§ 98.21 Eligibility determination processes. ( a ) A Lead Agency shall re-determine a child's eligibility for child care services no sooner than 12 months following the initial determination or most recent redetermination, subject to the following: ( 1 ) During the period of time between determinations or redeterminations, if the child met all of the requirements in § 98.20(a) on the date of the most recent eligibility determination or redetermination, the child shall be considered eligible and will receive services at least at the same level, regardless of: ( i ) A change in family income, if that family income does not exceed 85 percent of SMI for a family of the same size; or
( ii ) A temporary change in the ongoing status of the child's parent as working or attending a job training or educational program. A temporary change shall include, at a minimum: ( A ) Any time-limited absence from work for an employed parent due to reasons such as need to care for a family member or an illness;;
( B ) Any interruption in work for a seasonal worker who is not working between regular industry work seasons;
( C ) Any student holiday or break for a parent participating in training or education;
( D ) Any reduction in work, training or education hours, as long as the parent is still working or attending training or education;
( E ) Any other cessation of work or attendance at a training or education program that does not exceed three months or a longer period of time established by the Lead Agency;
( F ) Any change in age, including turning 13 years old during the eligibility period; and
( G ) Any change in residency within the State, Territory, or Tribal service area.
( 2 ) ( i ) Lead Agencies have the option, but are not required, to discontinue assistance due to a parent's loss of work or cessation of attendance at a job training or educational program that does not constitute a temporary change in accordance with paragraph (a)(1)(ii) of this section. However, if the Lead Agency exercises this option, it must continue assistance at least at the same level for a period of not less than three months after each such loss or cessation in order for the parent to engage in job search and resume work, or resume attendance at a job training or educational activity.
( ii ) At the end of the minimum three-month period of continued assistance, if the parent is engaged in a qualifying work, education, or training activity with income below 85% of SMI, assistance cannot be terminated and the child must continue receiving assistance until the next scheduled re-determination, or at Lead Agency option, for an additional minimum 12—month eligibility period.
( iii ) If a Lead Agency chooses to initially qualify a family for CCDF assistance based on a parent's status of seeking employment or engaging in job search, the Lead Agency has the option to end assistance after a minimum of three months if the parent has still not found employment, although assistance must continue if the parent becomes employed during the job search period.
( 3 ) Lead Agencies cannot increase family co-payment amounts, established in accordance with § 98.45(k), within the minimum 12-month eligibility period except as described in paragraph (b)(3) of this section.
( 4 ) Because a child meeting eligibility requirements at the most recent eligibility determination or redetermination is considered eligible between redeterminations as described in paragraph (a)(1) of this section, any payment for such a child shall not be considered an error or improper payment under subpart K of this part due to a change in the family's circumstances.
( 5 ) Notwithstanding paragraph (a)(1), the Lead Agency may discontinue assistance prior to the next re-determination in limited circumstances where there have been: ( i ) Excessive unexplained absences despite multiple attempts by the Lead Agency or designated entity to contact the family and provider, including prior notification of possible discontinuation of assistance; ( A ) If the Lead Agency chooses this option, it shall define the number of unexplained absences that shall be considered excessive;
( B ) [Reserved]
( ii ) A change in residency outside of the State, Territory, or Tribal service area; or
( iii ) Substantiated fraud or intentional program violations that invalidate prior determinations of eligibility.
( b ) ( 1 ) Lead Agencies that establish family income eligibility at a level less than 85 percent of SMI for a family of the same size (in order for a child to initially qualify for assistance) must provide a graduated phase-out by implementing two-tiered eligibility thresholds, with the second tier of eligibility (used at the time of eligibility re-determination) set at: ( i ) 85 percent of SMI for a family of the same size; or
( ii ) An amount lower than 85 percent of SMI for a family of the same size, but above the Lead Agency's initial eligibility threshold, that: ( A ) Takes into account the typical household budget of a low income family; and
( B ) Provides justification that the second eligibility threshold is: ( 1 ) Sufficient to accommodate increases in family income over time that are typical for low-income workers and that promote and support family economic stability; and
( 2 ) Reasonably allows a family to continue accessing child care services without unnecessary disruption.
( 2 ) At re-determination, a child shall be considered eligible (pursuant to paragraph (a) of this section) if their parents, at the time of redetermination, are working or attending a job training or educational program even if their income exceeds the Lead Agency's income limit to initially quality for assistance, as long as their income does not exceed the second tier of the eligibility described in (b)(1);
( 3 ) A family meeting the conditions described in paragraph (b)(2) of this section shall be eligible for services pursuant to the conditions described in § 98.20 and all other paragraphs of this section, with the exception of the co-payment restrictions at paragraph (a)(3) of this section. To help families transition off of child care assistance, Lead Agencies may gradually adjust co-pay amounts for families whose children are determined eligible under the graduated phase-out conditions described in paragraph (b)(2) and may require additional reporting on changes in family income as described in paragraph (h)(3) of this section, provided such requirements do not constitute an undue burden, pursuant to conditions described in paragraphs (h)(2)(ii) and (iii) of this section.
( c ) The Lead Agency shall establish processes for initial determination and redetermination of eligibility that take into account irregular fluctuation in earnings, including policies that ensure temporary increases in income, including temporary increases that result in monthly income exceeding 85 percent of SMI (calculated on a monthly basis), do not affect eligibility or family co-payments.
( d ) The Lead Agency shall establish policies and processes to incorporate additional eligible children in the family size (*e.g.,* siblings or foster siblings), including ensuring a minimum of 12 months of eligibility between eligibility determination and redetermination as described in paragraph (a) of this section for children previously determined eligible and for new children who are determined eligible, without placing undue reporting burden on families.
( e ) At a Lead Agency's option, a child may be considered presumptively eligible for up to three months and begin to receive child care subsidy prior to full documentation and eligibility determination: ( 1 ) The Lead Agency may issue presumptive eligibility prior to full documentation of a child's eligibility if the Lead Agency first obtains a less burdensome minimum verification requirement from the family.
( 2 ) If, after full documentation is provided, a child is determined to be ineligible, the Lead Agency shall ensure that a child care provider is paid and shall not recover funds paid or owed to a child care provider for services provided as a result of the presumptive eligibility determination except in cases of fraud or intentional program violation by the provider.
( 3 ) Any CCDF payment made on behalf of a presumptively eligible child prior to the final eligibility determination shall not be considered an error or improper payment under subpart K of this part and will not be subject to disallowance so long as the payment was not for a service period longer than the period of presumptive eligibility.
( 4 ) If a child is determined to be eligible, the period of presumptive eligibility will apply to the minimum of 12 months of eligibility prior to re-determination described in paragraph (a) of this section.
( 5 ) The Secretary may deny the use of federal funds for direct services under presumptive eligibility for Lead Agencies under a corrective action plan for error rate reporting pursuant to § 98.102(c).
( f ) The Lead Agency shall establish procedures and policies to ensure parents, especially parents receiving assistance through the Temporary Assistance for Needy Families (TANF) program are not required to unduly disrupt their education, training, or employment in order to complete the eligibility determination or re-determination process, including the use of online applications and other measures, to the extent practicable.
( g ) At the Lead Agency's option, enrollment in other benefit programs or documents or verification used for other benefit programs may be used to verify eligibility as appropriate according to § 98.68(c) for CCDF, such as: ( 1 ) Benefit programs with income eligibility requirements aligned with the income eligibility at § 98.20(a)(2)(i) may be used to verify a family's income eligibility; and
( 2 ) Benefit programs with other eligibility requirements aligned with § 98.20(a)(3) may verify: ( i ) A family's work or attendance at a job training or educational program;
( ii ) A family's status as receiving, or need to receive, protective services; or
( iii ) Other information needed for eligibility.
( h ) The Lead Agency shall establish procedures and policies to ensure parents, especially parents receiving assistance through the Temporary Assistance for Needy Families (TANF) program, are not required to unduly disrupt their education, training, or employment in order to complete the eligibility redetermination process.
( i ) The Lead Agency shall specify in the Plan any requirements for parents to notify the Lead Agency of changes in circumstances during the minimum 12-month eligibility period, and describe efforts to ensure such requirements do not place an undue burden on eligible families that could impact continued eligibility between redeterminations. ( 1 ) The Lead Agency must require families to report a change at any point during the minimum 12-month period, limited to: ( i ) If the family's income exceeds 85% of SMI, taking into account irregular income fluctuations; or
( ii ) At the option of the Lead Agency, the family has experienced a non-temporary cessation of work, training, or education.
( 2 ) Any additional requirements the Lead Agency chooses, at its option, to impose on parents to provide notification of changes in circumstances to the Lead Agency or entities designated to perform eligibility functions shall not constitute an undue burden on families. Any such requirements shall: ( i ) Limit notification requirements to items that impact a family's eligibility (*e.g.,* only if income exceeds 85 percent of SMI, or there is a non-temporary change in the status of the child's parent as working or attending a job training or educational program) or those that enable the Lead Agency to contact the family or pay providers;
( ii ) Not require an office visit in order to fulfill notification requirements; and
( iii ) Offer a range of notification options (*e.g.,* phone, email, online forms, extended submission hours) to accommodate the needs of parents;
( 3 ) During a period of graduated phase-out, the Lead Agency may require additional reporting on changes in family income in order to gradually adjust family co-payments, if desired, as described in paragraph (b)(3) of this section.
( 4 ) Lead Agencies must allow families the option to voluntarily report changes on an ongoing basis. ( i ) Lead Agencies are required to act on this information provided by the family if it would reduce the family's co-payment or increase the family's subsidy.
( ii ) Lead Agencies are prohibited from acting on information that would reduce the family's subsidy unless the information provided indicates the family's income exceeds 85 percent of SMI for a family of the same size, taking into account irregular income fluctuations, or, at the option of the Lead Agency, the family has experienced a non-temporary change in the work, training, or educational status.
( j ) Lead Agencies must take into consideration children's development and learning and promote continuity of care when authorizing child care services.
( k ) Lead Agencies are not required to limit authorized child care services strictly based on the work, training, or educational schedule of the parent(s) or the number of hours the parent(s) spend in work, training, or educational activities.
[81 FR 67579, Sept. 30, 2016, as amended at 89 FR 15413, Mar. 1, 2024; 89 FR 52397, June 24, 2024]