Aid to Families With Dependent Children; Extension of Medicaid When Support Collection Results in Termination of Eligibility

Federal RegisterNov 17, 1994

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 435 and 436

Medicaid

Administration for Children and Families

45 CFR Part 233

RIN 0970-AA07

Aid to Families With Dependent Children; Extension of Medicaid

When Support Collection Results in Termination of Eligibility

AGENCIES: Administration for Children and Families (ACF) and Health

Care Financing Administration (HCFA), HHS.

ACTION: Final rule.

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SUMMARY: These final rules interpret section 20 of the Child Support

Enforcement Amendments of 1984, as amended by section 303(e) of the

Family Support Act of 1988, and section 8003 of the Omnibus Budget

Reconciliation Act of 1989. The 1984 law extended Medicaid coverage for

a period of four months to certain dependent children and adult

relatives who become ineligible for Aid to Families with Dependent

Children (AFDC) as a result, wholly or partly, of the collection or

increased collection of child or spousal support under title IV-D of

the Social Security Act (the Act). The regulations are applicable to

the AFDC and Medicaid programs in all jurisdictions.

EFFECTIVE DATE: November 17, 1994.

FOR FURTHER INFORMATION CONTACT:

AFDC: Mr. Mack Storrs, ACF/OFA 5th Floor, 370 L'Enfant Promenade S.W.,

Washington, DC 20447, telephone (202) 401-9289.

Medicaid: Mr. Marinos T. Svolos, HCFA Room 323, East High Rise

Building, 6325 Security Boulevard, Baltimore, Maryland 21207, telephone

(410) 966-4451.

SUPPLEMENTARY INFORMATION:

Statutory Authority

Section 20 of the Child Support Enforcement Amendments of 1984

(Public Law 98-378) amended both the AFDC and Medicaid titles of the

Act. Title IV-A (AFDC) was amended by adding a new paragraph (h) to

section 406 of the Act. This new paragraph provides that: ``[e]ach

dependent child and each relative with whom such a child is living

(including the spouse of such relative as described in subsection (b)),

who becomes ineligible for aid to families with dependent children as a

result (wholly or partly) of the collection or increased collection of

child or spousal support under Part D, and who has received such aid in

at least three of the six months immediately preceding the month in

which such ineligibility begins, shall be deemed to be a recipient of

aid to families with dependent children for purposes of title XIX for

an additional four calendar months beginning with the month in which

such ineligibility begins.''

Section 20 of Public Law 98-378 also amended section

1902(a)(10(A)(i)(I) to require Medicaid coverage of eligible

individuals pursuant to section 406(h) of the Act. Both amendments

apply only to those individuals who became ineligible for AFDC on or

after August 16, 1984, the date of enactment of Public Law 98-378, and

before October 1, 1988, and who received AFDC in at least three of the

six months immediately preceding the month of ineligibility.

Section 303(e) of the Family Support Act of 1988 (Public Law 100-

485) amended section 20 of the Child Support Enforcement Amendments of

1984 to extend for one year, through September 30, 1989, the authority

of this provision. Section 8003 of the Omnibus Budget Reconciliation

Act of 1989 (Public Law 101-239) removed the sunset date for this

section, thus making it a permanent provision of the Act.

Notice of Proposed Rulemaking (NPRM)

A NPRM was published in the Federal Register on November 27, 1992

(57 FR 56294), amending 45 CFR Part 233 and 42 CFR Parts 435 and 436 to

set forth the circumstances under which individuals become eligible for

the four-month period of extended Medicaid coverage because they have

lost AFDC as a result (wholly or partly) of the collection or increased

collection of child or spousal support. The proposed rules interpreted

the statute to require either the new receipt of, or an increase in,

the collection of child or spousal support which renders the family

ineligible for AFDC.

As required by statute, the proposed rules provide that individuals

must have received AFDC in at least three of the six months immediately

preceding the month in which AFDC ineligibility begins in order to

qualify for the extended Medicaid coverage. As we pointed out in the

preamble to the proposed rules, individuals who do not actually receive

an AFDC payment for any month because of the rounding of the payment

amount to zero, the recoupment of an overpayment, or the elimination of

payments for those who are eligible for amounts less than $10 are

deemed to be AFDC recipients for that month for purposes of determining

eligibility for continued Medicaid coverage under this provision.

Also under the proposed rules, continued Medicaid under this

provision ends for any individual family member who moves to another

State. In the preamble to the proposed rules, we stated that Medicaid

ends effective with the month following the month the individual moves

to the new State. Although benefits end when an individual moves to

another State, eligibility can be reinstated in the State in which he

or she was entitled to the extended coverage if the individual re-

establishes residence there before the end of the four-month period. It

was the Department's view that extended Medicaid benefits are available

only in the State in which the family became ineligible for AFDC

benefits. For example, if a family moved to another State in March, the

first month of the extended period, and moved back in May, the third

month of the extended period, they would be eligible for extended

Medicaid benefits for the months of May and June.

The preamble to the proposed rules recognized that States require

collection of support made by absent parents and spouses to be paid

directly to the IV-D agency. Nevertheless, AFDC recipients occasionally

receive child or spousal support directly. Because current regulations

require that these payments must be turned over to the IV-D agency, we

consider direct payments which are properly turned over to the IV-D

agency to be collections of support for the purposes of this provision.

Thus, extended Medicaid coverage will be provided when collections of

child or spousal support are received by the eligible assistance unit

and are turned over to the IV-D agency if these payments result (wholly

or partly) in the loss of AFDC.

The proposed rules indicated that section 406(h) of the Act

provides certain individuals with extended Medicaid if they lose AFDC

eligibility ``as a result (wholly or partly) of the collection or

increased collection of child or spousal support * * *'' (emphasis

added). They separately specified the circumstances under which AFDC

ineligibility would be considered to be due ``wholly'' to a collection

and when they would be considered to be due ``partly'' to a support

collection. They also discussed at length examples of cases in which

the child or spousal support collection ``wholly'' or ``partly''

affected the family's AFDC eligibility and made a clear distinction

between the ``wholly'' or ``partly'' cases.

Our interpretation of Congressional intent as it relates to the

term ``wholly'' or ``partly'' limits the Medicaid extension under this

provision to cases where ineligibility can be attributed, at least

partly, to the initiation of or an increase in the amount of a child or

spousal support collection. The proposed and final regulations both

reflect our position that the collection of support must actually cause

or actively contribute to ineligibility for AFDC, even if there are

other factors which also contribute to ineligibility or could

simultaneously cause it.

The proposed rules provided that extensions of Medicaid eligibility

pursuant to expiration of the earnings disregards as set forth in 45

CFR 233.20(a)(14) or pursuant to section 303(a) of the Family Support

Act of 1988 (P.L. 100-485) are not affected by this provision. Thus, if

a family is entitled to extended Medicaid as a result of earned income

under section 303(a) and is also simultaneously entitled to extended

Medicaid as a result of the initiation of or a change in the amount of

the child or spousal support collection, the assistance unit would be

entitled to the full twelve-month extension of Medicaid available under

the section 303(a) transitional provision if it meets the requirements

of section 1925 of the Act. However, the periods run concurrently so

that one extended period cannot be delayed until the end of the other

extended period.

Response to Specific Individual Comments

We received five comments on the proposed rules. Three were from

State government agencies, one was from an advocacy group and one was

from a health services organization. A discussion of these comments and

our responses follows.

Comment: One advocacy group requested that the Department clarify

the definition of support collections which would trigger entitlement

to extended Medicaid coverage. It recommended that the change must be

in the amount of support collected. The advocacy group was concerned

that the language in the discussion of the proposed regulations

referring to an increase in the ``ongoing support payment'' may be read

as referring to an increase in the amount the absent parent has to pay,

rather than an increase in the amount which is collected in a given

month.

Response: We have eliminated any reference to an increase in an

``ongoing support payment.'' We believe this will eliminate any

confusion between support ordered and support collected. The amount of

support ordered is not material when establishing eligibility for

extended benefits. This eligibility is based on the amount of support

which is collected.

Comment: One State agency recommended a change in the definition of

``collection'' of child or spousal support to cover situations where

collections of child or spousal support contribute to a loss of

eligibility but no initiation of or increase in collections occurred.

Another State agency believed that the proposed definition is more

restrictive than the wording of the statute and that there was no

legislative history presented to conclude that Congress intended to

define the entitlement as narrowly as proposed.

Response: As a condition of extended Medicaid coverage, the final

regulations continue to require that ineligibility for AFDC must result

from a change in support collection; that is, either the new receipt

of, or an increase in, the amount of a child or spousal support

collection. As we stated in the preamble to the proposed rules, we

believe that the Conference Report, H.R. Rep. No. 925, 98th Cong., 2d

Sess. (1984), contemplates a change in the amount of the child or

spousal support collection. In describing the House bill, the

Conference Report states that ``[i]f a family loses AFDC eligibility as

the result (wholly or partly) of increased collection of support

payments * * *, the State must continue to provide Medicaid benefits *

* *.'' Id. at 55 (emphasis added). The Conference Agreement followed

the House bill, but with an amendment limiting the application of the

provision to families who become ineligible for AFDC before October 1,

1988.

Similarly, the Report of the Committee on Ways and Means, H.R. Rep.

No. 527, 98th Cong., 1st Sess. at pages 11, 23, 52, and 56 refers

repeatedly to either an ``increase in child support payments'' or to

``a change in child support levels.''

Comment: Two State agencies believed that the definition of

``collection'' was convoluted, unnecessarily complex, and difficult to

administer. One agency believed the definition would make automation

more difficult and expensive.

Response: We believe that any difficulty in the proposed definition

stemmed from our attempt to interpret the law broadly. The

interpretation requires States to compare the different possible causes

for the loss of AFDC, but was designed to allow continued eligibility

under a number of different circumstances.

We could have interpreted section 406(h) to mean that continued

eligibility is available only when changes in support collections alone

lead to a loss of AFDC. Extended coverage would not have been available

if any other factors contributed to or caused ineligibility. We instead

chose to cover individuals who lose AFDC under any circumstances in

which the change in support either causes or contributes to the loss of

AFDC. This interpretation, by its nature, has increased the complexity

of the rule.

We have attempted in the final regulation to express these concepts

more simply and concisely. We have done so by removing the emphasis in

the proposed regulation on the distinction between the loss of AFDC

which results ``wholly'' instead of ``partly'' from support

collections. Instead, we have placed the emphasis on extended Medicaid

whenever a support collection has either caused or actively contributed

to the loss of AFDC. As in the proposed regulation, a family can

qualify for extended Medicaid when the support collection alone causes

ineligibility for AFDC or when the support collection, in conjunction

with other changes in income or family circumstances, contributes to

ineligibility. The following examples demonstrate these concepts, as we

have revised them. They are keyed to the regulations at

Secs. 435.115(h)(1), 436.114(h)(1) and 233.20(a)(15)(iii)(A).

An example of how the final rule would apply in

Secs. 435.115(h)(1)(i), 436.114(h)(1)(i) and 233.20(a)(15)(iii)(A)(1)

is an assistance unit which receives $250 in countable child support

collections monthly. The applicable standard of need is $375. In the

next month the countable child support collection increases to $400. In

this example, the resulting ineligibility is due to the collection of

child support, and the Medicaid extension would apply.

Another illustration includes a situation which conforms to

Secs. 435.115(h)(1)(i), 436.114(h)(1)(i) and 233.20(a)(15)(iii)(A)(1)

of the final regulations. An assistance unit receives $200 in countable

child support collections and $100 in title II benefits monthly. The

applicable standard of need is $325. In the next month both the child

support collection and title II increase by $75, for a total increase

of $150 a month. Here, the resulting ineligibility is due to the child

support collection because the change in support by itself, when added

to the unchanged title II benefit, would cause ineligibility. Thus, the

Medicaid extension would apply.

An example of how the definition of ``collection'' applies in

combination with other changes in family circumstances, as indicated in

Secs. 435.115(h)(1)(ii), 436.114(h)(1)(ii) and

233.20(a)(15)(iii)(A)(2), would be as follows. An assistance unit

received $275 in countable child support collections and the applicable

standard of assistance was $375. In the next month, the countable child

support collection increased to $325 and at the same time one of the

older children left home. As a result, the applicable standard of

assistance was reduced to $300. The countable child support collection

of $325 exceeded the new standard of $300 and resulted in the

assistance unit's ineligibility.

Under the clarified definition of ``collection'' in the final

regulation, the family would be eligible for extended Medicaid, since

the collection of child support increased and contributed to the

ineligibility. In this instance, the reduction in the standard of

assistance worked in combination with the increased collection of

support to cause the ineligibility. It thus contributed to the family's

ineligibility. Neither change would have caused ineligibility by

itself.

However, suppose that in this example the $275 received by the

assistance unit was raised to $325 and the $375 standard of assistance

was reduced to $250. In this case, the increase in child support would

have no effect on eligibility for AFDC. That is because the change in

the standard of assistance would have caused ineligibility even before

the child support collection was raised from $275 to $325. Because the

change in the support collection neither caused nor contributed to

ineligibility for AFDC, the family would not be eligible for extended

Medicaid.

Thus, under the definition included in the final rule, other

changes affecting eligibility and occurring in conjunction with a

change in the amount of the support collection would not negate the

family's entitlement to extended Medicaid, as long as the support

collection contributes to ineligibility for AFDC.

Comment: One State questioned the discussion of payments made by

absent parents directly to the AFDC recipient. The State asserted that

if these payments are turned in as required, the money flows through

the child support mechanism as would money collected by the State

directly from the absent parent. As such it represents a ``collection''

under title IV-D. If the money is not forwarded to the State agency, it

is budgeted accordingly (as income to the family), and penalties (for

non-cooperation) are imposed as appropriate. The regulations are silent

on the issue of monies not forwarded so the State assumes there is no

intent to provide the extension when the support causes ineligibility

when budgeted, since to provide such an extension in this case would be

contrary to the statute.

Response: There is no intent to provide the extension in such

situations. The State is correct that monies not forwarded to the State

agency would not constitute a ``collection'' under title IV-D, as

required by the statute. Such monies would be budgeted as income to the

family in a IV-A income State, with sanctions for non-cooperation

imposed as appropriate. In a IV-D recovery State, the IV-D agency must

recover all such payments. The IV-D agency would enter into a repayment

agreement with the custodial parent in accordance with 45 CFR 303.80.

We have revised the regulation in several places in order to make it

clear that support collections must be child or spousal support

collected under title IV-D.

Comment: One State agency commented that, given the erratic nature

of child support payments, the proposed policy could result in

disparate treatment for clients with equal amounts of child support.

Another State agency expressed concern that the application of the

proposed regulations may provide an incentive for an absent parent not

to pay child support when a child is approaching the age of majority or

some other income change is expected to occur.

Response: Because of the sporadic nature of the receipt of support

payments and other changes in family circumstances, it would be

difficult to determine when such a situation might occur. Nevertheless,

it is true that, in some cases, an increase in support collection would

coincide with other circumstances affecting AFDC eligibility. The

statute places no special requirements on the circumstances which

resulted in the increased support collection which, in turn, triggered

the four-month period. If a family receives a change in support

payments which in some way causes that family to lose AFDC, regardless

of the circumstances, then that family is entitled to four extra months

of Medicaid coverage. The statute places no relevance on the regularity

or timing of payments.

Comment: Two commenters suggested that extended Medicaid should be

continued when a family or individual moves out of the State and is no

longer a resident of the State. One commenter suggested that the State

where the individual was originally eligible for extended Medicaid

should be responsible for providing any remaining months of extended

Medicaid, particularly where the individual was enrolled in a managed

care organization. The other commenter suggested that the new State

should be automatically responsible for paying for the remaining months

of the extended period.

Response: In the preamble to the notice of proposed rulemaking,

HCFA took the position that ``[c]ontinued Medicaid under this provision

ends for any individual who moves to another State.'' The preamble

further provided, however, that eligibility could be reinstated if the

individual returns to the State and the individual would be entitled to

any remaining months of extended benefits. We believe that it is

reasonable to allow States to terminate families who become residents

of other States during the extended Medicaid period.

Nothing in section 406(h) explicitly requires a State to continue

extended benefits for an individual who has moved to another State. In

addition, our interpretation of this provision conforms with the

longstanding policy that States are only required to provide Medicaid

to their own residents. The Medicaid statute establishes a framework of

cooperative federalism in which each state develops a plan for

providing medical assistance for its residents. The statute establishes

a general framework for the State's Medicaid program; however, States

have some flexibility to tailor the program to meet the particular

needs of their residents. As a result, each State plan is different.

From the outset of the Medicaid program, State residency has been

an important aspect of Medicaid eligibility. Section 1902(b)(2), 42

U.S.C. section 1396a(b)(2), prohibits the Secretary from approving a

plan which imposes any residency requirement which excludes individuals

who reside in the State, regardless of whether or not the residence is

maintained permanently or at a fixed address. On the other hand, there

has never been any general statutory requirement that a State cover

individuals who are not its residents or continue to cover those who

are no longer its residents. Indeed, section 1902(b)(2) implicitly

recognizes that States may limit Medicaid coverage to their own

residents.

Moreover, the statute requires the State plan to include provisions

for furnishing medical assistance under the plan ``to individuals who

are residents of the State but are absent therefrom'' (section

1902(a)(16); 42 U.S.C. section 1396a(a)(16)). This provision recognizes

a State's continued responsibility for its Medicaid eligible residents

during temporary periods of absence in another jurisdiction, but only

as long as they remain residents. In light of these rules, we have for

many years taken the position that the Secretary is permitted to

approve a plan which limits eligibility to all State residents and

consequently denies medical assistance to individuals who do not reside

in the State. It is our understanding that most States expressly

require individuals to be residents of the State in order to receive

medical assistance under the State plan, although they could choose to

cover non-residents.

The right to continued receipt of Medicaid normally ends when an

individual establishes residency in a new State. If an individual seeks

medical assistance in the new State, eligibility is determined based on

the State plan of the new State. If Congress had intended in section

406(h) a major departure from this traditional role of States under the

Medicaid statute, we believe this would have been clear from either the

statute or legislative history. Our review of the statute and the

legislative history for section 406(h) does not reflect that Congress

intended this result.

We also do not believe that section 406(h) requires an individual's

new State of residence to provide continued Medicaid coverage. This

provision simply deems an individual to be an AFDC recipient for

Medicaid purposes for an additional four calendar months; that is, as

an add-on to the period of coverage the individual has already received

under the State plan of his or her original State. HCFA does not regard

section 406(h) as creating a portable status that entitles the

individual to different Medicaid coverage in a different State.

The fact that an individual is an AFDC recipient in State A does

not get that individual Medicaid benefits in State B. Similarly, the

fact that an individual is deemed to be an AFDC recipient in State A

would not necessarily get that individual Medicaid benefits in State B

(unless State B chooses to cover the individual or has an interstate

agreement which does so). If the individual is deemed to be an AFDC

recipient for Medicaid purposes for an additional four months, the

individual should therefore receive extended Medicaid only in the State

in which he or she lost AFDC status and was granted the four months of

extended coverage.

One commenter also raised the question of whether our policy has

constitutional implications because the commenter believes that it

violates an individual's right to interstate travel. The commenter

points out that other residents in the new State would be eligible for

extended benefits while the newly arrived individuals with exactly the

same circumstances would not be eligible. We believe that the commenter

is incorrect in assuming that the individual who has moved is equally

situated with other residents of the new State who are receiving the

additional four months of Medicaid. The individual's former State may

well have had a higher AFDC eligibility standard than the new State,

which enabled the individual to get Medicaid in the old State before he

or she lost AFDC because of a support payment. In the new State, the

individual may never have been eligible for AFDC even without the

increased collection.

We do not believe the residency requirement for extended Medicaid

has any significant effect on managed care. Ordinarily, an HMO will

lose an enrollee when he or she has moved to another State, because

HMOs have defined service areas and provider networks. In most cases,

when a recipient enrolled in an HMO moves to another State, he or she

would no longer be in the service area of the HMO. As such, the

recipient would no longer be qualified to remain in the HMO, regardless

of the residency requirement. In addition, the effect of the residency

requirement on recipients of extended Medicaid is no different from the

effect of the residency requirement on any Medicaid eligible HMO

recipient who moves from the State.

Regulatory Procedures

Executive Impact Analysis

These regulations have been reviewed pursuant to Executive Order

12866 to ensure their consistency with the priorities and principles

set forth in that Executive Order. An assessment of the costs and

benefits of available regulatory alternatives (including not

regulating) demonstrated that the approach taken in the regulation is

the most cost-effective and least burdensome while achieving the

regulatory objectives.

Paperwork Reduction Act

There will be no reporting or record keeping requirements imposed

on the public or States which would require clearance by the Office of

Management and Budget.

Regulatory Flexibility Act

The Regulatory Flexibility Act (Pub. L. 96-354) requires the

Federal government to anticipate and reduce the impact of regulations

and paperwork requirements on small businesses. The primary impact of

these final rules is on State governments and individuals. Therefore,

we certify that these rules will not have a significant economic impact

on a substantial number of small entities because they affect benefits

to individuals and payments to States. Thus, a regulatory flexibility

analysis as provided in Public Law 96-354, the Regulatory Flexibility

Act (RFA), is not required.

Section 1102(b) of the Social Security Act requires the Secretary

to prepare a regulatory impact analysis if a rule may have a

significant impact on the operations of a substantial number of small

rural hospitals. Such an analysis must conform to the provisions of

section 603 of the RFA. For purposes of section 1102(b) of the Act, we

define a small rural hospital as a hospital which is located outside of

a Metropolitan Statistical Area and has fewer than 50 beds.

We are not preparing a rural impact statement since we have

determined, and the Secretary certifies, that this final rule will not

have a significant economic impact on the operations of a substantial

number of small rural hospitals.

List of Subjects

42 CFR Part 435

Aid to Families with Dependent Children, Grant programs--health,

Medicaid, reporting and record keeping, Supplemental Security Income

(SSI), Wages.

42 CFR Part 436

Aid to Families with Dependent Children, Grant programs--health,

Guam, Medicaid, Puerto Rico, Supplemental Security Income (SSI), Virgin

Islands.

45 CFR Part 233

Aliens, Grant programs--social programs, Public assistance

programs, Reporting and record keeping requirements.

(Catalog of Federal Domestic Assistance Program No. 13.714, Medical

Assistance Program: 13.780, Assistance Payments Maintenance

Assistance.)

Dated: April 4, 1994.

Mary Jo Bane,

Assistant Secretary for Children and Families.

Dated: April 24, 1994.

Bruce C. Vladeck,

Administrator, Health Care Financing Administration.

Approved: November 4, 1994.

Donna E. Shalala,

Secretary of Health and Human Services.

For the reasons set forth in the preamble, parts 435 and 436 of

chapter IV, title 42 and part 233 of chapter II, title 45, Code of

Federal Regulations, are amended as set forth below:

Health Care Financing Administration

42 CFR Chapter IV

PART 435--ELIGIBILITY IN THE STATES, DISTRICT OF COLUMBIA, THE

NORTHERN MARIANA ISLANDS, AND AMERICAN SAMOA

1. The authority citation for Part 435 continues to read as

follows:

Authority: Section 1102 of the Social Security Act (42 U.S.C.

1302).

2. Section 435.115 is amended by adding new paragraphs (f), (g),

and (h) to read as follows:

Sec. 435.115 Individuals deemed to be receiving AFDC.

* * * * *

(f) The State must deem an individual to be receiving AFDC if a new

collection or increased collection of child or spousal support under

title IV-D of the Social Security Act results in the termination of

AFDC eligibility in accordance with section 406(h) of the Social

Security Act. States must continue to provide Medicaid for four

consecutive calendar months, beginning with the first month of AFDC

ineligibility, to each dependent child and each relative with whom such

a child is living (including the eligible spouse of such relative as

described in section 406(b) of the Social Security Act) who:

(1) Becomes ineligible for AFDC on or after August 16, 1984; and

(2) Has received AFDC for at least three of the six months

immediately preceding the month in which the individual becomes

ineligible for AFDC; and

(3) Becomes ineligible for AFDC wholly or partly as a result of the

initiation of or an increase in the amount of the child or spousal

support collection under title IV-D.

(g)(1) Except as provided in paragraph (g)(2) of this section,

individuals who are eligible for extended Medicaid lose this coverage

if they move to another State during the 4-month period. However, if

they move back to and reestablish residence in the State in which they

have extended coverage, they are eligible for any of the months

remaining in the 4-month period in which they are residents of the

State.

(2) If a State has chosen in its State plan to provide Medicaid to

non-residents, the State may continue to provide the 4-month extended

benefits to individuals who have moved to another State.

(h) For purposes of paragraph (f) of this section:

(1) The new collection or increased collection of child or spousal

support results in the termination of AFDC eligibility when it actively

causes or contributes to the termination. This occurs when:

(i) The change in support collection in and of itself is sufficient

to cause ineligibility. This rule applies even if the support

collection must be added to other, stable income. It also applies even

if other independent factors, alone or in combination with each other,

might simultaneously cause ineligibility; or

(ii) The change in support contributes to ineligibility but does

not by itself cause ineligibility. Ineligibility must result when the

change in support is combined with other changes in income or changes

in other circumstances and the other changes in income or circumstances

cannot alone or in combination result in termination without the change

in support.

(2) In cases of increases in the amounts of both support

collections and earned income, eligibility under this section does not

preclude eligibility under 45 CFR 233.20(a)(14) or section 1925 of the

Social Security Act (which was added by section 303(a) of the Family

Support Act of 1988 (42 U.S.C. 1396r-6)). Extended periods resulting

from both an increase in the amount of the support collection and from

an increase in earned income must run concurrently.

PART 436--ELIGIBILITY IN GUAM, PUERTO RICO, AND THE VIRGIN ISLANDS

1. The authority citation for Part 436 continues to read as

follows:

Authority: Section 1102 of the Social Security Act (42 U.S.C.

1302).

2. Section 436.114 is amended by adding new paragraphs (f), (g),

and (h) to read as follows:

Sec. 436.114 Individuals deemed to be receiving AFDC.