OLDER WORKER BULLETIN NO. 95-5

TO: ALL SENIOR COMMUNITY SERVICE EMPLOYMENT

PROGRAM (SCSEP) SPONSORS -

SUBJECT: Revised Procedures for Computing Annual Family Income

1. Purpose. To transmit revised procedures for computing annual family income to determine income eligibility for the Senior Community Service Employment Program (SCSEP).

2. References. Section 507(1) of the Older Americans Act of 1965, as amended, 20 CFR Part 641, Final Rule, Senior Community Service Employment Program.

3. Background. All individuals who apply for enrollment, re-enrollment or who are being certified for continued enrollment in the SCSEP must have their annual family income computed to determine their income eligibility to participate in the program. Each SCSEP sponsor must assure the eligibility of each SCSEP enrollee, record it, and maintain records indicating that all participants are eligible.

Up to this time, the personal information necessary for eligibility determinations has been verified by the applicant or enrollee's signature on the appropriate form. This process will continue until the proposed final regulations are issued and a work group develops specific requirements. However, SCSEP sponsors may continue to require the applicant or enrollee to provide additional documentation to insure that only eligible persons participate.

The present procedures for computing annual family income have been unaltered since 1980 when Older Worker Bulletin No 80-19 was issued. During that period, a series of changes has been made both formally and informally. However, a comprehensive revision has not been issued to incorporate all the changes into a single document. This directive is intended to provide you with a comprehensive revision which updates the former OW Bulletin and answers all questions raised to date on this subject.

It is acknowledged that neither this directive nor any other can answer the detailed questions and variations of concerns that may be raised in an operational setting. It is simply not possible to project the variety of situations which must be faced locally. Eligibility decisions must be made at the project level as project directors are confronted by real situations in contrast to the abstract guidance that is provided in this directive. Local decision-making will have to be exercised for fine distinctions. If there is a unique situation, it is recommended that the determination be documented, including any explanation of why the determination was made.

4. Responses to Comments Received. To ensure that all concerns related to this

topic were addressed, a proposed OW Bulletin was circulated for comment. A total of

14 sponsors responded to this request. The comments fit into one of three categories

- general agreement, not determined to be practical, or outside of the scope of this

directive. -

Category I. For the most part, there was a general agreement on the following concerns:

a. Period for Calculation. There was strong support to retain the six month option and no comments opposing this provision; therefore, the option of using either six or twelve months is retained for SCSEP.

b. Poverty Guidelines. There was almost complete support for continuing the 125 percent of poverty interpretation. The only response that differed suggested that it be raised to a higher ratio. Because section 507(2) of the Older Americans Act established the level, it would not be prudent to raise the level beyond the 125 percent level; therefore, the percentage multiple of 125 percent of the poverty guidelines is retained for SCSEP.

c. Re-certification/Re-enrollment. It was pointed out in the comments that we did not deal with the period between leaving SCSEP and returning. This is correct; therefore, we have limited the $500 exclusion for re-enrollment for up-to-one-year period. The annual certification of eligibility was not questioned; therefore, it is unchanged.

d. Dual Eligibility with Job Training Partnership Act. With the passage of amendments to the Older Americans Act in 1994 and the issuance of JTPA final regulations in September 1994, eligible SCSEP enrollees qualify based on income for either the Section 203 or Section 204(d) JTPA programs where there is a written agreement in place between the service delivery area and the SCSEP sponsor.

e. Twenty-Five Percent Social Security Exclusion. Only one response was opposed to providing this additional flexibility; however, it was noted if this provision were adopted, it should be applied uniformly on a national basis. This provision will be applied uniformly across all States.

f. Lottery Winning. There was no concern expressed on this item; therefore, a maximum of up to $3,000 in lottery winnings during a 12-month period is excluded.

g. Black Lung Payments. One response indicated that the Black Lung income was not addressed. The matrix in the draft directive did list this income as an

exclusion, but it was not highlighted. The clear intent is to continue this exclusion. There will be no change.

h. Inclusion of Existing Enrollees Who May No Longer Qualify. - It -was suggested in several sets of comments that there needed to be a cut-off point on continuing eligibility. To provide for a firm transition period for enrollees and project staff to make adjustments, anyone impacted by these guidelines will continue to be eligible for up to a one-year period after the effective date of this directive.

i. Common Sense on Social Security Disability Payments. Several comments were received on this vexing problem area. There is no simple solution which will solve all concerns. The disability does not magically disappear when the individual or spouse turns 65. Nevertheless, the basic premise for establishing the disability benefit under the Social Security Act was to cover the person until he/she reached what was then viewed as the retirement age for full coverage under the Old Age Survivors Insurance provisions. Our understanding of the rationale was that the individual had an attachment to the labor force, and that the individual was no longer able to be gainfully employed in his/her occupation due to the disability. At age 65, the individual would be eligible for old age and survivors benefits, and the payment stream would flow from the trust fund. After a great deal of discussion, it has been determined that the only sensible thing to do is to exclude such payments as long as the disability exists.

j. Definition of Family.

(1) Unmarried Members of Families. Several organizations raised questions about changes taking place in our society with couples living together, but unmarried. It was pointed out that these arrangements provided an advantage to such persons when considering income for eligibility purposes. We cannot change what happens in the sphere of personal choice on living arrangements. We also looked at using joint income tax returns as the answer to this problem; however, married persons file single and joint returns. This was not the answer we had hoped for in our search for a solution. Therefore, it will be necessary to continue to make decisions on a case-by-case basis which will be based on State and local laws.

(2) Family of One. Questions were raised on the continuation of this concept. The provision for a family of one living in group quarters will continue to be retained for an individual 18 or older who receives less than 50 percent of his/her support from the family, and who is not the principal earner, or the spouse of the principal earner. Note: See paragraph i.(3) below for an exception.

(3) Other Dependents. Concerns about addressing other changes in our society such as grand children and other arrangements were also raised. For the purposes of SCSEP, anyone claimed as a dependent on the applicant's or the

enrollee's Federal Income Tax return for the previous year shall be presumed,

unless otherwise demonstrated, to be a part of the applicant's or the enrollee's

family for the current year. This provision applies to grandchildren or foster care

situations. -

k. Lump Sum Payments versus Periodic Distributions. Questions on such payments led to a review of such payments. For SCSEP purposes, payments which are excludable or includable will vary due to the method in which they are paid. Nevertheless, as a general rule, personal property sales, reverse mortgages, IRA's, one-time unearned income, uncollected capital gains or similar payments will be excluded.

I. Payments to Native Americans. Questions on income from the Federal . government for rental income were raised. There is no basis for excluding such payments unless they are covered by Federal Claims legislation. Therefore, rental income from the Federal government will not be excluded unless it can be shown to be covered by Federal Claims legislation.

m. Interest. A desire for reassurance that such payments would continue to be excluded was expressed by one respondent. There is no attempt by the SCSEP to penalize persons who earned and invested income in the past, but a threshold is necessary if the SCSEP is to serve those most in need. Therefore, a threshold of $3,000 for interest payments will be retained.

n. Temporary Support Payments. One respondent wanted to know how to handle temporary support payments. As in the case of alimony payments, these payments which are awarded by a court while a final settlement is being negotiated will be counted as income.

Category II. The following issues were determined to be impractical for eligibility purposes:

a. Waiver of Eligibility Guidelines. A proposal was put forth to waive the eligibility guidelines for emergency situations for individuals who are faced with severe economic or personal trauma such as becoming homeless or being subjected to abuse. This recommendation was not adopted since the legislative history has traditionally interpreted the phrase "low income" to mean poverty level.

b. Definitions. A series of requests for detailed definitions was contained in one response. Such definitions would only lengthen the document and create administrative burdens for all sponsors; therefore, they will be dealt with individually.

c. Disabled. One question was raised about using comparable language to the

JTPA in calculating family income for the disabled, including such issues as most in

need, supporting a dependent who is disabled, enrollment of other members of the

family and identification of disability. The intent of this change only deals with the

family-of-one concept. It does not apply to dependents or other members of the

family. The term disability is defined in the final rule. -

Category I11. The following issues were determine to be outside the scope of this directive:

a. Combined JTPA/SCSEP Bulletin. Development of a combined bulletin would be time consuming with little practical impact since the dual eligibility provisions have solved most of the cross-program concerns.

b. Exclusion of SCSEP Wages. One suggestion was made to exclude SCSEP wages as is the case under the JTPA. Unfortunately, there is no similar provision that exists under SCSEP which would permit the waiver of these wages. In contrast, the JTPA has such a provision.

c. Other Federal Program Inclusions/Exclusions. One response suggested that a list of other Federal statutes with income payments excluded for the SCSEP should be created. Since the attached matrix provides such a list for the JTPA, a new list has not been created.

5. Action Reduired. SCSEP sponsors are required to provide the attached procedures to all staff who make income eligibility determinations. These new procedures are effective immediately.

6. Recision. OW Bulletin 80-19.

6. Inquiries. Questions should be directed to your Federal Representatives on (202) 219-5904.

CHARLES L. ATKINSON '~ .

Chief erector

Division of Older Worker Office of Special

Programs Targeted Programs

Attachments

1. Procedures for Computing Annual Family Income to Determine Income

Eligibility for the SCSEP

2. Changes incorporated which were not contained in OW Bulletin 80-19

3. Summary of JTPA/SCSEP Inclusions and Exclusions -

Attachment No. 1

PROCEDURES FOR COMPUTING ANNUAL FAMILY INCOME

TO DETERMINE INCOME ELIGIBILITY FOR THE SCSEP

1. Income Computation Procedures. Income refers to the total family cash receipts

before taxes. -

a. Computation. Annual family income shall be determine by using either the following time frames, whichever is more beneficial to the individual:

(1) the actual includable income for the 12 months preceding application or certification for continued enrollment, or

(2) annualizing the actual includable income for the 6 months preceding application or certification for continued enrollment.

Annual family income for current family members refers to the sum of the amounts received from wages or salary, self-employment or other income described below in section 2(c)(1) below which lists monies to be included and counted as income. Annual family income does not refer to monies received from sources described in section 2(c)(2) below which lists monies to be excluded and not counted as income.

2. Definitions of Family and Family Income. This section defines the terms "family" and "family income" as well as providing specific guidance for what is to be included or excluded from the computations regarding family income.

a. "Family" means two or more persons 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:

(1) a husband, wife, and dependent children. (2) a parent or guardian and dependent children (3) a husband and wife.

Note: Where individuals are living together under common law or similar arrangements, their joint income should be counted as members of families when they jointly file tax returns.

An "individual with a disability, shall for income eligibility determination, be considered to be an unrelated individual who is a family unit of one.

b. "Family income" means income as defined by the Department of Health and Human Services in connection with the annual poverty guidelines. Such income shall not include unemployment compensation, child support and public assistance (including Aid to Families with Dependent Children, Supplemental Security Income,

Emergency Assistance money payments, and non-federally funded General Assistance or General Relief money payments). In addition, such income shall also exclude foster child care payments, educational financial assistance received under title IV of the Higher Education Act (20 U.S.C. 1087), as amended by section 479(B) of the Higher Education Act amendments of 1992), needs-based scholarshipassistance, and income earned while on active military duty and other benefit payments specified at 38 U.S.C. 4213. items (1) and (3). Twenty-five percent of Social Security and Old Age Survivors' Insurance benefit payments under title II of the Social Security act, (41 U.S.C., section 401, et seq.) from the definition of family income. When a federal statute specifically provides that income or payments received under such statute shall be excluded in determining eligibility for the level of benefits received under any other federal statute such income or payments shall be excluded in SCSEP eligibility determination.

c. Inclusions and Exclusions of Family Income. It is recognized that the above definitions are inadequate to cover all instances when computing family income. Therefore further specific guidance on inclusions and exclusions to be used when counting family income are provided herein. Even the following lists are not likely to cover every conceivable situation where questions about potential income are raised in an operational setting. Nevertheless, this guidance should be useful in making judgements about inclusions and exclusions.

(1) Inclusions. The following types of income shall be counted for the purpose of determining annual family income for the SCSEP.

(a) Wages or Salary. Count the total money earnings received for work performed as an employee. Use the amount paid before deductions for income taxes, social security, bond purchases, union dues,. etc. If the individual is unemployed, earnings from the individual's previous job(s) shall be counted using the procedures provided in this bulletin (to the extent it falls into the computation time period).

(b) Self-employment income. Net money income (gross receipts minus operating expenses) from a business firm, farm, rent or other enterprise in which a person is engaged must be counted.

(c) Other income. Money income received from such sources as social security benefits (Old Age and Survivors Insurance), pensions, rent, dividend and interest payments individually or combined in excess of $3,000; periodic income from alimony, insurance annuities and receipts from estates must be counted as well as regular support from an absent family member or someone not living in the household; and winnings from lotteries or games of chance which are in excess of $3,000.

(d) SCSEP wages of another family member. The SCSEP wages of a current SCSEP enrollee shall be included in another family member's income if the

other family member applies for SCSEP enrollment, or if two members are enrolled at the same time. The SCSEP wages shall not be counted as income for the other family member if the enrollee is terminated.

(2) Exclusions. The following types of income shall not be counted for the purpose of determining annual family income for the SCSEP:

(a) Non-Cash Income. Non-cash income such as food stamps, energy assistance and compensation received in the form of food or housing.

(b) Public assistance payments. Any individual receiving direct cash welfare payments in his or her own name and any individual who is counted in the computation of the amount of the welfare grant as a dependent, is considered to have a low income. Merely being a relative by blood or marriage of another person who receives welfare payments is not sufficient to be considered automatically eligible. Only when the individual is receiving welfare payments directly or is counted by the welfare agency as the dependent of another person receiving welfare payments (and thus some share of a welfare payment is intended to aid the individual) is the individual automatically classified as having a low income.

(c) Certain cash payments. Cash payments received pursuant to a State plan approved under Title I (Grants to States for Old Age Assistance and Medical Assistance for Aged), Title IV (Grants to States for aid and services to Needy Families with Children and for Child-Welfare services), Title X (Grants to States for Aid to Blind), and Title XVI (Supplemental Security Income for Aged, Blind and Disabled) of the Social Security Act; disability insurance payments received under Title II (Federal Old-Age, Survivors, and Disability Insurance Benefits) of the Social Security Act;

(d) Black Lung. Disability insurance payments received under Title IV (Black Lung Benefits) of the Federal Coal Mine Health and Safety Act.

(e) Employment and training payments. Certain payments made to participants in employment and training activities, such as allowance payments for classroom training, stipends and grants, transportation and dependents' allowances and wages for work experience. If a member of an applicant's family (as defined in section 2) is currently enrolled under the SCSEP, or if two or more members of the same family are enrolled at the same time, then the SCSEP wages of the other family member(s) must be counted. If a family member is subsequently terminated, his or her SCSEP wages shall no longer be counted when determining the annual family income of another member of the same family.

(f) Payments to certain volunteers. Payments to volunteers under the National and Community Service Trust Act of 1993 or other similar legislation shall

not be counted, including payments to VISTA volunteers, Senior Companions and Foster Grandparents.

(g) The $500 exclusion for current and re-enollees. Five-hundred dollars ($500) of includable income (as described in section 1, shall not be counted as annual family income for those individuals applying for SCSEP re-enrollment who were previously terminated due to illness or transition to unsubsidized employment.

(h) Capital gains and assets draw down. Uncollected capital gains and assets withdrawn from a bank account, including Individual Retirement Accounts.

(i) Unemployment Compensation and Trade Adjustment Payments. Federal, State or local unemployment benefits and payments received under the Trade Re-Adjustment Act of 1988.

(j) One-time unearned income. Payments receive for a limited fixed term under income maintenance programs and supplemental (private) unemployment benefit plans; income from the sale of one's principal residence, one-time or fixed-term scholarship and fellowship grants; accident, health and casualty insurance payments; disability and death payments, including fixed term (but not life-time) life insurance annuities and death benefits; one time awards and gifts; inheritances, including fixedterm annuities, fixed-term workers' compensation awards; terminal (or severance) leave pay and $3,000 of winnings from a lottery or game of chance. This list is not intended to be all-inclusive, but is intended to provide the conceptual framework of one-time unearned income.

(k) Child support. Payments for child support.

6'Q' (I) Veterans. The following income shall also be excluded: amounts

received as pay or allowances while serving on active duty in the Armed Forces;

educational assistance and compensation payments to veterans and other eligible

persons under Chapter II (Dependency and Indemnity Compensation for Service

onnecte Death), 31 Vocational Rehabilitation), 34 (Veteran's Educational

Assistance), 35 (War Orphans' and Widows' Educational Assistance) and 36

(Administration of Educational Benefits) of Title 38, United States Code.

(m) Certain payments to Indians. Pursuant to the Indian Claims Act, P.L. 93-134 and P.L. 97-458, Section 4, the first $2,000 of certain per capita fund distributions which are made to Indians.

(n) Payments, to World War II internees. Compensation awarded to World War 11 internees under the Civil Act, 100-383 as mentioned at Section 105(f).

(o) Inheritances and sale of personal property. Lump sum inheritances and one-time sale of personal property.

(p) Interest and dividends. Three thousand ($3,000) of interest and/or dividend income shall be excluded from income computation (see c.(1)(c). above for parallel inclusion).

(q) Social Security Income. Twenty-five percent of Social Security and Old Age Survivors' Insurance benefit payments under the Social Security Act (42 U.S.C. section 401, et. seq) consistent with the definition of family income for section 204(d)(5) of the JTPA.

Attachment 2

CHANGES INCORPORATED WHICH WERE NOT CONTAINED IN

OLDER WORKER BULLETIN NO. 80-19

1. Family. The definitions for "family" and "family income" in Section 2 of Attachment 1 have been modified to bring them in line with the definitions contained in the Job Training Partnership Act and the JTPA final rule which was issued on September 2, 1994 in order to assist local staff who are presently confronted by different definitions.

2. Inclusions.

a. Other Income (attachment 1, see c.(1)(c))..

(1) Dividend and interest payments individually or combined which are over $3,000.

(2) Regular support from an absent family member such as a child who contributes monthly to the support of his parents.

(3) Lottery Winnings. Winnings from games of chance or lotteries shall be counted to the extent that they exceed $3,000.

3. Exclusions.

a. Payments to certain volunteers (see c.(2)(f)., attachment 1). Payments made to volunteers under the National and Community Service Trust Act of 1993 or similar legislation for stipends to VISTA Volunteers or Senior Companions.

b. One-time unearned income (see c.(2)(j)., attachment 1). The definition of on-time unearned income has been supplemented with an example to clarify that the sale of the applicant's or enrollee's home is excluded. For example, winnings from a game of chance or lottery that are less than $3,000 would not be counted.

c. Indians (see c.(2)(n)., attachment 1). Up to $2,000 of certain per capita fund distributions.

d. Payments to World War II internees (see c.(2)(o)., attachment 1).

e. Inheritances and sale of personal property (see c.(2)(p), attachment 1). Lump sum inheritances and one-time sale of personal property.

f. Interest or dividend payments (see c.(2)(gl., attachment 1). Up to $3,000.

g. Social Security Income (see c.(2)(r). attachment 21. Twenty-five percent of Social Security and Old Age Survivor's Insurance benefit payments.

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