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PA Bulletin, Doc. No. 99-75

RULES AND REGULATIONS

Title 55--PUBLIC WELFARE

DEPARTMENT OF PUBLIC WELFARE

[55 PA. CODE CHS. 165, 168, 183 AND 3040]

Subsidized Child Day Care Eligibility

[29 Pa.B. 271]

Statutory Authority

   The Department of Public Welfare (Department), by this order adopts amendments to Chapters 165, 168, 183 and 3040, under the authority of Articles II, IV and VII of the Public Welfare Code (62 P. S. §§ 201--211, 401--493 and 701--703), the act of December 16, 1997 (P. L. 549, No. 58 (Act 58) and Title VI of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), Pub. L. No. 104-193, known as the Child Care and Development Block Grant (CCDBG) (42 U.S.C.A. §§ 9858--9858q).

   Notice of proposed rulemaking was published at 27 Pa.B. 4615 (September 6, 1997).

Purpose of Amendments

   The purpose of these amendments is to establish the eligibility requirements for individuals who are applying for or receiving assistance with the cost of child care through funding authorized by Title VI of PRWORA, known as CCDBG and section 408(b) of the Public Welfare Code (62 P. S. § 408(b)), added by section 8 of the act of May 16, 1996 (P. L. 175, No. 35) (Act 35). The PRWORA was signed into law by President Bill Clinton on August 22, 1996. Act 35 was signed into law by Governor Tom Ridge on May 16, 1996.

   The amendments set forth the rules for the Department to determine a family's eligibility for child care assistance for: families receiving Temporary Assistance for Needy Families (TANF) benefits who are involved with job search, training or work activities under the Road to Economic Self-Sufficiency through the Employment and Training Program (RESET); families leaving TANF who are making the transition from welfare to work; families at risk of going on welfare; and low-income working families. The Department has revised the child care regulations because the child care entitlement for cash assistance families and for those transitioning off cash assistance has been repealed. The Federal CCDBG funds are capped, and it is necessary to create a child care program that meets the needs of all of these populations.

   In addition, these amendments clarify and strengthen the existing eligibility requirements for the subsidized child care program. The clarification will assist the general population in understanding the eligibility requirements and the benefits associated with eligibility. The regulations have been strengthened to ensure that the most needy children receive the benefits of the subsidized child care program.

   The new CCDBG program provides states with a unique opportunity to develop a coordinated child care system that will, with the least amount of disruption, serve families receiving cash assistance, families who leave the cash assistance program, and low-income working families who need help with child care costs.

   The CCDBG program allows states to maximize flexibility in developing child care subsidy policies and programs that best meet the needs of parents and children and in providing child care subsidy to parents who are attempting to achieve independence from welfare. Although the CCDBG does not set a time limit for individuals receiving child care benefits, the Department was presented with the challenge of creating a subsidized child care system that meets the needs of broadly-defined populations within the fiscal constraints of a block grant.

   The Department, upon adoption of these final-form regulations, will implement a consolidated child care subsidy system called Child Care Works. Child Care Works will serve families who receive cash assistance, those transitioning off welfare and low-income working families with similar rules and procedures for all families. The final-form regulations are designed to coordinate regulations governing those families receiving cash assistance and those who are not receiving cash assistance. Changes identified in these final-form regulations will provide a continuum of child care benefits to families receiving cash assistance, those transitioning off cash assistance, and assist low-income families in maintaining self-sufficiency and not returning to welfare. In these amendments, there are similar requirements for cash assistance and low-income families, wherever appropriate.

Introduction

   The Department has developed Child Care Works to provide an integrated system of child care services to low-income families of this Commonwealth. The regulations which implement Child Care Works reflect new State and Federal welfare laws while helping both welfare and low-income working families find, select and pay for child care services. The new program supports parent choice, increases consumer education, and aligns policies and procedures for consistency. Child Care Works makes child care subsidies available to TANF and non-TANF families, and makes child care subsidies available to a number of families who, under the current system, did not receive the help they needed to support the transition from welfare to work or to otherwise maintain economic independence. The final-form regulations significantly increase child care support to recipients of TANF in three major areas. For the first time, employed TANF recipients will qualify for a child care allowance that begins with the date they start working and incurring child care costs. Under the current program, TANF recipients receive no help with child care costs until after they receive the first pay, by which time the family could be in debt to their child care provider. For the first time, employed TANF recipients will qualify for a child care allowance to help with the cost of care while they work their way off welfare. Under the current program, the help an employed TANF family receives with child care costs is through a TANF cash assistance grant calculation that provides for a disregard of a portion of the family's earnings needed to pay for child care. Federal regulations formerly limited the disregard amount to $175 per month, per child. This amount fell short of covering the full cost of child care for some families. Some families either found themselves in debt to their child care provider or used the least expensive care they could find. These families had limited parent-choice options.

   The new co-payment schedule offers TANF families co-payment levels significantly lower than the current co-payment amount under the disregard system and increased purchasing power, resulting in a much wider range of child care choices for their children. For the first time, employed TANF recipients who earn enough to go off of cash assistance will qualify for continued help with child care costs, with no time limits or interruptions. Under the current system, these TANF families receive 12 months of Transitional Child Care (TCC) help through the County Assistance Office (CAO), after which many families go on a waiting list to get a subsidy through the Child Care Information Services (CCIS) agency. The CCIS agency is designated to serve part of a county, a county, or several counties.

   The CCIS has previously been known as the Local Management Agency (LMA). During State Fiscal Year 1998-99, the Department is in the process of changing the name from LMA to CCIS. For the purposes of these regulations, the LMA and CCIS are the same. In the text of this preamble whenever the commentator used the term LMA, that term is listed in the comment section only. Whenever the Department provides its response, it uses the term CCIS.

   In addition to supporting the goals of welfare reform by helping TANF families, the regulations significantly increase the availability of child care subsidy to nonwelfare low-income working families. More children will be served under the new program as a result of the revised family co-payment schedule. Families who currently receive child care subsidy may be required to contribute more toward the cost of care. For example, a typical family receiving subsidized child care is a single parent with two children earning $17,500 per year and paying a fee of $20 per week. Under the revised parent co-payment schedule, the family's fee will increase to $35 per week.

   With each family contributing more toward the costs, an additional 4,105 children will be able to receive subsidized child care. For the first time, families who have lingered on the subsidy waiting list have an increased opportunity to move into the subsidized system and get the help they need with child care costs and the opportunity to select care that they could never have afforded when they had to shoulder the full cost of care themselves. The revised parent co-payment schedule in these final regulations reflects a substantial change made by the Department in response to concerns that the proposed parent co-payment schedule, which included consideration of cost of care selected, would eliminate parent choice.

   The new program includes requirements for nonwelfare low-income working families to seek child support and other benefits, which reduces the amount of the subsidy for child care and makes the family more self-sufficient. One outcome of the changes in Child Care Works is an assurance that the most needy families receive a child care subsidy.

   Child Care Works encompasses more than just the eligibility regulations which govern receipt of child care subsidy dollars. Two major components of Child Care Works are in the area of initiatives for increasing quality in day care settings and making families better consumers of child care services. These initiatives include: the expansion of consumer education; implementation of child care resource and referral services; availability of seed money to increase available child care and an increase in the reimbursement ceilings for payments to child care providers. At the same time, the Department continues to use the current licensing regulations that assure that children are in healthy and safe child care settings. The Department will increase its commitment to upgrade the quality of child care services by increasing its commitment to offer training to child care staff. Child Care Works introduces changes to the child care system and maintains quality initiatives which benefit the children of this Commonwealth.

Background

   The PRWORA replaced the 61-year-old Aid to Families with Dependent Children (AFDC) program with the time-limited cash assistance block grant program known as TANF. The TANF program began in this Commonwealth on March 3, 1997. The PRWORA also repealed the child care portion of the Family Support Act and combined four separate Federal funding sources for child care into one block grant called the CCDBG. The PRWORA also ended any child care entitlements to families on cash assistance who work, who are in training, or who were transitioning off welfare. There were three child care funding streams under the Family Support Act. These included funds for AFDC families who were enrolled in the Job Opportunity and Basic Skills (JOBS) program; for families receiving TCC benefits; and for families at risk of going on welfare. These three funding streams were combined with funds from the former CCDBG. The law under which all of the funds are governed is called the CCDBG.

   The Governor's Budget for Fiscal Year 1998-99 includes an unprecedented $348 million for child care. Together with Child Care Works, this represents a commitment to expanded child care benefits within the realities of a limited block grant. These final-form regulations address not only the need for similar standards for both populations, but the need to contain costs and serve the greatest number of children possible within available resources.

   After the adoption of these final-form regulations, the Department will implement the components of Child Care Works. It will also submit an amendment to the State Child Care Plan, which was approved by the Federal Administration for Children and Families (ACF), Health and Human Services Department on September 30, 1997, reflecting the new regulations.

   When the Department drafted the proposed amendments, ACF had published proposed regulations regarding requirements for CCDBG. On July 24, 1998, ACF published final regulations at 63 FR 39935--39998 which amends 45 CFR Chapters 98 and 99. Changes made to Chapters 165, 168 and 3040 (relating to employment and training program; transitional child care; and subsidized child day care) are consistent with the Federal regulations.

   Under the Federal CCDBG, states must develop an integrated child care system. Although child care subsidy is no longer an entitlement program, states must provide services to the same populations as were served under previous laws. In Fiscal Year 1998-99, once the final-form regulations are implemented, the Department will have an integrated child care system. Regardless of whether a family is receiving cash assistance or not receiving cash assistance, the determination of the family's subsidy level and co-payment responsibilities will be based on the individual family's circumstances.

   Under the revised eligibility requirements in Chapter 3040, families who no longer receive cash assistance, those who would have received 12 months of TCC benefits under the current system and families who are working and have low-income, will receive their child care benefits through the CCIS agency in each county. Persons receiving cash assistance will receive child care benefits through the CAO.

Need for Final-Form Regulations

   The Department has amended the final-form regulations to comply with the PRWORA, which establishes standards for the receipt of cash assistance under TANF and the receipt of child care assistance in a parent-choice system under the CCDBG. These regulations comply with the Federal law to: assure Federal financial participation; fulfill the Department's goal to achieve a seamless and coordinated child care system for families moving toward self-sufficiency; and continue the network of subsidized child care benefits which are easily understood and accessed by eligible families who need subsidized child care.

   In addition, the Department has amended the final-form regulations to address the changes made by the PRWORA and the CCDBG, which eliminate the entitlement to child care subsidy for families who are on cash assistance and families who would have received TCC benefits under the current system. The CCDBG child care funding is capped and regulations must reflect the capped funding.

Affected Groups and Organizations

   Groups and individuals affected by these amendments include families who are receiving TANF benefits and parents applying for and receiving subsidized child care. Other groups affected by these final-form regulations include child care providers and eligibility agents.

Accomplishments/Benefits

   The anticipated benefits from the improved final-form regulations include the following:

   1.  An integrated child care system for families receiving cash assistance and low-income families not receiving cash assistance. The integrated child care system reaffirms the Department's objective to offer child care assistance to those parents who are working toward self-sufficiency.

   2.  Elimination of the 12-month TCC program, and allowing individuals leaving TANF to have uninterrupted services through subsidy.

   3.  An increase in the maximum amount of funding per child receiving TANF by replacement of the income disregard for working TANF parents with a child care allowance.

   4.  Implementation of a child care allowance to cover costs incurred up to first pay for employed TANF parents.

   5.  A revised method of determining the co-payment based on family size and income. The revised co-payment affords families the opportunity to select care from the full range of child care providers.

   6.  A requirement for increased number of hours of employment for adult family members to meet eligibility requirements to receive subsidy consistent with Federal rules governing other public assistance.

   7.  Child care benefits to help low-income families attain self-sufficiency through employment. Benefits take into consideration parents' needs to work nontraditional hours and also receive child care assistance.

   8.  Increased accountability for low-income working families to accurately and completely report circumstances and changes in circumstances.

Public Comments

   Written comments, suggestions and objections were solicited within a 30-day period after the publication date of the proposed amendments on September 6, 1997. A public hearing was held on September 23, 1997, at the State Museum Auditorium, Harrisburg, PA 17120. Seventy-six individuals attended the hearing and 26 individuals presented testimony. This hearing followed an extensive public forum process the Department conducted prior to the initial submission of the proposed amendments, which offered a forecast of the proposed amendments.

Discussion of Comments and Summary of Changes

   The Department received more than 850 letters from the general public, providers, advocates and Legislators during the 30-day comment period. The Department heard the testimony of 26 individuals during the public hearing. The Department, in order to hear from as many individuals as possible, distributed more than 7,000 copies of the proposed amendments. The Department also received comments from the Independent Regulatory Review Commission (IRRC) and separate letters from individual Legislators. A majority of comments that the Department received were form letters from parents and organizations representing providers who serve children currently eligible for subsidized child care.

   For the purpose of this document, the Department has organized the discussion of comments into two broad groups. The first group describes the most frequently expressed comments and consequent changes to provisions in the regulations. The second group addresses comments on the regulations in the order in which the regulations appeared in the proposed regulations. Where the location of a final-form regulation has been changed from where it appeared in the proposal, reference has been added to identify where the provision appears in these final-form regulations. Changes made in the final-form regulations that were not the result of comments are addressed as issues under the section in which they appear in these final-form regulations.

Major Comments

   The greatest number of written comments received was related to the topics listed as follows. These comments are consistent with comments the Department received during the Child Care Works public forums conducted prior to the release of the proposed regulations. The discussion of these comments and the Department's responses are listed beginning with the topics for which the Department received the greatest number of comments.

Issue: Cost Structure

   Comment: Weekly family co-payment--Commentators raised objections regarding the amount of the increase of the weekly family co-payment computed in accordance with proposed § 3040.63 (relating to calculating a co-payment). Commentators believed that the proposed increases for families were too high and that families' co-payments should not exceed 10% of a family's gross income.

   Response: The Department has determined that the increases in the parent co-payment are reasonable. Parents whose income is below 100% of the Federal Poverty Income Guidelines (FPIG) will not pay more than 10% of their income towards their co-payment. Families whose income exceeds 100% of FPIG up to 185% of FPIG will make a co-payment in an amount varying from 10% to 14.5% of their income. The Department has concluded that a co-payment schedule which reflects up to 14.5% of a parent's income is comparable to other states which have limits up to 18% of a parent's income when total income is below 185% of FPIG.

   Here is an example. A parent with one child age 4 has a monthly income of $1,175 per month, or 130% of the FPIG, and selects child care which costs $365 per month. His fee will increase from $15 per week, or 5.5% of his annual income, to $25 per week, or 9.2% of his annual income.

   Under the current system, there are families on the waiting list who are paying the total cost of their child care. For these families, the opportunity to obtain subsidy under the revised co-payment schedule will reflect a significant decrease in costs. Additionally, working families on welfare have historically paid for the full cost of care. After the welfare family provided verification that the family had paid the child care costs, the family would receive an income disregard of the actual costs, but the disregard amount was capped at $175 per month, per child. While this income disregard reduced the amount of income considered in determining the amount of the cash assistance grant, in many instances, the amount of the cash grant was considerably less than the actual child care costs paid by the client. For working welfare families who are currently receiving the disregard, the revised co-payment schedule reflects a significant decrease in their child care co-payment responsibility. While the revised co-payment schedule reflects an increase in costs for many nonwelfare families who are currently receiving subsidy, it represents a significant decrease in costs for many other families now on the waiting list who will be served for the first time under these final-form regulations.

   Comment: Consideration of the cost of care in weekly co-payment schedule--Commentators raised objections to consideration of the cost of care in the determination of the amount of the family co-payment under § 3040.63(c). The commentators did not agree with the proposed co-payment schedule because they asserted it would force families to pick care which was less costly. Commentators raised objections to the proposed co-payment schedule because it did not acknowledge variance in cost for younger children and variance in cost from county to county, in particular, where the cost of child care exceeds the average cost of care.

   Response: The Department has reconsidered its position, and has deleted consideration of the cost of care in assessing co-payment obligation. The child care co-payment will be determined based on family size and income.

Issue: Eligibility determination process.

   Comment: Six-month redetermination--Commentators raised objections regarding the requirement in § 3040.52(b)(2) (relating to eligibility agent responsibilities) that redeterminations of eligibility occur at least every 6 months, suggesting a requirement would be burdensome for parents and eligibility agents.

   Response: The Department has retained the requirement for a 6-month eligibility redetermination for all subsidized child care recipients. A redetermination period of 6 months is not burdensome and is reasonable, given the potential for changes in the family income and demand for service. The final-form regulations have been revised to clarify that at a redetermination the eligibility agent needs to document only factors that are subject to change and which may affect eligibility, such as income information and the need for child care. Also, mail-in applications can be used for redeterminations. The Department will keep the 6-month requirement to assure that funds are directed to eligible families. The demand for subsidized day care continues to grow, as evidenced by the growing number of children on the waiting list. The waiting list varies between 9,000 and 11,000 children per month depending upon the time of year. Since the demand is greater than the resources available, the Department must assure that only eligible families receive subsidy. The 6-month redetermination will assist in reducing the amount of overpayments incurred by a family if the parent fails to report a change such as an increase in income.

   Comment: Limiting the use of a mail-in application--Commentators raised objections regarding § 3040.52(a)(2) which permits eligibility agents to require an initial face-to-face interview. They erroneously believed that the use of mail-in applications would be replaced with a requirement for face-to-face interviews for low-income families who are required to have redeterminations for eligibility.

   Response: Under § 3040.52(a)(4), the Department has retained provisions that allow mail-in applications and has not eliminated the use of mail-in applications for a redetermination of eligibility. Also, the Department has not required every redetermination of eligibility to be a face-to-face meeting between the parent and the eligibility agent. The Department supports the use of mail-in applications for parents who have a difficult time traveling to the eligibility agent for their redetermination of eligibility. The Department has retained in these final-form regulations the requirement for a face-to-face interview for the family before the first child in the family is enrolled in service.

   Comment: Face-to-face interviews--Commentators raised objections to § 3040.52(a)(2) which permits the eligibility agent to require a face-to-face meeting between the eligibility agent and the parent prior to the receipt of subsidized child care. Commentators believed that face-to-face interviews would disadvantage TANF families.

   Response: Under § 3040.52(a)(10), the Department has retained the requirement for one face-to-face interview prior to the enrollment of the first child in the family into subsidized child care. This face-to-face meeting requirement allows the eligibility agent to accomplish a variety of tasks including: 1) providing child care resource and referral information and consumer education; 2) offering a review and explanation of the parent's rights and responsibilities in receiving subsidized day care; and 3) verifying the parent's identity, including witnessing the parent's signature on the application form.

   The Department also has clarified that this requirement is modified for former TANF families. Section 3040.53(g) has been revised to allow a 90-day period for the eligibility agent to conduct the face-to-face interview with former TANF families. The required face-to-face meeting for families moving from TANF must occur within the first 90 days of receipt of subsidized child care, but will not cause a delay in the receipt of the families' benefits. A face-to-face meeting requirement is needed for former TANF families because these families, as recipients of subsidized child care, must learn of their benefits under the subsidized program. Language has been added to the final-form regulations to clarify that a parent/caretaker who transfers from TANF shall meet at least once face-to-face with the eligibility agent.

Issue: Benefits for child care.

   Comment: Eligibility of school-age children--Commentators raised objections to § 3040.3 (relating to definitions) because they believed that the proposed amendments, which described a unit of care, indicated that school-age children were eligible for either before-school care or after-school care during the school year, but not both before- and after-school care. Also, commentators, including IRRC, pointed out that the definition of a ''unit of care'' would limit service for school-age children to a single provider.

   Response: Under § 3040.3, the Department has eliminated the term ''unit of care,'' which was defined as an enrolled day of care with a single provider in a 24-hour period. The Department has eliminated this term because it is moving from a description of the amount of child care allowed in a 24-hour period to a revised description of the amount of child care a family can receive in a week, which more accurately reflects parents' varying child care needs with varying shift work. Language in the proposed amendments was not intended to limit a school-age child's receipt of before- and after-school care during the school year. The Department has always allowed school-age children to receive both before- and after-school care if the need exists and will continue to allow the parent to choose more than one provider in a 24-hour period.

   Comment: Administrative processes--There were requests by some commentators, including IRRC, that the Department provide more detail on the process for former TANF families who are to receive continuing child care benefits through the LMAs.

   Response: The Department's practice is to include this type of information in written procedures for workers of the CAOs and the eligibility agents. These procedures for Child Care Works will describe operational requirements and will be subject to revisions depending upon forms and implementation of changes to management information systems. Including these procedures in the final-form regulations is not appropriate.

Issue: Background checks.

   Comment: IRRC and other commentators stated that the Department should require background checks for all relative/neighbor caregivers.

   Response: The Department has decided not to address background checks in the final-form regulations. At the current time, there is no requirement in 23 Pa.C.S. §§ 6301--6384 (relating to Child Protective Services Law) for background checks for relative/neighbor caregivers and the Department will not require background checks for relative/neighbor caregivers.

   The Department has developed an integrated child care system, for cash assistance and low-income families, where parents have a variety of child care choices supported by consumer education which helps parents to choose child care. Parents often choose relative/neighbor care because they are familiar with the caregiver. A parent may request the relative/neighbor caregiver to pursue criminal history and child abuse background checks at any time. It is the parents' vigilance on a daily basis that best assures their children's safety in homes of relative/neighbor caregivers they select. The Department is expanding its training effort for an increased number of relative/neighbor caregivers.

   The Department has allowed cash assistance recipients access to, and has been paying for child care provided by, relative/neighbor caregivers for over 25 years without requiring background checks. While there is no requirement for child abuse or criminal background checks, CAOs have been instructed to advise families in writing of the availability of child abuse and criminal background checks, and of their right to request these checks before making a decision to place their children with relative/neighbor caregivers. At present, nearly 44% of families receiving child care payments through the CAO use relative/neighbor care. The Department will continue to take steps to ensure that these families are aware of the types of choices of child care which are available to them as well as their parental right to ask that a relative/neighbor seek a background check.

   Requiring background checks for relative/neighbor care would create an undue burden for cash assistance and low-income families. Many cash assistance families might need child care immediately or on an intermittent basis when they first receive TANF benefits and could not wait for background checks to be processed. Also, requiring background checks would be inconsistent with other practices for families who use relative/neighbor care and do not receive subsidized child care. It is inappropriate to require background checks for families seeking a subsidy, as it would place a burden on low-income families which is not placed on middle-income families.

Chapters 168 and 3040

   These two chapters govern eligibility for subsidized child care for cash assistance and low-income families. Public comments are discussed at each section of the chapters, as they appear sequentially.

   In general, IRRC suggested that Chapters 168 and 3040 should be consistent whenever possible. In response to these concerns, certain terms used throughout Chapters 168 and 3040 have been changed to be consistent. These terms include: ''parent,'' ''child care'', ''co-payment'' and ''maximum child care allowance.'' All of these terms will be further explained at the appropriate section of the chapters.

Chapter 165--Discussion of Comments

   Although the intent, as described in proposed rulemaking, is to change rules pertaining to child care for TANF recipients, the deletion of child care provisions in Chapter 165 would also have had the effect of deleting child care provisions for General Assistance recipients. To prevent this, the Department has retained in Chapter 165 the child care provisions for General Assistance recipients. Chapter 168 sets forth all the child care provisions for TANF recipients.

§ 165.42.  Advance payment of special allowances for supportive services.

   Comment: Subsection (a). IRRC and others raised a concern that the provisions for advance payment of supportive services other than child care had been deleted. Child care advanced payment provisions are in § 168.1(b)(3).

   Response: Provisions for advanced payment of supportive services other than child care are in § 165.45(f). In the proposed amendments, § 165.42(a) was deleted to avoid duplication and repetition. However, the Department has decided to reinstate subsection (a) to avoid any misunderstanding. The Department has also added a cross reference to § 165.42 in § 168.1(b)(3).

§ 165.81.  Fair hearing.

   Issue: Paragraph (2). The Department has amended the provision to provide for continued payment of supportive services when a recipient files a timely appeal.

Chapter 168--Discussion of Comments

§ 168.1.  Policy on child care.

   Comment: Subsection (a). The statement that payment for child care ''may be made to enable the parent/caretaker to participate in work-related activities'' raised questions from IRRC and others about whether the decision on eligibility was left to local CAO discretion.

   Response: The language ''may be made'' was an effort to acknowledge the realities of a block grant from which funds might not be available. The Department has clarified that, to the extent that funds are available, the Department did not and does not intend the CAOs to have discretion in authorizing payment to eligible families. The Department has revised language in § 168.1(a) by changing the word ''may'' to ''will.''

   Comment: Subsection (a). IRRC suggested that the term ''caretaker/relative'' be replaced with the term ''parent'' as used in Chapter 3040 for consistency between the programs.

   Response: The Department agrees that, whenever possible, terminology should be identical to avoid confusion. Language throughout Chapters 168 and 3040 has been revised to replace the terms ''caretaker relative'' and ''parent'' with the term ''parent/caretaker.''

   Issue: Subsection (a). The Department has added language to clarify that eligibility for a child care payment is continued during a month of zero cash payment. Zero cash payment results from receipt of a nonrecurring extra pay in a budget month, such as a vacation pay or a fifth pay in a calendar month.

   Issue: Subsections (a) and (b)(3). The Department has added language to clarify that child care payments are considered a reimbursement of past or future child care expenses. As such, child care payments are not considered as income for determining eligibility for food stamps.

   Comment: Subsection (b). IRRC and others questioned the wording that ''upon request,'' families would be informed of the types and location of child care providers and referred to the CCIS for help in locating care. The concern was that families would not know to ask for help for a referral to the CCIS, until they were first made aware that this help exists.

   Response: The Department agrees with the concerns raised and has revised subsection (b)(1) and (2) to provide that participants in work-related activities who need child care are routinely informed of the types and locations of child care providers, and the services available from the CCIS for help in finding and selecting a provider, including resource and referral assistance. A referral will be made to the CCIS whenever the client indicates a need for further help. Clients will be provided with the address and the telephone number of the CCIS so that they can contact the CCIS of their own volition at any time.

   Comment: Subsection (b). IRRC suggested that the term ''local management agency'' be defined and that the definition be consistent with any definition used in Chapter 3040.

   Response: A definition of ''local management agency'' has been added in § 168.2 to mirror the definition used in Chapter 3040.

   Issue: Subsection (b)(3) (final-form regulations). The Department has added an exception to the provisions which limit advance payment to instances in which the provider requires it, and which restrict advance payment for providers enrolled in the child care vendor payment system for TANF budget groups determined prospectively ineligible as a result of starting new employment. For these families, advance payment for child care costs will be issued when verification has been obtained through a collateral contact with the child care provider. This change will enable these families to have a smooth transition from receiving subsidy from the CAO to receiving subsidy from the CCIS.

   Comment: Subsection (c). IRRC and others suggested that the reference to the Employment Development Plan (EDP) should be replaced with reference to the Agreement of Mutual Responsibility (AMR) and that a definition of the AMR be added to § 168.2.

   Response: The Department has replaced all references to an EDP with references to an AMR. The Department will promulgate the definition of ''AMR'' in the TANF program regulations which are being developed at this time. The term was defined in the TANF Notice of Rule Change published at 27 Pa.B. 1092 (March 1, 1997).

   Comment: Subsections (d) and (e). Commentators suggested that the language in subsection (d) be modified to specifically identify a determination of eligibility as an action requiring notice of approval or denial, and that language in subsections (d) and (e) be added to the general text to specifically reference the ''time frames'' in §§ 165.43 and 165.45.

   Response: Since approval or denial of benefits follows a determination of eligibility, the Department does not think the language change is necessary, but has made the suggested change in subsection (d) to avoid any misunderstanding. Reference to the time frames for action in subsections (d) and (e) which refer to §§ 165.43 and 165.45 is already referenced in these final-form regulation.

   Comment: Subsection (f). IRRC questioned the provision that the child care co-payment sliding fee scale and maximum child care allowance charts ''are available upon request.'' Specifically, IRRC criticized the fact that unless families were made aware of availability, they would not know to request copies.

   Response: The Department has revised subsection (f) to require the CAO to discuss the co-payment sliding fee scale and maximum child care allowances with clients and to advise clients that copies are available from the CAO.

   Issue: Subsection (g) (final-form regulations). The Department has added subsection (g) to clarify that the CAO will refer the client to the CCIS whenever help is needed in finding and selecting a child care provider.

§ 168.2.  Definitions.

   Issue:  The Department has deleted the definition of ''average child care costs,'' as unnecessary. This term applied to the determination of a co-payment obligation based on the cost of care selected. Cost of care is not a factor in determining the co-payment in the final-form regulations.

   Comment:  IRRC raised concern about the lack of consistency between the definition of a family unit for families who receive TANF in Chapter 168 and for those who do not in Chapter 3040.

   Response:  Child care benefits under Chapter 168 are a supportive service available to TANF-eligible families only. The definition of what constitutes a TANF-eligible family is dictated by TANF eligibility criteria, which uses the concept of a ''budget group.'' The concept of the ''budget group'' is based upon a determination of those in the household who have a responsibility for the child. The concept of a family in Chapter 3040 is not inextricably linked to TANF eligibility criteria; and uses a concept of family based upon those in the household who live as an economic unit. In this instance, consistency between the programs is not feasible. However, to facilitate transition between programs, provisions have been incorporated into Chapter 3040 to give TANF families a 6-month period before they are subject to Chapter 3040 eligibility criteria.

   Issue:  The Department has added a definition of ''Child Care Information Services (CCIS) Agency.''

   Issue:  The Department has eliminated the definition of a ''child with a disability'' as duplicative of provisions in § 168.17(3) for determining eligibility of a child with a physical or mental disability.

   Issue:  The Department has added a definition of ''co-payment'' as the monthly amount the family pays for child care that is subsidized. A co-payment is required only of employed TANF recipients as in § 168.71. The co-payment is established monthly for these TANF recipients because eligibility for TANF is determined on a monthly basis.

   Issue:  The Department has revised the definition of ''co-payment sliding fee scale'' to eliminate reference to the average child care costs, and has added a reference to Chapter 3040, Appendix B.

   Comment:  IRRC suggested that the Department adopt a consistent term for identifying the payment ceiling level for child care payments. Throughout Chapter 168 the term ''maximum child care allowance'' is used, whereas the term ''county ceiling rate'' is used throughout Chapter 3040.

   Response:  The Department has decided to adopt the term ''maximum child care allowance'' throughout both Chapters 168 and 3040. Language in Chapter 3040 has been amended.

   Comment:  IRRC suggested that the term ''relative/neighbor care'' be replaced with ''unregulated care'' or ''exempt care.'' Concern was raised that not all care which is exempt from certification is provided by relatives or neighbors.

   Response:  The Department has decided to retain use of the term ''relative/neighbor care.'' The Department believes the term is easily understood by families and the child care community to describe care arrangements by persons who are exempt from child care licensure and/or certification. The definition of ''relative/neighbor'' care has been changed to ''care given by a person who is exempt from certification or registration under Chapters 3270, 3280 and 3290 (relating to child day care centers; group child day care homes; and family child day care homes) and cares for three or fewer children unrelated to the caregiver.''

   Issue:  The Department has revised the definition of ''TANF'' to clarify that it is a program which provides cash assistance to families that include dependent children.

   Issue:  The Department has added a definition of ''sleep-time'' in § 168.2 and made a corresponding addition to § 168.72 to provide for payment of child care for parents/caretakers in third-shift employment when an eligible child is in the home and care is needed to enable the parent/caretaker to sleep following the work shift. Clients with young children at home have raised concerns about taking a third-shift job unless they can get help in paying for child care during both the hours of employment and the hours they need to sleep. Because work is a condition for the receipt of cash benefits, the Department has provided for payment for care during work hours and hours of sleep for persons who need to accept third-shift employment to make progress toward financial self-sufficiency.

§ 168.11.  General requirements.

   Issue:  Subsection (a). The Department has added in-home care as a type of care for which child care allowances are available as required under the CCDBG.

   Comment:  Subsection (d)(2). IRRC noted that the reference to eligibility for a child with a developmental disability who has reached his 13th birthday was inconsistent with the corresponding reference in § 3040.2. It was suggested that the Department adopt consistent criteria. It was also noted that the criteria for determining a child's eligibility were duplicated in § 168.17.

   Response:  As a result of comments suggesting that provisions in § 168.11(d)(2) regarding eligibility for a child age 13 or older with a developmental disability were duplicative of provisions in § 168.17 and resulted in confusion, § 168.11(d) was deleted. Acknowledging the need for eligibility policies to be consistent whenever possible for families who receive TANF and those who do not, the Department has revised language in § 168.17(3) to clarify that a child over the age of 13 years will remain eligible if the child is under age 19 and has a developmental age of less than 13 years. This is consistent with provisions in § 3040.2 of the proposed amendments (relocated to § 3040.11(e) due to format changes).

   Comment:  Subsection (e). One commentator suggested that the Department include payment of registration fees as an allowable child care cost.

   Response:  Under the now repealed Family Support Act of 1989, payment of registration fees was a state option. However, the Department never adopted this option. During the past 8 years, there has been no indication that this issue presents a barrier to accessing child care, and it is not something that clients have raised as a concern. Given the wide range of choice of child care for those receiving subsidy, and in the absence of evidence to substantiate a need, the Department has retained the past practice of not allowing payment of registration fees as an allowable child care cost. In addition, reference to allowable child care costs originally proposed in § 168.11(e) has been deleted as duplicative of provisions in § 168.72.

   Issue:  Subsection (e). The Department has deleted this subsection because it was duplicative of provisions set forth in §§ 168.71(1) and 168.72(2) and (3).

   Issue:  Subsection (h). The Department has relocated provisions on payment of child care reasonably related to the hours of employment or RESET participation, including travel time, to § 168.72(1) to group similar information together.

   Comment:  Subsection (i). One commentator misinterpreted the language change regarding providers in the Child Care Vendor Payment System and concluded that relative/neighbor caregivers would be eligible to participate in the vendor system. A commentator noted that this subsection duplicated provisions in § 168.81.

   Response:  The misunderstanding was caused by eliminating the adjective describing providers as ''regulated'' which led to the conclusion that relative/neighbor caregivers would be eligible to participate in the vendor payment system. Since the vendor payment system is open only to those child care providers who have a registration certificate or certificate of compliance, the Department had thought it was redundant to define these providers as ''regulated.'' The Department has reinserted the adjective to avoid further misunderstanding. Section 168.11(i) as proposed has been eliminated. Provisions for vendor payment continue to be found only in § 168.81.

   Comment:  Subsection (i)(1). IRRC raised questions about identifying and tracking payments to providers who are not enrolled in the Department's Child Care Vendor Payment System and about the Department's plans for safeguarding children and assuring proper use of public funds when direct payment of the child care subsidy is made to persons not in the vendor payment system.

   Response:  The Department will maintain a list of all providers serving families in the subsidized child care system, including the names and addresses of relative/neighbor caregivers. An automated information system redesign for capturing this information has been developed and is now being used Statewide.

   Currently, families using relative/neighbor caregivers who are not in the Child Care Vendor Payment System receive a copy of the minimal health and safety standards for relative/neighbor caregivers and are advised in writing of their right to request child abuse and/or criminal background checks before placing their children in care. Providers are required to certify to compliance with minimal health and safety requirements and submit the certifications to the CAO on a monthly basis. The Department will be expanding child care consumer education efforts and training opportunities for relative/neighbor caregivers.

   The provision for payment of child care benefits directly to a client when the caregiver is not in the vendor payment system is not a new provision. The practice of direct checks to clients for child care expenses, previously in § 165.46(a)(11), has been in place for over 25 years. Assurances of proper use of public funds for child care benefits are identical to those in place for use of TANF funds, as in § 168.91.

   Comment: Subsections (d), (f) and (j). Comments by IRRC and others noted that provisions in § 168.11 duplicate provisions in subsequent sections:  § 168.17 (relating to eligible children); § 168.18 (relating to need for child care); and § 168.19 (relating to child care arrangements).

   Response:  The Department acknowledges that some of the provisions were duplicative. To avoid confusion, the Department has eliminated those references in § 168.11 which are addressed in §§ 168.17--168.19.

§ 168.17. Eligible children.

   Comment:  One commentator suggested that the Department include nurse practitioners and physician assistants as sources of verification to document physical or mental incapacities or disabilities.

   Response:  The Department had considered this issue previously with regard to eligibility under the General Assistance Program and concluded that permitting medical verification by sources other than physicians and licensed psychologists is not authorized under the law. Section 9 of Act 35, amending 62 P. S. § 432(3)(i)(C) narrowed language to permit an assessment of physical or mental disability done only by ''a physician or psychologist.'' While this section of Act 35 applies to general assistance, the Department has adopted a consistent approach for determining eligibility for TANF and TANF-related child care benefits.

   Issue:  Paragraph (3). The Department has increased the age limit on eligibility for child care, from age 18 to age 19, for a child who is not physically capable of caring for himself or who has a developmental age of less than 13 years. The change was made for consistency with the eligibility provisions for cash assistance, which provide that a person under the age of 19 may be included as a child in the budget group.

   Issue:  Paragraph (4). The Department has added a requirement that all children who receive child care subsidy have age-appropriate immunizations. This requirement has been added under the requirement in the final Federal CCDBG regulations at 63 FR 39987, to be codified in 45 CFR § 98.41(a)(1)(i).

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