After allowing lump sum deductions according to Section 157.3 and Section 157.4, the CAO must determine the effect on the budget group’s eligibility depending on the amount of the lump sum and the relationship of the person who received the lump sum.
If the CAO has begun a closure for another reason and the budget group timely reports that it has received a lump sum, an overpayment may occur in the month after the month when it is received if the budget group has excess resources. If the budget group reapplies, count any remaining lump sum as a resource.
Example:
Ms. Tanner and her children receive TANF. On March 22, she reports the start of a job. The CAO determines that her expected earnings will close cash benefits effective the second payment date in April. On March 29, Ms. Tanner reports that she received an inheritance cash settlement of $2,500. On April 1, the CAO processes an overpayment referral for April due to excess resources because Mrs. Tanner did not verify that her resources are below the $1,000 allowable limit.
For an applicant:
Count a lump sum payment in determining eligibility and payment amount for the application month if it is received before authorization of cash assistance.
If counting the lump sum payment results in ineligibility, consider funds remaining in later months as a resource. 55 Pa. Code § 183.104(iii)(A)
Example: Mrs. Martin applies for Cash Assistance for herself and three children on June 14. She reports that she received a net settlement of $10,000 on June 3, to compensate her for her injuries from a fall at a restaurant last year. Mrs. Martin reports that she has $2,500 left after buying a used car. She is financially ineligible for assistance in June. The CAO explains that beginning July 1, she may be eligible for Cash Assistance as long as her resources, including any money left from the lump sum, are within the allowable limit of $1,000 or less.
For a recipient:
A lump sum payment must be reported and verified within 10 calendar days of receipt of the payment.
If the lump sum payment is reported timely, by the 10th of the month after the receipt month, there is no overpayment.
Net lump sum income (after allowable deductions in Section 157.3) that is not expected to continue as a source of regular income is considered income that starts and stops and is not counted.
If the net lump sum payment combined with any other countable resources is greater than the budget group’s resource limit but the household verifies expenditures leaving a remaining lump sum that is less than the appropriate resource limit, the CAO need take no further action. Cash Assistance remains open.
If the source of the lump sum payment provides a continuing countable cash payment (such as a Social Security benefit) that is:
greater than the FSA for the budget group, send an advance notice to close the cash benefit with the first payment date that can be met.
greater than the FSA for the budget group when combined with other countable income in the budget group, send an advance notice to close the cash benefit with the first payment date that can be met.
less than the FSA when combined with other countable income in the budget group, send an advance notice to decrease the cash benefit with the first payment date that can be met.
Examples:
Ms. Bland and her two children receive TANF. On July 15, Ms. Bland receives a $20,000 personal damage settlement on an automobile accident claim. The insurance company reported an auto replacement value of $3,000. Reimbursement to DPW and legal fees totaled $10,000. On July 17, Ms. Bland verified her net payment from the settlement to be $7,000 ($20,000 - $13,000). The net payment is considered income for the month of July but is not counted in the eligibility determination or benefit computation. The income maintenance caseworker explains to Ms. Bland that any remainder of the $7,000 will be counted as a resource for August and future months. If Ms. Bland does not verify the remaining balance of her settlement, an advance notice is sent to close Cash Assistance effective with the first payment date in August that can be met with proper notice.
Mrs. Harrison receives TANF for herself and her two children. On May 12, she reports that on April 25 she received back pay of $5,000 from a former employer. The income maintenance caseworker sends notification to Mrs. Harrison to close her Cash Assistance case due to excess resources. Because Mrs. Harrison did not report timely, an overpayment referral is completed for April due to excess income and for May due to excess resources.
For a lump sum payment received by a budget group member or an LRR living in the home, except for a parent of a TANF minor parent:
Funds remaining from the lump sum payment count as a resource. 55 Pa. Code § 183.105(4)(iv)
If the net lump sum payment combined with any other countable resources is less than the resource limit for the budget group, Cash Assistance remains open.
If the net lump sum payment combined with any other countable resources is greater than the resource limit for the budget group and the household does not give proof that available resources are within allowable limits, the income maintenance caseworker will send an advance notice to close based on excess resources. An overpayment exists for any months the household received a cash benefit and was ineligible based on excess resources.
NOTE: Income maintenance caseworkers are encouraged to discuss ways the client may use the lump sum payment to help become self-sufficient. The discussion could include using the funds to buy a reliable vehicle or to start a family savings account to save for an education, for a home or to start a business. Deposits and interest on family savings accounts are exempt from consideration for cash programs. See .
Example: Ms. Bowers receives TANF for herself and her three children. On Nov. 15, Ms. Bowers reports and verifies that she received an inheritance of $4,000 (after allowable deductions) on Nov. 10. The income maintenance caseworker explains that the $4,000 is considered stop/start income that will not be counted in November. On Dec. 1, any funds remaining from the inheritance are considered a resource and will make the family ineligible for continued Cash Assistance if her resources exceed $1,000. The income maintenance caseworker tells Ms. Bowers about ways to use the lump sum that will not affect her eligibility. The income maintenance caseworker also explains that Mrs. Bowers must provide proof by December 1 of how the money is spent if she wishes to remain eligible for Cash Assistance.
On Dec. 1, Ms. Bowers verifies that she spent more than $3,000 on a new refrigerator and other household items. Ms. Bowers and the children remain eligible for Cash Assistance. If she had not provided verification by Dec.1 that her resources were within allowable limits, the income maintenance caseworker would have sent an advance notice to discontinue.
For a lump sum payment received by a stepparent or a parent of a TANF minor parent, exclude as a resource any portion kept by the stepparent or parent of a TANF minor parent after the month when it is received when determining the budget group’s eligibility unless it is made available to the budget group. 55 Pa. Code § 183.105(4)(v)
For a lump sum payment received by a sponsor of an alien, any part kept by the sponsor after the month when it is received is a resource to the alien in later months. 55 Pa. Code § 183.105(4)(vi)
If the exact amount of the lump sum is unknown and the client refuses to provide information, the CAO must send an advance notice of Cash Assistance closing for failure to provide information. If necessary, the CAO must complete an OIG 173-S, Reimbursement Referral. See Supplemental Handbook 915.7. 55 Pa. Code § 183.105(4)(vii)
When the budget group does not report the receipt of a lump sum timely, the CAO must determine if an overpayment exists, beginning with the month when the lump sum is received.
The CAO must not allow work or personal expense deductions or the earned income incentive from earned income unless good cause is established.
NOTE: Good cause includes, but is not limited to, serious illness, accident, death, physical or mental handicap, illiteracy or language problems that make it impossible to expect the person to meet reporting requirements.
Example: A client received but did not report a lump sum payment of $3,500 in September. The CAO discovers the lump sum payment in December. The CAO contacts the client and determines that the budget group had other net income from RSDI of $300 and TANF of $102 for three people in September. The net lump sum is $3,000 after allowing a $500 attorney fee as an expense deduction.
|
Countable lump sum |
$3,000 |
|
Other net unearned income |
+ 300 |
|
Total net income for September |
$3,300 |
The CAO completes an overpayment referral for September based on excess income and for October through December based on excess resources.
The overpayment due to excess resources would exist only for the months the resources were not verified to be below the resource limit. There is no overpayment for any month after the receipt month for which the client verifies that resources were below the resource limit.
Reviewed July 30, 2013