Source: http://www.twc.state.tx.us/child-care-services-guide-d-100-eligibility-child-care-services
Timestamp: 2018-01-17 01:11:52
Document Index: 514479951

Matched Legal Cases: ['§809', '§802', '§809', '§809', '§809', '§809', '§800', '§809', '§208', '§207', '§501', '§501', '§203', '§212', '§802', '§809', '§809', '§809', '§809', '§809', '§809', '§2017', '§809', '§809', '§1087', '§809', '§32', '§809', '§809', '§12637', '§809', '§809', '§2931', '§8624', '§459', '§3056', '§9858', '§5044', '§5058', '§10602', '§809', '§809', '§809', '§809', '§809', '§809', '§809', '§809', '§809', '§809']

Child Care Services Guide - D-100: Eligibility for Child Care Services | Texas Workforce Commission
Child Care Services Guide - D-100: Eligibility for Child Care Services
D-101: A Child’s General Eligibility for Child Care Services
D-102: Child Care Eligibility Determination & Verification
D-103: Child’s Age & Citizenship or Immigration Status
D-104: Residence
D-105: Determining the Family Size
D-106: Family Income
D-107: Calculating Family Income
D-108: Income Changes During the 12- Month Eligibility Period
D-109: Determining Self-Employment Income
D-110: Cash-Paid Earnings
D-111: Income Changes Reported During the 12-Month Eligibility Period
Workforce Development Boards (Boards) must be aware that, with the exception of children receiving or needing protective services as described in D-700: Child Care for Children in Protective Services, eligibility for subsidized child care services requires the following at the time of eligibility determination or redetermination:
The child is under 13 years of age or, at the option of the Boards, is a child with disabilities under 19 years of age.
The child is a U.S. citizen or legal immigrant as described below in D-103: Child’s Age & Citizenship or Immigration Status.
The child resides with one of the following:
A family within the Board’s local workforce development area (workforce area) whose income does not exceed the income limit established by the Board—which cannot exceed 85 percent of the state median income for a family of the same size—whose assets do not exceed $1 million as certified by a family member, and with parents who require child care in order to work or attend job training or an educational program as defined in Part A
An individual standing in loco parentis for the child while the child’s parent or parents are on military deployment and the deployed military parent’s income does not exceed the Board’s income limits
A family that meets the definition of experiencing homelessness as defined in A-100
- Rule Reference: §809.41(a)
D-101.a: Children of Parents on Military Deployment
Boards must be aware that for a child with a parent or parents on military deployment, child care eligibility is based on the income and work, education and job training activities of one of the following:
The parent on military deployment
The individual standing in loco parentis for the child
If eligibility is based on the circumstances of the parent on military deployment, it is assumed that military deployment automatically allows the parent to meet the minimum work requirements.
Boards must be aware that it is the responsibility of the deployed military parent or parents to ensure that the information necessary to determine eligibility is made available to the Board’s child care contractor. However, the Board also must work with deployed military parents in situations in which deployment does not allow the parent to provide information within the required time frames.
D-101.b: Board Policies for Parents Attending Educational Program
Boards must establish policies, including time limits, for the provision of child care services while a parent is attending an educational program (as required by TWC rule at 40 TAC §802.1(f) and as detailed in WD Letter 10-07 , Board members must take such actions in an open meeting).
- Rule Reference: §809.41(b
Boards must ensure that time limits for parents attending educational programs include the provision of child care services for four years, if the eligible child’s parent is enrolled in an associate’s degree program that will prepare the parent for a job in a high-growth, high-demand occupation (also known as “in-demand or target occupation”) as determined by the Board.
- Rule Reference: §809.41(c)
Boards may establish a policy for the provision of child care services based on the type of education or degree level (such as an advanced degree) pursued by the parent.
Boards must be aware that there is no requirement that a student’s career field be attached to a target or high-demand occupation in order to be eligible for child care services. However, a Board may choose to have a local policy that places this restriction as a condition of initial eligibility or eligibility redetermination.
If a parent with an enrolled child in one workforce area moves to a workforce area with a different educational requirement for eligibility, the educational eligibility requirement of the Board in the new workforce area can only be applied at the parent's scheduled 12-month redetermination.
D-101.c: Making Progress Toward Successful Completion of the Job Training or Educational Program
As required in B-302, Boards must develop a policy to determine if a parent is making progress toward successful completion of the job training or educational program.
Boards have the flexibility to determine that being enrolled in and meeting attendance standards of the program meet the Board’s standard for making progress toward completion of the program.
Boards must be aware that, in accordance with the definition of “attending a job training or educational program” in A-100, the policy is applied only at the 12-month eligibility redetermination.
Rule Reference: §809.2
Past performance or attendance in an education or job training program must not be considered in initial eligibility for child care. A parent’s progress toward completion of the education or job training program must be based only on the parent’s performance while receiving child care, as a lack of stable child care can contribute to a parent’s inability to work toward successful completion of the education or training activity.
D-101.d: Income Eligibility Phase-Out
Boards may establish an initial income eligibility threshold lower than 85 percent of the state median income (SMI).
However, Boards that implement lower income thresholds must ensure that a family’s children remain income-eligible for care after passing the Board’s initial income eligibility limit up to 85 percent of SMI.
Boards that implement lower income thresholds at initial eligibility determination also must ensure that the family income limit at the 12-month eligibility redetermination is less than 85 percent of SMI.
Rule Reference: §809.41(e)
Resource: Desk Aid for Setting up Income Eligibility Phase Out in TWIST, Appendix J
D-101.e: Eligibility for Non-Child Care Development Fund Child Care Services
Boards must be aware that, unless otherwise specified, the provisions of Part D apply only to child care services using funds allocated pursuant to §800.58, including local public transferred funds and local private donated funds, as described in Part C.
Workforce Development Boards (Boards) must ensure that their child care contractors verify all eligibility requirements for child care services before authorizing child care.
Boards must be aware that self-attestation is only acceptable for verifying that the value of a family’s assets does not exceed $1 million, and to verify initial eligibility for families experiencing homelessness.
Notwithstanding the period of time required to review a customer’s application for child care services, the Board also must ensure that eligibility is redetermined no sooner than 12 months following initial determination or more recent redetermination.
Rule Reference: §809.42
To ensure that children receive a minimum of 12 months of services, Boards must ensure that if a customer’s eligibility end date falls on a weekend or holiday, the eligibility end date is extended to the next working day.
Boards must be aware that a family is considered eligible when the parent is notified of the determination of eligibility and acknowledges the eligibility determination and parent share of cost as described in Section D-1004. Any changes in the parent’s status after the eligibility notification are treated as changes reported during the 12-month eligibility period.
For more information, see Section D-1000: Eligibility Determination Processes.
Because the child is the primary beneficiary of child care services, only the child’s citizenship or immigration status is subject to documentation.
Documented receipt of Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) benefits, Medicaid or other public assistance in which citizenship or immigration status is a requirement for eligibility and is considered valid documentation of citizenship or immigration status.
Boards must ensure that appropriate staff verify a child’s age and U.S. citizenship or legal immigrant status as part of child care services eligibility requirements.
Resource: Child Care Eligibility Documentation Log, Appendix J
D-103.a: Verifying Age and Citizenship or Immigration Status
Boards must ensure that appropriate staff:
Use only the documents listed in this section as acceptable sources for documenting the age and citizenship or immigration status of a child receiving child care services
Retain appropriate documentation of the child’s citizenship or legal immigration status, as well as age, in the child’s case file
Do not require documentation of citizenship or immigration status prior to placing a child on a Board’s waiting list
Request one document that provides both proof of the child’s age and the child’s citizenship or immigration status
Accept photocopies of the documentation to expedite the eligibility process during the initial enrollment period
Boards must be aware that the following are acceptable primary and secondary verification documents:
Primary verification documents for age and citizenship
Birth certificate (United States or its possessions)
Hospital or public health birth record (United States or its possessions)
Church or baptismal record (United States or its possessions)
TANF, SNAP benefits, Medicaid or other related public assistance records
Secondary verification documents for citizenship or immigration status only--if no primary documents for age and citizenship are available, the following are acceptable sources to verify a child’s citizenship or immigration status:
Baptismal certificate (if place of birth is shown)
Report of birth abroad of U.S. citizen (FS-240) issued by U.S. Department of State
Certificate of Birth (FS-545) issued by a foreign service post
Certificate of U.S. Citizenship (N-561)
Native American Tribal Document/Card (Form I-872)
Immigrant/“Qualified Alien”
Lawful Permanent Resident Card, also known as “Green Card” (Form I-551)
Form I-94/ I-94a (Form I-94 is an arrival/departure admission form given by U.S. Immigration and Customs Enforcement at the port of entry to nonimmigrant visa holders and must be stamped with the applicable immigration rule citations)
For Asylee: Annotated with stamp showing asylum granted under §208 of the Immigration and Nationality Act (INA), a copy of grant letter from the Asylum Office of the U.S. Citizenship and Immigration Services (USCIS) or a copy of the order of an immigration judge granting asylum
For Refugee: Annotated with stamp showing admission under INA §207 or Form I-571 (Refugee Travel Document)
For Cuban/Haitian Entrant: Annotated with stamp showing §501(e), Permanent Resident Card, also known as Green Card (Form I-551), unexpired temporary Form I-551, or stamp in foreign passport showing §501(e)
Alien Whose Deportation or Removal Was Withheld—order from an immigration judge showing deportation or removal withheld
Alien Granted Conditional Entry—Form I-94 identifying the bearer as “Refugee-Conditional Entry” and a citation of §203(a)(7)
Alien Who Has Been Declared a Battered Alien or Alien Subjected to Extreme Cruelty—USCIS petition and supporting documentation
Alien Who Is Paroled—proof of parole under INA §212(d)(5) for a period of at least one year
Secondary verification documentation for age only
If no documentation listed under the primary age and citizenship category is available, the following are acceptable sources to verify a child’s age:
Adoption papers or records (United States or its possessions)
Divorce and/or court custody decrees
Bureau of Indian Affairs or Tribal records
Child support paternity records
School records/identification card
As defined in A-100: Definitions, a child is considered to be residing with the parent when the child is living with and physically present with the parent during the time period for which child care services are being requested or received.
D-104.a: Residency for Children of Parents Attending an Educational Program
Workforce Development Boards (Boards) may establish a policy to allow parents attending an educational program that leads to a postsecondary degree from an institution of higher education to be exempt from residing with the child. (As required by TWC rule at 40 TAC §802.1(f) and as detailed in WD Letter 10-07 , Board members must take such actions in an open meeting.)
- Rule Reference: §809.41(e)
D-104.b: Residency for Children of Parents on Military Deployment
Boards must be aware that children of parents on military deployment may reside with a caretaker while the parent is on military deployment.
- Rule Reference: §809.41(
D-104.c: Residency During Custody and Visitation Arrangement
Boards must be aware that a child who is temporarily living with a parent on court-ordered visitation is considered to be residing with the parent during the visitation arrangement.
Boards may allow child care to continue or be suspended, depending on the particular family and child care arrangements, for custody arrangements of short duration (for example, two weeks during the summer or one week a month).
Boards must be aware that child care services may only be suspended at the concurrence of the parent, as described in section D-806.
D-104.d: Residency for Children Experiencing Homelessness
A child whose family is experiencing homelessness might not have a stable residence to report. Therefore, the family’s primary sleeping location at time of eligibility determination should be used to determine county of residence. Homeless families have three months to provide documentation of eligibility, including primary night-time residence.
Boards must also be aware that The Workforce Information System of Texas (TWIST) requires a residence address in "Intake Common," although families experiencing homelessness lack primary residences. Board child care contractors should work with families and other agencies that serve them to identify the best means to communicate and use the most practical address in TWIST.
Some options for the residence address field in TWIST include using the address of the workforce center, a homeless shelter, or the child care provider (if the provider agrees). United States Postal Service “General Delivery” may also be used if the customer is able to get to a post office that makes that service available.
When determining family size, Workforce Development Boards (Boards) must be aware of the following definitions.
D-105.a: Family and Household Dependents
A “family” is the unit composed of two or more individuals related by blood, marriage, or decree of court, who are living in a single residence and are included in one or more of the following categories:
Two individuals, married—including by common-law—and household dependents
A single parent and household dependents.
A “household dependent” is an individual living in the household who is one of the following:
An adult considered as a dependent of the parent for income tax purposes
The child of a teen parent
A child or other minor living in the household who is the responsibility of the parent
D-105.b: Parent
A parent is an individual who is responsible for the care and supervision of a child and is identified as the child’s natural parent, adoptive parent, stepparent, legal guardian or person standing in loco parentis (as determined in accordance with Texas Workforce Commission (TWC) policies). Unless otherwise indicated, the term applies to a single parent or both parents.
D-105.c: In Loco Parentis
Boards must be aware that, in situations in which a child’s natural parent, adoptive parent, stepparent or legal guardian is unavailable to care for the child, it is sometimes necessary for the child to be cared for by an individual who is not the child’s legal guardian—that is, standing in loco parentis.
TWC defines in loco parentis as the following:
An individual 18 years of age or older who is responsible for the day-to-day care and supervision of the child when the child’s natural parent, adoptive parent, stepparent or legal guardian is not available to care for the child. The individual must document the reason the child’s parents are unavailable to care for the child and that he or she is exercising parental responsibility for the child.
Boards must be aware that the documentation requirements for Texas Department of Family and Protective Services Child Protective Services (CPS) placement set forth in the following table apply only to situations in which CPS has not authorized child care as described in D-700: Child Care for Children in Protective Services.
Boards must ensure that individuals standing in loco parentis provide documentation verifying the following:
The reason the parent is unavailable to care for the child
That the caretaker is responsible for the child as set forth in the following table
Table 1: Documentation Requirements for In Loco Parentis
Reason Parent is Unavailable
Documentation Verifying Reason Parent is Unavailable
Documentation Verifying Caretaker is Responsible for the Child
In Treatment or Rehabilitation
A document from a licensed medical professional, for example, physician, psychiatrist or psychologist, stating the medical condition that makes the parent unable to care for his or her child.
A document from a licensed professional such as a counselor or therapist is an acceptable alternative as long as the recommendation or diagnosis does not exceed the licensed professional’s authority.
If the parent is in a treatment or rehabilitation center, a letter from the facility verifying admission must be signed by an authorized representative of the facility and include both the admission and anticipated release date. A copy of the order mandating the placement will suffice.
Caretaker must have a notarized power of attorney or a sworn affidavit of temporary custody/guardianship of the child.
CPS Placement
Documentation must include at least one of the following:
A recent (within six months) CPS safety plan or CPS placement agreement
A court order naming the individual as the caretaker
A letter from CPS that confirms the child’s placement with the caretaker or foster parent is ongoing
No other documentation is necessary.
A suitable alternative such as a confirmation by the base commander or other military official
A military power of attorney appointing the caretaker as guardian of the child
In lieu of a military power of attorney, a military family plan that gives the caretaker the authority to execute decisions on child care matters
A commitment order from the court
Verification from the Texas Department of Criminal Justice (TDCJ) Offender Information Search database for offenders who are incarcerated in a TDCJ facility
A letter from the sheriff’s office confirming incarceration if the parent is in a local jail
The document must include the date of incarceration and anticipated release date.
Other Reasons Parent or Legal Guardian is Unavailable
A sworn affidavit of facts attesting to all of the following:
the circumstances of how and why the caretaker assumed responsibility for the child
the whereabouts of the natural parent(s)
the caretaker’s relationship to the child
the length of time the child has been with the caretaker
Additionally, the caretaker must have documentation from a verifiable source that establishes his or her parental responsibility for the child. The documentation can be one of the following:
The caretaker’s most recent IRS tax return listing the child as a dependent
A letter from a child care center or other independent, nonrelative, verifiable source that can establish the individual’s parental and financial responsibility for the child
A letter from an independent school district
Documentation that the caretaker is receiving TANF benefits on behalf of the child, or has received TANF benefits within the past six months
Workforce Development Boards (Boards) must be aware that, effective October 1 of each year, the Texas Workforce Commission (TWC) supplies Boards with eligibility code cards containing up-to-date income data for determining eligibility. The income information is also loaded into The Workforce Information System of Texas (TWIST). Eligibility code cards cover Federal Poverty Guidelines (FPG) information and state median income (SMI) levels.
Boards may use either FPG or SMI to determine income eligibility limits, but in either case, family incomes cannot exceed 85 percent of SMI.
Boards must also ensure that for the purposes of determining family income and assessing the parent share of cost, family income is calculated as described in D-107.
D-106.a: Monthly Family Income
Boards must be aware that unless otherwise required by federal or state law, a family’s monthly income for purposes of determining eligibility and the parent share of cost includes all income sources that are not excluded under D-106.b: Excluded Income Sources, for each family member.
- Rule Reference: §809.44(a)
Boards must be aware that a family’s monthly income is the gross income before adjustments are made for taxes, which can also be referred to as gross earnings or gross pay.
D-106.b: Excluded Income Sources
In accordance with TWC income calculation rules at §809.44(b), Boards must ensure that monthly family income excludes the following income sources:
Medicare, Medicaid, Supplemental Nutrition Assistance Program benefits, school meals, and housing assistance
Monthly monetary allowances provided to or for children of Vietnam veterans born with certain birth defects
Needs-based educational scholarships, grants, and loans—including financial assistance under Title IV of the Higher Education Act—Pell Grants, Federal Supplemental Educational Opportunity grants, the Federal Work-Study Program, PLUS, Stafford loans and Perkins loans
Individual Development Account withdrawals for the purchase of a home, medical expenses or educational expenses
Onetime cash payments, including tax refunds, Earned Income Tax Credit (EITC) and Advanced EITC, onetime insurance payments, gifts and lump sum inheritances
VISTA and AmeriCorps living allowances and stipends
Noncash or in-kind benefits such as employer-paid fringe benefits, food, or housing received in lieu of wages (for example, an employer provides a uniform or tools)
Foster care payments and adoption assistance
Special military pay or allowances, including subsistence allowances, housing allowances, family separation allowances, or special allowances for duty subject to hostile fire or imminent danger (see Appendix J)
Income from a child in the household between 14 and 19 years of age who is attending school
Early withdrawals from qualified retirement accounts classified as hardship withdrawals by the Internal Revenue Service (IRS)
Cash assistance payments, including Temporary Assistance for Needy Families (TANF), Supplemental Security Income, Refugee Cash Assistance, general assistance, emergency assistance and general relief
Onetime income received in lieu of TANF cash assistance
Income earned by a veteran while on active military duty and certain other veterans’ benefits, such as compensation for service-connected death, vocational rehabilitation, and education assistance (see Appendix J)
Regular payments from Social Security, such as the Old-Age and Survivors Insurance Trust Fund (see Appendix J)
Lump sum payments received as assets from the sale of a house, in which the assets are to be reinvested in the purchases of a new home (consistent with IRS guidance)
Payments received as the result of an automobile accident insurance settlement that are being applied to the repair or replacement of an automobile
Any income sources specifically excluded by federal law or regulation
Rule Reference: §809.44(b)
Boards must be aware that employer reimbursements for work-related expenses such as travel or uniforms are not considered income and therefore are not included in income calculations. Employer-paid cash benefits that are not reimbursements are included.
D-106.c: Income Excluded by Federal Law or Regulation
Boards must be aware of the following income sources specifically excluded by federal law or regulation.
Rule Reference: §809.44(b)(20)
INCOME EXCLUDED BY FEDERAL LAW
7 USC §2017(b)
The value of the allotment provided to an eligible household under the Food Stamp Act
Note: Currently exempted by TWC Child Care Services rule §809.44(b)(1)
PL 104-204
Payments to children with spina bifida born to Vietnam veterans
Note: Currently exempted by TWC Child Care Services rule §809.44(b)(2)
20 USC §1087uu
Amounts of scholarships funded under Title IV of the Higher Education Act of 1965, including awards under federal work-study program or under the Bureau of Indian Affairs student assistance programs
Note: Currently exempted by TWC Child Care Services rule §809.44(b)(3), which excludes all needs-based educational scholarships, grants and loans
26 USC §32(j)
EITC refund payments and Advanced EITC received
Note: Currently exempted by TWC Child Care Services rule §809.44(b)(4)(5)
PL 105-285
IDAs, including participant savings, matching contributions and any income earned thereon
Note: IDA withdrawals are currently exempted by TWC Child Care Services rule §809.44(b)(4)
42 USC §12637(d);
PL 101-610;
PL 93-113
Allowances, earnings and payments to persons participating in programs under the National and Community Services Act. The exclusion applies to all payments made under the AmeriCorps Program and payments under Title I, VISTA.
Note: VISTA and AmeriCorps living allowances and stipends are currently exempted by TWC Child Care Services rule §809.44(b)(6).
Pay received by military personnel as a result of deployment to a combat zone
Note: Currently exempted by TWC Child Care Services rule §809.44(b)(9), which also excludes special military pay or allowances, for example, subsistence allowances, housing allowances and family separation allowances
29 USC §2931
Allowances, earnings and payments to individuals participating in programs under the Workforce Innovation and Opportunity Act of 2014, except for earned income received from taking part in on-the-job training programs
42 USC §8624(f)
Payments or allowances made under the U.S. Department of Health and Human Services’ Low-Income Home Energy Assistance Program
25 USC §459e
Income derived from certain submarginal land of the United States that is held in trust for certain Native American tribes
42 USC §3056(f)
42 USC §9858q
The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 2014
42 USC §5044(g), §5058);
Payments to volunteers, such as Active Corps of Executives under the Domestic Volunteer Services Act of 1973, under Title II Retired Senior Volunteer Program (RSVP), Foster Grandparents and Title III Service Corps of Retired Executives
PL 100-435
Benefits from the Women, Infants and Children Program
42 USC §10602
Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) because of the commission of a crime against the applicant under the Victims of Crime Act
PL 97-377 and
Payments from federal energy assistance, for example, for insulation, weatherization and storm windows
PL 111-312
All federal tax refunds received from December 31, 2009, through December 31, 2012, must be disregarded as income and from consideration as a resource for a period of 12 months from receipt when determining eligibility for program benefits.
Note: Tax refunds are currently excluded by TWC Child Care Services rule §809.44(b)(6).
PL 111-291
The Claims Resolution Act of 2010 (PL 111-291) provides that amounts received from the Cobell v. Salazar settlement will not be treated as income for the month during which the amounts were received for purposes of any federally assisted program. Therefore, amounts received from the settlement must be excluded from income for purposes of determining initial eligibility, ongoing eligibility or level of benefits for Child Care and Development Fund assistance.
D-106.d: Income Deductions
When calculating income eligibility for a family with a child with disabilities, Boards must ensure that the cost of the child’s ongoing medical expenses is deducted from the family income.
- Rule Reference: §809.50(d)
D-106.e: Income Verification
As detailed in D-1000 (Processes for Determining Eligibility), Boards must ensure that the child care contractors verify allowable income sources and ensure eligibility for child care services before authorizing child care.
Rule Reference: §809.42(a)
Boards must be aware that parents are responsible for reporting family income. Board contractor staff is responsible for reviewing the income reported and excluding those sources disallowed by rule from the calculation.
Boards must ensure that appropriate staff have a process to inform the parent of the requirements for reporting income and the consequences for not reporting any income discovered later.
Pursuant to §809.44(a), for the purposes of determining family income and assessing the parent share of cost, Boards must ensure that the family income is calculated in accordance with Texas Workforce Commission guidelines to:
Take into account irregular fluctuations in earnings
Ensure that temporary increases in income, including temporary increases that result in monthly income exceeding 85 percent of SMI, do not affect eligibility or the parent share of cost
Rule Reference: §809.44(a)
D-107.a: Determining Average Gross Monthly Family Income from Earnings at Initial Eligibility and at Eligibility Redetermination
Boards must ensure that calculation of a family’s income for the purposes of determining initial eligibility and redetermining eligibility is based on the average monthly family income for each family member.
Unless a family member has an insufficient work history or other constraints to obtaining necessary documentation, in accordance with local procedures, Board contractor staff must review the previous three months of income for monthly pay periods, the previous 13 weeks for weekly pay periods, or the previous 12–14 weeks for biweekly pay periods for each family member to determine average earnings and the family’s financial situation.
Boards must be aware that three months is a guideline for determining earnings from continuous employment. Boards also must be aware that the intent of the three-month income determination window is to provide enough information to determine typical average income.
Absent the full three months of documentation, the Board may use whatever documentation a parent is able to provide, including the year-to-date amount on available check stubs.
Boards must be aware that bonus amounts that appear in the year-to-date amount but fall outside of the three-month window must be counted in accordance with D-107.d: Bonuses and Lump Sum Payments.
Boards must also be aware that a family member might be employed for three or more months but have irregular or no earnings within one or more pay periods. See Section D-107.c regarding fluctuations in income.
D-107.b: Substantial Change in Earnings
In some instances, such as when an individual has a substantial change in earnings during the most recent month, current employment status or anticipated earnings changes will be more representative of expected income than those of the past three months.
A family member is considered to have a “substantial change in earnings” if, at the time of eligibility determination or redetermination, the individual has experienced a permanent change in compensation or employment status within the most recent month of the three-month period, a change that will affect future earnings and would better reflect the family’s income. In this case, the income should be calculated from the period the income or employment status changed instead of the full previous three months.
Changes in earnings or employment that are considered substantial are those due to any of the following:
A permanent decrease/change in employment status from full-time to part-time or vice versa
A permanent decrease/change in hourly wages or compensation
An employed family member adding or ending employment at one or more employers
D-107.c: Fluctuations in Earnings
Boards must be aware that a customer may have income fluctuations during the 3-month income calculation period. Income fluctuations that occur during the three months are calculated separately and averaged over the appropriate time period, in accordance with local procedures.
Fluctuations in earnings during sustained employment are income amounts that differ due to any of the following:
Variable work schedules without an expected number of hours per day or per week for a pay period
Pay based solely on commissions or tips
Fixed compensation paid in different time periods, as in education
Boards must be aware that it is better to annualize some fluctuations in income rather than average them across the three-month period. Examples of income that should be annualized may include, but are not limited to, the following:
Coaching stipend paid only for season
Accrued vacation leave paid out in a lump sum at year end
D-107.d: Bonuses and Lump Sum Payments
Boards must ensure that, if pay documents indicate that a family member received a bonus or other lump sum during the income calculation period or in the year-to-date amount, staff determines the number of months the bonus or lump sum covers and if there is any expectation of future repetition. In that case, the sum is averaged over the applicable number of months to reach an average monthly figure. For example:
Average an annual bonus by 12
Average a lump sum payment by 12
Average a quarterly bonus by 3
Average a onetime payment by 12
Boards are advised to ask customers if they receive regular bonuses from their employers and to include this question on any Employment Verification form used to verify employment income.
D-107.e: Calculating Unearned Income
A family member may receive income unearned outside of employment, such as merit-based scholarships, alimony payments, or rental income. If a family member has received countable unearned income within the previous three months, determine the frequency of the income and average accordingly to determine an average monthly amount of unearned income.
For example, if a merit-based scholarship was received during the previous three-month period, average the scholarship amount by 12 to determine a monthly amount to include in gross monthly income.
D-107.f: Income Documentation Requirements
Boards must ensure that documentation of all employment and income earned is obtained for the previous three-month period. If the family member does not have three full months of documentation because he or she has not been employed throughout the full three-month period, obtain pay documents for the period employed.
If the family member started a new job, or experienced a substantial change in earnings, and does not have pay documents from that job, an Employment/Income Verification Form (included in the Eligibility Documentation Log, Appendix J) or other Board-defined employer verification must be completed.
If the family member is employed by the same employer or employers for the entire period, the family member must provide the past three months (or the previous 12–14 weeks, if paid monthly) or 13 weeks (if paid weekly or biweekly) of consecutive pay stubs or payroll history from each employer to document and calculate average gross monthly income.
If the family member is unable to obtain the required documents covering the time employed, but the amount earned over the most recent three months is reflected in the year-to-date information, then the average gross monthly income can be calculated using the documents provided. However, if the year-to-date information does not cover the period under review, an Employment/Income Verification Form (or other Board-defined employer verification) must be completed for the time period.
If the family member is an employee who is paid in cash, an Employment/Income Verification Form must be completed by the employer. If the family member is not an employee, they are considered self-employed pursuant to D-109.
D-107.g: Income Calculation Methodology
Gross monthly income for eligibility determination and parent share of cost are based on pay stubs, pay frequency, and/or employer verification of hours, wages, and pay frequency, when applicable.
Average pay per pay period—gross earnings per pay period (less bonuses and lump sums) divided by the number of pay stubs.
Average base monthly earnings—average earnings per pay period times applicable pay frequency factor (see Table 1).
Gross monthly income—average base monthly earnings plus prorated bonuses and lump sums plus monthly unearned income.
Calculating earned income from pay stubs or employer verification:
If there is more than one employer with differing pay periods, calculate an average base monthly for each separately then add them to obtain the total average base monthly earnings.
Add the included gross pay (less bonuses and/or lump sums) from all check stubs and divide by total number of paystubs to get an average pay per pay period per employer.
Multiply average pay by pay frequency factor for each employer to get the base monthly earnings (see Table 1).
If using employer verification rather than paystubs, use the following formula to determine monthly earnings: Multiply hourly rate of pay by weekly hours by 4.33.
If a bonus or other lump sum payment was included in the paystubs, divide the total by the applicable number of months to get the average monthly amount.
Gross monthly income equals average base monthly earnings plus prorated bonus and/or lump sum plus any included unearned monthly income.
Table 1 Calculating Average Base Monthly Earned Income from Pay Stubs
Average earnings per pay period x 4.33
Biweekly (every other week)*
Average earnings per pay period x 2.165 or Average earnings per pay period x 2.167
Average earnings per pay period x 2
Note: Boards automated income calculators may be programmed to use 2.165 or 2.167 depending on if the calculation methodology is based on 26 pay periods per year (2.167) or 4.33 weeks per month (2.165).
Boards must ensure that full eligibility determination only occurs at initial determination and at redetermination, which may not occur earlier than 12 months after the initial determination.
D-108.a: Determining if Monthly Family Income Exceeds 85 Percent of State Median Income During the 12-Month Eligibility Period
Boards must be aware that, pursuant to §809.73(b), during the 12-month eligibility period, parents are required to report changes in family income or family size that would cause the family to exceed 85 percent of SMI for a family of the same size. Families are only required to report changes in income that are substantial and permanent. See D-107.b.
For reported substantial and permanent increases in income during the 12-month period, the income must be calculated from the period in which the income or employment status changed.
Boards must be aware that temporary changes, including increases in income, which last three months or less, do not affect a customer’s eligibility for continuing to receive child care services. However, temporary increases in income that last longer than three months must be evaluated to determine if the change puts the customer over 85 percent SMI.
Temporary increases in income that occur during the 12-month eligibility period and last longer than three months are assessed against an annual time frame so that the calculated income reflects the customer’s earnings over the entire year.
A customer reports a temporary assignment that will last four months. During the four months, the customer’s income will be over 85 percent SMI
Board contractor staff recalculate income:
(Regular gross monthly income X 12) + (monthly earnings for temporary assignment X 4) = adjusted income for year
Adjusted income for year / 12 = new gross monthly income
Board contractor staff must use the newly calculated gross monthly income to determine if the increase caused the family to have an average monthly income above 85 percent of SMI.
D-108.b: Reducing the Assessed Parent Share of Cost Due to Reductions in Income During the 12-Month Eligibility Period
Boards must ensure that, pursuant to B-604.b, a new parent share of cost is assessed upon a parent’s report of a change in income, family size, or number of children in care that would result in a reduced parent share of cost assessment.
If the reported change in income is determined to be a substantial decrease in earnings, as defined in D-107.b, then the parent share of cost must be reassessed based on the new, lower reported income.
Boards must require documentation of a decrease in earnings when the parent share of cost is reduced. Additionally, Boards must ensure that the changes to the parent share of cost are documented in TWIST Counselor Notes or in the case file.
D-108.c: Using the Income Exception Report
As described in TA Bulletin 276, “Child Care Fraud Detection Report Tools—Update,” the Child Care Income Exception Report is a tool to assist Boards in the oversight of Child Care and Development Fund funds. The Texas Workforce Commission Regulatory Integrity Division’s Business Support Section sends the report to Boards quarterly. The report seeks to identify and assess customers who are potentially ineligible due to parental/custodial changes or underreporting of income that could place the family income over 85 percent of SMI. A customer identified in the report is not necessarily ineligible for services; the issue of eligibility can be established only after a thorough review of the customer’s case file and may involve contacting the customer for further information.
Boards must use the Income Exception report on a quarterly basis to identify customers who are potentially ineligible. Boards must be aware that if a customer appears on the Child Care Income Exception Report, care cannot be terminated based solely on the report. The contractor must reach out to the customer to determine if income exceeds 85 percent of SMI, accounting for fluctuations as described in D-107.c.
If the parent does not respond, attempting contact with the employer is the next step. Contacting the employer can be the beginning of the fraud fact-finding process. All attempts at contact with the parent and/or employer must be clearly documented in TWIST Counselor Notes.
If it is determined that the parent is currently over 85 percent of SMI, taking into consideration fluctuations of income pursuant to the income calculation guidelines defined in Part D of the Child Care Guide, then care must be terminated. If family income is not currently over 85 percent of SMI at the time of staff assessment, then care must continue.
If fraud fact-finding leads to a determination that the customer is over 85 percent of SMI, then care may be terminated at that point, regardless of whether a determination of fraud is eventually reached. However, Boards must be aware that recoupment is only pursued if a fraud determination is made per Child Care Services rule §809.117(d).
Boards must be aware that for self-employment to be considered an eligible work activity, the individual is required to demonstrate engagement in an income-producing enterprise or activity that is distinguishable from a hobby or pastime.
D-109.a: Definitions for Self-Employment
Self-employed—An individual is considered self-employed if the individual works in an income-producing trade or business as one of the following:
The sole proprietor or independent contractor
Otherwise in business for him or herself and not a paid employee of the business or enterprise
Self-employment income—gross business income minus business operating expenses.
Established self-employment—a business or enterprise with demonstrated business income and expenses for more than three months.
New self-employment—a business or enterprise with demonstrated business income and expenses for less than three months.
D-109.b: Verification and Documentation of Self-Employment Income
Boards must ensure that Workforce Solutions Office staff verifies that a self-employment business or enterprise is in existence and covers the eligibility period for child care services at initial eligibility determination and at eligibility redetermination using one of the following documents:
Current property titles, deeds, tax records, or rental agreement for the place of business
Recent business bank statement
Recent business phone, utility, or insurance bill
Copies of money orders or checks received and lists of individuals/customers served (if applicable)
Business registration or license (that is, DBA license or Assumed Name Certificate)
D-109.c: Identifying Self-Employment Gross Income
Boards must ensure that Workforce Solutions Office staff verifies income for self-employment enterprises at initial eligibility determination, eligibility redetermination, and following a reported change in family income.
Established Self-Employment
To verify income for established self-employment enterprises, Boards must require one of the following documents from the most recent tax year and/or most recent quarter:
IRS Form 1040 with IRS Schedule C, F, or SE federal income tax returns
Any documents listed under New Self-Employment
To verify income for new self-employment enterprises, Boards must require one of the following documents covering a time period within the previous three months:
Business records that document income and expenditures, such as:
Copies of money orders or checks received
Lists of and/or invoices for customers served with dates and identifying information (such as addresses)
Personal receipt books of business activity and amount
Personal payment records with third-party signed verification (such as notary)
D-109.d: Identifying Self-Employment Net Income
Boards must ensure that Workforce Solutions Office staff verifies business expenses for self-employment enterprises at initial eligibility determination, eligibility redetermination and following a reported change in family income.
Itemized Operating Expenses
Document and deduct operating expenses from the self-employment gross income for the same period. Operating expenses may include, but are not limited to:
Gas for automobile
D-109.e: Using a Standard Deduction for Determining Net Income
Boards may implement a procedure to use a standard deduction rather than itemizing self-employment expenses. Such an approach offers a more efficient method for determining self-employment net income. Local procedures may define the amount of the standard deduction and any process to itemize expenses in lieu of using the standard deduction.
Boards must allow parents the option to itemize expenses or not itemize expenses and use the gross income.
Resource: Technical Assistance Bulletin 277: Implementing a Standard Deduction Policy for Determining Self-Employment Net Income
D-109.f: Verifying Self-Employment Work Hours
Examples of acceptable verifiable documentation for self-employed workers include, but are not limited to:
Quarterly federal tax returns
Signed year-to-date profit and loss statements for each business owned
Business ledgers, records, receipts, check receipts, and business statements
Customer contracts or work orders
Calendar of work appointments and money earned through these appointments
The federal minimum hourly wage for self-employed income is applied to calculate participation hours when the individual cannot provide verifiable documentation of work hours. The formula for determining work hours based on self-employment income and minimum wage follows:
Monthly Net Self-Employment Income / Minimum Wage = Monthly Work Hours
Monthly Work Hours / 4.33 = Average Weekly Work Hours
If a standard deduction is used to determine net income and using the minimum wage calculation results in the average weekly hours being below the Board’s requirement, then the parent must document the weekly work hours.
If a family member is an employee paid in cash, an Employment/Income Verification Form must be completed by the employer. If the family member has cash earnings and is not an employee, consider the family member self-employed and subject to the provisions in D-109.
During the 12-month eligibility period, parents can report changes that Boards must act on, in accordance with §809.73.
Boards must be aware that when a parent reports a change in family size or income that result in a reduced family income, the Board must act upon that information to reduce the parent’s share of cost in accordance with §809.73. The Board must request that the parent provide documentation to determine the new income level and appropriate parent share of cost.
Boards must be aware that parents are not required to report income changes that do not place the family over 85 percent SMI. If a parent reports an increase and is unsure if it places them over 85 percent SMI, the Board may evaluate the new income information, taking into account temporary fluctuations in income in accordance with §809.44.