department of health and social services
Division of Social Services
Child Care Subsidy Program
NATURE OF THE PROCEEDINGS
Delaware Health and Social Services (“Department”) / Division of Social Services initiated proceedings to provide information of public interest with respect to the Child Care Subsidy Program regarding Income and Making Income Determinations. The Department’s proceedings were initiated pursuant to 29 Delaware Code Section 10114 and its authority as prescribed by 31 Delaware Code Section 512.
The Department published its notice of public comment pursuant to 29 Delaware Code Section 10115 in the July 2010 Delaware Register of Regulations, requiring written materials and suggestions from the public concerning the proposed regulations to be produced by July 31, 2010 at which time the Department would receive information, factual evidence and public comment to the said proposed changes to the regulations.
SUMMARY OF PROPOSED CHANGES
The proposed change described below amends Child Care Subsidy Program policies in the Division of Social Services Manual (DSSM) regarding Income and Making Income Determinations.
45 CFR §98.11(b)(2), Administration under contracts and agreements
Summary of Proposed Changes
1) DSSM 11003.9.1, Income: The purpose of this rule change is to clarify the rules regarding determining countable income and to remove procedures. This amendment clarifies how to decide what income to count to determine eligibility for subsidized child care.
2) DSSM 11003.9.5, Making Income Determinations: The purpose of this rule change is to clarify the rules regarding determining financial eligibility and to remove procedures. The revised rule clarifies how to count income to arrive at a monthly amount.
SUMMARY OF COMMENTS RECEIVED WITH AGENCY RESPONSE AND EXPLANATION OF CHANGES
The Governor’s Advisory Council for Exceptional Citizens (GACEC) and the State Council for Persons with Disabilities (SCPD) offered the following observation and recommendation summarized below. DSS has considered each comment and responds as follows.
First, §11003.9.1A refers to “social security pensions”. Section 11003.9.1 refers to (capitalized) “Social Security pensions”. DSS may wish to substitute “Social Security income” in both contexts similar to its reference to “Supplemental Security Income” in the latter section. Otherwise, the reference would appear to cover Social Security retirement benefits but not Title II SSDI benefits.
Agency Response: Thank you for your observation. The policy has been changed to read as follows:
Countable Income. All sources of income, earned (such as wages) and unearned (such as child support, Social Security income, etc.) are countable income when determining a family's monthly gross income. …
Second, §11003.9.1 lists “disregarded income which includes the following subpart:
7. The value of USDA donated foods and Food Stamp Act of 1964 as amended;
This provision remains unchanged from the current regulation. However, the reference to the Food Stamp Act literally makes no sense (e.g. the value of the Food Stamp Act of 1964 is disregarded). We suspect some words are missing.
Agency Response: Thank you for picking up on this error. The policy has been changed as follows:
7. the value of USDA donated foods;
FINDINGS OF FACT
The Department finds that the proposed changes as set forth in the July 2010 Register of Regulations should be adopted.
THEREFORE, IT IS ORDERED, that the proposed regulation to amend the Child Care Subsidy Program policies regarding Income and Making Income Determinations is adopted and shall be final effective September 10, 2010.
Rita M. Landgraf, Secretary, DHSS
DSS FINAL ORDER REGULATIONS #10-36
45 CFR 98.11(b)(2)
A. Countable Income. All sources of income, earned (such as wages) and unearned (such as child support, [social security pensions Social Security income], etc.) are countable income when determining a family's monthly gross income. Monthly gross income typically includes the following:
1. Money from wages or salary, such as total money earnings Money earned from work performed as an employee, including wages, salary, Armed Forces pay, commissions, tips, piece rate payments and cash bonuses. Count the amount earned before deductions are made for taxes, bonds, pensions, union dues, etc. This is gross income. Wages need to be equal to the federal minimum wage or an equivalent.
Gross income from farm or non-farm self-employment is determined by subtracting the self-employment standard deduction for producing income as described below. The individual's personal expenses (lunch, transportation, income tax, etc.) are not deducted as business expenses but are deducted by using the TANF standard allowance for work connected expenses. In the case of unusual situations (such as parent/caretaker just beginning business), refer to DSSM 9056 and 9074.
Earnings from self-employment are counted after applying a standard deduction for self-employment expenses. To get the self-employment deduction, self-employed households must verify at least one business cost to produce income.
Self-Employment Standard Deduction for Producing Income
The cost for producing income is a standard deduction of the gross income. This standard deduction is a percentage of the gross income determined annually and listed in the Cost-of-Living Adjustment (COLA) notice each October. The standard deduction is considered the cost to produce income.
The standard deduction is considered the cost to produce income. The gross income test is applied after the standard deduction. The earned income deductions are then applied to the net self-employment income and any other earned income in the household.
The standard deduction applies to all self-employed households with costs to produce income. To receive the standard deduction, the self-employed household must provide and verify they have business costs to produce income. The verifications can include, but are not limited to, tax records, ledgers, business records, receipts, check receipts, and business statements. The self-employed household does not have to verify all its business costs to receive the standard deduction.
Self-employed households not claiming or verifying any costs to produce income will not receive the standard deduction.
2. Social Security pensions, Supplemental Security Income, Veteran's benefits, public
assistance payments, net rental income, unemployment compensation, workers compensation, pensions, annuities, alimony, adoption assistance, disability benefits, military allotments, Rail Road Retirement, and child support.
B. Disregarded Income
Monies received from the following sources are not counted:
1. per capita payments to or funds held in trust for any individual in satisfaction of a judgment of Indian Claims Commission or the Court of Claims;
2. payments made pursuant to the Alaska Native Claims Settlement Act to the extent such payments are exempt from taxation under ESM 21(a) of the Act;
3. money received from the sale of property such as stocks, bonds, a house or a car (unless the person was engaged in the business of selling such property, in which case the net proceeds are counted as income from self-employment);
4. withdrawal of bank deposits;
5. money borrowed or given as gifts;
6. capital gains;
7. the value of USDA donated foods [and Food Stamp Act of 1964 as amended];
8. the value of supplemental food assistance under the Child Nutrition Act of 1966 and the special food service program for children under the National School Lunch Act, as amended;
9. any payment received under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
10. loans or grants such as scholarships obtained and used under conditions that preclude their use for current living costs;
11. any grant or loan to any undergraduate student for educational purposes made or insured under any program administered by the Commissioner of Education under the Higher Education Act;
12. home produce utilized used for household consumption;
13. all of the earned income of a minor or minor parent (under 18) who is a full-time student or a part-time child under age 18 who is a student who is working but is not a full-time employee (such as high school students who are employed full-time during summer);
14. all payments derived from participation in projects under the Food Stamp Benefit Employment & Training (FS FB E&T) program or other job training programs;
15. all Vista income; and
16. all income derived as a Census taker.
Resources (such as cars, homes, savings accounts, life insurance, etc.) are not considered when determining financial eligibility or the parent fee.
(Break In Continuity of Sections)
11003.9.5 Making Income Determinations
45 CFR 98.11(b)(2)
DSS programmed the DCIS II Child Care Sub system to automatically make financial eligibility decisions. As long as the appropriate income for the appropriate persons is entered into the system, and as long as the correct family size is entered, the DCIS II Child Care Sub system will calculate income and determine eligibility.
In the event of system failure, use 4 1/3 weeks per month to compute a person's monthly gross income. If there is a variance in wages, use the average of the last month's wages or the average of the last three month's wages, whichever is less.
The following are examples for converting various pay schedules to monthly income.
A. Client A is paid $200.00 per week - $200 x 4.33 = $866/month.
B. Client A is paid $200 per week, but has a varying work schedule. Week one - $200; week two $100; week three - $176; week four - $200. $200 + $100 + $176 + $200 = $676 divided by 4 = $169/week average. $169 x 4.33 = $731.77/month.
C. Client B is paid $400 every other week. $400 x 2.16 = $864.
D. Client C is paid $950 twice a month. $950 x 2 = $1900/month.
E. Other sources of income, such as child support, are added to wages either as the actual amount received or as an average of the amount received in the past three months.
Staff will use gross monthly income in all cases except for self-employment income. Gross income is income before any deductions. See 11003.9.1 for disregarded income.
Determine the monthly amount of income using the conversion method below. This applies to earned and unearned income.
A. Weekly gross income is multiplied by 4.33 to calculate the monthly income.
B. Bi-weekly gross income is multiplied by 2.16 to calculate the monthly income. Bi-weekly income is income that is received every other week.
C. Semi-monthly gross income is multiplied by 2 to calculate the monthly income. Semi-monthly income is income that is received twice each month.
If the income is different from pay to pay, use the income from the previous month or the average of the last three months income, whichever is less. This applies for earned and unearned income.