DEPARTMENT OF PUBLIC WELFARE [ 55 PA. CODE CH. 3041 ] Subsidized Child Care Eligibility [42 Pa.B. 2029]
[Saturday, April 14, 2012]The Department of Public Welfare (Department) amends Chapter 3041 and Appendix A (relating to subsidized child care eligibility; and income to be included, deducted and excluded in determining gross monthly income) to read as set forth in Annex A under the authority of sections 201(2), 403(b) and 403.1 of the Public Welfare Code (code) (62 P. S.§§ 201(2), 403(b) and 403.1), as amended by the act of June 30, 2011 (P. L. 89, No. 22) (Act 22).
Omission of Proposed Rulemaking
Act 22 amended the code and added several new provisions. Specifically, Act 22 added section 403.1 of the code. Section 403.1(a)(1) of the code authorizes the Department to promulgate final-omitted regulations to establish standards for determining eligibility and the nature and extent of assistance. The basis for the final-omitted regulation is section 204(1)(iv) of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. § 1204(1)(iv)), known as the Commonwealth Documents Law (CDL), which authorizes an agency to omit or modify notice of proposed rulemaking when the regulation relates to Commonwealth grants or benefits. See section 403.1(d) of the code. Child care subsidy is a Commonwealth benefit. In addition, until June 30, 2012, section 403.1 of the code expressly exempts certain regulations under the Regulatory Review Act (71 P. S. §§ 745.1—745.12), section 205 of the CDL (45 P. S. § 1205) and section 204(b) of the Commonwealth Attorneys Act (71 P. S. § 732-204(b)).
The Department is amending Chapter 3041 and Appendix A in accordance with section 403.1 of the code because this final-omitted rulemaking pertains to establishing standards for determining eligibility and the nature and extent of assistance. In addition, this final-omitted rulemaking implements section 403.1(c) of the code. As provided in section 403.1(c) of the code, the Department is permitted to exercise its rulemaking authority granted under section 403.1(a) of the code as may be necessary to ensure that expenditures for State Fiscal Year (FY) 2011-2012 for assistance programs administered by the Department do not exceed the aggregate amount appropriated for the program by the General Appropriations Act of 2011. Specifically, this final-omitted rulemaking will save $641,000 in State FY 2011-2012.
Purpose
The purpose of this final-omitted rulemaking is to amend the definition of ''self-employment,'' rescind subsidized child care special eligibility for children enrolled in a prekindergarten program and amend copayment requirements for school-age child care subsidies. ''Prekindergarten'' is defined as a program serving children 3 or 4 years of age operated by a school entity or a certified child care center or licensed private academic school under contract with a school entity.
Requirements
§ 3041.3. Definitions
The definition of ''self-employment'' is being amended to include ''profit equal or greater than the hourly Pennsylvania minimum wage.''
§ 3041.52
Special eligibility granted to parents or caretakers who have a child enrolled in a prekindergarten program is being rescinded. Under the regulation, parents or caretakers who are eligible for special eligibility under this section are not subject to 6-month redeterminations and are not required to report changes in circumstances regarding work hours and income. In some instances, this results in parents or caretakers who do not meet the work requirements receiving additional hours of child care beyond their work or training schedule and pay co-payments that are not reflective of their changes in family income and size. Families enrolled in Pennsylvania Pre-K Counts, a prekindergarten program administered through the Department of Education and managed locally through school entities, have income at or below 300% of the Federal Poverty Income Guidelines. This income limit is higher than the income limit for other families that receive subsidized child care, making it more likely that a family with a child enrolled in Pennsylvania Pre-K Counts could be over the income limit for subsidized child care, as compared to other families that receive subsidy. By rescinding this regulation, parents or caretakers who have a child enrolled in a prekindergarten program will be required to report all changes and have a redetermination every 6 months, as required for all other subsidy recipients under §§ 3041.127 and 3041.130 (relating to parent and caretaker report of change; and redetermination of eligibility), with the exception of those families enrolled in a Head Start expansion program. Under the amended regulations, parents or caretakers will be required to meet the work requirement, only be eligible for child care for the hours they are in a work or training activity and pay a co-payment based on their family size and income.
§ 3041.65. Verification of income
This section is amended to specify that the verification of income from self-employment must be documented by Federal Income Tax Returns, including all schedules related to self-employment. A notarized statement of gross earnings, minus allowable cost of doing business, is acceptable verification for a parent or caretaker who has not been self-employed for more than 1 year in the same business. However, the notarized statement is only valid until the Federal Income Tax Return is filed. At the time the Federal Income Tax Return is filed, a redetermination of eligibility shall be completed.
§ 3041.67. Verification of work, education and training
This section adds the requirement for submission of a Federal Income Tax Return as verification of work for a parent or caretaker who is self-employed. The Federal Income Tax Return must show profit from self-employment, that when divided by the Pennsylvania minimum wage, is equal to or greater than the number of hours required under § 3041.43 (relating to work, education and training) and is equal to or greater than the number of hours of care needed.
§ 3041.108. Co-payment for families headed by a parent
The Department is deleting subsection (c) and renumbering the section accordingly. By deleting subsection (c), parents or caretakers shall pay the full co-payment amount, regardless of the child's age or hours of care. Deleting this subsection will provide for equal application for all families that receive subsidy under § 3041.101 (relating to general co-payment requirements) which requires co-payments to be based on family income and size.
Appendix A, Part I. Income inclusions
The following items are being deleted from the list of allowable deductions for the cost of doing business for self-employment income: professional licensing fees and union dues, if necessary to practice a profession or trade; depreciation; and other deductions allowed by the Internal Revenue Service (IRS). The reason for disallowing these IRS deductions is to standardize the calculation of gross annual income for the purposes of determining eligibility and co-payment amount. Currently, these deductions are allowable for self-employed individuals only. For example, parents or caretakers who are not self-employed may not use professional licensing fees or unions dues as allowable deductions when determining their gross annual income.
The changes regarding self-employment income will serve to better align calculation of gross annual income for parents or caretakers receiving subsidized child care and clarify standards for acceptable verification relating to self-employment. Parents or caretakers will need to be able to show a profit equal to or greater than the Pennsylvania hourly minimum wage to be eligible. This change will result in a cost savings to the Commonwealth and meet the Department's goal that only income-eligible families are served.
Affected Individuals and Organizations
Parents or caretakers who have a child enrolled in a prekindergarten program will have to comply with the same reporting requirements as other parents or caretakers who receive child care subsidy, with the exception of those families enrolled in the Head Start expansion program. The new requirements include the need to report a decrease in work or training hours which could result in ineligibility for subsidized child care and redetermination of income eligibility which will result in paying the appropriate co-payments based on their income and family size. Parents or caretakers will be ineligible for additional hours of child care beyond their work or training schedule.
Under the amended regulations, acceptable verification to demonstrate self-employment will be more specific than existing requirements for parents or caretakers who are self-employed. In addition to specifying acceptable documentation to establish self-employment, parents or caretakers shall show a profit equal to or greater than the Pennsylvania minimum wage to be eligible for subsidized child care.
Co-payments will increase for families of school-age children who have only one child receiving part-time subsidized child care. For example, if a parent or caretaker has a child who is in first grade that receives subsidized child care to attend a before and after school program for a total of 3 hours per day, the parent or caretaker will pay the full co-payment amount for the family size and income, the same as other families with one child receiving part-time care.
Each of these amendments will strengthen the eligibility requirements to be certain that those receiving subsidized child care truly are eligible for subsidy. This is imperative as there is currently a waiting list of otherwise eligible parents or caretakers in most counties in this Commonwealth.
Accomplishments and Benefits
This final-omitted rulemaking implements section 403.1 of the code. As provided in Act 22, this final-omitted rulemaking will help the Department's efforts to conserve resources to ensure that the expenditures for State FY 2011-2012 for assistance programs administered by the Department do not exceed the aggregate amount appropriated for assistance programs by the General Appropriations Act of 2011.
Fiscal Impact
The Commonwealth will realize an estimated savings of $641,000 in State FY 2011-2012.
Paperwork Requirements
There are new paperwork requirements under the final-omitted rulemaking. There will be increased reporting requirements for families with a child enrolled in a prekindergarten program. Parents or caretakers will be required to complete a redetermination every 6 months, as well as report changes relating to work hours and income.
Parents or caretakers who are self-employed will be required to submit Federal Income Tax Returns. If the parent or caretaker has been self-employed for less than 1 year in the same business, a notarized statement of gross earnings, minus allowable cost of doing business, shall be submitted as verification until a Federal Income Tax Return is filed.
Public Comment
Although this rulemaking is being adopted without publication as proposed rulemaking, the Department posted a draft regulation on the Department's web site on February 24, 2012, with a 15-day comment period. The Department invited interested persons to submit written comments regarding the final-omitted rulemaking to the Department. The Department received 23 comments. The Department also discussed the Act 22 regulations and responded to questions at the House Health Committee hearing on March 8, 2012.
The Department considered the comments received in response to the draft regulation. For the following reasons, the Department has decided to maintain the policies as provided in the draft regulation.
Discussion of Comments
Following is a summary of the major comments received within the public comment period and the Department's response to the comments.
Comment
Several commentators stated that the Department did not allow sufficient time for review and comment of the regulations. In addition, commentators requested the public comment period be extended an additional 30 days due to the policy changes and the volume of regulations.
Response
The Department engaged in a transparent public process through which the Department solicited and received numerous comments and input from stakeholders and other interested parties. As previously mentioned, the Department posted the draft regulation on the Department's web site on February 24, 2012. The Department invited interested persons to submit written comments, on or before March 9, 2012, regarding the draft regulation to the Department. In addition, the Department's Regulatory Agenda announced the Act 22 regulations at 42 Pa.B. 879, 893 (February 11, 2012).
As a final-omitted regulation under Act 22, the Department was not required to have a public comment process. However, to encourage transparency and public input the Department provided an opportunity for comment by posting the draft regulation on the Department's web site. This public comment process provided sufficient opportunity for interested parties to submit comments, as supported by the number of comments that were submitted. Therefore, the Department is not extending the public comment period.
Comment
Comments were received both in support and opposition to the amendments regarding self-employment.
Response
The Department is maintaining the changes regarding self-employment. These changes standardize the calculation of gross annual income for the purposes of determining eligibility and co-payment amount. Further, the amendments clarify the verification requirements for self-employment.
Comment
Comments were received in opposition to the change to the school-age copayment regulation. Recommendations received included monitoring the drop in the number of school-aged children being served, maintaining eligibility during the school year and creating a summer school-age set aside.
Response
The Department is maintaining the change to delete § 3041.108(c) (relating to co-payment for families headed by a parent). This amendment will require parents and caretakers to pay a full co-payment throughout the year.
Co-payment amounts are based on family size and income under § 3041.108. However, families receiving a subsidy with school-age children only pay the full co-payment amount from mid-June to the end of August. This amendment aligns the co-payment provisions for families receiving a child care subsidy since parents of school-age children will be required to pay the full co-payment amount throughout the year, just as other parents receiving child care subsidy are required to pay.
The Department will monitor the number of school-age children that become ineligible due to the copayment being greater than the cost of part-time care. In addition, the Department will create a summer school-age set aside to provide care for children that are only eligible during summer months when the cost of care is higher due to the need for full-time enrollment.
Comment
Comments were received in opposition concerning the change in regulation allowing special eligibility for children enrolled in prekindergarten programs. Recommendations included developing clear information to families regarding prekindergarten redetermination changes and sufficient time for families to adjust to the changes.
Response
The Department is maintaining the changes to remove the special conditions for subsidy-eligible children enrolled in prekindergarten. This amendment will align the requirements for receipt of subsidized child care. As previously stated, parents and caretakers who have a child enrolled in a prekindergarten program will be required to report all changes and have a redetermination every 6 months, as required for other subsidy recipients under §§ 3041.127 and 3041.130.
Parents or caretakers will receive written notification of the change in regulation as soon as the regulation becomes effective. In the following month, parents and caretakers with children enrolled in prekindergarten who have not received a redetermination in the last 6 months will receive a redetermination packet allowing the parent or caretaker 6 weeks to provide the required information. The Department anticipates that children currently eligible under the current prekindergarten section will be able to finish the 2011-2012 school year.
Regulatory Review Act
Under section 403.1 of the code, this final-omitted rulemaking is not subject to the Regulatory Review Act.
Findings
The Department finds that:
(1) Notice of proposed rulemaking is omitted in accordance with section 204(1)(iv) of the CDL, 1 Pa. Code § 7.4(1)(iv) and section 403.1(d) of the code because the regulations relate to Commonwealth grants and benefits.
(2) Adoption of this final-omitted rulemaking in the manner provided by this order is necessary and appropriate for the administration and enforcement of the code.
Order
The Department, acting under the code, orders that:
(a) The regulation of the Department, 55 Pa. Code Chapter 3041, are amended by deleting § 3041.52 and amending §§ 3041.3, 3041.65, 3041.67 and 3041.108 and Appendix A to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(b) The Secretary of the Department shall submit this order and Annex A to the Offices of General Counsel for approval as to legality and form as required by law.
(c) The Secretary of the Department shall certify and deposit this order and Annex A with the Legislative Reference Bureau as required by law.
(d) This order shall take effect upon publication in the Pennsylvania Bulletin.
GARY D. ALEXANDER,
SecretaryFiscal Note: 14-527. No fiscal impact; (8) recommends adoption.
Annex A TITLE 55. PUBLIC WELFARE PART V. CHILDREN, YOUTH AND FAMILIES MANUAL Subpart B. ELIGIBILITY FOR SERVICES CHAPTER 3041. SUBSIDIZED CHILD CARE ELIGIBILITY GENERAL PROVISIONS § 3041.3. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Self-employment—Operating one's own business, trade or profession for profit equal to or greater than the hourly Pennsylvania minimum wage.
* * * * * SPECIAL ELIGIBILITY PROGRAMS § 3041.52. (Reserved).
SELF-CERTIFICATION AND VERIFICATION § 3041.65. Verification of income.
(a) Acceptable verification of earned income from employment includes one of the following:
(1) Pay stubs reflecting earnings for 4 weeks in the most recent 6-week period, the Department's Employment Verification form reflecting actual or anticipated earnings, the Internal Revenue Service form used for reporting tips, an employer statement of anticipated earnings and hours or other document that establishes the parent's or caretaker's earnings or anticipated earnings from employment.
(2) A collateral contact, as specified in § 3041.62 (relating to collateral contact).
(3) A written self-declaration by the parent or caretaker as specified in § 3041.64 (relating to self-declaration).
(b) Acceptable verification of income from self-employment includes one of the following:
(1) Tax returns, including schedules related to self-employment, filed for the preceding Federal tax year and which document profit for that year.
(2) A notarized statement of gross earnings, minus allowable cost of doing business which shows hourly profit equal to or more than the Pennsylvania minimum wage, for the preceding Federal tax quarter is acceptable and is valid until the next Federal Income Tax Return is filed. At the time the Federal Income Tax Return is filed, a redetermination of eligibility shall be completed.
(3) An annual Federal Income Tax Return shall be used as income documentation when the parent or caretaker has been self-employed for more than 1 year in the same business and is only valid until the next Federal Income Tax Return is filed.
(c) Acceptable verification of unearned income includes one of the following:
(1) A copy of a current benefit check, an award letter that designates the amount of a grant or benefit, such as a letter from the Social Security Administration stating the amount of the Social Security benefit, a bank statement, a court order, or other document or database report that establishes the amount of unearned income.
(2) A collateral contact, as specified in § 3041.62.
(3) A written self-declaration by the parent or caretaker, as specified in § 3041.64.
(d) If a family receives or pays child support, the eligibility agency shall verify the amount of support received or paid by the family by requesting this information from the Department, whether the information is found in the Pennsylvania Child Support Enforcement System or in another source.
§ 3041.67. Verification of work, education and training.
Acceptable verification of hours of work, education, training or enrollment in education or training includes one of the following:
(1) A document provided by the parent or caretaker as verification of earned or anticipated earned income, provided this verification indicates or can be used to compute the number of hours the parent or caretaker worked, is normally scheduled to work or in cases when hours vary, the average number of hours worked.
(2) A copy of a work schedule signed by the employer.
(3) A copy of the class or training schedule from an education or training representative.
(4) Another document that establishes hours of work or anticipated hours of work, education or training.
(5) A collateral contact, as specified in § 3041.62 (relating to collateral contact).
(6) A written self-declaration by the parent or caretaker that indicates the parent or caretaker works or will work at least 20 hours per week, as specified in § 3041.64 (relating to self-declaration).
(7) A Federal Income Tax Return showing profit from self-employment that when divided by the Pennsylvania minimum wage is equal to or greater than the required number of hours, as specified in § 3041.43 (relating to work, education and training) and is equal to or greater than the number of hours of care needed.
CO-PAYMENT AND PAYMENT BY THE DEPARTMENT § 3041.108. Co-payment for families headed by a parent.
(a) For families headed by a parent, the family co-payment shall be determined based on the following:
(1) The family size and family income, as specified in §§ 3041.31—3041.34 (relating to determining family size and income).
(2) The co-payment shall be at least $5, unless waived as specified in §§ 3041.44(a) and 3041.91(c) (relating to prospective work, education and training; and general domestic violence waiver requirements).
(3) The family's annual co-payment may not exceed 11% of the family's annual income.
(4) If the family's annual income is 100% of FPIG or less, the annual co-payment may not exceed 8% of the family's annual income.
(b) The eligibility agency shall determine the co-payment by using the co-payment chart in Appendix B (relating to co-payment chart family co-payment scale based on the 2005 FPIGs). The co-payment is calculated in $5 increments for each $2,000 of annual income.
(c) If the co-payments for 1 month are equal to or exceed the monthly payment for care, the family is not eligible for subsidized child care with that provider.
APPENDIX A INCOME TO BE INCLUDED, DEDUCTED AND EXCLUDED IN DETERMINING GROSS MONTHLY INCOME PART I. INCOME INCLUSIONS Income from the following sources is included when determining total gross monthly income:
* * * * * T. Profit from self-employment; total gross receipts minus costs of doing business. The costs of doing business shall only include:
(1) Costs of maintaining a place of business such as rent, utilities, insurance on the business and its property and property taxes. Note: If a business is operated in a home, the costs of maintaining a place of business are only those costs identified for the part of the home used exclusively for the business.
(2) Interest on the purchase of income-producing equipment and property.
(3) Employee labor costs, such as wage, salaries, taxes, benefits, Unemployment Compensation or Worker's Compensation.
(4) Cost of goods sold, supplies and materials.
(5) Advertising costs.
(6) Accounting and legal fees.
(7) Transportation costs necessary to produce income.
U. Net income from room rent or room and board: Gross income received minus $10 per month for each room rented. Divide the remainder by 2. That number is the income inclusion.
* * * * * [Pa.B. Doc. No. 12-648. Filed for public inspection April 13, 2012, 9:00 a.m.]
