Original Notice.

Preproposal statement of inquiry was filed as WSR 99-07-105.

Title of Rule: WAC 388-450-0035 Educational benefits, 388-450-0045 Income from employment or training programs, 388-450-0060 Lump sum payments, 388-450-0065 Gifts--Cash and noncash, 388-450-0080 Self-employment income--General rules, and 388-450-0085 Self-employment income--Allowable expenses.

Purpose: Changes rules to be consistent with federal laws, rules, and regulations.

Statutory Authority for Adoption: RCW 74.08.090 and 74.04.510.

Statute Being Implemented: RCW 74.08.090 and 74.04.510.

Summary: WAC 388-450-0035, clarified how rule applies to graduate students. WAC 388-450-0045, added treatment for on-the-job training income for JTPA earnings. WAC 388-450-0060, added treatment of lump sum payments for food assistance. WAC 388-450-0065, corrected treatment of cash gifts for food assistance. WAC 388-450-0080, added requirements for lease or rental property income to be considered as self-employment income. WAC 388-450-0085, clarified that there is no requirement for exclusive business use of portion of the home in order to have the related expenses considered as a self-employment expense.

Reasons Supporting Proposal: Current rules are not consistent with federal laws, rules, and regulations.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: John Camp, Division of Assistance Programs, P.O. Box 45480, Olympia, WA 98504-5480, (360) 413-3232.

Name of Proponent: Department of Social and Health Services, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: Changes rules to be consistent with federal laws, rules, and regulations.

Proposal Changes the Following Existing Rules: WAC 388-450-0035 Educational benefits, 388-450-0045 Income from employment or training programs, 388-450-0060 Lump sum payments, 388-450-0065 Gifts--Cash and noncash, 388-450-0080 Self-employment income--General rules, and 388-450-0085 Self-employment income--Allowable expenses.

WAC 388-450-0035, clarified how rule applies to graduate students. WAC 388-450-0045, added treatment for on-the-job training income for JTPA earnings. WAC 388-450-0060, added treatment of lump sum payments for food assistance. WAC 388-450-0065, corrected treatment of cash gifts for food assistance. WAC 388-450-0080, added requirements for lease or rental property income to be considered as self-employment income. WAC 388-450-0085, clarified that there is no requirement for exclusive business use of portion of the home in order to have the related expenses considered as a self-employment expense.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The changes as a result of this rule do not affect small businesses.

RCW 34.05.328 does not apply to this rule adoption. This rule does not meet the definition of significant legislative rule.

Hearing Location: Lacey Government Center (behind Tokyo Bento Restaurant), 1009 College Street S.E., Room 104-B, Lacey, WA 98503, on July 6, 1999, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Paige Wall by June 25, 1999, phone (360) 664-6094, TTY (360) 664-6178, e-mail wallpg@dshs.wa.gov.

Submit Written Comments to: Identify WAC Numbers, Paige Wall, Rules Coordinator, Rules and Policies Assistance Unit, P.O. Box 45850, Olympia, WA 98504-5850, fax (360) 902-8292, by July 6, 1999.

Date of Intended Adoption: July 9, 1999.

May 28, 1999

Marie Myerchin-Redifer, Manager

Rules and Policies Assistance Unit

This section applies to TANF/SFA, RCA, GA, TANF/SFA-related medical and food assistance programs. Unless otherwise stated, exclusions and disregards of educational benefits apply to clients engaged in undergraduate studies only.

(1) ((A student can)) We exclude the educational assistance in the form of grants, loans or work study, issued from Title IV of the Higher Education Amendments (Title IV - HEA) and Bureau of Indian Affairs (BIA) education assistance programs. Examples of Title IV - HEA and BIA educational assistance include but are not limited to:

(a) College work study (federal and state);

(b) Pell grants; and

(c) BIA higher education grants.

(2) We do not count the following types of educational assistance, in the form of grants, loans, or work study((, are not counted)) when determining a student's need:

(a) Assistance under the Carl D. Perkins Vocational and Applied Technology Education Act, P.L. 101-391 for attendance costs identified by the institution as specified in subsections (3) and (4) of this section; and

(b) Educational assistance made available under any program administered by the Department of Education (DOE) to an undergraduate student. Examples of programs administered by DOE include but are not limited to:

(i) Christa McAuliffe Fellowship Program;

(ii) Jacob K. Javits Fellowship Program; and

(iii) Library Career Training Program.

(3) Educational assistance under subsection (2)(a) of this section is disregarded when used for the following attendance costs ((is not counted)) when a student is attending school less than half-time:

(a) Tuition;

(b) Fees; and

(c) Costs for purchase or rental of equipment, materials, or supplies required of all students in the same course of study.

(4) Educational assistance under subsection (2)(a) of this section ((for a student attending school at least half-time)) that is used for the following ((attendance costs)) expenses is disregarded in addition to the costs specified in subsection (3) of this section when the student is attending school at least half-time:

(a) Books;

(b) Supplies;

(c) Transportation;

(d) Dependent care; and

(e) Miscellaneous personal expenses.

(5) For TANF/SFA, RCA, GA, and TANF/SFA-related medical assistance, the amount of a student's remaining educational assistance equal to the difference between the student's appropriate need standard and payment standard is excluded.

(6) Any remaining income is unearned income and budgeted using the appropriate budgeting method for the assistance unit.

(7) When a student participates in a work study program that is not excluded by subsections (1) and (2) of this section, the income received is treated as earned income:

(a) Applying the applicable earned income disregards;

(b) For TANF/SFA, RCA, GA, and TANF/SFA-related medical assistance, excluding the difference between the student's appropriate need standard and payment standard; and

(c) Budgeting remaining income using the appropriate budgeting method for the assistance unit.

(8) When a student receives Veteran's Administration Educational Assistance:

(a) All applicable attendance costs are subtracted; and

(b) The remaining unearned income is budgeted using the appropriate budgeting method for the assistance unit.

(9) When a student participates in graduate school studies, educational assistance made available to the student is ((treated)) counted as ((unearned income)):

(a) Assistance from another agency for cash and medical assistance;

(b) Earned income for food assistance if there are work requirements; or

(c) Unearned income for food assistance if there are no work requirements.

[Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090.  98-16-044, § 388-450-0035, filed 7/31/98, effective 9/1/98.]

This section applies to TANF/SFA, RCA, GA, and food assistance programs.

(1) Payments issued under the Job Training Partnership Act (JTPA) are ((treated)) considered as follows:

(a) Wages paid under JTPA including wages for on-the-job training are ((considered)) counted as earned income.

(b) For TANF/SFA, RCA, and GA assistance, needs based payments issued under JTPA including payments for on-the-job training are considered as follows:

(i) Payments which cover special needs not covered in the need standard are excluded.

(ii) Payments which duplicate items contained in the need standard are excluded up to the difference between the student's appropriate need standard and payment standard.

(c) For food assistance((,)):

(i) Living allowances and incentive payments under JTPA are excluded as income; and

(ii) Earnings received from on-the-job training programs under JTPA are:

(A) Counted as earned income for persons:

(I) Age nineteen and older; or

(II) Age eighteen or younger and not under parental control.

(B) Excluded income for persons eighteen years of age or younger and under parental control.

(2) Payments issued under the National and Community Service Trust Act of 1993 (AmeriCorps) are ((treated)) considered as follows:

(a) For cash assistance, living allowances or stipends paid under AmeriCorps are ((considered)) counted as earned income.

(b) For food assistance, living allowances or stipends paid under AmeriCorps are excluded income.

(3) AmeriCorps/VISTA stipends and living allowances paid to VISTA volunteers under the Domestic Volunteer Act of 1973:

(a) For TANF/SFA, RCA, and GA assistance, are disregarded as income; and

(b) For food assistance, are ((disregarded)) counted as earned income((,)). The payments are disregarded if the client received:

(i) Food assistance or cash assistance at the time they joined the Title I program; or

(ii) An income disregard for the Title I program at the time of conversion to the Food Stamp Act of 1977. Disregard of Title I program income will continue through temporary interruptions in food assistance participation.

(4) For TANF/SFA, RCA, and GA assistance, needs based payments issued under AmeriCorps are ((treated like)) considered the same way as JTPA payments as provided in subsection (1)(b) of this section.

(5) For food assistance, training allowances from vocational and rehabilitative programs are counted as earned income when:

(a) Recognized by federal, state, or local governments; and

(b) Not a reimbursement.

(6) For training allowances received by GA-U clients:

(a) The earned income incentive and work expense deduction specified under WAC 388-450-0175 is applied when applicable; and

(b) For clients enrolled in a remedial education or vocational training course, the actual cost of uniforms or special clothing required for the course is deducted from the training allowance.

(7) Support service payments received by or made on behalf of WorkFirst participants are not considered income.

[Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090.  98-16-044, § 388-450-0045, filed 7/31/98, effective 9/1/98.]

This section applies to TANF/SFA, RCA, GA, and TANF/SFA-related medical , and food assistance benefits. A one-time lump sum payment is ((treated)) considered as follows:

(1) Compensatory awards or related settlements are considered countable resources as provided in WAC 388-470-0080.

(2) For food assistance, nonrecurring lump sum payments are counted as a resource in the month received unless specifically excluded as a resource in WAC 388-470-0035.

(3) For all other one-time lump sum payments, the amount equal to the difference between the client's countable resources and the resource limit is disregarded as income. The remaining amount is called the net lump sum payment and affects the client's eligibility and benefit amount as provided in WAC 388-450-0240.

[Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090.  98-16-044, § 388-450-0060, filed 7/31/98, effective 9/1/98.]

A gift is an item furnished to a client without work or cost on his or her part.

(1) A cash gift is a gift that is furnished as money, cash, checks or any other readily negotiable form.

(a) For TANF/SFA, RCA, GA-S, GA-H, and TANF/SFA-related medical programs, cash gifts ((of up to)) totaling no more than thirty ((cumulative)) dollars per calendar quarter for each assistance unit member are disregarded as income.

(b) For GA-U ((and food assistance programs)), cash gifts are treated as unearned income.

(c) For food assistance programs:

(i) Cash gifts to the assistance unit are excluded if they total thirty dollars or less per quarter;

(ii) Cash gifts in excess of thirty dollars per quarter are counted in full as unearned income.

(2) For TANF/SFA, RCA, GA-S, GA-H, GA-U and TANF/SFA-related medical programs, a noncash gift is treated as a resource.

(a) If the gift is a countable resource, its value is added to the value of the client's existing countable resources and the client's eligibility is redetermined as specified in chapter 388-470 WAC.

(b) If the gift is an excluded or noncountable resource, it does not affect the client's eligibility or benefit level.

[Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090.  98-16-044, § 388-450-0065, filed 7/31/98, effective 9/1/98.]

This section applies to TANF/SFA, RCA, GA, TANF/SFA-related medical and food assistance programs.

(1) Self-employment earned income is used to reduce a client's need for assistance. The income is treated as earned income as provided in WAC 388-450-0030.

(2) Self-employment earned income is defined as gross business income minus total allowable business expenses as defined in WAC 388-450-0085.

(3) In order to establish eligibility for assistance, a self-employed client must maintain and make available to the department a record clearly documenting all business expenses and income.

(4) Income from the following is treated as self-employment income:

(a) Adult family home;

(b) Farming;

(c) Roomers and boarders;

(d) Rental and lease of personal property or real estate owned by the client((; and)) is counted as unearned income unless the following conditions are met:

(i) For TANF/SFA clients, the use of the property is part of an approved individual responsibility plan;

(ii) For food assistance clients, the client spends at least twenty hours per week managing the property; or

(iii) For RCA or GA clients, there are no specific requirements of a self-sufficiency plan or a set number of hours managing the property.

(e) Self-produced or supplied items.

(5) For food assistance, when two or more assistance units share a residence, the money paid from one assistance unit to the other assistance unit for shelter costs is roomer income when:

(a) One assistance unit owns or is buying the residence; or

(b) One assistance unit is renting a residence and charges the other assistance unit an amount that is in excess of the total cost of renting the residence.

[Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090.  98-16-044, § 388-450-0080, filed 7/31/98, effective 9/1/98.]

The following self-employment expenses are allowed as deductions from gross self-employment income for TANF/SFA, RCA, GA, medical and food assistance programs unless otherwise specified:

(1) Rent or lease of business equipment or property;

(2) Utilities;

(3) Postage;

(4) Telephone;

(5) Office supplies;

(6) Advertising;

(7) Business related insurance, taxes, licenses and permits;

(8) Legal, accounting, and other professional fees;

(9) For TANF/SFA, RCA, and GA assistance programs only, the cost of goods sold, including wages paid to employees producing salable goods, raw materials, stock, and replacement or reasonable accumulation of inventory, provided inventory has been declared exempt on the basis of ((an agreed plan pursuant to chapter 388-470 WAC)) the individual responsibility plan or other plan approved by the department;

(10) Repairs to business equipment and property, excluding vehicles;

(11) Interest on business loans used to purchase income-producing property or equipment;

(12) Gross wages and salaries paid to employees who are not:

(a) Producing salable goods; or

(b) A member of the assistance unit

(13) Commissions paid to agents and independent contractors;

(14) Seed, fertilizer, and feed grain for a self-employed farmer;

(15) Other reasonable and necessary costs of doing business;

(16) The cost of the place of business((.)):

(a) For TANF/SFA, RCA, GA, and medical assistance, if any portion of the client's home is used as the place of business, it must be used exclusively for business to be an allowable business expense. The percentage of the home used for business can be an allowable business expense;

(b) For food assistance, there is no requirement for a portion of the home to be used exclusively for business. The percentage of the home used for business can be an allowable business expense

(17) The following transportation expenses are allowed as a deduction from gross self-employment income:

(a) Actual, documented costs for:

(i) Gas, oil, and fluids;

(ii) Replacing worn items such as tires;

(iii) Registration and licensing fees;

(iv) Auto loan interest; and

(v) Business related parking and tolls; or

(b) A cost per mile established by the department.

[Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057 and 74.08.090.  98-16-044, § 388-450-0085, filed 7/31/98, effective 9/1/98.]

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