income.  On March 25 the household provides verification of the terminated source income.  When working benefits for the month of April, the terminated source income is removed.  The new source income cannot be anticipated as verification was not provided.  The worker must send the F401 on April 1 to close the case the end of April.
2.	On March 18 an individual reports a change in employment.  The worker sends the F442 on March 18 allowing the household 10 days to provide verification of the terminated source and new source income.  On March 25 the household provides signed verification of new source income. When working benefits for the month of April, the new source income must be anticipated.  The terminated source income used to calculate March benefits must also be anticipated as verification was not provided.  (If March includes an extra check, the extra check must not be anticipated for April.)  The worker must send the F401 on April 1 to close the case the end of April.

29.	430-05-65-20 – Adding a New Household Member.  Added an additional exception regarding child support alerts.

	Adding a New Household Member 430-05-65-20

When adding a new household member to an ongoing food stamp case, the individual is processed as a new applicant. The mandatory verifications apply to the new individual. If the individual being added has received food stamp benefits in another household, state, or through the Food Distribution Program, the individual cannot be added. 

Exception:
Initial application proration does not apply to the individual being added to the household. 

If the household does not provide the mandatory verifications needed to add the individual, F442 is sent allowing the household 10 days from the mail date to provide the information needed. 

If the household provides the mandatory verifications needed to add the individual within 10-days from the mail date and it results in an increase in benefits, the individual must be added to the household for the next benefit month. If because of when the change is reported, the 10-day timeframe extends into the next benefit month, a supplement must be issued. 

If the household provides the mandatory verifications needed to add the individual and it results in a decrease in benefits, the worker must issue a 10-day advance notice unless this change was reported in writing and signed by the household. If the worker does not have 10-days for the 10-day advance notice, the individual is not added for the next benefit month, but must be added the month following the expiration of the 10-day advance notice. 

If the household does not respond to the F442 within the 10 days from the mail date, the worker will receive an alert to send the F401. If it is prior to advance notice deadline, the F401 must be sent and the case will close at the end of that month. If it is after advance notice deadline, the F401 cannot be sent until the first working day of the following month. Benefits for the last month of the certification period are authorized the same as the previous month.

Exceptions:
1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.
2.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

If the household provides the verification anytime prior to case closing, the worker has 10 days to act on the change and the case cannot be closed.

30.	430-05-65-25 – Removing a Household Member.  Added an exception and example to clarify when a household member that is temporarily away from home is not removed.  
	
	Removing a Household Member 430-05-65-25

	When a household reports that an individual has left, the individual must be removed.

	Exception:

	If the individual is temporarily away from the household  for less then one full calendar month.  

		Example:

Household reports on January 17 that a household member entered a 30-day treatment program on January 13 and anticipates returning on February 12.  Since this household member will be away for less then one full calendar month, the individual is not removed from the household.  

31.	430-05-65-35 – TANF Information and Referral Services.  Added an additional exception regarding child support alerts.

	TANF Information and Referral Services 430-05-65-35

	If during the certification period a worker becomes aware through an IEVS alert that the household has assets that had not been reported, the worker must send notice F902 - IEVS Asset Verification to the household. 

If the household responds and provides the requested verification, the case continues and the worker acts on the verification as may be appropriate. 

If the household fails to respond to the IEVS notice or contacts the worker and refuses to provide the requested information, and it is on or before advance notice deadline, the worker must send the F401 for failure to provide information, along with F440 – Closure TANF I & R Services and the case will close at the end of the month. If it is after advance notice deadline the worker cannot send the F401 or the F440 until the first working day of the following month. Benefits for the last month of the certification period are authorized the same as the previous month. 

Exceptions:
1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.
2.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

If the worker becomes aware of unreported assets from a source other than IEVS, the F442 must be sent. The household has 10 days from the date this notice is mailed to provide the requested information. If the household fails to provide the verification the worker will receive an alert to send the F401. If it is on or before advance notice deadline the worker must send the F401 along with F440 – Closure TANF I & R Services and the case will close at the end of the month. If it is after advance notice deadline the worker cannot send the F401 or the F440 until the first working day of the following month. Benefits for the last month of the certification period are authorized the same as the previous month.

Exceptions:

1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

2.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

32.	430-05-65-40 – TANF Households.  Added an additional exception regarding child support alerts.

	TANF Households 430-05-65-40

TANF households are subject to monthly reporting requirements. When a household has not submitted a TANF monthly report by the third to the last working day of the month, the TANF grant must not be counted prospectively to determine food stamp benefits.

Exception:
If there is a two-month known history of late reporting for TANF. 

If a change is made to the TANF case after authorizing food stamps and it results in the TANF case closing, the worker must revert TANF to close and reauthorize the food stamp case as the household is no longer considered categorically eligible.

A worker must not terminate a household’s food stamp benefits solely because the TANF case has closed. The worker must make a separate determination that the household fails to satisfy the food stamp eligibility requirements.

Whenever a change results in the reduction or termination of a household’s TANF benefits within the household’s food stamp certification period, the worker must use the following procedures.

1.	If a change in household circumstances requires a reduction or termination in the TANF grant and the worker has sufficient information to determine how the change affects the household’s food stamp eligibility and benefit level, the worker must take the following actions:
a.	If the change requires a reduction or termination of food stamp benefits, the worker must issue a single advance notice for both the TANF and food stamp actions. If the household requests a fair hearing within the period provided by the advance notice, the worker must continue the household’s food stamp benefits on the basis authorized immediately prior to sending the advance notice. 
If a fair hearing is requested for both programs, the hearing must be conducted according to TANF procedures and timeliness standards.
If the food stamp certification period expires before the fair hearing process is completed, the household must reapply for food stamp benefits.
If the household does not appeal, the worker must make the change effective based on the advance notice.
b.	If the change will result in an increase in benefits as a result of the reduction or termination of the TANF grant, the worker must issue the TANF advance notice, but must not take any action to increase the household’s food stamp benefits until the household decides whether it will appeal the TANF advance notice.
If the household appeals and the TANF grant is continued, the household’s food stamp benefits must continue at the previous level.
If the household does not appeal, the worker must act on the change. The time limit for the worker to act on this increase must be calculated from the date the TANF advance notice period expires.
2.	Whenever a change results in the termination of the TANF grant and the worker does not have sufficient information to determine how the change affects food stamp eligibility and benefit level (such as an absent parent returning to the household and the household asked to have its TANF case closed without providing any information on the income of the new household member), the worker must take the following action:
a.	If the situation requires a reduction or termination of the TANF grant, the worker must issue F442 at the same time it sends a TANF advance notice giving the household 10 days from the mail date to provide the needed information. Before taking further action, the worker must wait until the TANF advance notice period expires, or until the household requests a fair hearing, whichever occurs first.
b.	If the household requests a fair hearing and elects to have the TANF grant continue pending the appeal, the worker must continue food stamp benefits at the same level.
c.	If the household does not request a fair hearing and continuation of the TANF grant and provides the information requested, the worker has 10 days to act on the change.
d.	If the household does not request a fair hearing and continuation of the TANF grant and fails to provide the information, the worker will receive an alert to send the F401 for failure to provide information. 
If it is prior to advance notice deadline the worker must send the F401 and the case will close at the end of the month. 
If it is after advance notice deadline the worker cannot send the F401 until the first of the month and benefits for the last month of the certification period are authorized the same as the previous month. 
Exceptions:
1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

2.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

If the household provides the requested information anytime during the advance notice period, the information must be acted on within 10 days and the case cannot be closed.
3.	If the situation does not require a TANF advance notice, the worker must send F442 giving the household 10 days from the mail date to provide the needed information. If the household provides the requested information within the 10 days, the worker has 10 days to act on the information.  
If the household fails to provide the requested information the worker will receive an alert to send the F401. 
If it is prior to advance notice deadline the worker must send the F401 and the case will close at the end of the month. 
If it is after advance notice deadline the worker cannot send the F401 until the first of the month. Benefits for the last month of the certification period are authorized the same as the previous month. 
Exceptions:
1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.
2.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.
If the household provides the requested information anytime during the advance notice period, the information must be acted on within 10 days and the case cannot be closed.
33.	430-05-65-55 – Action on Changes Reported by Source Other than the Household.  Added an additional exception regarding child support alerts.

	Action on Changes Reported by Source Other than the Household 430-05-65-55

Any change reported from a source other than the household must be acted on by sending the F442. The household has 10 days from the mailing date to respond and provide the requested information. If the household provides the requested information within 10 days, the worker has 10 days to act on the information.

If the household fails to respond or refuses to provide the requested information within 10 days, the worker will receive an alert to send the F401.

If it is prior to advance notice deadline the worker must send the F401 and the case will close at the end of the month. 

If it is after advance notice deadline the worker cannot send the F401 until the first of the month. Benefits for the last month of the certification period are authorized the same as the previous month. 

Exceptions:

1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

2.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

34.	430-05-65-60 – Failure to Report.  Added an additional exception regarding child support alerts.

	Failure to Report 430-05-65-60

Claims can be established and IPV pursued only for mandatory reportable changes.

Example:
A household is not required to report a change in rent during the certification period if the household has not moved. A claim is not established if a change in rent is not reported. 

If the worker discovers that a household failed to report a change that would have caused a reduction in food stamp benefits, a claim is prepared against the household based on 10-10-10. A 10 day advance notice must be issued if the household's benefits are reduced during the certification period. If the worker is unable to act on the change, F442 must be sent.

If the household does not respond to the F442 within 10 days from the mail date, the worker will receive an alert to send the F401.

If it is prior to advance notice deadline the worker must send the F401 and the case will close at the end of the month. 

If it is after advance notice deadline the worker cannot send the F401 until the first of the month. Benefits for the last month of the certification period are authorized the same as the previous month. 
Exceptions:
1.	If the last month of the certification period includes an extra check or if the second to the last month included an extra check, this change must be acted on for the last month of the certification period as it is considered known information to the agency.

2.	If the worker received an alert that child support was received in the base month, this change must be acted on for the last month of the certification period as it is considered known information to the agency.		

If the household provides the requested information anytime during the advance notice period, the information must be acted on within 10 days and the case cannot be closed.

A disqualification is implemented only after IPV procedures and finding.

35.	430-05-65-75 – Adequate Notice.  Added a statement to clarify that adequate notice is not required for increases in benefits.  

A household must receive adequate notice no later than the date the household receives or would have received its next benefit allotment. Adequate notice must be generated in the system by the worker on the third to the last working day of the month to allow for two days mailing time to the household. 

		Adequate notice is not required for increases in benefits. 

Adequate notice is required anytime information and verification is provided and signed by the household. 

An adequate notice is required for the following changes:

Intentional Program Violations and Other Disqualifications  430-05-75

36.	430-05-75-25 – Other Disqualification.  Added instructions on what to do if an individual indicates they are a fleeing felon, parole or probation violator.  

Fleeing Felons, Parole or Probation Violators

An individual that is a fleeing felon, parole or probation violator is ineligible to participate in the program and the appropriate TECS code on SSDO is DF.

If an individual indicates on the application, recertification or reports that they are a fleeing felon, parole or probation violator, the worker must obtain information to substantiate the report.  Any information received must be forwarded to the State Food Stamp Office.  The State Food Stamp Office will review the information to determine if the violation disqualifies the individual from the Food Stamp Program and notify the worker.  If appropriate, the State Food Stamp Office will enter the disqualification on the sanction screen in TECS, change the individual’s participation code to DF and enter the individual into the DRS system.

Claims – 430-05-80

37.	430-05-80-65 – Bankruptcy and Claims.  State law does not allow the State to pursue repayment of a claim when a household has filed for bankruptcy.  

	Bankruptcy and Claims 430-05-80-65

When a worker has been notified that a household has filed for bankruptcy, collection action must stop for all claims, pending the outcome of the court proceedings. The prohibition on collection action includes recoupment. 

Although administrative and inadvertent error claims are not dischargeable in bankruptcy, a worker must not assume that this is always the case and must defer to the court's determination. A worker must resume or initiate collection after and in conformance with the final court action.

When there is a determination of fraud involving an overissuance, the claim is not dischargable by filing for bankruptcy regardless of the court order. A worker must resume collection after final court action. 

A copy of the Notice of Bankruptcy, Meeting of Creditors, and Deadlines and the Discharge of Debtor must be sent to the State Office.

38.	430-05-80-70 – Types of Payments.  Added policy under installment contracts on the required payment amounts.   

Claims can be paid using any of the following types of payments or a combination of them:

1.	Allotment Reduction
Allotment reduction is automatic for participating households and begins with the first allotment issued after the appropriate notification. if the household did not make arrangements to repay the claim through a lump sum or in installment payments.
a.	Administrative and inadvertent household error claims. The amount of food stamp benefits recovered each month is the greater of 10% of the household’s monthly allotment or $10 per month, whichever is greater. 
b.	IPV claims. The amount of food stamp benefits recovered each month is the greater of 20% of the household’s monthly allotment or $20, whichever is greater.
c.	If a household requests benefit reduction at a rate higher than those listed in (a) or (b) immediately above, benefits are reduced by that amount. Supporting documentation must be in the case file.
Exception:
If collecting at the limits listed in (a) or (b) immediately above are greater than the requested benefit reduction by the household, then (a) or (b) immediately above must be used.
2.	Offsetting Underpayments
When a household has an outstanding balance on a claim and is entitled to an underpayment, the system will automatically apply the underpayment to the overpayment.
3.	Lump Sum or Installment Payments
If the household chooses an installment payment plan and their food stamp case is currently open, the payment must be equal to or greater than 10% or $10, whichever is greater. 
	Exception:
If the claim is due to fraud, the payment must be equal to or greater than 20% or $20, whichever is greater.  
Acceptable forms of lump sum or installment payments include a check, cash, money order or EBT benefits, or food stamp coupons whether it represents partial or full payment. These payments are generally part of a negotiated repayment agreement.
If a household fails to submit a negotiated payment, the claim is subject to additional collection actions.

4.	Treasury Offset Program (TOP)
This is informational and is a State Office procedure.
Properly established administrative error, inadvertent household error and IPV error claims can be submitted if they meet the following requirements:
a.	Case must be closed.
b.	Claims must be $25 or more. Smaller claims for an individual can be combined.
c.	A claim must be at least three months delinquent but no more than nine years and 11 months old when sent for offset December 1 of each year.
Exceptions:
1.	There is a court order.
2.	If part of a combined claim is under judgement, it is not limited by the ten-year time frame.
3.	Double submissions of claims involving more than one adult household member are not allowed.
4.	Claims submitted for bankruptcy cannot be referred.  if the State Office is notified of the bankruptcy.
d.	The State Office must provide households a 60-day notice informing them that the delinquent claim will be referred for offset.
5. Client Authorized EBT Benefits
A household must be allowed to pay a claim using benefits from its EBT account.  If the household is currently participating in the program, allotment reduction is automatic.  The worker must explain to the household that choosing repayment from its EBT account in addition to allotment reduction or an EBT benefit greater than allotment reduction is strictly voluntary.  
Written authorization must be obtained from the client which specifies the amount. The Demand for Payment notice can be used. This information must be submitted to the State Office.
6.	Stale EBT Account Debits
An automatic notice will be sent to the household allowing the household 10 days to advise either the worker or the State Office that they do not want these benefits used to pay the claim.
If the household advises the worker that they do not want these benefits used, they cannot be used. The worker must contact the State Office with this information.
7.	Expunged EBT Benefits
Any benefits in an EBT account that has not been used in 365 days are expunged and no longer available to the household. Expunged benefits are applied to any outstanding claim using the EX code. This is a State Office procedure.
8.	Other Collection Actions
Other collection action may be used to collect claims such as collection agencies.
9.	Unspecified Joint Collections
When an unspecified payment is received for a combined case, each program must receive a prorata share of the amount collected.

10.	Public Service
If authorized by a court, the value of a claim may be paid by performing public service.

39.	430-05-80-85 – Submitting and Reporting of Cash/Benefit Payments.  Removed food stamp paper coupons as a payment type.  

When a claim is repaid with cash or food stamp benefits, the following procedures apply:
1.	Cash payments: All cash payments must be promptly submitted to the Finance Division of the Department of Human Services with a completed SFN 827 - Credit Form.
2.	Payments in benefits: 
a.	When food stamp paper coupons are used, they must be voided and promptly submitted to the State Food Stamp Office, with a cover letter referencing the following:
1.	Case Name
2.	Case Number
3.	Social Security Number 
4.	Type of claim (administrative error, inadvertent household error, or IPV) and claim number.
5.	Type and amount of payment.
b.	If a Food Stamp household elects to make payments on a claim using EBT benefits, a demand for payment notice or other written authorization must be signed by the household. A copy of the demand letter or other written authorization must be sent to the State Food Stamp Office, and EBT personnel make the adjustment. 
All collections must be noted administrative, inadvertent, or intentional.
	
40.	430-05-80-95 – Notice Requirements.  Deleted the F736 – Increase in Benefit/Decreased Persons-Fraud notice.  This notice is not used, as there would never be an increase in benefits when removing a household member disqualified for fraud.  The disqualified household member is removed from the household size, however, all of their income and assets count in their entirety to the remaining household members.   

		Notice Requirements 430-05-80-95
		
When appropriate send the following notices:
•	X005 – FS Demand for Payment Notice (AG Error) 
This notice is automatically sent by TECS once F819 – FS Overissuance Notice (AG Error) has been sent by the worker.
•	X007 – FS Demand for Payment Notice (CL Error)
This notice is automatically sent by TECS once F816 – FS Overissuance Notice (CL Error) has been sent by the worker.
•	F410 – Closure of Food Stamp Case – Fraud Action
This notice is used when a one-person household has been found guilty of IPV, which results in case closure.
•	F736 – Increase Benefit/Decreased Persons-Fraud
This notice is used when one or more individuals have been found guilty of IPV which results in a decrease in household size that results in an increase in food stamp benefits.

•	F737 – Decreased Benefits/Decreased Persons – Fraud
This notice is used when one or more individuals have been found guilty of IPV which results in a decrease in household size that results in a decrease in food stamp benefits.
•	F816 – FS Overissuance Notice (CL Error)
This notice is used for client errors. Once this worker generated notice is sent, TECS will automatically send Notice X007 – FS Demand for Payment Notice.
•	F818 – IPV – Food Stamp Overissuance
This notice is used in cases where a household has been found guilty of IPV.
•	F819 – FS Overissuance Notice (AG Error)
This notice is used for agency errors. Once the worker generated notice is sent, TECS will automatically send Notice X005 – FS Demand for Payment Notice.
•	F820 – FS Demand for Payment Notice (AG Error)
This notice is sent quarterly when a household has not returned the original Demand for Payment on an agency error claim.
•	F821 – FS Demand for Payment Notice (CL Error)
This notice is sent quarterly when a household has not returned the original Demand for Payment on a client error claim and the case is closed.
•	F822 – IPV/Court Conviction/Deferred Adjudication
This notice is used when a household has been found guilty of IPV and adjudication has been deferred. The household is to select a repayment method.
•	F823 – IPV/Court Conviction – No FS Overissuance
This notice is used when a household has been found guilty of IPV and there is no overissuance.

	430-05-85 – Supplements and Replacements

41.	430-05-85-05 – Supplements.  This section was rewritten in its entirety to clarify the policy.  

		Supplements 430-05-85-05

A supplement is issued when a household timely reports either of the following changes and verifies the change within 10 days of the report: 
•	an ongoing decrease of $50 or more in the household's gross monthly income, or
•	the addition of a new household member who is not a member of another certified food stamp household
and verifies the change within 10 days of reporting the change.  The worker must act on the change no later than the first allotment issued 10 days after the change was reported.  The worker must notify the household that supplemental benefits were issued using the TECS notice F703 – Supplemental Benefits notice.  
Worker failure to increase benefits will result in an underpayment. 
Examples:
1.	A household reported and verified a decrease in gross monthly income of $50 or more on July 25. No supplement is issued for the month of July. The worker must process the reported change and issue a supplement for the benefit month of August by August 4, if the worker hasn’t processed this change by regular issuance deadline.
2.	A household reported and verified the addition of a new household member on August 3. No supplement is issued for the current month (August). When processing September benefits the new household member must be added to the case.

3.	A household reports the addition of a new household member on January 27 and does not provide the verifications needed to add the individual until February 10.  No supplement is issued for the current month (February).  When processing March benefits the new household member must be added to the case.

In this example, if the household provided the verifications within 10 days of the reported change (February 5), a supplement must be issued for the benefit month of February.

A supplement is not issued:

•	For the month a change is reported and verified. 
•	If a change is not reported timely.
•	If verification is not provided within 10 days of the reported change. 
 
42.	430-05-85-10 – Replacement Issuance.  Clarified when a replacement issuance must be provided. 

	Replacement Issuance – 430-05-85-10

	A replacement issuance must be provided when a household reports that food purchased with food stamp benefits was  destroyed in a household disaster or misfortune. 

•	A fire
•	A flood
•	A tornado
•	Loss of electricity due to a power outage
•	Food stolen from a clients’ home

The household need not be currently participating.  The worker must determine that the destruction occurred in a household disaster, such as, but not limited to, a fire, flood, tornado, or loss of electricity due to a power outage. The worker must verify the loss through a collateral contact such as, but not limited to, the fire department, Red Cross, a police report or a home visit.

The worker must document in the household’s case file each request for replacement, the date, the reason, and whether or not a replacement was provided. 

Replacement issuances are provided only:
•	If a household timely reports the loss within 10 days of the loss.
•	If a signed statement or affidavit is received within 10 days of the date of the report.

The signed statement or affidavit must be faxed to the State Office as the State Office completes all replacements. The worker must retain a copy of the signed statement or affidavit in the case file. The signed statement or affidavit must include the following:
1.	Amount destroyed up to the original issuance.
2.	Specify the reason for replacement.
3.	That the household is aware of the penalties for intentional misrepresentation of the facts, including but not limited to, a charge of perjury for a false claim.

If the worker does not receive the signed statement or affidavit within 10 days of the date of the report, no replacement is made. If the 10th day falls on a weekend or holiday, and the statement is received the day after the weekend or holiday, the worker must consider the statement timely. 

There is no limit to the number of replacements. 
	
The maximum replacement cannot be for more than one month and cannot be more than the Thrifty Food Plan if that had been the original amount issued, unless the issuance includes underpayments which must be replaced.

	Underpayments 430-05-90

43.	430-05-90 – Underpayments.  Updated the F709 notice to Additional Food Stamp Benefits Notice.  An e-mail notification of this change was sent to counties and state staff on July 1, 2005. 

Benefits are issued to households whenever a loss was caused by worker error, when an IPV disqualification is later reversed, or when specifically required by federal regulations.

If the worker discovers an underpayment has occurred, action must be taken to issue the underpayment. No action by the household is necessary.

Underpayments are not issued to households for unreported changes.

An underpayment must be issued even if the household is not currently participating. The amount issued is in addition to any current benefit the household is entitled to receive.

The worker must notify the household using TECS notice F709 – Additional Food Stamp Benefits Notice.  Food Stamp Underpayment.

	Forms 430-05-100

44.	430-05-100-15 - SFN 378 – Change Report Form.  Updated this form to the latest version (07-2005).

45.	430-05-100-20 - SFN 407 – Recertification Form.  Updated this form to the latest version (06-2005).

46.	430-05-100-30 - DN 693 – Food Stamp Change Reporting Information Fact Sheet. Updated this form to the latest version (03-2004).

47.	430-05-100-115 - SFN 643 – Quality Improvement Report.  Update this form to the latest version (08-2004).