SCSEP income eligibility definitions and calculation

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2006/TEGL12-06_508.pdf

CLASSIFICATION
      EMPLOYMENT AND TRAINING ADMINISTRATION            SCSEP
                  ADVISORY SYSTEM                       CORRESPONDENCE SYMBOL
             U.S. DEPARTMENT OF LABOR                   OWI
                Washington, D.C. 20210                  DATE
                                                        December 28, 2006

ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 12-06

TO:             ALL SENIOR COMMUNITY SERVICE EMPLOYMENT
                PROGRAM GRANTEES

FROM:           EMILY STOVER DeROCCO /s/
                Assistant Secretary

SUBJECT:        Revised Income Inclusions and Exclusions and Procedures for
                Determining Senior Community Service Employment Program
                (SCSEP) Eligibility

1. Purpose. To provide administrative guidance on changes in the SCSEP income
   eligibility guidelines resulting from the enactment of Public Law 109-365.

2. References. Section 518(a)(3)(A) and (4) of the Older Americans Act (OAA)
   Amendments of 2006, Public Law 109-365; Training and Employment Guidance
   Letter (TEGL) 13-04 (Jan. 7, 2005).

3. Background. The law governing the SCSEP defines the term “eligible individual” to
   limit eligibility to individuals with a “low income.” To determine if an individual is
   “low income,” Department of Labor regulations provide that we will issue
   administrative guidance on income definitions and income exclusion and inclusion
   standards for eligibility purposes 20 CFR 641.500(a), 641.507(b). Current guidance
   on such standards is in TEGL 13-04. TEGL 13-04 generally follows the U.S. Census
   Bureau’s Current Population Survey (CPS) definition of income, but specifically
   excludes certain types of payments from the types of income to be included in
   determining participant eligibility. We are issuing new guidance to provide
   instructions on income exclusions and inclusions to be applied effective January 1, 2007,
   for the remainder of Program Year (PY) 2006.

   The OAA Amendments of 2006 (P.L. 109-365) amend the current eligibility
   requirements by excluding certain payments from the “low income” component of the
   definition of “eligible individual.” These exclusions take effect on July 1, 2007. As
   described below, we have determined that it is beneficial to the SCSEP program to
   apply the new statutory exemptions to PY 2006 using our authority under current law
   to issue guidance on income exclusion and inclusion. Guidance consistent with this
   issuance will be incorporated in the Final Rule implementing the 2006 amendments.

4. Changes in the SCSEP Income Eligibility Guidelines. To calculate income for
   purposes of SCSEP eligibility after July 1, 2007, which is the effective date of the
   2006 SCSEP amendments, Public Law 109-365 mandates the following changes in
   procedures and income inclusions and exclusions.

           •    The statute mandates exclusion of any income that is:
                 o Unemployment compensation
                 o A benefit received under Title XVI of the Social Security Act
                     Supplemental Security Income for the Aged, Blind and Disabled—
                     e.g., Social Security Disability Insurance
                 o Payment made to or on behalf of veterans or former members of the
                     Armed Forces under the laws administered by the Secretary of
                     Veterans Affairs
                 o Twenty-five percent of a benefit received under title II of the Social
                     Security Act, Federal Old-Age, Survivors and Disability Insurance

           •    For purposes of eligibility determinations, the statute defines "income" as
                income received during the 12-month period that ends on the date of
                application, or at the option of the grantee, the annualized income for the 6-
                month period that ends on the date of application.

   Revised procedures for computing annual family income for SCSEP are detailed in
   Attachment II.

   The Department believes that early implementation of these changes will result in
   more effective recruitment, fewer unexpended funds, improved performance
   outcomes, and greater opportunities for low income older individuals to secure
   unsubsidized employment. Accordingly, the Department decided to apply these
   exclusions and revised computation procedures to the current program year in order
   to alleviate the difficulties of recruiting sufficient numbers of eligible individuals
   under the current income eligibility guidelines.

5. Clarification of Procedures.

   Includable Income. With certain exceptions, which will be delineated herein, the
   CPS official definition of “income” will govern the determination of SCSEP
   applicant eligibility. The CPS income sources that apply, as defined in Attachment I,
   are as follows:

       •       Earnings
       •       Benefits received under title II of the Social Security Act (of which seventy-
               five percent will be counted as includable income)
       •       Survivor benefits
       •       Pension or retirement income
       •       Interest income
       •       Dividends

    • Rents, royalties, and estates                    and trusts
    • Educational assistance
    • Alimony
    • Financial assistance from outside of the household
    • Other income
Excluded Income. As noted above, the Department has decided to exclude, for
purposes of eligibility determination, certain income sources that the CPS official
definition of “income” includes. The Department based this decision to achieve
consistency with the 2006 SCSEP amendments that will take effect July 1, 2007.
These excluded income sources are:

     •     Social Security Disability Insurance
     •     Unemployment Compensation
     •     Twenty-five percent of a benefit received under title II of the Social Security
           Act
     •     Payment made to or on behalf of veterans or former members of the Armed
           Forces under laws administered by the Secretary of Veterans Affairs
     •     Supplemental Security Income
     •     Public assistance
     •     Income from other employment and training programs
     •     Disability benefits
     •     All forms of child support
     •     Workers’ compensation
     •     The first $2,000 of certain per capita fund distributions that are made to
           Indians pursuant to the Indian Claims Act, P.L. 93-134 and P.L. 97-458.
     •     Any other income exception required by applicable Federal law-- e.g.,
           stipends from programs funded by the Senior Corps of the Corporation
           for National and Community Service

The Department will also exclude, for purposes of SCSEP applicant eligibility, the
same income sources that the CPS does not count in its official definition of income.

 •       Capital gains people received (or losses they incur) from the sale of property,
         including stocks, bonds, a house, or a car (unless the person engaged in the
         business of selling such property, in which case the CPS counts the net proceeds
         as income from self-employment)
 •       Withdrawals of bank deposits
 •       Money borrowed
 •       Tax refunds
 •       Gifts
 •       Lump-sum inheritances, insurance payments, gambling and lottery earnings

CPS definitions and explanations for all of the above-cited income inclusions and
exclusions are detailed in Attachment I.

Look-Back Period for Income. The 2006 SCSEP amendments specify that low
income status is to be computed by counting the includable income received by the

   individual during the 12-month period       ending on the date of SCSEP application
   or by counting the annualized income for the 6-month period ending on that date. As
   described above, we have determined that it is in the best interest of the SCSEP
   program to apply the 2006 SCSEP amendments computation procedures to the
   current program year. For PY 2006, grantees are required to determine whether to
   use the 6-month or the 12-month income look-back on a case-by-case basis, based
   upon which is more favorable to the applicant in determining eligibility. Determining
   whether the 6-month or the 12-month computation is best on a case-by-case basis
   may take slightly more time but it will insure the broadest possible inclusion of
   eligible applicants.

6. Action Required. SCSEP grantees must advise all staff that are responsible for
   income eligibility determinations about these new income eligibility requirements
   applicable to PY 2006.

7. Effective Date. January 1, 2007

8. Rescission. TEGL No. 13-04

9. Inquiries. Questions should be directed to the appropriate Federal Project Officer.

10. Attachments.

   Attachment I, CPS Income Definitions and Explanations
   Attachment II, Procedures for Computing Annual Family Income to Determine
   Income Eligibility for SCSEP

Attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2006/TEGL12-06_Att1.pdf

ATTACHMENT I

Application of the U.S. Census Bureau’s Current Population Survey (CPS) to the Senior
Community Service Employment Program (SCSEP) —Definitions and Explanations

Income, official definition of:

(A) Earnings. The Census Bureau classifies earnings from jobs (or self-employment) and other
employment earnings into three types:

1. Money wage or salary income is the total income people receive for work performed as an
employee during the income year. This category includes wages, salary, armed forces pay,
commissions, tips, piece-rate payments, and cash bonuses earned, before deductions are
made for items such as taxes, bonds, pensions, and union dues.

2. Net income from non-farm self-employment is the net money income (gross receipts
minus expenses) from one’s own business, professional enterprise, or partnership. Gross
receipts include the value of all goods sold and services rendered. Expenses include items
such as costs of goods purchased, rent, heat, power, depreciation charges, wages and salaries
paid, and business taxes (not personal income taxes). In general, the Census Bureau
considers inventory changes in determining net income from non-farm self-employment;
replies based on income tax returns or other official records do reflect inventory changes.
However, when respondents do not report values of inventory changes, interviewers will
accept net income figures exclusive of inventory changes. The Census Bureau does not

include the value of saleable merchandise consumed by the proprietors of retail stores as part
of net income.

3. Net income from farm self-employment is the net money income (gross receipts minus
operating expenses) from the operation of a farm by a person on their own account, as an
owner, renter, or sharecropper. Gross receipts include the value of all products sold,
payments from government farm programs, money received from the rental of farm
equipment to others, rent received from farm property if payment is made based on a percent
of crops produced, and incidental receipts from the sale of items such as wood, sand, and
gravel. Operating expenses include items such as cost of feed, fertilizer, seed, and other
farming supplies; cash wages paid to farmhands; depreciation charges; cash rent; interest on
farm mortgages; farm building repairs; and farm taxes (not state and federal personal income
taxes). The Census Bureau does not include the value of fuel, food, or other farm products
used for family living as part of net income. In determining farm self-employment income,
the Census Bureau considers inventory changes in determining net income only when they
are accounted for in replies based on income tax returns or other official records which

reflect inventory changes; otherwise, the Census Bureau does not take inventory changes into
account.

(B) Unemployment compensation. Payments people receive from government unemployment
agencies or private companies during periods of unemployment and any strike benefits received
from union funds. (Excluded for purposes of SCSEP income eligibility determinations.)

(C) Workers’ compensation. Payments people receive periodically from public or private

insurance companies for injuries received at work. (Excluded for purposes of SCSEP income
eligibility determinations.)

(D) Social security. Includes social security pensions and survivors’ benefits and permanent
disability insurance payments made by the Social Security Administration prior to deductions for
medical insurance. The Census Bureau does not include Medicare reimbursements for health
services as social security benefits. (Twenty-five percent of a benefit received under title II

of the Social Security Act is excluded for purposes of SCSEP income eligibility
determinations.)

(E) Supplemental security income (often referred to as SSI). Federal, state, and local welfare
agency payments to low-income people who are 65 years old and over or people of any age who
are blind or disabled. (Excluded for purposes of SCSEP income eligibility determinations.)

(F) Public assistance or welfare payments. For purposes of the CPS, the Census Bureau
defines this income as any cash public assistance payments that low-income people receive.
Examples include, but are not limited to, Temporary Assistance to Needy Families (TANF),
general assistance, and emergency assistance. The Department of Labor expands this
interpretation to include income from other employment and training programs for low-income

individuals, including SCSEP wages. (Excluded for purposes of SCSEP income eligibility
determinations.)

(G) Veterans’ payments. Payments disabled members of the armed forces or survivors of
deceased veterans receive periodically from the Department of Veterans Affairs for education

and on-the-job training, and means-tested assistance to veterans. (Excluded for purposes of
SCSEP income eligibility determinations.)

(H) Survivor benefits. Payments people receive from survivors’ or widows’ pensions, estates,
trusts, annuities, or any other types of survivor benefits. May include payments from ten
different sources: private companies or unions; federal government (Civil Service); military;
state or local governments; railroad retirement; workers’ compensation; Black Lung payments;
estates and trusts; annuities or paid-up insurance policies; and other survivor payments.

(I) Disability benefits. Payments people receive as a result of a health problem or disability.
May include payments from ten sources: workers’ compensation; companies or unions; the
federal government (civil service); military; state or local governments; railroad retirement;
accident or disability insurance; black lung payments; state temporary sickness; or other
disability payments. (All disability payments, including Social Security Disability Income
(SSDI), are excluded from SCSEP income eligibility determinations.)

(J) Pension or retirement income. Payments people receive from eight sources: companies or
unions; the federal government (civil service); military; state or local governments; railroad
retirement; annuities or paid-up insurance policies; individual retirement accounts (IRAs),
Keogh, or 401(k) payments; or other retirement income.

(K) Interest income. Payments people receive (or have credited to accounts) from bonds,

Treasury notes, IRAs, certificates of deposit, interest-bearing savings and checking accounts, and
all other investments that pay interest.

(L) Dividends. Income people receive from stock holdings and mutual fund shares. The CPS
does not include capital gains from the sale of stock holdings as income.

(M) Rents, royalties, and estates and trusts. Net income people receive from the rental of a
house, store, or other property, receipts from boarders or lodgers, net royalty income, and
periodic payments from estate or trust funds.

(N) Educational assistance. Pell Grants; other government educational assistance; any

scholarships.or grants; or financial assistance students receive from employers, friends, or
relatives not residing in the student’s household.

(O) Alimony. All periodic payments people receive from ex-spouses. Alimony excludes one-
time property settlements.

(P) Child support. All periodic payments a parent receives for the support of children, even if
these payments are made through a state, local or federal government office. The Department of
Labor expands this definition to include any support for the care of a dependent child who is
under 18 years of age. (Excluded for purposes of SCSEP income eligibility determinations.)

(Q) Financial assistance from outside of the household. Periodic payments people receive
from non-household members. This type of assistance excludes gifts or sporadic assistance.

(R) Other income. All other payments people receive regularly that are not included elsewhere

in this list. Some examples are state programs such as income received from foreign government
pensions.

(S) Government transfers. Payments people receive from the following sources: (1)
unemployment compensation (excluded), (2) state workers’ compensation (excluded), (3) Social
Security (partially excluded), (4) Supplemental Security Income (excluded), (5) public assistance
(excluded), (6) veterans’ benefits (excluded), (7) government survivor benefits, (8) government
disability benefits (excluded), (9) government pensions, and (10) government educational
assistance. (Excluded, as indicated, for purposes of SCSEP income eligibility

determinations. Only twenty-five percent of a benefit received under title II Social Security
benefits is excluded.)

Attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2006/TEGL12-06_Att2.pdf

ATTACHMENT II

PROCEDURES FOR COMPUTING ANNUAL FAMILY INCOME FOR SCSEP

1. Annual Family Income. Annual family income for current family members refers to
the sum of the amounts received from the income inclusions delineated in Attachment I.

2. Computation. The 2006 SCSEP amendments specify that low income status is to be
computed by counting the includable income received by the individual during the
12-month period ending on the date of SCSEP application or by counting the
annualized income for the 6-month period ending on that date. As described above,
we have determined that it is in the best interest of the SCSEP program to apply the
2006 SCSEP amendments computation procedures to the current program year. For
PY 2006, grantees are required to determine whether to use the 6-month or the 12-
month income look-back on a case-by-case basis, based upon which is more
favorable to the applicant in determining eligibility. Determining whether the 6-
month or the 12-month computation is best on a case-by-case basis may take slightly
more time but it will insure the broadest possible inclusion of eligible applicants.

3. Standard Definition of Family.
• A family is defined as:
• A husband, wife and dependent children; or

• A parent or guardian and dependent children; or
• A husband and wife.

• A person with a disability may be treated as a “family of one” for income

eligibility determination purposes as currently provided at 20 CFR 641.500 of the
SCSEP regulations.

4. Exception to Standard Definition of Family.

• When the applicant is claimed as a dependent on the federal income tax return of
another family member with whom he or she resides, the Current Population
Survey (CPS) definition of family must apply.

• The family is defined by the CPS as:

• A family is a group of two or more people related by birth, marriage, or
adoption and residing together; all such people (including related
subfamily members) are considered as members of one family.

• As in the standard definition above, a person with a disability may be
treated as a “family of one” for income eligibility determination purposes.

5. CPS Definition of Subfamily.

• Subfamily. A subfamily is a married couple with or without children, or a single
parent with one or more of their own never-married children under 18 years old.

A subfamily does not maintain its own household, but lives in the home of
someone else.

¢ Related subfamily. A related subfamily is a married couple with or without
children, or one parent with one or more of their never-married children under 18
years old, living in a household and related to, but not including, the person or
couple who maintains the household. One example of a related subfamily is a
young married couple sharing the home of the husband’s or wife’s parents.

¢ Unrelated subfamily. An unrelated subfamily (formerly called a secondary
family) is a married couple with or without children, or a single parent with one or
more of their own never-married children, or a single parent with or more of their
own never-married children under 18 years old living in a household. Unrelated
subfamily members are not related to the householder. An unrelated subfamily
may include people such as guests, partners, roommates, or resident employees
and their spouse and/or children. An unrelated subfamily is NOT included in the
determination of income eligibility for SCSEP.

6. Documentation. Grantees must ask applicants and enrolled participants for written
documentation of age, income sources and family size when conducting income
eligibility or recertification procedures—e.g., driver’s licenses, Social Security or
Medicare cards, pay stubs, income tax returns, and like “official” documentation.
Further, the record of such documents must be jointly signed by both the individual
applicant or participant and the grantee interviewer. Tax return documentation is
particularly critical in instances in which the applicant indicates that he is claimed as
a dependent on the income tax return of another family member with whom he or she
resides. Grantees are required to maintain copies of the source information.

In situations in which such proof may not be readily copied, grantees must create
documentation that the source document reviewed with applicants and enrolled
participants relating to the verification of income eligibility. Such documentation
must include the name of the reviewer, the date the information was reviewed, the
name of the source documentation, the date of the source documentation and other
pertinent information, including the signature of the reviewer and the
applicant/participant. To be able to be considered a family of one under the disability

provision, appropriate medical documentation must be provided and filed, even in
remote locations. Self-certifications are not permitted.

7. Recertification. Grantees must recertify participant eligibility at least once every 12

months. They are strongly urged to do so in February and March since the Federal
Income Guidelines are published in February.

RESCISSIONS: TEGL No. 13-04
EXPIRATION DATE: Continuing