[Federal Register Volume 61, Number 243 (Tuesday, December 17, 1996)]
[Proposed Rules]
[Pages 66233-66238]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31989]


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DEPARTMENT OF AGRICULTURE

Food and Consumer Service

7 CFR Part 273

[Amendment No. 376]
RIN 0584-AB57


Food Stamp Program; Anticipating Income and Reporting Changes

AGENCY: Food and Consumer Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This rule proposes revisions in Food Stamp Program procedures 
for reporting and acting on changes in earned income. The changes are 
designed to increase State agency flexibility and improve procedures 
for determining the eligibility and benefits of households whose income 
fluctuates unpredictably. Under this proposal, State agencies would 
choose from three different reporting requirements for households with 
earned income. The reporting requirement a State agency selects would 
replace the current requirement that households report a change of more 
than $25 in earned income. In addition to reporting a change in source 
of income, households would be required to report one of the following: 
A change in wage rate or salary and a change in part-time or full-time 
status, provided the household is certified for no more than 3 months; 
a change in wage rate or salary and a change of more than 5 hours a 
week that is expected to continue for more than a month; or a change in 
the amount earned of more than $80 a month.

DATES: Comments must be received on or before February 18, 1997 to be 
assured of consideration.

ADDRESSES: Comments should be submitted to Margaret Werts Batko 
Assistant Branch Chief, Certification Policy Branch, Program 
Development Division, Food and Consumer Service, USDA, 3101 Park Center 
Drive, Alexandria, Virginia, 22302, (703) 305-2516. Comments may also 
be datafaxed to the attention of Ms. Batko at (703) 305-2486. The 
internet address is: [email protected]. All written comments 
will be open for public inspection at the office of the Food and 
Consumer Service during regular business hours (8:30 a.m. to 5 p.m., 
Monday through Friday) at 3101 Park Center Drive, Alexandria, Virginia, 
Room 720.

FOR FURTHER INFORMATION CONTACT: Questions regarding the proposed 
rulemaking should be addressed to Ms.

[[Page 66234]]

Batko at the above address or by telephone at (703) 305-2516.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This proposed rule has been determined to be significant and was 
reviewed by the Office of Management and Budget in conformance with 
Executive Order 12866.

Executive Order 12372

    The Food Stamp Program (Program) is listed in the Catalog of 
Federal Domestic Assistance under No. 10.551. For the reasons set forth 
in the final rule in 7 CFR part 3015, Subpart V and related Notice (48 
FR 29115), this Program is excluded from the scope of Executive Order 
12372 which requires intergovernmental consultation with State and 
local officials.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Ellen Haas, 
Under Secretary for Food, Nutrition, and Consumer Services, has 
certified that this rule will not have a significant economic impact on 
a substantial number of small entities. State and local welfare 
agencies will be the most affected to the extent that they administer 
the Program.

Paperwork Reduction Act

    This proposed rule contains information collections which are 
subject to review by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The reporting and 
recordkeeping burden associated with the eligibility, certification, 
and continued eligibility of food stamp recipients is approved under 
OMB No. 0584-0064. Current burden estimates for OMB No. 0584-0064 
include burden associated with collecting and verifying information 
reported on the application to determine initial household eligibility 
and also on a form given to households for reporting changes in their 
circumstances during the certification period. Some households are 
required to submit a report every month; other households (change 
reporting households) are required to report changes within 10 days of 
the date they become aware of the change. State agencies provide 
households with a form for reporting these changes (change report form) 
at every certification and whenever a change is reported. This rule 
would amend 7 CFR 273.12(a)(1)(i) to provide State agencies with three 
options for earned income changes households would be required to 
report. The options are (1) a change in wage rate or salary and a 
change in part-time or full-time status, provided that the household is 
certified for no more than 3 months; (2) a change in wage rate and a 
change of more than 5 hours a week that is expected to continue for 
more than a month; or (3) a change in the amount earned of more than 
$80 a month. State agencies would select one of these options to 
include on the change report form. The provisions in 7 CFR 
273.12(a)(1)(i) of this proposed rulemaking do not alter burden 
estimates already approved under OMB No. 0584-0064 for change reporting 
households. The methodologies used to determine the burden estimates 
assume that all change reporting households will submit at least one 
change report form annually. The number of change reporting households 
is estimated to be 9,324,000. Although the proposed changes would 
remove the need for change reporting households to report small changes 
in the amount of earned income, households would still be required to 
report other changes, and the assumption of at least one report a year 
remains valid. The public reporting burden for the change report form 
is estimated to average .1617 hours per report form for a total burden 
of 1,507,691 hours annually.
    Comments. Comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information will 
have practical utility; (b) the accuracy of the agency's estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used; (c) ways to enhance 
the quality, utility and clarity of the information to be collected; 
and (d) ways to minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology. Comments may be 
sent to Wendy Taylor, OIRM, Room 404-W, Office of Management and 
Budget, Paperwork Reduction Project (OMB No. 0584-0064), Washington, 
D.C. 20503 and Department of Agriculture, Clearance Officer, OIRM, AG 
Box 7630, Washington, DC 20250. Comments and recommendations on the 
proposed information collection must be received by February 18, 1997.

Executive Order 12778

    This rule has been reviewed under Executive Order 12778, Civil 
Justice Reform. This rule is intended to have preemptive effect with 
respect to any State or local laws, regulations or policies which 
conflict with its provisions or which would otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the EFFECTIVE DATE paragraph of this preamble. 
Prior to any judicial challenge to the provisions of this rule or the 
application of its provisions, all applicable administrative procedures 
must be exhausted.

Regulatory Impact Analysis

Need for Action

    This action is needed to respond to requests from State agencies 
for revision of the requirements for reporting changes in earned 
income, to clarify procedures for averaging income, and to assist 
households in meeting their responsibility to comply with Program 
requirements.

Benefits

    State agencies will benefit from this rule because households will 
better understand which changes in earnings they are required to 
report. Recipients who work will benefit because they will have to 
report only significant changes in their employment status rather than 
frequent and temporary changes in the amount of monthly income.

Costs

    The changes in requirements for reporting changes in earnings and 
acting on reported changes are not expected to have a significant 
impact on Program costs.

Background

    There are two systems in the Food Stamp Program for determining the 
amount of benefits a household should receive: Prospective budgeting 
and retrospective budgeting. Section 5(f)(3)(A) of the Food Stamp Act 
of 1977, as amended (the Act), 7 U.S.C. 2014(f)(3)(A), provides that 
calculation of household income on a prospective basis should be based 
on the income the household reasonably anticipates receiving during the 
period for which eligibility and benefits are being determined. The law 
requires the calculation to be made in accordance with regulations 
which provide for taking into account both the income reasonably 
anticipated to be received by the household during the period for which 
eligibility or benefits are being determined and the income received by 
the household during the preceding 30 days. Section 5(f)(3)(B) of the 
Act, 7 U.S.C. 2014(f)(3)(B), provides that

[[Page 66235]]

calculation of household income on a retrospective basis is the 
calculation of income for the period for which eligibility or benefits 
are being determined on the basis of income received in a previous 
period. 7 CFR 273.10(c) of the food stamp regulations provides 
requirements for prospective budgeting; retrospective budgeting is 
addressed in 7 CFR 273.21.
    Certified households are required to report certain changes in 
circumstances that occur during the certification period. State 
agencies have the option under section 6(c)(1)(A) of the Act, 7 U.S.C. 
2015(c)(1)(A), to require some categories of households to report on a 
periodic basis; however, State agencies are prohibited from including 
certain households in a monthly reporting system or budgeting the 
households retrospectively as provided at 7 CFR 273.21(b).
    Section 6(c)(1)(B) of the Act, 7 U.S.C. 2015(c)(1)(B), provides 
that households not required to file a periodic report on a monthly 
basis shall be required to report changes in income or household 
circumstances as provided in regulations. State agencies are required 
to determine the benefits of monthly reporting households by 
retrospective budgeting. However, change reporting households, i.e, 
those households not subject to monthly reporting, may be budgeted 
prospectively or retrospectively. Regulations for monthly reporting 
households are at 7 CFR 273.21; those for change reporters are at 7 CFR 
273.12.
    In this rule we are proposing to simplify the regulations for 
reporting changes in earned income when a household is not required to 
report monthly. The proposed revisions are designed to address problems 
State agencies have reported in determining the benefits of households 
with income that fluctuates monthly.

Prospective Budgeting and Change Reporting

    Prior to passage of the Hunger Prevention Act of 1988 (HPA) (Pub. 
L. 100-435, September 19, 1988), monthly reporting and retrospective 
budgeting (MRRB) were mandatory for households with earnings or a 
recent work history. The HPA made monthly reporting a State agency 
option.
    Since then, some State agencies have abandoned monthly reporting 
while others have retained MRRB for all or part of the caseload. There 
are several advantages to retaining MRRB for households with earnings. 
Households with earnings report their income each month, and benefits 
are adjusted accordingly for a subsequent issuance month. Since the 
actual amount of income earned in the budget month is used to determine 
the allotment for the issuance month, the allotment corresponds exactly 
to the reported income rather than to an estimate of anticipated 
income. The requirement that a household submit a monthly report also 
helps eligibility workers keep in contact with households on a regular 
basis without the need for frequent recertification.
    However, a monthly reporting system requires the State agency to 
determine each month whether or not a monthly reporting household has 
filed a report and to act on any reported changes. When caseloads 
increase, it is sometimes difficult for eligibility workers to process 
the reports within the required time frames. A monthly reporting system 
is also expensive because of the number of reports and notices that 
have to be printed and mailed out. Monthly reporting is burdensome for 
participants and less responsive to changes in household circumstances 
than change reporting because benefits are based on circumstances that 
existed in a prior month.
    Because of the costs associated with monthly reports, many State 
agencies converted their entire caseload from MRRB to change reporting 
and prospective budgeting. Prospective budgeting requires State 
agencies to use information available at initial certification and 
subsequent recertifications to predict what a household's circumstances 
will be during the period of eligibility--the certification period. 
Change reporting provisions at 7 CFR 273.12(a) require households to 
report certain changes in household circumstances within 10 days of the 
date the change becomes known to the household. Each time the State 
agency learns of a change in the household's circumstances during the 
certification period, the State agency must determine the effect of the 
change on eligibility and benefits.
    One of the difficulties encountered by State agencies using 
prospective budgeting and change reporting is the problem of 
determining the eligibility and benefits of households with income that 
changes unpredictably in amount or frequency from month to month 
(fluctuating income).
    Under prospective budgeting, State agencies must anticipate income 
that will be received. Regulations at 7 CFR 273.10(c) for anticipating 
income were published on October 17, 1978, and have not been amended 
since that time. The regulations include the following requirements:
    1. If the amount of income anticipated to be received and the date 
of receipt are uncertain, the income shall not be counted.
    2. Income received during the past 30 days shall be used as an 
indicator of future income, but past income shall not be used if a 
change has occurred or is anticipated. If income fluctuates to the 
extent that income from the past 30 days is not an accurate predictor 
of future income, the State agency and the household may use a longer 
period of past time to provide a more accurate figure.
    3. If the receipt of income is reasonably certain but the monthly 
amount may fluctuate, the household may elect to have its income 
averaged. To average income, the State agency shall use the household's 
anticipation of income fluctuations over the certification period.
    4. Income shall be counted only in the month in which it is 
expected to be received, unless it is averaged.
    5. If income is received on a weekly or biweekly basis (every 2 
weeks), the State agency shall convert the income to a monthly amount 
by multiplying weekly amounts by 4.3 and biweekly amounts by 2.15, use 
the State agency's public assistance (PA) conversion standard, or use 
the exact monthly figure if it can be anticipated for each month of the 
certification period.
    If the income fluctuates and there is an income history, the usual 
practice is to anticipate future fluctuations in income by projecting 
an average of income received in recent past months. However, 
regulations at 7 CFR 273.12(a) require households to report changes of 
more than $25 in gross monthly income. If income is averaged, the 
figure used to determine the allotment will differ from the income a 
household actually received in any one month. To address this and other 
problems, FCS has proposed changes in the $25 reporting requirement on 
several occasions.
    Section 5(f)(3)(A) of the Act, 7 U.S.C. 2014(f)(3)(A), gives the 
Secretary of Agriculture broad discretion in the area of Food Stamp 
Program reporting requirements. Regulations published July 15, 1974 (39 
FR 25996-26008) required households to report changes of $25 or more in 
income or deductions. The preamble to a proposed rule issued May 2, 
1978 (43 FR 18874-96) discussed problems with the income reporting 
requirement and solicited comments on the proposed change and two 
alternatives. The proposed change was to require households to report 
all changes in income, except changes in the PA grant. The two 
alternatives were:

[[Page 66236]]

    1. The household would be required to report all income changes but 
the State agency would not have to act on monthly changes of $10 or 
less.
    2. The household would be required to report only changes of $20 or 
more, but the $20 would apply separately to each income source.
    The preamble to final rules dated October 17, 1978 (43 FR 47846, 
47872-74) indicates that the largest number of commenters preferred the 
second alternative and the next largest group preferred the current 
procedures. Based on the comments citing the administrative 
difficulties of the three reporting procedures offered in the proposed 
rule and the number of comments supporting the $25 requirement, we 
chose to continue the then existing and still current policy.
    In a rulemaking published January 16, 1981 (46 FR 4642), we 
proposed to change the income reporting requirement to address problems 
in handling changes for households with fluctuating income. The 
proposed change would have required households with fluctuating income 
to report changes in wage rate, full-time or part-time status, and 
source of income. The $25 minimum reporting requirement would not have 
applied to these households. No change was proposed in the reporting 
requirement for households with stable earnings or unearned income.
    Some commenters opposed the proposal, calling it burdensome, an 
example of overregulation, and too confusing. Other commenters believed 
that the omission of a requirement to report changes in the number of 
hours worked would result in lack of action on possibly significant 
changes. Because of the adverse comments and the imminent 
implementation of monthly reporting requirements, a final rule was not 
published on the subject.
    As part of a rule proposed September 29, 1987 (52 FR 36546), we 
again proposed to change requirements for reporting changes in 
fluctuating income. In addition to problems with the $25 threshold 
cited in previous rules, the preamble of these regulations indicated 
that the current requirement makes it difficult to develop quality 
control (QC) review procedures. The proposal was also designed to be 
consistent with provisions of the Aid to Families with Dependent 
Children (AFDC) QC manual which defined a change as any employment 
status change which results in either increased or decreased income 
such as a change in part-time or full-time status, the loss of a job, 
or a change in hourly rate. The proposal retained the $25 threshold for 
reporting changes but added the requirement to report changes in full-
time or part-time status, source, or hourly rate. The proposed 
requirement applied only to households with fluctuating income, which 
was defined as income that varies unpredictably from month to month. 
Under the proposal, households with fluctuating income would report 
permanent changes in the source of income and ongoing changes in the 
number of hours worked. The proposal was based on assumptions that the 
$25 minimum reporting requirement does not lend itself to changes in 
fluctuating income and that errors in household income are more 
frequently attributable to changes in employment status, such as 
converting from unemployed to employed or from part-time to full-time 
work.
    A majority of commenters opposed this proposal. They were concerned 
that the rule would add another reporting requirement and that it would 
be difficult to define permanent and non-permanent status changes and 
fluctuating income. In addition, the proposed changes would not have 
resulted in complete conformity between the Food Stamp and AFDC 
Programs. For these reasons, the provision was not adopted as final. 
The implementation of monthly reporting also reduced the immediate need 
for a change in change reporting requirements.
    In addition to the problems of anticipating income that fluctuates 
and determining which changes should be reported during the 
certification period, there is also the difficulty in deciding under 
what circumstances a reported change in fluctuating income should be 
reflected in a changed allotment. Introductory paragraph 7 CFR 
273.12(c) requires State agencies to take prompt action on all changes 
to determine if the change affects the household's eligibility or 
allotment. Even if the allotment is not changed, the State agency must 
document the reported change in the case file and send the household 
another change report form. Regulations at 7 CFR 273.12(c)(1) and (2) 
provide specific requirements for changes that result in an increase or 
decrease in the allotment.
    However, it is not clear how the State agency should react to a 
temporary change in income reported by a household whose income has 
been averaged. The regulations do not specifically require the State 
agency to compute a new average based on a temporary change. One 
eligibility worker might reaverage the income based on the new 
information and adjust the household's allotment. Another eligibility 
worker might document the reported change in accordance with 7 CFR 
273.12(c), but make no change in the allotment unless it was 
anticipated that the change would continue.
    In this rule, we are proposing to modify the requirements for 
averaging income, reporting changes in income, and acting on reported 
changes. We believe these modifications will assist State agencies in 
determining the eligibility and benefits of households with fluctuating 
income over the months of the certification period. When income is 
averaged, the amount of income received each month does not correspond 
directly to the issuance for any given month. However, if the average 
used corresponds closely to the household's average income received 
during the certification period, the household's benefits over the 
certification period will correctly reflect the increases and decreases 
in income that normally occur.
    The changes proposed in this rule are designed to simplify the 
reporting requirements and assist State agencies in managing cases with 
fluctuating income. We are seeking comments on the following proposed 
changes and suggestions for alternatives.

a. Averaging Income--7 CFR 273.10(c)(3)(i)

    Current regulations at 7 CFR 273.10(c)(3)(i) provide that 
households (except destitute households and public assistance (PA) 
households subject to monthly reporting) may elect to have their income 
averaged over the certification period. Some State agencies have 
requested that food stamp regulations be revised to allow averaging at 
the State agency's option. Others have requested that averaging be 
mandatory for fluctuating income.
    We are proposing to retain the provision of 7 CFR 273.10(c)(3)(i) 
allowing households to choose whether income shall be counted in the 
month received or averaged. We believe households should continue to 
have the opportunity to select the method used to determine their 
benefits when fluctuations in income are anticipated. There may be 
situations in which the household would prefer to have income counted 
in the month received rather than having it averaged. However, we would 
like to solicit comments on this provision. We are proposing to amend 7 
CFR 273.10(c)(3) to remove the reference to PA households subject to 
monthly reporting. This section was written before the use of monthly 
reporting in the Food Stamp Program. Section 273.21 now provides

[[Page 66237]]

requirements for monthly reporting and retrospectively budgeted 
households; therefore, there is no need to mention these households at 
7 CFR 273.10(c)(3).
    We have received questions concerning the steps to be followed in 
averaging and converting weekly or biweekly income amounts. For the 
purposes of 7 CFR 273.10(c)(3), income (whether earned or unearned) is 
averaged by adding together income amounts received or expected to be 
received over two or more months. The total is then divided by the 
number of months used in the calculation to arrive at an average.
    Conversion as authorized in 7 CFR 273.10(c)(2)(i) is the process of 
taking into account months in the year in which an extra weekly or 
biweekly payment will be received by using a conversion factor instead 
of adjusting the allotment for the months in which the extra check is 
received. The amounts used in anticipating income must be 
representative of income the household expects to receive. If the 
household member has just started a job and has no income history, the 
eligibility worker would anticipate income in accordance with the 
requirements at 7 CFR 273.10(c)(1). If the same amount of income is 
received or expected to be received every week, anticipated income from 
one payment may be converted to a monthly amount by using a conversion 
factor. However, converting a single weekly amount to a monthly amount 
does not constitute averaging for the purposes of the provisions in 7 
CFR 273.10(c)(3). State agencies that elect not to use a conversion 
factor would have to anticipate receipt of an extra pay check and 
adjust the allotment for the month in which it will be received.
    We are proposing to revise 7 CFR 273.10(c)(3)(i) to eliminate the 
reference to PA monthly reporting households and to add a reference to 
Sec. 273.12(c), which we propose to amend as indicated below. We would 
also clarify that monthly amounts are used in averaging and eliminate 
unnecessary language, including the example.

b. Income Reporting Requirements--7 CFR 273.12(a)(1)

    The heading of regulations at 7 CFR 273.12 currently reads 
``Reporting changes.'' The section includes requirements for reporting 
and acting on changes for households not required to report monthly. 
Requirements for monthly reporting households have been added to the 
regulations at 7 CFR 273.21 since 7 CFR 273.12 was originally written. 
Therefore, we are proposing to change the title of 7 CFR 273.12 to 
``Requirements for change reporting households.'' The introductory 
sentence of 7 CFR 273.12(a)(1) currently provides that ``Certified 
households are required to report the following changes in 
circumstances.'' We are proposing to amend the sentence to specify that 
households not required to report monthly (change reporting households) 
are required to report the specified changes. Proposals for changes in 
the reporting requirements are discussed below.
    In this rulemaking, we are proposing to modify 7 CFR 
273.12(a)(1)(i) by revising the reporting requirements for earned 
income. Although the reporting requirement for fluctuating income is of 
particular concern, we are proposing that the requirement apply to all 
earned income (as defined in 7 CFR 273.9(b)(1)). Under this proposal, 
all households would be required to report a change in source of 
income, such as starting or losing a job, changing employers, or 
gaining or losing a source of unearned income. All households would 
also have to report a change of more than $25 in unearned income.
    Households with earned income would also be required to report 
changes affecting the amount of income earned. As a substitute for the 
current requirement to report a change of more than $25 in income, we 
propose to offer State agencies three alternative earned income 
reporting requirements. The three earned income reporting options are:
    (1) A change in wage rate or salary and a change in part-time or 
full-time employment status. Because some households could experience a 
change in part-time employment that would be less than a change from 
part-time to full-time but could involve a significant change in 
income, State agencies would be required to certify these households 
for no more than 3 months.
    (2) A change in wage rate and a change in hours worked of more than 
5 hours a week that is expected to continue for more than a month.
    (3) A change in the amount earned of more than $80 a month.
    Under the first option, households would have to report any change 
in wage rate and a change in part-time or full-time employment status. 
We believe a change in part-time or full-time status would signal a 
significant change in the number of hours a household member would be 
expected to work. Regulations at 7 CFR 273.7 provide that a person 
working a minimum of 30 hours a week is exempt from work registration, 
and we considered using the 30-hour figure as a bench mark for full-
time employment. However, because State agencies may have a definition 
of ``part-time'' that is used for PA, we have decided not to define 
``part-time.'' To provide State agency flexibility and facilitate 
consistency with PA, we are proposing that State agencies may define 
``part-time.''
    Under the second option, households would be required to report 
when a change in wage rate occurred and also when there was a change of 
more than 5 hours a week that is expected to continue for more than a 
month. Under the third option, households would be required to report 
when the amount earned changed by more than $80 a month. We believe the 
use of one of these options would eliminate some of the problems with 
the current reporting requirement for earned income. Households with 
earnings would have a clearer idea of exactly what to report and would 
not have to report fluctuations in income resulting from temporary 
changes in the number of hours worked. In addition, the proposal would 
eliminate some of the problems encountered in quality control reviews 
of cases with fluctuating income. Providing three options would 
increase the ability of State agencies to conform reporting 
requirements for various programs.
    In this rule we are proposing to continue the current $25 reporting 
requirement threshold for unearned income with the two changes noted 
below. However, we are interested in comments on alternative reporting 
requirements for unearned income, including the use of computer 
matching information in lieu of household reporting.
    Some State agencies may have the capability of making information 
regarding a household's unearned income available to their eligibility 
workers very quickly through data exchange systems that have been 
established for the exchange of information between the providers of 
various benefits and State agencies. Through these systems, State 
agencies match household records with information from the income 
sources and determine the amount of Supplemental Security Income (SSI), 
Federal Old Age, Survivors, and Disability Insurance (OASDI) benefits, 
and unemployment compensation (UC) households receive. It would appear 
that information from these data sources, rather than from the 
households, could be used to maintain current and accurate information 
about the benefits households are receiving. However, this would be 
possible only if the information could be obtained and

[[Page 66238]]

used to adjust food stamp benefits in accordance with the timeframes 
currently in place for acting on changes.
    New systems developed by the Social Security Administration (SSA) 
may provide faster access to accurate information about SSI and OASDI 
benefits than has previously been the case. SSA has developed the State 
Verification and Exchange System (SVES), 42 U.S.C. 1320b-7(a), which 
replaces previously separate exchanges for SSI and OASDI data. Using 
the new File Transfer Management System (FTMS), State agencies will be 
able to obtain daily updates of SSI and OASDI information. SSA will 
respond to SVES inquiries submitted via FTMS within 24 hours. Using 
these systems, State agencies will be able to obtain current income 
information and update records at the State level or provide the 
information to local offices electronically.
    We are interested in State agency comments on their ability to 
access and use these systems to identify and act on changes in SSI and 
OASDI benefits within the current timeframes in 7 CFR 273.12(c) for 
acting on reported changes. We are also interested in comments on the 
ability of State agencies to use the State's UC data systems for acting 
on changes in households' UC benefits.

c. Action on Changes in Fluctuating Income--7 CFR 273.12(c)

    To address the problem of determining when eligibility workers 
should act on a reported change in fluctuating income, we are proposing 
to revise the introductory paragraph of 7 CFR 273.12(c) to specify that 
if a household reports a change in income, the State agency shall use 
the information to compute a new allotment amount if the change is 
representative of anticipated future income. Whether it is 
representative would be determined on the basis of an expectation that 
the new circumstance will continue for at least one month beyond the 
month in which the change is reported. The worker would document the 
case record to indicate the basis for adjusting or not adjusting the 
average. If the change does not affect the allotment, the worker would 
document that fact.

Implementation

    We are proposing that the changes made by this rule would be 
effective and implemented no later than the first day of the month 180 
days after publication of the final rule.

List of Subjects in 7 CFR Part 273

    Administrative practice and procedure, Aliens, Claims, Food stamps, 
Fraud, Grant programs--social programs, Penalties, Records, Reporting 
and recordkeeping requirements, Social security, Students.

    Accordingly, 7 CFR part 273 is proposed to be amended as follows:
    1. The authority citation of part 273 continues to read as follows:

    Authority: 7 U.S.C. 2011-2032.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

    2. In Sec. 273.10, paragraph (c)(3)(i) is revised to read as 
follows:


Sec. 273.10  Determining household eligibility and benefit levels.

* * * * *
    (c) Determining income. * * *
    (3) Income averaging. (i) Households may elect to have their income 
averaged. However, the State agency shall not average the income of 
destitute households (as defined in paragraph (e)(3) of this section). 
When averaging income, the State agency shall use the household's 
anticipation of monthly income fluctuations over the certification 
period. An average must be recalculated at recertification and in 
response to changes in income, in accordance with Sec. 273.12(c).
* * * * *
    5. In Sec. 273.12,
    a. The heading of the section, the introductory text of paragraph 
(a)(1) and paragraph (a)(1)(i) are revised.
    b. The introductory text of paragraph (c) is amended by adding two 
sentences after the first sentence.
    The revisions and additions read as follows:


Sec. 273.12  Requirements for change reporting households.

    (a) Household responsibility to report. (1) Monthly reporting 
households are required to report as provided in Sec. 273.21. Certified 
change reporting households are required to report the following 
changes in circumstances:
    (i) (A) A change greater than $25 in the amount of unearned income, 
except changes relating to PA or general assistance (GA) in project 
areas in which GA and food stamp cases are jointly processed. The State 
agency is responsible for identifying changes during the certification 
period in the amount of PA or GA in jointly processed cases.
    (B) A change in the source of income, including starting or 
stopping a job or changing jobs.
    (C) One of the following, as determined by the State agency:
    (1) A change in the wage rate of earned income and a change in 
full-time or part-time employment status (as determined by the employer 
or as defined in the State's PA Program), provided that the household 
is certified for no more than 3 months;
    (2) A change in wage rate and a change in hours worked of more than 
5 hours a week that is expected to continue for more than a month; or
    (3) A change in the amount earned of more than $80 a month.
* * * * *
    (c) State agency action on changes. * * * If a household reports a 
change in income, the State agency shall act on the change in 
accordance with paragraphs (c)(1) and (c)(2) of this section if the new 
circumstance is expected to continue for at least one month beyond the 
month in which the change is reported. The time frames in paragraphs 
(c)(1) and (c)(2) of this section apply to these actions. * * *
* * * * *
    Dated: December 10, 1996.
Ellen Haas,
Under Secretary for Food, Nutrition, and Consumer Services.
[FR Doc. 96-31989 Filed 12-16-96; 8:45 am]
BILLING CODE 3410-30-U