Title of Regulation: 22VAC40-601. Supplemental Nutrition Assistance Program (adding 22VAC40-601-70).

Statutory Authority: § 63.2-217 of the Code of Virginia; 7 CFR 271.4.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: October 22, 2017.

Agency Contact: Celestine Jackson, Department of Social Services, 801 East Main Street, Richmond, VA 23219, telephone (804) 726-7376, FAX (804) 726-7356, TTY (800) 828-1120, or email celestine.jackson@dss.virginia.gov.

Basis: Section 63.2-217 of the Code of Virginia grants authority to the State Board of Social Services to promulgate rules and regulations to operate assistance programs in Virginia. Federal regulations at 7 CFR 271.4 delegate responsibility to administer the Supplemental Nutrition Assistance Program (SNAP) within a state to the agency assigned responsibility for other federally funded public assistance programs. Federal regulations at 7 CFR 273.9(d)(5) permit states the option to either count legally obligated child support payments to nonhousehold members as an income deduction or an income exclusion; Virginia currently uses the income deduction option.

Purpose: In an effort to encourage noncustodial parents to meet their obligations to pay child support, the agency proposes to change how legally obligated child support payments are evaluated when determining SNAP eligibility and in determining the amount of SNAP benefits these households may receive. States may evaluate child support payments for SNAP households as an income deduction or income exclusion. States must select only one method to assess child support payments. The amount of SNAP benefits eligible households would receive would be the same regardless of the method used to assess child support payments but, by excluding the amount paid for child support as income, more households may meet the maximum income amount.

The agency is hopeful that, as more households meet the maximum income amounts, fewer households may be denied for being over the income limit. Having fewer households being denied for exceeding the maximum income limits may be an incentive for noncustodial parents to make their legally obligated child support payments regularly. Having parents meet their child support obligations regularly promotes the health, safety, or welfare of citizens by reducing reliance on public assistance programs and increases financial resources for affected families.

Substance: 22VAC40-601-70 allows SNAP households to have mandatory child support paid to or for individuals outside the SNAP household to be excluded from their gross income when determining eligibility for SNAP benefits. Applicant households for SNAP benefits must meet a gross income test if the household does not contain at least one household member who is 60 years of age or older or one member who is permanently disabled. If the gross income exceeds the allowable limit for the size of the household, the application for SNAP benefits must be denied without any consideration of household expenses. Excluding child support payment amounts as income reduces the gross income amount for a household, which conceivably may allow more households to meet the gross income eligibility test.

Issues: Changing how child support payments are evaluated for SNAP applicants and recipients offers the potential advantage to affected households of reducing countable gross income. If households pass the gross income eligibility screening test, allowable household expenses are evaluated and deducted. After household expenses are deducted, the calculated net income for all applicant households must fall below the allowable new income limit based on household size in order to receive a SNAP benefit. Calculated SNAP benefit amounts are not affected by the adoption of income exclusion for child support payments over the income deduction method so program integrity is maintained. The advantage of this regelation is to incentivize the payment of child support from noncustodial parents by recognizing their commitment to their children and potentially offsetting some of the child support paid with SNAP benefits. If households are eligible for SNAP benefits, the likelihood of food insecurity is reduced.

A programming change to the eligibility computer system will be needed to allow for the exclusion as income for child support payments instead of a deduction from the income. Neither local departments of social services nor local eligibility workers should be adversely affected by a change in the evaluation of child support payments, as there is no change in the benefit amount or in the likely number of applicants for benefits.

There are no disadvantages to the public or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The State Board of Social Services (Board) proposes to allow legally obligated child support payments paid by a Supplemental Nutrition Assistance Program (SNAP) household member to or for a non-household member as an exclusion from countable income for SNAP-eligibility purposes.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Title 7 of the Code of Federal Regulations (CFR) section 271.4¹ delegates responsibility to administer SNAP within a state to the agency assigned responsibility for other federally funded public assistance programs. Federal regulation at 7 CFR 273.9(d) (5)² permits states the option to either count legally obligated child support payments to non-household members as an income deduction or an income exclusion when determining eligibility for SNAP benefits; Virginia currently uses the income deduction option. The Board proposes to amend the SNAP regulation to indicate that the income exclusion option will be used.

Households that do not include at least one individual who is either at least 60 years old or permanently disabled must not have gross income over a specified amount, nor net income over a different specified amount,³ in order to qualify for SNAP benefits. The income deduction reduces only net income. The income exclusion reduces both gross income and net income. Thus the proposal to count legally obligated child support payments to non-household members as an income exclusion rather than an income deduction would likely increase the number of households that qualify for SNAP benefits, and may encourage more noncustodial parents to make their legally obligated child support payments regularly since doing so could make their household SNAP qualified. As SNAP is fully funded by the federal government, the proposal clearly produces a net benefit for the Commonwealth.

Businesses and Entities Affected. The proposed amendment potentially affects low-income households where a member of the household is legally obligated to make child support payments, and the households that receive those child support payments.

Localities Particularly Affected. Localities with a high proportion of low-income households would likely be particularly affected by the proposed amendment.

Projected Impact on Employment. The proposal to allow legally obligated child support payments paid by a SNAP household member to or for a non-household member as an exclusion from countable income for SNAP-eligibility purposes will effectively allow such a household to earn more income and still qualify for SNAP. This may encourage a household member to perhaps get a part-time job who otherwise would not have, or encourage any already employed household member to seek a better paying job.

Effects on the Use and Value of Private Property. The proposed amendment would not significantly affect the use and value of private property.

Real Estate Development Costs. The proposed amendment would not affect real estate development costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The proposed amendment would not affect costs for small business.

Alternative Method that Minimizes Adverse Impact. The proposed amendment would not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendment would not adversely affect businesses.

Localities. The proposed amendment would not adversely affect localities.

Other Entities. The proposed amendment would not adversely affect other entities.

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¹ See https://www.gpo.gov/fdsys/pkg/CFR-2011-title7-vol4/pdf/CFR-2011-title7-vol4-sec271-4.pdf

² See https://www.gpo.gov/fdsys/pkg/CFR-2011-title7-vol4/pdf/CFR-2011-title7-vol4-sec273-9.pdf

³ The specified amounts are dependent on household size.

Agency's Response to Economic Impact Analysis: The Department of Social Services reviewed the economic impact analysis prepared by the Department of Planning and Budget and concurs.

Summary:

The proposed section allows amounts paid by a Supplemental Nutrition Assistance Program (SNAP) household member for child support pursuant to a court or administrative order to be excluded as countable income for SNAP-eligibility purposes.

22VAC40-601-70. Income exclusion for legally obligated child support payments.

Legally obligated child support payments paid by a SNAP household member to or for a nonhousehold member will be allowed as an exclusion from countable income for SNAP purposes.