OKDHS - OAC 340:40-7-12. Sources of excluded income

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340:40-7-12. Sources of excluded income

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Revised 6-1-10

Only the income listed in this Section is excluded in determining a household's eligibility for a child care benefit. No other income is excluded.

(1) Lump sum payments. One-time lump sum payments are excluded as income. Recurring lump sum payments are excluded as income unless specifically mentioned in OAC 340:40-7-11 as a countable source of income.
(2) In-kind income. In-kind income is defined as any gain or benefit which is not in the form of money payable directly to the household, including non-monetary or in-kind benefits such as meals, clothing, public housing, or produce from a garden, and is excluded. • 1
(3) Money received from the sale of property. Money received from the sale of property such as stocks, bonds, a house, or a car is excluded. This exclusion does not apply if the person is engaged in the business of selling such property. • 2
(4) Bank or trust account withdrawals. Money withdrawn from a bank or trust account is excluded as income even if used to meet current living expenses.
(5) Capital gains. The proceeds from the sale of capital goods or equipment are excluded.
(6) Household income for certain children adopted through Oklahoma Department of Human Services (OKDHS). The income of all household members is exempt for a child only when conditions in (A) through (E) are met. • 3 The:
- (A) child has been adopted through OKDHS or a federally recognized Indian tribe, as defined by the Federal and Oklahoma Indian Child Welfare Acts, by the parent who is applying for benefits; • 4
- (B) adoptive parent applying for benefits must have a fully executed Form 04AN002E, Adoption Assistance Agreement, that lists child care as an adoption assistance benefit for the child and also includes Form 04AN033E, Post Adoption Child Care Referral; • 5
- (C) adoptive parent and child are residents of Oklahoma;
- (D) child is five years of age or younger; and
- (E) need for child care is for employment only and proof is provided. • 6 Subsidized child care may be approved only for the days and hours the parent works. • 7 In a two-parent family, care may also be approved for sleep time when one parent works days and the other parent works during normal night time sleep hours. Refer to OAC 340:40-7-8.
(7) Earnings of children. Earnings of a person 17 years of age and younger who is considered a child in the case is excluded as long as the child is attending school regularly. This exclusion continues to apply during temporary interruptions in school attendance due to semester or vacation breaks, provided the child's enrollment resumes following the break. Earned income of a child who is head of his or her own household, such as is the case for a minor parent, is treated as adult income. • 8
(8) Irregular income. Any income received too infrequently or irregularly to be reasonably anticipated is not counted unless it is in excess of $30 per calendar quarter.
(9) Reimbursements. Reimbursements for past or future expenses to the extent they do not exceed actual expenses are excluded. • 9
(10) Tax refunds. Federal or state income tax refunds, including the state and federal Earned Income Tax Credit (EITC), and advance payments of federal EITC are excluded.
(11) Money received for third parties. Money received and used for the care and maintenance of a third party who is not a household member is excluded.
(12) Loans. All loans, including loans from private as well as commercial institutions, are excluded. Verification that the income is a loan is required.
(13) Grants. Grants obtained and used under conditions that preclude their use for current living costs are excluded.
(14) Educational assistance. Educational assistance including grants, work-study, scholarships, fellowships, educational loans on which payment is deferred, veteran's education benefits, and the like are exempt if receipt is contingent upon the student regularly attending school and the money received is intended to offset the costs of education and expenses as identified by the institution, school, program, or other grantor. • 10 If the money received is not intended to be a reimbursement and is a gain to the client, it is considered income. • 11
(15) Stipends. Stipends paid to students participating in the Indian Vocational Education Program through the Carl D. Perkins Vocational and Applied Technology Education Act is excluded.
(16) Service Corps of Retired Executives (SCORE) and Active Corps of Executives (ACE). Payment for supportive services or reimbursement of out‑of‑pocket expenses made to volunteers serving as foster grandparents, senior health aides, or senior companions, and to persons serving in SCORE and ACE is excluded.
(17) Government rent or housing subsidies. Government rent or housing subsidies by government agencies which is received in-kind or in cash for rent, mortgage payments, or utilities is excluded.
(18) Foster care payments. Foster care payments received for a foster child in state or tribal custody are excluded as income.
(19) Title IV E of the Social Security Act or State Adoption Subsidy. Federal or state funded adoption subsidy payments made to adoptive parents are excluded as income.
(20) Victims of Crime Act of 1984. Payments made from the crime victims' compensation program as amended in Section 1402 of the Victims of Crime Act of 1984 are excluded. [42 USC 10602]
(21) Family Support Assistance Payment Program. Family Support Assistance Payment Program payments paid to persons by the Developmental Disabilities Services Division of the Oklahoma Department of Human Services (OKDHS) are excluded as income.
(22) Vendor payments. Vendor payments are payments in money on behalf of a household when a person or organization outside the household uses its own funds to make a direct payment to either a household's creditors or a person or organization providing a service to the household are excluded. Payments specified by a court order or other legally binding agreement to be paid directly to the client but that are instead diverted to pay a third party for a household expense are counted as income. • 12
(23) Money received by another household for a household member.
- (A) When a child spends part of the month in two separate households and receives countable income, the worker determines which household actually receives the income. Only the portion of the income that is actually received by the household applying for or receiving a child care benefit is considered as income for that household. • 13
- (B) When a minor parent is the payee and lives with one of his or her parents or a caretaker who receives child support for the minor parent, that child support is considered income for the parent or caretaker and not considered for the child care benefit.
(24) Income excluded by federal law. Income excluded by federal law is defined as:
- (A) payments received under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
- (B) payments received:
  - (i) under the Alaska Native Claims Settlement Act [Public Law (P. L.) 92‑203, § 21(a)];
  - (ii) under the Sac and Fox Indian Claims Agreement [P.L. 94‑189];
  - (iii) from the disposition of funds to the Grand River Band of Ottawa Indians [P.L. 94-540];
  - (iv) by members of the Confederated Tribes of the Mescalero Reservation [P.L. 95-433]; or
  - (v) under the Maine Indian Claims Settlement Act of 1980 to members of the Passamaquoddy and the Penobscot Nation [P.L. 96‑420];
- (C) any payment to volunteers under Title II, Retired and Senior Volunteer Program, Foster Grandparents and others, of the Domestic Volunteer Services Act of 1973 [P.L. 93-113] as amended. Payments under Title I of that Act, Volunteers in Service To America, University Year for Action, and Urban Crime Prevention Program, to volunteers are excluded only if the monthly amount, when converted to an hourly rate, is less than the Oklahoma minimum wage; • 14
- (D) income derived from submarginal land of the United States which is held in trust for certain Indian tribes [P.L. 94-114, Sec. 6];
- (E) Indian payments, which include judgment funds or funds held in trust, distributed per capita by the Secretary of the Interior of the Bureau of Indian Affairs or distributed by the tribe subject to approval by the Secretary of the Interior. Any interest or investment income accrued on such funds while held in trust or any purchases made with judgment funds, trust funds, interest, or investment income accrued on such funds. Any income from mineral leases, from tribal businesses investments, and the like, as long as the payments are paid per capita. For purposes of this paragraph, per capita is defined as each tribal member receiving an equal amount. However, any interest or income derived from the principal or produced by purchases made with the funds after distribution is considered as any other income;
- (F) income up to $2,000 per year received by individual Indians, which is derived from leases or other uses of individually-owned trust or restricted lands, is not counted as income. The income exclusion applies to calendar years beginning January 1, 1994. Any remaining disbursements from the trust or restricted lands are considered as income;
- (G) allowances, earnings, and payments made for participation in the Workforce Investment Act (WIA) to persons of all ages and student status. There are numerous programs for which payments are excluded. These programs include Summer Youth, Job Corp, paid classroom training, and others. The exception to the income exclusion is income to persons for on-the-job training paid to participants 19 years and older. This income is treated as any other earned income. See OAC 340:40-7-11(b)(4);
- (H) payments, allowances, or earnings to persons participating in programs under Title I of the National and Community Service Trust Act of 1993. Title I includes three Acts: Serve-America, The Community Service, Schools and Service-Learning Act of 1990, the American Conservation and Youth Service Corps Act of 1990, and the National and Community Service Act. Most of the payments are made as a weekly stipend or for educational assistance. The Higher Education Service-Learning Program and the AmeriCorps Umbrella Program come under this Title. This includes AmeriCorps income;
- (I) payments or allowances made under any federal law for the purpose of energy assistance, Low Income Home Energy Assistance Program (LIHEAP), and also utility payments and reimbursements made by the Department of Housing and Urban Development (HUD) and the Farmers Home Administration (FmHA);
- (J) the amount of the mandatory salary reduction of military service personnel used to fund the G.I. Bill;
- (K) all funds paid to persons under the Community Service Employment Program under Title V. [P.L. 100-175] This program is authorized by the Older Americans Act. Each State and various organizations receive some Title V funds. These organizations include:
  - (i) Green Thumb;
  - (ii) National Council on Aging;
  - (iii) National Council of Senior Citizens;
  - (iv) American Association of Retired Persons;
  - (v) U.S. Forest Service;
  - (vi) National Association for Spanish Speaking;
  - (vii) National Urban League;
  - (viii) National Council on Black Aging; and
  - (ix) National Council on Indian Aging;
- (L) payments made from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement In Re Agent Orange Product Liability Litigation, M.D.L. No. 381 (E.D.N.Y.);
- (M) payments received under the Civil Liberties Act of 1988. These payments are made to persons of Japanese ancestry who were detained in interment camps during World War II;
- (N) payments made from the Radiation Exposure Compensation Trust Fund as compensation for injuries or deaths resulting from exposure to radiation from nuclear testing and uranium mining;
- (O) payments for the fulfillment of a Plan for Achieving Self-Support under Title XVI of the Social Security Act;
- (P) payments made to persons because of their status as victims of Nazi persecution;
- (Q) payments made for the Experimental Housing Allowance Program under Annual Contributions Contracts entered into prior to January 1, 1975, under Section 23 of the U.S. Housing Act of 1937 as amended;
- (R) monetary allowances provided to certain children of Vietnam War veterans as described in Chapter 18 of Title 38 of the United States Code (USC);
- (S) federal major disaster and emergency assistance provided under the Disaster Relief Act of 1974, and comparable disaster assistance provided by states, local governments, and disaster assistance organizations. For payments to be excluded, the disaster or emergency must be declared by the President of the United States;
- (T) the value of the food benefit allotment under the Food and Nutrition Act of 2008; and
- (U) the value of supplemental food assistance under the Child Nutrition Act of 1966 and the special food services program for children under the National School Lunch Act of 1970, both as amended by the Omnibus Budget Reconciliation Act of 1981.

INSTRUCTIONS TO STAFF 340:40-7-12

Revised 6-1-10

1. See OAC 340:40-7-11(c)(5) for court-ordered benefits.

2. See OAC 340:40-7-11(b)(2) for how to handle self-employment income.

3. (a) When all five conditions listed in OAC 340:40-7-12(6) are met, no income is considered for the child. This includes exempting income from any adult non‑relative opposite sex individual (ANROSI) who is living in the home with the adoptive parent for the adopted child's case. The worker codes the adoptive parent in the FACS Household Tab as 'Income and Resources not Considered for Benefit Computation – Individual not Included'. The worker must document in Family Assistance/Client Services FACS Case Notes why the income is being excluded.

(b) When all five conditions listed in OAC 340:40-7-12(6) are not met, all household income is considered for the child in accordance with OAC 340:40‑7-6 and care may be approved for any need factor met in OAC 340:40-7-7 and 340:40-7-8.

(c) When the adopted child meets all five conditions listed in OAC 340:40-7-12(6) and there are other children in need of care in the home that do not meet the conditions, separate cases must be established. See OAC 340:40-5-1 Instructions to Staff (ITS) #15(b) or OAC 340:40-7-6 ITS #1(f).

4. The parent meets this condition by providing a copy of the Final Decree of Adoption.

5. When the parent does not have Form 04AN002E and Form 04AN033E, Post Adoption Child Care Referral, the parent contacts the Children and Family Services Division (CFSD) Post Adoption Services Section to obtain the forms.

6. Proof can be a copy of the work schedule showing the parent's name and the name of the business or a signed statement from the employer. A written statement is preferable, but if this is unavailable, the worker can also confirm the parent's work hours over the telephone with the employer. The worker must document how work hours are verified in FACS Case Notes.

7. (a) When it is a single parent household, care may only be approved for the days and hours the parent is employed including travel time.

(b) When this is a two-parent household and both parents are employed, care is only authorized for the hours worked in common including travel time unless they qualify for sleep time child care as defined in OAC 340:40‑7‑8(a)(5).

8. For purposes of this provision, an elementary or high school student also includes someone who attends classes, to obtain a General Educational Development (GED) certificate, that are recognized, operated, or supervised by the student's state or local school district.

9. (a) Examples are reimbursements for:

(1) job or training related expenses such as travel, per diem, uniforms, and transportation to and from the job or training site. If these expenses are not reimbursements, they are not otherwise deductible;

(2) out-of-pocket expenses incurred by volunteers in the course of their volunteer activity;

(3) medical or dependent care; and

(4) services provided by Title XX of the Social Security Act.

(b) When a reimbursement, including a flat allowance, covers multiple expenses, each expense does not have to be separately identified as long as none of the reimbursement covers normal living expenses. The worker counts the amount of the reimbursement that exceeds the actual incurred expenses. The worker does not consider a reimbursement to exceed actual expenses unless the provider or household indicates the amount is excessive.

10. Exempt student income includes:

(1) any money from Title IV of the Higher Education Act including federal or state work study;

(2) educational assistance funded through the Department of Veterans Affairs (VA) such as the Montgomery GI Bill;

(3) grants;

(4) scholarships;

(5)subsidized and unsubsidized Stafford loans;

(6) federal PLUS loans;

(7) TRIO grants;

(8) Robert C. Byrd Honors Scholarship Program;

(9) Bureau of Indian Affairs (BIA) student assistance;

(10) money from the Carl D. Perkins Vocational Education Act; and

(11) Workforce Investment Act (WIA).

11. Student income that is not exempt includes:

(1) money that is paid directly to the student and not sent through the bursar's account other than funds listed in ITS # 10 of this Instruction;

(2) institutional work study; or

(3) money intended as an incentive for school attendance or grades rather than the school expenses.

12. (a) Examples of vendor payments that are excluded as income are:

(1) a friend, employer, agency, church, relative, or former spouse making payments for household expenses such as rent or utilities directly to the landlord or utility company. If the payment is made from funds not owed to the household, it is a vendor payment and excluded as income;

(2) a payment made directly to the landlord or financial institution for the household's rent or house by an employer, in addition to paying regular wages, is excluded;

(3) payments specified by a court order or other legally binding agreement to go directly to a third party rather than the household are excluded as income as they are not otherwise payable to the household; or

(4) payments or allowances made by the Department of Housing and Urban Development (HUD) or by the Farmers Home Administration (FmHA) directly to mortgage holders, landlords, or utility providers are vendor payments and excluded as income.

(b) An example of a vendor payment that is considered as income is when a non-custodial parent is directed by the court to pay $400 in child support to the client. The non-custodial parent pays $200 to the client and $200 directly to the landlord for rent. The worker counts the entire $400 as unearned income because the payment is taken from money that is owed to the household. If the court order had directed the non-custodial parent to make a payment directly to a vendor, that payment is excluded as income.

13.An example of this could occur in certain joint or shared custody situations. One parent may be receiving a Temporary Assistance for Needy Families (TANF) benefit or a Supplemental Security Income (SSI) payment for a child. If none of the income comes with the child into the other parent's household, it is not counted as income in that household. If part of the income is given to the other parent, only that portion of the income is considered as income.

14. See OAC 340:50-7-22(5)(H) for determining food benefit eligibility.

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