SR 12-10 Dated 03/12

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

DFA SIGNATURE DATE:	February 24, 2012
FROM:	OFFICE OF THE DIRECTOR, DFA Terry R. Smith
AT (OFFICE):	Division of Family Assistance
TO:	DFA Supervisors District Office Managers of Operations
SUBJECT:	Change in the Earned Income Methodology Used to Determine Eligibility and Benefit Allotment Amount for the Aid to the Permanently and Totally Disabled (APTD) and Old Age Assistance (OAA) Financial Assistance Programs
EFFECTIVE DATE:	March 1, 2012

SUMMARY

This SR releases changes in the earned income methodology used to determine eligibility and benefit allotment amount for the Aid to the Permanently and Totally Disabled (APTD) and Old Age Assistance (OAA) financial assistance programs only. This change is a result of budget reductions imposed by House Bill 1, Chapter Law 223 (2011 session) and Senate Bill 198-FN, which amends RSA 167:3-c,IX. APTD and OAA medical assistance are not impacted by these changes due to the maintenance of effort (MOE) requirements of the Affordable Care Act (PL 111-148), signed into law on March 23, 2010.

FORMER EARNED INCOME METHODOLOGY FOR APTD & OAA FINANCIAL ASSISTANCE

NEW EARNED INCOME

METHODOLOGY FOR APTD & OAA FINANCIAL ASSISTANCE

When the Social Security Income (SSI) methodology was used, the following earned income disregard (EID) was deducted from the earnings of APTD and OAA applicants and recipients when determining eligibility and benefit allotment amount:

· The first $65 of earnings;

· Any impairment-related work expenses (IRWEs) for APTD only; and then

· One-half of the balance.

The following EID will now be deducted from the earnings of APTD and OAA applicants and recipients when determining eligibility and benefit allotment amount for financial assistance:

· The first $20 of earnings;

· One-half of the balance up to $30 (for a maximum total EID of $50); and then

· An employment expense disregard (EED) of $18 or actual employment expenses, whichever is greater.

IRWEs will no longer be used when determining APTD cash assistance eligibility and benefit allotment.

Previously, for all adult categories of financial assistance, the EID was not applied to non-applicant (counted) individual’s earnings. The EID was only applied to the eligible individual’s earnings.

The EID will now apply to all individuals whose income is counted in the APTD and OAA cash case, including non-applicant spouses and needy essential persons. Counted individuals in the APTD/OAA cash case are entitled to their own APTD/OAA EID disregard, even if the APTD/OAA applicant or recipient is already receiving an EID.

Note: IRWEs are still allowed as a deduction in the Substantial Gainful Activity (SGA) determination process used only in the initial APTD eligibility process, even when the individual is applying for APTD cash assistance. This means that even if the individual is applying for APTD financial assistance, allow IRWEs in the SGA process to determine if the APTD cash assistance applicant meets the SGA criteria, then disallow IRWEs for the rest of the APTD cash eligibility and benefit allotment process.

BACKGROUND

The budget reductions of House Bill 1, Chapter Law 223 (2011 session), and Senate Bill 198-FN require the Department to revert to the earned income methodology that was in effect prior to 1993 for cash assistance only. The medical assistance eligibility determination process remains unchanged.

POLICY

The following earned income disregard (EID) will now be deducted from the earnings of Aid to the Permanently and Totally Disabled (APTD) and Old Age Assistance (OAA) applicants and recipients when determining eligibility and benefit allotment amount for financial assistance:

· The first $20 of earnings;

· One-half of the balance up to $30 (for a maximum total EID of $50); and then

· An employment expense disregard (EED) of $18, or actual employment expenses, whichever is greater.

No changes are being made to the eligibility determination process for any adult category of medical assistance or in the process to determine if an APTD applicant meets SGA criteria. This means that although impairment-related work expenses (IRWEs) will no longer be used when determining APTD cash assistance eligibility and benefit allotment, IRWEs will continue to be allowed when determining eligibility for APTD medical assistance and when determining whether the APTD cash or medical assistance applicant meets SGA criteria.

The EID will now apply to all individuals whose income is counted in the APTD and OAA cash case, including non-applicant spouses and needy essential persons. Currently, for all adult categories of financial assistance, the EID is not applied to non-applicant (counted) individual’s earnings. It is applied only to the eligible individual’s earnings. Now, non-applicant spouses and needy essential persons with earnings who are part of the APTD or OAA cash case, are entitled to their own APTD/OAA EID, even if the APTD/OAA applicant or recipient is already receiving an EID.

Note: This change does not affect the income methodology process for Aid to the Needy Blind (ANB) or any adult category of medical assistance, including any category of assistance under the Medicare Savings Program (MSP) which includes the Qualified Medicare Beneficiary (QMB), Specified Low Income Medicare Beneficiary (SLMB & SLMB135), and Qualified Disabled and Working Individual (QDWI) programs. The Department is mandated to continue to use SSI methodology for these groups. Additionally, the SGA determination process remains unchanged and IRWEs are still allowed as a deduction when determining whether the APTD cash or medical assistance applicant meets SGA criteria.

Old EID Method for aptd and oaa financial assistance	New EID Method for aptd and oaa financial assistance
The SSI Earned Income Methodology was used: The first $65 of earned income (EI) was deducted, followed by any deductions for impairment-related work expenses (IRWEs), and then one-half of the balance.	Original 209(b) Methodology is now used: The first $20 of EI is deducted, followed by a deduction of one-half of the balance up to $30 (for a maximum total EID of $50), and then the higher of $18 or actual employment expenses.

Eaxmple 1: OAA Recipient with $116.92 in monthly earned income and $572.31 in monthly unearned income. No IRWEs.

Client’s Monthly EI:	$116.92	Client’s Monthly EI:	$116.92
Earned Income Deduction (EID):	- $65.00	EID:	- $20.00
Total:	$51.92	Total:	$96.92
IRWES	- $0.00	½ the balance up to $30	- $30.00
Total:	$51.92	Total:	$66.92
½ the balance	- $25.96	$18 or actual expenses	- $18.00
Net Earned Income:	$25.96	Net Earned Income:	$48.92
Add Unearned Income:	+ $572.31	Add Unearned Income:	+ $572.31
Total Income:	$598.27	Total Income:	$621.23
Standard Income Deduction:	- $13.00	Standard Income Deduction:	- $13.00
Net Income:	$585.27	Net Income:	$608.23
Standard of Need (SON) – Net Income [$712 - $585] = Grant:	$127	SON - Net Income [$712 - $608] = Grant:	$104
		Grant size reduction compared to the old method is $23.

Example 2: APTD Recipient with $411.35 in monthly earned income and $489.50 in monthly unearned income. No IRWEs.

Client’s Monthly EI:	$ 411.35	Client’s Monthly EI:	$411.35
EID:	- $65.00	EID:	- $20.00
Total:	$346.35	Total:	$391.35
IRWES	- $0.00	½ the balance up to $30	- $30.00
Total:	$346.35	Total:	$361.35
½ the balance	- $173.175	$18 or actual expenses	- $18.00
Net Earned Income:	$173.18	Net Earned Income:	$343.35
Add Unearned Income:	+ $489.50	Add Unearned Income:	+ $489.50
Total Income:	$662.68	Total Income:	$832.85
Standard Income Deduction:	- $13.00	Standard Income Deduction:	- $13.00
Net Income:	$649.68	Net Income:	$819.85
Standard of Need (SON) – Net Income [$712 - $649] = Grant:	$63	SON- Net Income [$712 - $819] = Grant:	$107 over the SON = Ineligible

NEW HEIGHTS SYSTEMS PROCEDURES AND IMPLEMENTATION

The policies released in this SR have been incorporated into New Heights for the March 1, 2012 effective date.

The evening of February 28, 2012, New HEIGHTS will run all open and pending APTD and OAA cash cases with earned income through a mass change to apply the new earned income methodology to the case effective March 1, 2012. Any APTD or OAA cases whose cash changes or terminates due to applying this new earned income methodology will receive the following special message in the "Explanations" section of the Notice of Decision (NOD) generated:

A state law has recently been passed that caused changes in your OAA or APTD cash grant. Those state law changes require us to count your earned income in a different way, effective March 1, 2012. This is why your cash grant is smaller or you no longer get cash. We sent a letter to people who might be impacted by this law change in January. This letter explained the changes that might happen. If you did not get the letter, this is what the change is: We can now only deduct up to $50 from your earnings, plus an additional $18 or actual expenses, for employment expenses. Please see your New and Old Budget below for more information.

POLICY MANUAL REVISIONS

Revised Adult Assistance Manual Topics

Section 603.01 Earned Income Disregard

Section 603.03 Employment Expense Disregard

IMPLEMENTATION

The revised policy released in this SR will be applied effective March 1, 2012.

CLIENT NOTIFICATION

On January 30, 2012, a one-time mailing will be generated to the approximately 470 APTD and OAA cases impacted by the application of the new earned income methodology. The letter has been attached for reference. Additionally, recipients whose APTD/OAA cash assistance allotment changes during the Mass Change will receive the following special message in the "Explanations" section of the NOD generated:

TRAINING

This policy change was discussed at the June 9, 2011 and February 3, 2012 Supervisors Meetings in Concord, NH. Supervisors will provide onsite training for the Family Services Specialists during the month of February. No other special training is planned.

DISPOSITION

This SR may be destroyed or deleted after its contents have been noted and the revised manual topics released by this SR have been posted to the On-line manuals.

DISTRIBUTION

This SR will be distributed according to the electronic distribution list for Division of Family Assistance policy releases. This SR, and revised On-Line Manuals, will be available for agency staff in the On-Line Manual Library, and for public access on the Internet at www.dhhs.nh.gov/DFA/publications.htm, effective April 2, 2012. Additionally, this SR, and printed pages with posting instructions, will be distributed under separate cover to all internal hard copy holders of the Adult Assistance Manual.

DFA/JBV:s