WSR 97-18-073

PERMANENT RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES

(Economic Services Administration)

(Public Assistance)

[Filed September 2, 1997, 4:54 p.m.]

Date of Adoption: September 2, 1997.

Purpose: To amend existing rules in chapter 388-218 WAC to implement a gross earned income disregard of one-half of the client's monthly earned income and to disregard the earned income of a full-time student or to a part-time student carrying at least half the normal school load and working fewer than thirty-five hours per week. Implementation of the 50% earned income disregard replaces the $30 and 1/3 and $30 income disregards.

Citation of Existing Rules Affected by this Order: Repealing WAC 388-218-1420, 388-218-1450, 388-218-1460, 388-218-1480 and 388-218-1730; and amending WAC 388-218-1210, 388-218-1230, 388-218-1300, 388-218-1350, 388-218-1410, 388-218-1430, 388-218-1440, 388-218-1470, 388-218-1630, 388-218-1710, 388-218-1720, and 388-218-1740.

Statutory Authority for Adoption: RCW 74.08.090.

Other Authority: Public Law 104-193, Section 103 (a)(1); EHB 3901, section 308 and 309(11) (1997) (amends RCW 74.04.005).

Adopted under notice filed as WSR 97-15-088 on July 17, 1997.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 12, repealed 5.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.

Number of Sections Adopted on the Agency's own Initiative: New 0, amended 0, repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, amended 0, repealed 0.

Number of Sections Adopted using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 0, repealed 0.

Effective Date of Rule: Thirty-one days after filing.

September 2, 1997

Merry A. Kogut, Manager

Rules and Policies Assistance Unit

AMENDATORY SECTION (Amending Order 3759, filed 7/27/94, effective 9/1/94)

WAC 388-218-1210 Exempt and disregarded income--Educational assistance. (1) The department shall exempt from consideration as income when determining need educational assistance, in the form of grants, loans, or work study, issued to a student from the following sources:

(a) Title IV of the Higher Education Amendments; or

(b) Bureau of Indian Affairs student assistance programs.

(2) The department shall disregard the following types of income when determining need:

(a) Grants or loans made or insured under any programs administered by the department of education to an undergraduate student for educational purposes.

(b) Educational assistance in the form of grants, loans, or work study, issued under the Carl D. Perkins Vocational and Applied Technology Education Act, P.L. 101-391, for attendance costs as identified by the institution. For a student attending school:

(i) At least half-time, attendance costs include tuition, fees, costs for purchase or rental of equipment, materials, or supplies required of all students in the same course of study, books, supplies, transportation, dependent care, and miscellaneous personal expenses; or

(ii) Less than half-time, attendance costs include tuition, fees, and costs for purchase or rental of equipment, materials, or supplies required of all students in the same course of study.

(c) Educational assistance in the form of grants, work study, scholarships, or fellowships, from sources other than those identified in subsections (1)(a) and (b), (2)(a) and (b)(i) and (ii) of this section for attendance costs as identified by the institution. Attendance costs include tuition, fees, costs for purchase or rental of equipment, materials, or supplies required of all students in the same course of study, books, supplies, transportation, dependent care, and miscellaneous personal expenses.

(d) Any remaining educational assistance, in the form of grants, work study, scholarships, or fellowships, not disregarded in subsections (1)(a) and (b), (2)(a), (b)(i) and (ii), and (c) of this section, as allowed under WAC 388-218-1540 Assistance from other agencies and organizations.

(e) ((Apply any applicable)) One-half of the gross earned income ((disregards to any)) received from work study earnings ((received and)) not disregarded in subsections (1)(a) and (b), (2)(a), (b)(i) and (ii), (c), and (d) of this section. If applicable, deduct the dependent care disregard as specified in WAC 388-218-1470.

(f) Veterans' Administration educational assistance for the student's educational expenses and child care necessary for school attendance. Attendance costs include tuition, fees, costs for purchase or rental of equipment, materials, or supplies required of all students in the same course of study, books, supplies, transportation, dependent care, and miscellaneous personal expenses.

[Statutory Authority: RCW 74.08.090. 94-16-044 (Order 3759), 388-218-1210, filed 7/27/94, effective 9/1/94; 94-10-065 (Order 3732), 388-218-1210, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-575 (part).]

AMENDATORY SECTION (Amending Order 3759, filed 7/27/94, effective 9/1/94)

WAC 388-218-1230 Disregarded income types. The department shall disregard the following types of income when determining need:

(1) Child's earned income. Earned income of a child when student eligibility conditions in WAC 388-218-1410 Earned income of a child, have been met.

(2) Foster care payments. Disregard as income a foster care payment made for the care of a child. See WAC 388-218-1400 Earned income types, for the treatment of foster care retainer fees.

(3) Gifts:

(a) Cash gifts. Nonrecurring cash gifts up to thirty cumulative dollars received by each member of the ((AFDC)) TANF assistance unit per calendar quarter. The department, unless otherwise specified by the donor, shall determine an individual's share in a gift to more than one person by dividing the amount of the gift by the number of persons receiving the gift.

(b) Noncash gifts. Gifts other than cash as defined under chapter 388-22 WAC provided such gifts are within the allowable program resource limits.

(4) Household cost funds. Funds representing another person's or family's share of household costs.

(5) Loans.

(a) Bona fide loans. The department shall consider a loan bona fide when the loan is a debt the borrower has an obligation to repay.

(b) Loan repayments. The department shall not consider as income to a client money received from loan repayment; however, the department shall consider any interest paid in the loan as newly acquired income.

(6) Office of support enforcement pass-through payments. The monthly child support incentive payment from the office of support enforcement (OSE);

(7) Overpayments recovered by source agency. Any overpayment amount withheld from a client's benefit in order to recover an overpayment by the source agency.

(8) Per diem and transportation. Per diem and transportation funds paid to ((AFDC)) TANF advisory committee members.

(9) Settlements. Settlements for destroyed, stolen exempt property, or back medical bills when conditions in, WAC 388-218-1530 Determining net income--Other income, have been met.

(10) Self-produced or supplied items. The value of self-produced or supplied items except as specified in, WAC 388-218-1340 Self-produced or supplied items, when:

(a) Self-produced items are sold for cash; or

(b) The household's requirement for shelter is supplied.

[Statutory Authority: RCW 74.08.090. 94-16-044 (Order 3759), 388-218-1230, filed 7/27/94, effective 9/1/94; 94-10-065 (Order 3732), 388-218-1230, filed 5/3/94, effective 6/3/94.]

AMENDATORY SECTION (Amending Order 3732, filed 5/3/94, effective 6/3/94)

WAC 388-218-1300 Self-employment income. (1) Earned income from self-employment is the amount left after deducting allowable business expenses from gross business income.

(2) ((Applicable)) Disregard one-half of the self-employment earned income ((disregards are further deducted from self-employment earned income)) to determine the net amount available to meet need. If applicable, deduct the dependent care disregard as specified in WAC 388-218-1470.

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

[Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1300, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-520 (part).]

AMENDATORY SECTION (Amending Order 3857, filed 5/24/95, effective 6/24/95 WAC 388-218-1350 Deductible self-employment expenses. The department shall consider the following items as deductible business expenses in a self-employment enterprise:

(1) Rental of business equipment or property.

(2) Utilities.

(3) Postage.

(4) Telephone.

(5) Office supplies.

(6) Advertising.

(7) Insurance.

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

(9) 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 WAC 388-216-2500.

(10) Interest on business indebtedness.

(11) Wages and salaries paid to employees not producing salable goods.

(12) Commissions paid to agents and independent contractors.

(13) Documented and verified costs of self-employment business-related transportation. These costs are limited to gas, oil, and fluids; necessary services and repairs; replacement of worn items such as tires; registration and licensing fees; and interest on automobile loans.

(a) The client may choose:

(i) To itemize the actual operating cost of a vehicle; or

(ii) A cost per mile established by the department using a prevailing rate based on market standards.

(b) The cost of tolls and parking related to the business shall be deducted as a business expense.

(c) If a vehicle is needed for both business and private purposes, the mileage and expenses attributable to the business must be documented in a daily log and is subject to verification by the department.

(d) Transportation to and from the place of business is not a business expense((, but is a personal work expense and is covered by the work expense deduction)).

(14) Nonpersonal taxes on the business and business property, including the employer's share of federal Social Security taxes on business employees and state and federal unemployment insurance contributions, if any. The self-employed person's personal income taxes and self-employment taxes are not business deductions((, but are work expenses covered by the work expense deduction)).

(15) Repairs to business equipment and property, excluding vehicles. An expenditure to maintain property in its usual working condition is deductible as a repair.

(16) Other expenditures reasonable and necessary to the efficient and profitable operation of the self-employment enterprise.

[Statutory Authority: P.L. 103-286, RCW 74.08.090 and The Confederated Tribes of the Colville Reservation Grand Coulee Dam Settlement Act. 95-11-124 (Order 3857), 388-218-1350, filed 5/24/95, effective 6/24/95. Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1350, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-520 (part).]

AMENDATORY SECTION (Amending Order 3732, filed 5/3/94, effective 6/3/94)

WAC 388-218-1410 Earned income of a child. The department shall apply the following rules when determining the amount of a child's earned income available to meet the current need of the assistance unit of which the child is a member:

(1) The department shall disregard all of the child's monthly earned income when the following circumstances apply:

(a) When determining whether total family income exceeds one hundred and eighty-five percent of the need standard for a child who is a full-time student. This disregard is limited to six months per calendar year;

(b) When determining ((whether total family income exceeds one hundred percent of the need standard)) the payment amount for:

(i) A((n applicant)) child, who is a full-time student((, provided that such income is also disregarded under (a) of this subsection)); or

(ii) A ((recipient)) child, who is ((a full-time student or)) a part-time student ((who is not a full-time employee;

(c) When determining the payment amount for an applicant or recipient child who is a full-time student or a part-time student who is not a full-time employee)) carrying at least half the normal school load and working fewer than one hundred fifty hours per month.

(2) A child earning income by working in a sheltered workshop or other training facility for handicapped children shall be considered, for purposes of income exemption, as being at least a part-time student working less than full time.

(3) To be employed full time, a child must be working ((thirty-five)) one hundred fifty hours ((a week)) per month or the number of hours considered full time by the industry for which he or she works, whichever is less.

(4) Summer employment of students shall not be considered as full-time employment due to the temporary nature of such employment, even though the hours worked may exceed thirty-five hours a week.

(5) In determining the amount of a nonstudent child's earned income available to meet the current needs of the assistance unit, net income shall be computed without application of the earned income disregards specified in this section.

[Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1410, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-535 (part).]

AMENDATORY SECTION (Amending Order 3732, filed 5/3/94, effective 6/3/94)

WAC 388-218-1430 Earned income disregards--Deduction sequence. Earned income disregards shall be applied in the following sequence:

(1) ((Work expense)) Earned income disregard; and

(2) ((Thirty dollars and one-third disregard; or

(3) Thirty-dollar disregard; and

(4))) Dependent care disregard.

[Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1430, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-570 (part).]

AMENDATORY SECTION (Amending Order 3732, filed 5/3/94, effective 6/3/94)

WAC 388-218-1440 ((Work expense)) Earned income disregard. (1) Disregard ((the first ninety dollars)) one-half of the gross earned income for ((work expenses, regardless of the number of hours worked per month)) each month the client receives earned income.

(2) When payment of income over a period of more than one month is delayed, the earned income disregard applies to the period during which the income was earned.

[Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1440, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-570 (part).]

AMENDATORY SECTION (Amending Order 3732, filed 5/3/94, effective 6/3/94)

WAC 388-218-1470 Dependent care disregard. Disregard the actual cost for care of each dependent child or incapacitated adult living in the same home and receiving ((AFDC)) TANF provided:

(1) Conditions under WAC ((388-51-110 (1)(c))) 388-290-110 (1)(c) are met for each dependent child;

(2) No disregard will be allowed for care provided by a parent or stepparent;

(3) The provider verifies the cost incurred;

(4) The cost is incurred for the month of employment being reported; and

(5) The cost for each dependent child or incapacitated adult, depending on the number of hours worked per month does not exceed the following:

Dependent Care

Maximum Dependent Care

Deductions Maximum

Dependent Two Deductions

Hours Years of Dependent Under

Worked Age or Two Years

per month Older of Age

0 - 40 $ 43.75 $ 50.00

41 - 80 87.50 100.00

81 - 120 131.25 150.00

121 or More 175.00 200.00

[Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1470, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-570 (part).]

AMENDATORY SECTION (Amending Order 3857, filed 5/24/95, effective 6/24/95 WAC 388-218-1630 Allocation of assistance unit income for support of legal dependents. (1) The department shall ((budget)) allocate the income of a parent ((or)), stepparent or caretaker relative included in the assistance unit to meet the needs of the assistance unit after ((allocating an amount for)) deducting:

(a) One-half of the gross earned income for each employed person;

(b) An amount for the support of the parent, stepparent or caretaker relative and other dependents not eligible for inclusion in the assistance unit for factors other than sanction or ((noncooperation)) disqualification, not to exceed the appropriate payment standard for an assistance unit of the same composition; and

(((b))) (c) An amount for court or administratively ordered support for a legal dependent, not living in the parent or stepparent's home not to exceed the lesser of the amount actually paid or the appropriate need standard for each dependent;

(2) The department shall consider a dependent to be one who:

(a) Is or could be claimed for federal income tax purposes by the parent ((or)), stepparent or caretaker relative; or

(b) The parent ((or)), stepparent or caretaker relative is legally obligated to support.

[Statutory Authority: P.L. 103-286, RCW 74.08.090 and The Confederated Tribes of the Colville Reservation Grand Coule Dam Settlement Act. 95-11-124 (Order 3857), 388-218-1630, filed 5/24/95, effective 6/24/95. Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1630, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-500 (part).]

AMENDATORY SECTION (Amending Order 3732, filed 5/3/94, effective 6/3/94)

WAC 388-218-1710 Income tests. To be eligible for ((AFDC)) TANF, a client shall meet the following income tests:

(1) One hundred eighty-five percent of need test, as specified in WAC 388-218-1720 One hundred eighty-five percent of need test; and

(2) ((One hundred percent of need test, as specified in WAC 388-218-1730 One hundred percent of need test; and

(3))) Payment standard test, as specified in WAC 388-218-1740 Payment standard test.

[Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1710, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-480 (part).]

AMENDATORY SECTION (Amending Order 3732, filed 5/3/94, effective 6/3/94)

WAC 388-218-1720 One hundred eighty-five percent of need test. A client whose nonexempt gross income exceeds one hundred eighty-five percent of the standard of need for the appropriate household size plus additional requirements authorized for that assistance unit, shall not be eligible for ((AFDC)) TANF from the date specified in WAC 388-218-1830 Treatment of income--Suspension of a grant.

(1) The department shall consider the income of all members of the assistance unit and the income of natural, adoptive, or stepparents of children in the assistance unit, residing in the same household, in this test except for income specifically exempted or disregarded and in subsection (2) of this section.

(2) In determining the total income of the family, the department shall exclude:

(a) The earned income of a child who is a full-time student is excluded for six months per calendar year; and

(b) The first fifty dollars per month of the current monthly support obligation of any child support collected on the family's behalf or received by the family.

[Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1720, filed 5/3/94, effective 6/3/94. Formerly parts of WAC 388-28-480 and 388-28-484.]

AMENDATORY SECTION (Amending Order 3732, filed 5/3/94, effective 6/3/94)

WAC 388-218-1740 Payment standard test. The assistance unit's monthly nonexempt unearned income, after applying the earned income disregards, plus monthly nonexempt earned income shall be below the appropriate state payment standard plus additional requirements.

[Statutory Authority: RCW 74.08.090. 94-10-065 (Order 3732), 388-218-1740, filed 5/3/94, effective 6/3/94. Formerly WAC 388-28-480 (part).]

REPEALER

The following sections of the Washington Administrative Code are repealed:

388-218-1420 Earned income disregards--General.

388-218-1450 Thirty dollars and one-third disregard.

388-218-1460 Thirty-dollar disregard.

388-218-1480 Circumstances where earned income disregards are not allowed.