WSR 06-05-020



(Economic Services Administration)

[ Filed February 6, 2006, 4:20 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 05-21-094.

Title of Rule and Other Identifying Information: WAC 388-450-0085 How we count your self-employment income?

Hearing Location(s): Blake Office Park East, Rose Room, 450 10th Avenue S.E., Lacey, WA (one block north of the intersection of Pacific Avenue S.E. and Alhadeff Lane, behind Goodyear Tire. A map or directions are available at or by calling (360) 664-6097), on March 21, 2006, at 10:00 a.m.

Date of Intended Adoption: Not earlier than March 22, 2006.

Submit Written Comments to: DSHS Rules Coordinator, P.O. Box 45850, Olympia, WA 98504, delivery 4500 10th Avenue S.E., Lacey, WA, e-mail, fax (360) 664-6185, by 5:00 p.m., March 21, 2006.

Assistance for Persons with Disabilities: Contact Stephanie Schiller, DSHS Rules Consultant, by March 17, 2006, TTY (360) 664-6178 or phone (360) 664-6097 or by e-mail at

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The amended rule clarifies current policy on the deductions the department allows to determine countable income of someone who is self-employed. It also adopts federal requirements for the food stamp program regarding losses for self-employed fishers or farmers.

Reasons Supporting Proposal: The proposed amendment updates current rules to reflect how the department treats self-employment income for cash assistance, Basic Food, and medical programs. RCW 74.04.510 requires the department to adopt rules consistent with federal requirements for administration of the food stamp program.

Statutory Authority for Adoption: RCW 74.04.050, 74.04.055, 74.04.057, 74.04.510, 74.08.090.

Statute Being Implemented: RCW 74.04.050, 74.04.055, 74.04.057, 74.04.510, 74.08.090.

Rule is necessary because of federal law, 7 C.F.R. 273.9, 7 C.F.R. 273.11.

Name of Proponent: Department of social and health services, governmental.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: John Camp, 1009 College S.E., Lacey, WA 98504, (360) 725-4616.

No small business economic impact statement has been prepared under chapter 19.85 RCW. These proposed rules do not have an economic impact on small businesses. The proposed amendments only affect DSHS clients by establishing eligibility rules related income deductions for people who are self-employed. The rules impact whether or not income is used to determine a person's eligibility for department programs including cash assistance, Basic Food, and medical programs.

A cost-benefit analysis is not required under RCW 34.05.328. These amendments are exempt as allowed under RCW 34.05.328 (5)(b)(vii) which states in-part, "[t]his section does not apply to...rules of the department of social and health services relating only to client medical or financial eligibility and rules concerning liability for care of dependents." These rules update references and clarify department policy for how the department treats income for department programs consistent with Title 74 RCW and Title 7 C.F.R. Part 273.

February 3, 2006

Andy Fernando, Manager

Rules and Policies Assistance Unit

AMENDATORY SECTION(Amending WSR 03-13-045, filed 6/11/03, effective 8/1/03)

WAC 388-450-0085   ((How we count your self-employment income)) Does the department count all of my self-employment income to determine if I am eligible for benefits?   This section applies to ((TANF/SFA, GA, RCA)) cash assistance, Basic Food, and medical programs for children, pregnant women and families.

(1) We decide how much of your self-employment income to count by:

(a) Adding together your gross self-employment income and any profit you make from selling your business property or equipment;

(b) Subtracting your business expenses as described in subsection (2) below; and

(c) Dividing the remaining amount of self-employment income by the number of months over which the income will be averaged.

(2) We ((automatically)) subtract one hundred dollars as a business expense even if your costs are less than this. If you want ((to claim)) us to subtract your actual costs of more than one hundred dollars, you must ((itemize and provide)) list and give us proof of your expenses ((in order)) for us to count them. We never allow the following expenses:

(a) Federal, state, and local income taxes;

(b) Money set aside for retirement purposes;

(c) Personal work-related expenses (such as travel to and from work);

(d) Net losses from previous periods;

(e) Depreciation; or

(f) Any amount that ((exceeds)) is more than the payment you get from a boarder for lodging and meals.

(3) If you have worked at your business for less than a year, we figure your gross self-employment income by averaging:

(a) The income over the period of time the business has been in operation; and

(b) The monthly amount ((estimated)) we estimate you will get for the coming year.

(4) For cash and medical assistance, if your self-employment expenses are more than your self-employment income, we do not use this "loss" to reduce income from other self-employment businesses or other sources of income to your assistance unit.

(5) For Basic Food, we use a "loss" from self-employment farming or fishing income to reduce other sources of income only if you meet the following three conditions:

(a) Someone in your assistance unit is a self-employed farmer or fisher;

(b) Your gross yearly income from farming or fishing is or is expected to be at least one thousand dollars; and

(c) Your allowable costs for farming or fishing are more than your income from farming or fishing.

[Statutory Authority: RCW 74.04.050, 74.04.055, 74.04.057, and 74.04.510. 03-13-045, 388-450-0085, filed 6/11/03, effective 8/1/03. Statutory Authority: RCW 74.08.090 and 74.04.510. 01-19-020, 388-450-0085, filed 9/11/01, effective 10/1/01; 99-16-024, 388-450-0085, filed 7/26/99, effective 9/1/99. 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.]