2636 Return of the Absent Parent

At any time the County Office has information that the absent parent has returned to the home, an appropriate investigation will be made. When the investigation establishes that the absent parent has returned or his return is reported by the client the Service Representative will:

1. If the absent parent is the parent of some of the children, drop their needs. The needs of the remaining children and parent will continue to be included in the budget.
2. If the absent parent is the parent of all the children, the case will be closed.

If the client alleges continued deprivation due to incapacity of either himself or the returning parent, and there has been a finding of disability for SSI or OASDI, incapacity will be established by OASDI award letter, SDX print-out, SSA-1610, or mark sense query card. Otherwise, incapacity will be established by sending current medical and social information (EMS-108 and EMS-107 or DHS-81) to the Medical Review Team. The client will continue to receive assistance for the children of the returning parent until incapacity is determined by MRT.

If the client alleges continued deprivation due to the unemployment of either him/herself or the returning parent, then an AFDC-UP (cat. 70) application will be taken. The children of the returning parent may not, though, continue to receive assistance as AFDC-Regular (cat. 20) pending the UP eligibility determination. The action to drop the children or close the category 20 case, whichever is appropriate, will be taken as scheduled. If UP eligibility is established, then an AFDC-UP case (cat. 70) will be opened for the UP eligibles. If the AFDC-Regular case remained open for other children, then that case will be closed and those children will be included in the UP case.

2637.1 Medical Review Team

If deprivation is based upon a finding of incapacity by the Medical Review Team, a reexamination will be made if:

1. A reexamination was directed on the EMS-109.
2. The County Office has information that the disabled parent is working or that he has received training in another occupation, or has reason to believe that his condition has improved sufficiently for him to resume his usual occupation.

Reexaminations will be initiated by the County Office by sending current medical and social information (EMS-108A and EMS-107 or DHS-81) to the Medical Review Team.

If the Medical Review Team determines that the parent is no longer incapacitated, assistance may be continued for up to three months to allow the family to make plans.

If deprivation is based upon a determination of disability for SSI or OASDI, continuation of the incapacity will be verified at each reevaluation and at any other time the County Office has reason to believe a change has occurred. Continued eligibility for SSI recipients will be verified by the SDX printout. Eligibility of OASDI recipients will be verified by SSA-1610 or mark sense query card.

If the individual is no longer eligible under OASDI or SSI criteria, incapacity will be determined by sending current medical and social information (EMS-108 and EMS-107 or DHS-81) to the Medical Review Team. Assistance will be continued for up to three months after the date the SSI or OASDI benefit was terminated to allow the family to make plans. Assistance will not be continued through the Medical Review Team process, if it extends beyond this period.

If the Principal Wage Earner becomes employed more than 100 hours/month, action to close the case will be initiated. If all other Transitional Medicaid requirements are met, TM benefits will be authorized (cat. 25). Refer to FA 2691.

If the PWE is not the parent of all the children included in the unit, then an AFDC-Regular (category 20) case will be opened for any members who remain eligible as AFDC-Regular. A new EMS-95 is not required. However, a category 20 application must be registered. The EMS-95 used to determine AFDC-UP eligibility will be used to obtain a category 20 register number. If the family has a previous category 20 case number, that case number will be used. Otherwise, a new case number will be assigned. Do not open the category 20 case with the AFDC-UP (Category 70) number.

The client will be notified of the action being taken via EMS-1 or a system generated notice. If any persons remain eligible as AFDC-Regular, one notice (EMS-1) may be sent advising of both the ineligibility of the UP members and the continued eligibility and grant amount for the AFDC-Regular members.

At any time there is a change in the person exercising primary responsibility for the care and control of the children (death or desertion of payee, children leaving the home of the payee, parent reaching majority or returning to the home) another eligible person may be designated as payee.

To change the AFDC payee:

1. Obtain a completed EMS-95.
2. Obtain and record sufficient information to establish all eligibility factors.
3. Complete a new budget on EMS-7.
4. Complete a new face sheet (EMS-86), cross-reference the old face sheet (EMS-86) and file in the closed file.
5. Adjust PA food stamps, if necessary (Reference FSC Manual.)
6. Send EMS-1410 advising of change to the Project SUCCESS Unit, if appropriate.
7. If the AFDC payee who is legally responsible for support of the children deserts or otherwise abandons the children, complete an EMS-115 and forward to the Terminal Operator for keying to WAPU.
8. Complete EMS-56 to change payee, and make any other necessary adjustments.
9. In situations in which a system notice is not generated, notify the client by EMS-1, if appropriate.

Death of the AFDC payee is not sufficient grounds for closure of the AFDC children's case unless the children become ineligible as a result, or an eligible payee cannot be located.

If an eligible payee is available, payee for the case will be changed. Any outstanding warrants which have not been endorsed by the original payee should be returned to the Central Office to be cancelled and re-issued to the new payee.

In emergency situations, payments can be made temporarily to a person acting in place of a parent when no eligible payee is immediately available, provided:

1. The payee has been removed from the home by death, desertion, imprisonment, or confinement to the State Hospital or other medical institution.
2. Payments are on a temporary emergency basis for the child(ren) receiving AFDC at the time the emergency occurred.
3. Payments are made only for the period of time necessary to make and carry out plans for the child(ren), including the transfer of responsibility for the child to another agency or community program or to determine that no further resource exists in that community to meet the child's needs.

No such temporary payment will be made for longer than 90 days.

Protective payment involves payment of the AFDC grant to an appointed individual who agrees to be responsible for its proper use. Protective payment may be authorized in the following situations:

1. When there is evidence that the grant is not being used in the best interests of the AFDC children (Mismanagement).
2. When a non-cooperation sanction has been imposed and such sanction requires protective payment as part of the sanction (Sanction).

Once appointed, it is the responsibility of the protective payee to ensure that the AFDC grant is used for the benefit of the AFDC children. However, it is still the responsibility of the AFDC casehead (i.e. the children's specified relative) to report changes, appear for re-evaluation interviews and complete

Persons Who May Be Selected As Protective Payee

A protective payee may be a relative, friend, neighbor, or member of a community service group. The person to act as protective payee should be selected by the client, or with the client's involvement and consent to the extent possible. The individual selected to act as payee must:

1. Show an interest and concern for the family.
2. Have the ability to help the family make proper use of the assistance payment.
3. Live near the family or have sufficient means of transportation to enable him to maintain close contact with them.
4. Have the ability to establish and maintain a positive relationship with the family.
5. Be a responsible and dependable individual, capable of fulfilling his responsibilities to the client and the agency.

Except for those specified below, a DHS employee may serve as the protective payee when it is determined that it would be in the best interests of the family for a staff member to act as the payee. This would be more appropriate in mismanagement situations than in sanction cases. Therefore, if such a protective payment is determined to be appropriate, then the staff member selected should be a DCFS employee providing protective services to the family.

Persons Who May Not Act As Protective Payee

The following individuals may not be selected as the protective payee:

1. Any landlord, grocer, or other vendor of goods or services who deals directly with the client.
2. The Director of the Department of Human Services.
3. The Director of the Division of Economic and Medical Services.
4. The Service Representative establishing eligibility for the family.
5. Any employee assigned to the Child Support Enforcement Unit or the Project SUCCESS Unit.
6. Any employee assigned to the Division of Finance or any employee assigned the function of handling fiscal processes related to the client.

Protective payment will be authorized by the Manager, AFDC Unit, Central Office, upon recommendation of the EMS County Supervisor or his/her designee. Form EMS-195, Request for Protective Payee Approval, will be used by the county office to recommend a person to act as the protective payee. It will also be used by the AFDC Unit to authorize a protective payee request.

Mismanagement protective payees will be authorized for a specified period of time, usually six months. The period will be shown on the EMS-195 authorizing the protective payment. At the end of that time, if it is believed the protective payment should continue, another authorization will be required (See FA 2641).

Sanction protective payees will be authorized for as long as the sanction is in place. After the initial authorization is obtained, it is not necessary to obtain subsequent authorizations unless the protective payee needs to be changed and a new person has been selected to be the payee.

Once authorization of the protective payee is received, the Service Representative will notify the client via Form EMS-1 that the AFDC payment will be changed to a protective payment. This notice must meet the requirements of a "timely and adequate" notice (See FA 2620) and will include the name of the protective payee. The Service Representative will complete Form EMS-56 changing the payee to the protective payee and showing all appropriate data to reflect the protective payment status of the case (See EMS Users Manual).

If at any time the protective payment is terminated, the county office will notify the AFDC Unit, Central Office, of this fact via memorandum.

When there is evidence that the AFDC grant is not being used in the best interests of the children, the County Office may recommend protective payment due to mismanagement. This is a temporary measure designed to help the client improve his management and use of money. If mismanagement is determined to exist and DCFS is not already providing services to the family, a referral to DCFS should be made to help the client resolve his/her money management problems. If, because of mental or physical incapacity, there is no substantial likelihood a client will ever be able to manage his own affairs, protective payment should not be recommended. Such persons should be referred for Legal Services for the appointment of a legal guardian.

The case record must clearly reflect the evidence upon which the Service Representative's recommendation for protective payment is based. Such evidence should indicate mismanagement of funds by the client to the extent that the children are not receiving the benefit of the assistance payment. Examples of such evidence are:

1. Continued inability to plan for necessary expenditures.
2. Continued evidence that the children are not properly fed or clothed and that expenditures for them are made in such a way as to threaten their chances for health, growth, and development.
3. Persistent and deliberate failure to meet obligations for rent, food, or other essentials.
4. Repeated evictions or incurrence of debts.

The continued need for a mismanagement protective payee will be reviewed by the county office at least every six months, or sooner if the authorization was for a shorter period of time.

If it is believed that a mismanagement protective payment should be continued, then a status report will be sent to the Manager, AFDC Unit, Central Office with a request for continuation of the protective payment.

The maximum time limit for a mismanagement protective payment is 24 months, unless other arrangements for the children (foster care, appointment of a legal guardian, placement with another relative, etc.) are being planned. In such case, the maximum time limit is 27 months.

In certain situations, protective payment is required as part of a sanction imposed upon a case. These sanction situations are as follows:

1. Project SUCCESS - When the specified relative has refused to participate in Project SUCCESS activities and the sanction for such refusal has been imposed. (Refer to FA 2274)
2. Child Support - When the specified relative fails to cooperate with the Child Support Enforcement Unit or otherwise fails to cooperate in child support activities and the sanction for such failure has been imposed. (Refer to FA 2247.2)

Whenever one of the above sanctions is imposed on a case, the search for a protective payee will also be initiated. The client may remain the payee during the time a protective payee is being located and approved, or if it is determined there is no suitable person available to serve as the protective payee. There is no specific time limit by which a protective payee must be located. However, if the search for a protective payee is terminated because no suitable payee can be located, the Service Representative will document the case record accordingly. A case may not be closed solely because a protective payee cannot be located. However, if the client fails or refuses to provide information to locate a protective payee, after specific written notice (EMS-1) requesting such information, then the case may be closed for failure to provide requested information.

A protective payment instituted as the result of one of the above sanctions will continue indefinitely for as long as the sanction is in place. If the protective payee should become unable to continue to serve as the protective payee, then the search for a new protective payee will be initiated. If it is determined there is no other suitable protective payee, then the client may be restored to payee status even though the sanction is still in place.

If the only eligible payee becomes incapable of caring for him/herself and the children, payment may be made to an alternate payee (guardian or custodian).

When the Service Representative has reason to believe that an AFDC payee suffers from limitation, incapacity, or incompetence such that he/she cannot receive or expend funds in accordance with AFDC guidelines, the Service Representative should submit a written statement to the Office of Chief Counsel explaining why a custodian or guardian is needed for the AFDC client. The statement should include a description of the limitations of the client and specify the client's current available income and resources. If the client has a guardian of the person, the statement should include the guardian's name and address. The statement will be sent, via memorandum, to the Office of Chief Counsel with a copy forwarded to the Manager, AFDC Unit, Central Office, and a copy retained in the case record. The Office of Chief Counsel will determine whether the facts support a petition for Guardianship or an Order Dispensing with Guardianship of the Estate.

The Office of Chief Counsel will notify the County Office directly as to the next steps which must be taken and any forms which must be completed.

Payment will be made to a guardian or custodian only after a copy of the court order is received by the County Office. Once such a court order is received, payment will be made only to the designated guardian or custodian until the guardianship or the Order Dispensing with Guardianship is terminated.

When a guardian or custodian is appointed, the Service Representative will:

1. Obtain a completed EMS-95 which must be signed by the guardian or custodian.
2. Complete Form EMS-56, adding the guardian or custodian's name and Social Security number and changing address to the guardian or custodian's address, if different from the client's.
3. Enter the name of the guardian or custodian on the EMS-86 (Face Sheet) and EMS-87 (Control Card).
4. Make the appropriate narrative entry.

If a legal guardian or a custodian under an Order Dispensing with Guardianship becomes unable or unwilling to perform his duties to the ward, the County Office will attempt to locate another person willing to serve as guardian or custodian and notify the Office of Chief Counsel, Central Office, via memorandum, that a new guardian or custodian is needed. OCC will then direct the County Office as to the next steps which must be taken.

Termination of guardianship or an Order Dispensing with Guardianship may be made without order if the AFDC payee is adjudged by a court to be competent to handle his own affairs. In all other cases, termination of guardianship must be made by court order.

Warrants for incorrect amounts may, at the request of the recipient, be cancelled and reissued in the correct amount.

A cancel and reissue will be authorized only if the change exceeds $1.00. If the warrant has been mailed, it must be returned to the Central Office.

The new warrant will be issued on the first available supplement.

When a client has received a warrant for an insufficient amount, the County Office may advise the client to cash the insufficient warrant and process any deficiency in payment as a retroactive payment rather than authorizing a cancel and reissue.

A missing AFDC warrant is defined as one that the client has not received within three working days from the first of the month, or one which was received but was lost or stolen prior to the client cashing or depositing it in a bank account. The following procedures shall be used in replacing such warrants.

1. On or after the 3rd working day of the month, clients who have not received their AFDC warrant for that month must report such fact to the County Office.
2. At the time of the report of the missing warrant, the County Office will inquire to the AFDC Pay History Screen (WADC) to determine if the warrant has been returned to the Central Office. If the warrant has been returned it may be released via the Check Action Screen (WACA). Any address correction must be entered to WACE before the check is released via WACA.
3. If the warrant has not been returned to Central Office, the County Office will prepare Section A of Form EMS-80 and issue to the client. The client will be responsible for completion of Sections B and C. Section B will be completed by a member of an appropriate local law enforcement agency. A local law enforcement agency is defined as a local municipal police department or a county sheriff's office in communities where there is no police department. The form will be returned to the county office.
4. Upon receipt of the completed EMS-80, forms AOS-2 (Notice of Lost Warrant), and AOS-3 (Bond for Reissuing Warrants) will be completed. Note that all forms must be notarized.

5. Once all forms are completed the County Office will again inquire to the AFDC Pay History Screen (WADC) to determine if the check has been returned. If the check has been returned, destroy all forms and release it via the Check Action Screen (WACA). If the check is still outstanding, forward all forms to the Division of Finance, Program Support, Slot # 3220.

Warrants reported missing on the 3rd working day of the month and determined uncashed by the State Auditor's Office may be reissued beginning the 14th day of the month, but in any event such warrants must be reissued by the 21st day of the month.

Subsequent reported missing warrants determined uncashed by the State Auditor's Office may be reissued 11 days after the initial report but must be reissued within 18 days after the initial report to the County Office.

Warrants reported missing on the 3rd working day of the month and determined cashed by the State Auditor's Office shall be reissued by the 21st day of the month. Warrants reported missing subsequent to the 3rd working day of the month and determined cashed by the State Auditor's Office shall be reissued within 18 days from the date such fact was reported to the County Office.

The client shall be instructed that if the original AFDC warrant is received, the client must immediately so notify the County Office. If the EMS-80 has not been forwarded to DOF, Program Support, it should be voided and placed in the case record with a notation that the warrant was subsequently received. This form should be retained for one year. If the EMS-80 has been forwarded to DOF, Program Support then the warrant will be forwarded to this section, and a duplicate warrant issued.

A warrant will be held when:

1. The recipients' whereabouts are unknown and Agency mail directed to him has been returned by the Post Office indicating no known forwarding address.
2. The recipient has been out of state for more than two months and his residence in the state is questionable.
3. The recipient requests in writing that his warrant be held.

Warrants will be held by updating the Check Action Screen (WACA) via Form EMS-61. Advance Notice (EMS-1) will be given as required. When a warrant is held, the case will be coded for appropriate follow-up action (e.g. release, closure, etc.)

No more than two warrants should be held except under unusual circumstances.

2662.1 Release Warrant

When a recipient whose warrant is held has provided all information necessary to reestablish his eligibility, his warrant will be released by updating the Check Action Screen (WACA) via Form EMS-61.

2670 Correction of Underpayments

A case is considered to have been underpaid when the grant amount paid in a particular month(s) is less than the grant amount for which the case was actually eligible in that month. A case is also considered to have been underpaid when no grant amount was paid due to an erroneous case closure for a month(s) in which eligibility actually existed.

An underpayment may be the result of an agency error, delay, or omission. An underpayment may also occur when the client fails to report, in a timely manner, a change in circumstances which results in the change not being reflected in the month it would have had the client reported timely. The total amount of the underpayment will be the total of the difference between the amount paid and the amount for which the case was actually eligible for each underpaid month.

When an underpayment is discovered, action to correct it will be initiated. An underpayment may be corrected by (1) authorizing a corrective payment provided the client is a current recipient, (2) offsetting an outstanding overpayment claim with all or a portion of the total underpayment amount, or (3) a combination of corrective payment and overpayment offset.

Corrective payment may be authorized only to persons who are current recipients, or would have been current recipients if the error causing the underpayment had not occurred, in the month the payment is authorized. For purposes of this section, "current recipient" and "month of authorization" are defined as follows. "Current recipient" means the client actually received, or would have received if the error had not occurred, an AFDC grant for the month, or would have received a grant except for the prohibition on the payment of grants less than $10. "Month of authorization" means the month in which the Service Representative determines the amount of corrective payment to be made and authorizes such payment by submitting a completed Form SS-56 to either (1) the Terminal Operator for keying, or (2) the supervisor for a second party review. If the client is not a current recipient in the month of authorization, then the corrective payment may not be made. This applies to any situation involving an underpayment including Fair Hearing decisions and QC reviews.

Example #1: In July, the county office determines incorrect income amounts were included in the budget resulting in an underpayment for the payment months of January, February and March. However, the case was closed correctly in May and remains closed. Since the client is not a current recipient in July (the month which would have been the month of authorization), the corrective payment cannot be made.

Example #2: A Fair Hearing decision is received in May. The decision is that the county incorrectly closed the case in March resulting in no grant being paid in April and May. Therefore, an underpayment exists for April and May. The client is determined to be currently eligible in May. Although she did not actually receive a grant in May, she would have had the incorrect closure not occurred. Therefore, the corrective payment for April and May may be made.

When a case has an outstanding AFDC overpayment claim, the underpayment amount will be used to offset the claim regardless of the client's current recipient status. After applying the underpayment amount to the current claim balance, any remaining underpayment amount will be authorized as corrective payment if the client is a current recipient. An underpayment may also be used to offset an overpayment when the overpayment report is initially submitted to the Overpayments Unit (Refer to FA 9010).

When an underpayment is discovered, the Service Representative will document the case record as to the corrective action taken. If the client is not a current recipient and does not have an outstanding AFDC overpayment claim, a narrative entry to that effect will be made. It is not necessary to determine the total underpayment amount in this situation. However, if a non-recipient does have an outstanding claim, the total underpayment amount will be determined and the offset completed. If there is any remaining underpayment amount, a narrative entry will be made to reflect the amount remaining and that corrective payment is not being authorized due to non-recipient status. In either situation, if the client later becomes a recipient again, the corrective payment may be made at that time.

Corrective payment received by a recipient will not be considered as income or as a resource in the month received or in the following month. Thereafter, any remaining money will be considered as a resource.

Corrective payment will be authorized as follows:

1. The Service Representative will complete Form SS-54, AFDC Underpayment/ Overpayment Offset Report. The EMS County Supervisor and the Service Representative must sign the SS-54. The original SS-54 will be filed in the case record.
2. The Service Representative will complete Form SS-56 to authorize the corrective payment.
3. If any of the underpayment amount has been used to offset an overpayment claim, a copy of Form SS-54 will be forwarded to the Overpayments Unit, Central Office.
4. The Service Representative will notify the casehead by letter that corrective payment has been authorized and, if appropriate, the amount used to offset an overpayment claim.
5. In addition to Form SS-54, the case record must contain documentation and/or narrative entries explaining in full the reason for corrective payment.

Corrective payments will be issued on the next supplemental payroll.

When all or a portion of the underpayment is used to offset an outstanding overpayment claim but no corrective payment is to be authorized, the procedure will be as follows:

1. The Service Representative will complete Form SS-54, AFDC Underpayment/ Overpayment Offset Report, and forward a copy of it to the Overpayments Unit, Central Office. The EMS County Supervisor and the Service Representative must sign the SS-54.
2. The Service Representative will notify the casehead by letter of the underpayment and that such amount has been applied to his/her overpayment claim.
3. In addition to Form SS-54, the case record must contain documentation and/or narrative entries explaining in full the reason for the underpayment and the overpayment offset.
   

Each County Office will maintain a register of underpayment corrections. Only those cases for which a corrective payment is authorized or an overpayment offset is completed will be added to this register. It must contain the case name, case number, date, the total amount of the underpayment, the amount if any, used to offset an overpayment, and the net amount if any, authorized as corrective payment.

The Revenue Act of 1978 amending the Tax Reduction Act of 1975 and the Tax Reform Act of 1976, provides for certain tax credits for businesses or individuals who employ certain individuals including AFDC recipients.

The Targeted Jobs Tax Credit (TJTC) provides an incentive to employers to hire certain persons from groups that have a particularly high unemployment rate or that have special needs. The Credit applies to wage costs incurred by employers between January 1, 1979, and December 31, 1984 for certified employees generally hired after September 26, 1978. A person does not have to be an AFDC recipient to be eligible for the credit, but must be in one of the following target groups:

1. WORK Program participants and recipients of AFDC.
2. Supplemental Security Income (SSI) recipients.
3. Youth, 18-24, from economically disadvantaged families.
4. Youth, 16-19, who are economically disadvantaged and participating in an approved cooperative education program.
5. Handicapped individuals referred by state vocational rehabilitation services and the Veterans Administration.
6. Economically disadvantaged Vietnam-era veterans.
7. General Assistance (Welfare) recipients.
8. Public service workers under the Comprehensive Employment and Training Act (CETA) who have been involuntarily terminated.
9. Certain ex-offenders.

Inquiries received by the County Office from employers and/or recipients regarding eligibility for the Targeted Jobs Tax Credit shall be referred to the Employment Security. Division office serving the county. Upon request from ESD, the Service Representative will verify that an individual is a recipient of AFDC.

A case will be closed:

1. When the recipient has requested closure. Advance notice will be given, if required. (Reference FA 2622)
2. Upon notice of another state agency that the recipient is being certified for financial assistance in that state.
3. When the County Office has factual information that a recipient fails to meet any eligibility requirement.
4. When a recipient has failed to come in for a re-evaluation interview, furnish requested information, or comply with other Agency procedures necessary to establish his eligibility after specific written notice (SS-1) that he must do so.
5. When two warrants have been held and the County Office has not received sufficient information to reestablish his eligibility.

6. When the amount of monthly child support collections received by the CSEU exceeds the grant amount by at least $50 (refer to FA 2632.2).
7. When a recipient refuses to cooperate in a Quality Control review of his assistance case.

To close a case:

1. Record pertinent information in case narrative.
2. Give Advance Notice (EMS-1) if required.
3. Send EMS-1410, advising of case closure, to the Project SUCCESS Program Unit, if appropriate.
4. Adjust PA Food Stamp case if necessary. (Reference FSC 1309)
5. Complete EMS-56 and forward to the Terminal Operator for keying.

For AFDC & AFDC-UP cases which are not eligible for extended Medicaid coverage under FA 2691-2691.4, Medicaid coverage will end on the last day of the month in which a notice of closure has been sent. If, however, the advance notice period extends into the following month and the client is not entitled to the grant issued in that month, the Medicaid end date will be the date the advance notice period expires (i.e., one of the first 9 days of the month)

Example 1. A family became ineligible due to the absent parent returning home on August 5. An advance notice of closure was sent August 9 to be effective August 19. The Medicaid end date will be August 31.

Example 2. The same situation except the advance notice was not sent until August 25 with an effective date of September 3. The Medicaid end date will be September 3.

The Family Support Act of 1988 established Transitional Medicaid benefits for AFDC recipients who become AFDC ineligible due to employment. In those cases which are being closed due to increased earnings or hours of employment of the AFDC child's parent (including a minor parent), or the increased earnings of a non-parent specified relative whose needs are included in the unit, or the loss of exclusions, six months of Transitional Medicaid coverage will be authorized to the family. A child under age 18 must continue to live in the home in order for the family to receive TM benefits. For an additional 6 month extension, the family must have received Medicaid during the entire initial TM extension period. In addition, a report form must be submitted by the 21st day of the 4th month of the initial TM extension, reporting the family's gross monthly earnings and child care costs for each of the first three months of the initial TM period. Please refer to the Medical Services Policy manual (MS 2061) for more detailed policy and procedures.

Establishing Eligibility for Initial 6 Month Period

For cases which become AFDC ineligible on or after April 1, 1990 due to employment, an initial six months of Transitional Medicaid coverage will be authorized to those who meet the following criteria:

1. The family received AFDC assistance (category 20 or 21) or AFDC-UP assistance (category 70 or 71) in at least three of the six months immediately preceding the first month of AFDC ineligibility due to earnings; and
2. The family is AFDC ineligible due to:

1. the earned income of the AFDC child's non-sanctioned parent (including a minor parent) or a non-parent specified relative whose needs are included in the unit; or
2. the loss of the $30 and/or 1/3 exclusion from the earned income of any family member; or
3. the hours of employment of the Principal Wage Earner (PWE) in an AFDC-UP case which results in the children no longer being deprived due to unemployment.

Everyone included in the case in the last month of AFDC/UP eligibility is eligible even if one or more persons did not receive AFDC for three of the six months (e.g., a newborn child) provided they are open members when the AFDC/UP case is closed. (See the AFDC-UP note below.)

Example 1. Ms. Smith received AFDC for herself and one child, John for the period May - August. In July, her daughter, Sally moved in the household. She previously lived with her father. Sally was added to the AFDC case in July. In August, Ms. Smith became ineligible due to earned income, and was determined eligible for TM. Even though Sally has not received AFDC for the three months, she is also eligible for TM because she was included in the case at the time of closure.

Receipt of AFDC in another state will count in meeting the three months of receipt requirements as long as the AFDC case was open in Arkansas for at least one month and the closure due to earned income occurred in Arkansas.

Example 2. Ms. Smith moved from Missouri to Arkansas. She received AFDC from Missouri in January and February. She applied for AFDC in Arkansas on 4/4 and was certified with eligibility beginning 4/31. On 5/10, Ms. Jones became employed and reported it 5/15. The earned income makes her ineligible prospectively and her case is closed in May. She meets the TM requirement because she received AFDC in January and February from Missouri and in April in Arkansas.

Example 3. Ms. Smith moves to Arkansas from Missouri. She applies for AFDC on 6-1 but has earned income in an amount which makes her ineligible and her application is denied. She received AFDC in Missouri in January, February, March and April. Her AFDC case was closed there due to earned income and she received TM from Missouri for May. However, when she moved to Arkansas, she lost her TM benefits from Missouri. She is also not eligible for TM from Arkansas since she was never an Arkansas AFDC recipient.

AFDC-UP NOTE: When an AFDC-UP case which includes members who are eligible for regular AFDC is closed because the PWE is no longer unemployed, the UP members may be eligible for TM even if the other members continue to receive regular AFDC (category 20 or 21). However, at least one UP child must have received in cat. 70 or 71 in three of the preceding six months in order for any of the UP members to be eligible for TM. Any months in which the regular AFDC members received in cat. 20 or 21 prior to receiving in the AFDC-UP case cannot be counted as a month of receipt for the UP members.

EXAMPLE: Ms. Jones received regular AFDC for herself and Jimmy, her child from a previous marriage, for several years. When her current husband became unemployed in May, they applied for UP for Mr. Jones and their child Mary. The UP case was certified in June with all of them included in the unit. On August 27, Mr. Jones started another job and was expected to work more than 100 hours/month. Since Mary was no longer deprived, the UP case was closed in September and Ms. Jones and Jimmy's regular AFDC case was re-opened. Since Mary did receive UP for three of the preceding six months (June, July, & August), she and Mr. Jones are eligible for TM.

The initial six-month period starts with the month following the last month of AFDC eligibility. The first month of the six months is the first month of AFDC ineligibility.

Example 4. Ms. Jones began work on 5/5 and reported it 5/15. She is ineligible prospectively for June. She is also ineligible for May based on the checks she will receive in May. May is the first month of ineligibility and therefore is the first month of the six months.

Example 5. Ms. Jones began work 4/15 and reported it 4/16. She is ineligible prospectively for May. However, based on the number of checks received in April, she is eligible for April. May is the first month of AFDC ineligibility and is therefore the first month of the six month period.

If an AFDC/UP case closed due to employment does not meet the eligibility criteria for transitional Medicaid, the reasons will be documented in the case record.

Notice of AFDC Case Closure and Eligibility for Transitional Medicaid Benefits

Form EMS-123, Notice of AFDC Case Closure Due to Employment, will be used for all cases meeting the above eligibility requirements for Transitional Medicaid. In addition to serving as the notice of AFDC case closure, the notice explains to the family its right to the initial six months of transitional Medicaid. The Service Representative will complete the form to show the specific reason for the AFDC closure and effective date and to identify members and the last month of the initial six-month Transitional Medicaid period.

Authorizing Initial Six Month Period

The Service Representative will authorize the initial six-month TM period when the AFDC/UP case is closed via Forms EMS-56 and EMS-125. Transaction type "CM" with the appropriate Action Reason will be entered on the EMS-56. An "N" will be entered to the client notice field so that a system notice will not be sent since an EMS-123 will be manually sent on each of these cases. Form EMS-125 will be completed to show open status and the beginning month of the initial 6 month period. It will be attached to the EMS-56 and forwarded to the terminal operator for keying to the WACE and WATM screen. If the case meets all night edits, the system will automatically convert it to Transitional Medicaid (Category 25). Please refer to the EMS User's Manual for a more detailed explanation of the WATM screen.

System Closure Due To Loss of $30 and/or 1/3

When the system automatically closes a case due to the loss of the $30 and/or 1/3 exclusions, it will automatically convert the case to category 25 and will determine the Medicaid begin date. A system notice will be generated to the client with the Transitional Medicaid information on it. The county office will not issue a manual notice to this type of case closure.

Continuing Eligibility for Initial 6 Month period

The initial extension of TM will be terminated at the close of the first month in which the family ceases to include a child under 18 who was in the AFDC/UP case in the last month of AFDC eligibility. The initial TM will also be terminated if the family moves out of state.

In addition to Transitional Medicaid benefits, the Family Support Act of 1988 established Transitional Child Care benefits for a period of twelve months for AFDC recipients who become AFDC ineligible due to employment on or after April 1, 1990. During the twelve month period, the client may receive assistance in paying child care costs which are due to employment. The amount of assistance will be based on a sliding fee scale but will, in no situation, be the full child care cost. The client will be responsible for paying some portion of the monthly child care expenses.

The initial eligibility requirements for TCC benefits are described below:

The family must:

1. Have received AFDC assistance (category 20, 21, 70 or 71) in at least three of the six months immediately preceding the first month of AFDC ineligibility due to earnings; and
2. Be AFDC ineligible due to:

1. the earned income of the AFDC child's parent (including a minor parent) or any other member whose needs are included in the unit; or
2. the loss of the $30 and/or 1/3 exclusion from the earned income of any family member; or
3. the increased hours of employment of the PWE in an AFDC-UP case which results in the child no longer being deprived due to unemployment.

Any family, regardless of Project SUCCESS participation status, who meets the above requirements will be eligible for TCC benefits for up to a twelve month period. The period will begin with the month following the last month of AFDC eligibility (i.e., the same month as the beginning month of the initial six-month TM period) and will continue for a period of twelve consecutive months provided all continuing eligibility criteria are met.

To receive TCC benefits, the client must submit an application for TCC and provide income verification when requested. An application for TCC may be submitted in any month during the twelve-month period.

Continuing Eligibility

TCC eligibility may be terminated during the twelve-month period if any of the following occur:

1. The recipient terminates employment without good cause.
2. The recipient fails, without good cause, to cooperate with the CSEU in obtaining child support payments.
3. The family ceases to include a child under age 18 who is deprived of parental care or support. (The child does not have to have been included in the AFDC case when it became ineligible.)

If the recipient loses a job with good cause and then finds another job during the twelve-month period, the family may be eligible for TCC for the remaining months of the twelve month period. If the family re-establishes AFDC eligibility during the twelve-month period, then a new twelve month period may be authorized only if all initial eligibility requirements are met (i.e., reason for close and receipt of AFDC in three of the preceding six months).

When an AFDC case is closed due to employment, the Service Representative will determine if the family meets the initial eligibility requirements for TCC. All recipients who are determined eligible for TCC will be notified of this eligibility when the notice of closure is sent. For cases which are closed by the county office, Form EMS-123, Notice of AFDC Case Closure Due to Employment, will serve as this notification. The Service Representative will enter on the form the last month of the twelve month period in the Child Care portion of the Transitional Benefits section. For cases which are automatically closed by the system due to the loss of exclusions, the system generated notice will explain both the TM and TCC benefits.

No further action by the Service Representative to authorize TCC benefits is required at the time of AFDC case closure. If the client contacts the worker regarding TCC benefits, he will refer the client to the staff person responsible for accepting and processing TCC applications for the county office. The Service Representative will also provide any information requested by the TCC staff person which is needed to process the TCC application.

Medicaid regulations require that stepparent deemed income cannot be considered in determining a child's Medicaid eligibility. Therefore, when an AFDC case is to be closed due to stepparent deemed income, Medicaid eligibility for the child(ren) must be continued, provided the child is otherwise eligible, without regard to the stepparent's income. This provision applies only to the children and not to the adult relative.

When AFDC ineligibility is determined to exist due to stepparent deemed income, the AFDC case will be converted to an AFDC-Stepparent Deemed Income case (Cat. 22) with only the dependent children as eligible open members. Refer to the Medical Services manual (MS 2085-2087) for the policy and procedures for determining continuing Medicaid eligibility and for converting the AFDC case to an AFDC Deemed Income case.

Although cases which are Medicaid eligible on the basis of disregarded stepparent deemed income are categorized as AFDC, they are strictly Medicaid Only cases and are not considered to be AFDC recipients.

Three months of extended Medicaid coverage will be authorized when an AFDC case is closed due to child support income (Action Reason 071) provided the case was open for at least three of the six months immediately preceding the first month of ineligibility. The three months will begin with the month following the first month in which the case became ineligible due to child support income. The AFDC ineligibility may have been caused in whole or in part by the child support income. Only those persons who were included in the budget in the last month of AFDC eligibility will be entitled to the three months of extended Medicaid.

The Service Representative must indicate the last month/year of extended Medicaid coverage on the EMS-56 in the Medicaid End Date field.

Please note that this provision is effective beginning October 1, 1989. Retroactive Medicaid coverage will be authorized to all eligible households.

Section 302 of the Medicare Catastrophic Coverage Act of 1988 states that pregnant women certified in any Medicaid category will not lose Medicaid eligibility because of changes in income in the families of which they are members. This includes pregnant women who are receiving AFDC and become ineligible due to a change in income. With medical verification of the pregnancy, a woman whose family income makes her ineligible for the category in which she is certified will be considered SOBRA eligible and will be certified in category 61. For policy and procedures concerning this coverage, refer to the Medical Services Manual Policy, MS 5900.