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e-CFR
Data is current as of July 1, 2008

Title 7:
Agriculture
PART 273—CERTIFICATION OF ELIGIBLE HOUSEHOLDS

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§ 273.7   Work provisions.

(a) Work requirements. (1) As a condition of eligibility for
food stamps, each household member not exempt under paragraph (b)(1) of
this section must comply with the following Food Stamp Program work
requirements:

(i) Register for work or be registered by the State agency at the time
of application and every 12 months after initial registration. The member
required to register need not complete the registration form.

(ii) Participate in a Food Stamp Employment and Training (E&T)
program if assigned by the State agency, to the extent required by the
State agency;

(iii) Participate in a workfare program if assigned by the State
agency;

(iv) Provide the State agency or its designee with sufficient
information regarding employment status or availability for work;

(v) Report to an employer to whom referred by the State agency or its
designee if the potential employment meets the suitability requirements
described in paragraph (h) of this section;

(vi) Accept a bona fide offer of suitable employment, as defined in
paragraph (h) of this section, at a site or plant not subject to a strike
or lockout, at a wage equal to the higher of the Federal or State minimum
wage or 80 percent of the wage that would have governed had the minimum
hourly rate under section 6(a)(1) of the Fair Labor Standards Act been
applicable to the offer of employment.

(vii) Do not voluntarily and without good cause quit a job of 30 or
more hours a week or reduce work effort to less than 30 hours a week, in
accordance with paragraph (j) of this section.

(2) The Food and Nutrition Service (FNS) has defined the meaning of
“good cause,” and “voluntary quit,” and “reduction of work effort” as used
in paragraph (a)(1)(vii) of this section. See paragraph (i) of this
section for a discussion of good cause; see paragraph (j) of this section
for a discussion of voluntary quit and reduction of work effort.

(3) Each State agency will determine the meaning of any other terms
used in paragraph (a)(1) of this section; the procedures for establishing
compliance with Food Stamp Program work requirements; and whether an
individual is complying with Food Stamp Program work requirements. A State
agency must not use a meaning, procedure, or determination that is less
restrictive on food stamp recipients than is a comparable meaning,
procedure, or determination under the State agency's program funded under
title IV-A of the Social Security Act.

(4) Strikers whose households are eligible under the criteria in
§273.1(e) are subject to Food Stamp Program work requirements unless they
are exempt under paragraph (b)(1) of this section at the time of
application.

(5) State agencies may request approval from FNS to substitute State or
local procedures for work registration for PA households not subject to
the work requirements under title IV of the Social Security Act or for GA
households. However, the failure of a household member to comply with
State or local work requirements that exceed the requirements listed in
this section must not be considered grounds for disqualification. Work
requirements imposed on refugees participating in refugee resettlement
programs may also be substituted, with FNS approval.

(6) Household members who are applying for SSI and for food stamps
under §273.2(k)(1)(i) will have Food Stamp Program work requirements
waived until they are determined eligible for SSI and become exempt from
Food Stamp Program work requirements, or until they are determined
ineligible for SSI, at which time their exemptions from Food Stamp Program
work requirements will be reevaluated.

(b) Exemptions from work requirements. (1) The following persons
are exempt from Food Stamp Program work requirements:

(i) A person younger than 16 years of age or a person 60 years of age
or older. A person age 16 or 17 who is not the head of a household or who
is attending school, or is enrolled in an employment training program, on
at least a half-time basis, is also exempt. If the person turns 16 (or 18
under the preceding sentence) during a certification period, the State
agency must register the person as part of the next scheduled
recertification process, unless the person qualifies for another
exemption.

(ii) A person physically or mentally unfit for employment. For the
purposes of this paragraph (b), a State agency will define physical and
mental fitness; establish procedures for verifying; and will verify
claimed physical or mental unfitness when necessary. However, the State
agency must not use a definition, procedure for verification, or
verification that is less restrictive on food stamp recipients than a
comparable meaning, procedure, or determination under the State agency's
program funded under title IV-A of the Social Security Act.

(iii) A person subject to and complying with any work requirement under
title IV of the Social Security Act. If the exemption claimed is
questionable, the State agency is responsible for verifying the
exemption.

(iv) A parent or other household member responsible for the care of a
dependent child under 6 or an incapacitated person. If the child has his
or her 6th birthday during a certification period, the State agency must
work register the individual responsible for the care of the child as part
of the next scheduled recertification process, unless the individual
qualifies for another exemption.

(v) A person receiving unemployment compensation. A person who has
applied for, but is not yet receiving, unemployment compensation is also
exempt if that person is complying with work requirements that are part of
the Federal-State unemployment compensation application process. If the
exemption claimed is questionable, the State agency is responsible for
verifying the exemption with the appropriate office of the State
employment services agency.

(vi) A regular participant in a drug addiction or alcoholic treatment
and rehabilitation program.

(vii) An employed or self-employed person working a minimum of 30 hours
weekly or earning weekly wages at least equal to the Federal minimum wage
multiplied by 30 hours. This includes migrant and seasonal farm workers
under contract or similar agreement with an employer or crew chief to
begin employment within 30 days (although this will not prevent
individuals from seeking additional services from the State employment
services agency). For work registration purposes, a person residing in
areas of Alaska designated in §274.10(a)(4)(iv) of this chapter, who
subsistence hunts and/or fishes a minimum of 30 hours weekly (averaged
over the certification period) is considered exempt as self-employed. An
employed or self-employed person who voluntarily and without good cause
reduces his or her work effort and, after the reduction, is working less
than 30 hours per week, is ineligible to participate in the Food Stamp
Program under paragraph (j) of this section.

(viii) A student enrolled at least half-time in any recognized school,
training program, or institution of higher education. Students enrolled at
least half-time in an institution of higher education must meet the
student eligibility requirements listed in §273.5. A student will remain
exempt during normal periods of class attendance, vacation, and recess. If
the student graduates, enrolls less than half-time, is suspended or
expelled, drops out, or does not intend to register for the next normal
school term (excluding summer), the State agency must work register the
individual, unless the individual qualifies for another exemption.

(2)(i) Persons losing exemption status due to any changes in
circumstances that are subject to the reporting requirements of §273.12
must register for employment when the change is reported. If the State
agency does not use a work registration form, it must annotate the change
to the member's exemption status. If a work registration form is used, the
State agency is responsible for providing the participant with a work
registration form when the change is reported. Participants are
responsible for returning the completed form to the State agency within 10
calendar days from the date the form was handed to the household member
reporting the change in person, or the date the State agency mailed the
form. If the participant fails to return the completed form, the State
agency must issue a notice of adverse action stating that the participant
is being terminated and why, but that the termination can be avoided by
returning the form.

(ii) Those persons who lose their exemption due to a change in
circumstances that is not subject to the reporting requirements of §273.12
must register for employment at their household's next
recertification.

(c) State agency responsibilities. (1) The State agency must
register for work each household member not exempted by the provisions of
paragraph (b)(1) of this section. As part of the work registration
process, the State agency must explain to the individual the pertinent
work requirements, the rights and responsibilities of work-registered
household members, and the consequences of failure to comply. The State
agency must provide a written statement of the above to each individual in
the household who is registered for work. A notice must also be provided
when a previously exempt individual or new household member becomes
subject to a work requirement, and at recertification. The State agency
must permit the applicant to complete a record or form for each household
member required to register for employment in accordance with paragraph
(a)(1)(i) of this section. Household members are considered to have
registered when an identifiable work registration form is submitted to the
State agency or when the registration is otherwise annotated or recorded
by the State agency.

(2) The State agency is responsible for screening each work registrant
to determine whether or not it is appropriate, based on the State agency's
criteria, to refer the individual to an E&T program, and if
appropriate, referring the individual to an E&T program component.
Upon entry into each component, the State agency must inform the
participant, either orally or in writing, of the requirements of the
component, what will constitute noncompliance and the sanctions for
noncompliance. The State agency may, with FNS approval, use intake and
sanction systems that are compatible with its title IV-A work program.
Such systems must be proposed and explained in the State agency's E&T
State Plan.

(3) The State agency must issue a notice of adverse action to an
individual, or to a household if appropriate, within 10 days after
learning of the individual's noncompliance with Food Stamp Program work
requirements. The notice of adverse action must meet the timeliness and
adequacy requirements of §273.13. If the individual complies before the
end of the advance notice period, the State agency will cancel the adverse
action. If the State agency offers a conciliation process as part of its
E&T program, it must issue the notice of adverse action no later than
the end of the conciliation period.

(4) The State agency must design and operate an E&T program that
may consist of one or more or a combination of employment and/or training
components as described in paragraph (e)(1) of this section. The State
agency must ensure that it is notified by the agency or agencies operating
its E&T components within 10 days if an E&T mandatory participant
fails to comply with E&T requirements.

(5) Each component of the State agency's E&T program must be
delivered through its statewide workforce development system, unless the
component is not available locally through such a system.

(6) In accordance with §272.2(d) and §272.2(e) of this chapter, the
State agency must prepare and submit an E&T Plan to its appropriate
FNS Regional Office. The E&T Plan must be available for public
inspection at the State agency headquarters. In its E&T Plan, the
State agency will detail the following:

(i) The nature of the E&T components the State agency plans to
offer and the reasons for such components, including cost information. The
methodology for State agency reimbursement for education components must
be specifically addressed;

(ii) An operating budget for the Federal fiscal year with an estimate
of the cost of operation for one full year. Any State agency that requests
50 percent Federal reimbursement for State agency E&T administrative
costs, other than for participant reimbursements, must include in its
plan, or amendments to its plan, an itemized list of all activities and
costs for which those Federal funds will be claimed, including the costs
for case management and casework to facilitate the transition from
economic dependency to self-sufficiency through work. Costs in excess of
the Federal grant will be allowed only with the prior approval of FNS and
must be adequately documented to assure that they are necessary,
reasonable and properly allocated;

(iii) The categories and types of individuals the State agency intends
to exempt from E&T participation, the estimated percentage of work
registrants the State agency plans to exempt, and the frequency with which
the State agency plans to reevaluate the validity of its exemptions;

(iv) The characteristics of the population the State agency intends to
place in E&T;

(v) The estimated number of volunteers the State agency expects to
place in E&T;

(vi) The geographic areas covered and not covered by the E&T Plan
and why, and the type and location of services to be offered;

(vii) The method the State agency uses to count all work registrants as
of the first day of the new fiscal year;

(viii) The method the State agency uses to report work registrant
information on the quarterly Form FNS–583;

(ix) The method the State agency uses to prevent work registrants from
being counted twice within a Federal fiscal year. If the State agency
universally work registers all food stamp applicants, this method must
specify how the State agency excludes those exempt from work registration
under paragraph (b)(1) of this section. If the State agency work registers
nonexempt participants whenever a new application is submitted, this
method must also specify how the State agency excludes those participants
who may have already been registered within the past 12 months as
specified under paragraph (a)(1)(i) of this section;

(x) The organizational relationship between the units responsible for
certification and the units operating the E&T components, including
units of the statewide workforce development system, if available. FNS is
specifically concerned that the lines of communication be efficient and
that noncompliance be reported to the certification unit within 10 working
days after the noncompliance occurs;

(xi) The relationship between the State agency and other organizations
it plans to coordinate with for the provision of services, including
organizations in the statewide workforce development system, if available.
Copies of contracts must be available for inspection;

(xii) The availability, if appropriate, of E&T programs for Indians
living on reservations;

(xiii) If a conciliation process is planned, the procedures that will
be used when an individual fails to comply with an E&T program
requirement. Include the length of the conciliation period; and

(xiv) The payment rates for child care established in accordance with
the Child Care and Development Block Grant provisions of 45 CFR 98.43, and
based on local market rate surveys.

(xv) The combined (Federal/State) State agency reimbursement rate for
transportation costs and other expenses reasonably necessary and directly
related to participation incurred by E&T participants. If the State
agency proposes to provide different reimbursement amounts to account for
varying levels of expenses, for instance for greater or lesser costs of
transportation in different areas of the State, it must include them
here.

(xvi) Information about expenses the State agency proposes to
reimburse. FNS must be afforded the opportunity to review and comment on
the proposed reimbursements before they are implemented.

(7) A State agency interested in receiving additional funding for
serving able-bodied adults without dependents (ABAWDs) subject to the
3-month time limit, in accordance with paragraph (d)(3) of this section,
must include in its annual E&T plan:

(i) Its pledge to offer a qualifying activity to all at-risk ABAWD
applicants and recipients;

(ii) Estimated costs of fulfilling its pledge;

(iii) A description of management controls in place to meet pledge
requirements;

(iv) A discussion of its capacity and ability to serve at-risk
ABAWDs;

(v) Information about the size and special needs of its ABAWD
population; and

(vi) Information about the education, training, and workfare components
it will offer to meet the ABAWD work requirement.

(8) The State agency will submit its E&T Plan annually, at least 45
days before the start of the Federal fiscal year. The State agency must
submit plan revisions to the appropriate FNS regional office for approval
if it plans to alter the nature or location of its components or the
number or characteristics of persons served. The proposed changes must be
submitted for approval at least 30 days prior to planned
implementation.

(9) The State agency will submit an E&T Program Activity Report to
FNS no later than 45 days after the end of each Federal fiscal quarter.
The report will contain monthly figures for:

(i) Participants newly work registered;

(ii) Number of ABAWD applicants and recipients participating in
qualifying components;

(iii) Number of all other applicants and recipients (including ABAWDs
involved in non-qualifying activities) participating in components;
and

(iv) ABAWDs subject to the 3-month time limit imposed in accordance
with §273.24(b) who are exempt under the State agency's 15 percent
exemption allowance under §273.24(g).

(10) The State agency will submit annually, on its first quarterly
report, the number of work registrants in the State on October 1 of the
new fiscal year.

(11) The State agency will submit annually, on its final quarterly
report:

(i) A list of E&T components it offered during the fiscal year and
the number of ABAWDs and non-ABAWDs who participated in each; and

(ii) The number of ABAWDs and non-ABAWDs who participated in the
E&T Program during the fiscal year. Each individual must be counted
only once.

(12) Additional information may be required of the State agency, on an
as needed basis, regarding the type of components offered and the
characteristics of persons served, depending on the contents of its
E&T Plan.

(13) The State agency must ensure, to the maximum extent practicable,
that E&T programs are provided for Indians living on reservations.

(14) If a benefit overissuance is discovered for a month or months in
which a mandatory E&T participant has already fulfilled a work
component requirement, the State agency must follow the procedure
specified in paragraph (m)(6)(v) of this section for a workfare
overissuance.

(15) If a State agency fails to efficiently and effectively administer
its E&T program, the provisions of §276.1(a)(4) of this chapter will
apply.

(d) Federal financial participation —(1) Employment and
training grants —(i) Allocation of grants. Each State agency
will receive a 100 percent Federal grant each fiscal year to operate an
E&T program in accordance with paragraph (e) of this section. The
grant requires no State matching.

(A) In determining each State agency's 100 percent Federal E&T
grant, FNS will apply the percentage determined in accordance with
paragraph (d)(1)(i)(B) of this section to the total amount of 100 percent
Federal funds authorized under section 16(h)(1)(A) of the Act for each
fiscal year.

(B) FNS will allocate the funding available each fiscal year for
E&T grants using a formula designed to ensure that each State agency
receives its appropriate share.

( 1 ) Ninety percent of the annual 100 percent Federal E&T
grant will be allocated based on the number of work registrants in each
State as a percentage of work registrants nationwide. FNS will use work
registrant data reported by each State agency on the FNS–583, Employment
and Training Program Activity Report, from the most recent Federal fiscal
year.

( 2 ) Ten percent of the annual 100 percent Federal E&T
grant will be allocated based on the number of ABAWDs in each State, as
determined by food stamp QC data for the most recently available completed
fiscal year, which provide a breakdown of each State's population of
adults age 18 through 49 who are not disabled and who do not live with
children.

(C) No State agency will receive less than $50,000 in Federal E&T
funds. To ensure this, FNS will, if necessary, reduce the grant of each
State agency allocated more than $50,000. In order to guarantee an
equitable reduction, FNS will calculate grants as follows. First,
disregarding those State agencies scheduled to receive less than $50,000,
FNS will calculate each remaining State agency's percentage share of the
fiscal year's E&T grant. Next, FNS will multiply the grant—less
$50,000 for every State agency under the minimum—by each remaining State
agency's same percentage share to arrive at the revised amount. The
difference between the original and the revised amounts will represent
each State agency's contribution. FNS will distribute the funds from the
reduction to State agencies initially allocated less than $50,000.

(D) If a State agency will not obligate or expend all of the funds
allocated to it for a fiscal year under paragraph (d)(1)(i)(B) of this
section, FNS will reallocate the unobligated, unexpended funds to other
State agencies during the fiscal year or the subsequent fiscal year on a
first come-first served basis. Each year FNS will notify all State
agencies of the availability of carryover funding. Interested State
agencies must submit their requests for carryover funding to FNS. If the
requests are determined reasonable and necessary, FNS will allocate
carryover funding to meet some or all of the State agencies' requests, as
it considers appropriate and equitable. The factors that FNS will consider
when reviewing a State agency's request will include the size of the
request relative to the level of the State agency's E&T spending in
prior years, the specificity of the State agency's plan for spending
carryover funds, and the quality of program and scope of impact for the
State's E&T program and proposed use of carryover funds.

(ii) Use of Funds. (A) A State agency must use E&T program
grants to fund the administrative costs of planning, implementing and
operating its food stamp E&T program in accordance with its approved
State E&T plan. E&T grants must not be used for the process of
determining whether an individual must be work registered, the work
registration process, or any further screening performed during the
certification process, nor for sanction activity that takes place after
the operator of an E&T component reports noncompliance without good
cause. For purposes of this paragraph (d), the certification process is
considered ended when an individual is referred to an E&T component
for assessment or participation. E&T grants may also not be used to
subsidize the wages of participants, or to reimburse participants under
paragraph (d)(3) of this section.

(B) A State agency's receipt of its 100 percent Federal E&T grant
is contingent on FNS's approval of the State agency's E&T plan. If an
adequate plan is not submitted, FNS may reallocate a State agency's grant
among other State agencies with approved plans. Non-receipt of an E&T
grant does not release a State agency from its responsibility under
paragraph (c)(4) of this section to operate an E&T program.

(C) Federal funds made available to a State agency to operate an
educational component under paragraph (e)(1)(vi) of this section must not
be used to supplant nonfederal funds for existing educational services and
activities that promote the purposes of this component. Education expenses
are approvable to the extent that E&T component costs exceed the
normal cost of services provided to persons not participating in an
E&T program.

(D) In accordance with section 6(d)(4)(K) of the Food Stamp Act, and
notwithstanding any other provision of this paragraph (d), the amount of
Federal E&T funds, including participant and dependent care
reimbursements, a State agency uses to serve participants who are
receiving cash assistance under a State program funded under title IV-A of
the Social Security Act must not exceed the amount of Federal E&T
funds the State agency used in FY 1995 to serve participants who were
receiving cash assistance under a State program funded under title IV-A of
the Social Security Act.

( 1 ) Based on information provided by each State agency, FNS
established claimed Federal E&T expenditures on this category of
recipients in fiscal year 1995 for the State agencies of Colorado
($318,613), Utah ($10,200), Vermont ($1,484,913), and Wisconsin
($10,999,773). These State agencies may spend up to a like amount each
fiscal year to serve food stamp recipients who also receive title IV
assistance.

( 2 ) All other State agencies are prohibited from expending any
Federal E&T funds on title IV cash assistance recipients.

(2) Additional administrative costs. Fifty percent of all other
administrative costs incurred by State agencies in operating E&T
programs, above the costs referenced in paragraph (d)(1) of this section,
will be funded by the Federal government.

(3) Additional allocations. In addition to the E&T program
grants discussed in paragraph (d)(1) of this section, FNS will allocate
$20 million in Federal funds each fiscal year to State agencies that
ensure availability of education, training, or workfare opportunities that
permit ABAWDs to remain eligible beyond the 3-month time limit.

(i) To be eligible, a State agency must make and comply with a
commitment, or “pledge,” to use these additional funds to defray the cost
of offering a position in an education, training, or workfare component
that fulfills the ABAWD work requirement, as defined in §273.24(a), to
each applicant and recipient who is:

(A) In the last month of the 3-month time limit described in
§273.24(b);

(B) Not eligible for an exception to the 3-month time limit under
§273.24(c);

(C) Not a resident of an area of the State granted a waiver of the
3-month time limit under §273.24(f); and

(D) Not included in each State agency's 15 percent ABAWD exemption
allotment under §273.24(g).

(ii) While a participating pledge State may use a portion of the
additional funding to provide E&T services to ABAWDs who do not meet
the criteria discussed in paragraph (d)(3)(i) of this section, it must
guarantee that the ABAWDs who do meet the criteria are provided the
opportunity to remain eligible.

(iii) State agencies will have one opportunity each fiscal year to take
the pledge described in paragraph (d)(3)(i) of this section. An interested
State agency, in its E&T Plan for the upcoming fiscal year, must
include the following:

(A) A request to be considered as a pledge State, along with its
commitment to comply with the requirements of paragraph (d)(3)(i) of this
section;

(B) The estimated costs of complying with its pledge;

(C) A description of management controls it has established to meet the
requirements of the pledge;

(D) A discussion of its capacity and ability to serve vulnerable
ABAWDs;

(E) Information about the size and special needs of the State's ABAWD
population; and

(F) Information about the education, training, and workfare components
that it will offer to allow ABAWDs to remain eligible.

(iv) If the information provided in accordance with paragraph
(d)(3)(iii) of this section clearly indicates that the State agency will
be unable to fulfill its commitment, FNS may require the State agency to
address its deficiencies before it is allowed to participate as a pledge
State.

(v) If the State agency does not address its deficiencies by the
beginning of the new fiscal year on October 1, it will not be allowed to
participate as a pledge State.

(vi) No pledges will be accepted after the beginning of the fiscal
year.

(vii)(A) Once FNS determines how many State agencies will participate
as pledge States in the upcoming fiscal year, it will, as early in the
fiscal year as possible, allocate among them the $20 million based on the
number of ABAWDs in each participating State, as a percentage of ABAWDs in
all the participating States. FNS will determine the number of ABAWDs in
each participating State using food stamp QC data for the most recently
available completed fiscal year, which provide a breakdown of each State's
population of adults age 18 through 49 who are not disabled and who do not
live with children.

(B) Each participating State agency's share of the $20 million will be
disbursed in accordance with paragraph (d)(6) of this section.

(C) Each participating State agency must meet the fiscal recordkeeping
and reporting requirements of paragraph (d)(7) of this section.

(viii) If a participating State agency notifies FNS that it will not
obligate or expend its entire share of the additional funding allocated to
it for a fiscal year, FNS will reallocate the unobligated, unexpended
funds to other participating State agencies during the fiscal year, as it
considers appropriate and equitable, on a first come-first served basis.
FNS will notify other pledge States of the availability of additional
funding. To qualify, a pledge State must have already obligated its entire
annual 100 percent Federal E&T grant, excluding an amount that is
proportionate to the number of months remaining in the fiscal year, and it
must guarantee in writing that it intends to obligate its entire grant by
the end of the fiscal year. A State's annual 100 percent Federal E&T
grant is its share of the regular 100 percent Federal E&T allocation
plus its share of the additional $20 million (if applicable). Interested
pledge States must submit their requests for additional funding to FNS.
FNS will review the requests and, if they are determined reasonable and
necessary, will reallocate some or all of the unobligated, unspent ABAWD
funds.

(ix) Unlike the funds allocated in accordance with paragraph (d)(1) of
this section, the additional pledge funding will not remain available
until obligated or expended. Unobligated funds from this grant must be
returned to the U.S. Treasury at the end of each fiscal year.

(x) The cost of serving at-risk ABAWDs is not an acceptable reason to
fail to live up to the pledge. A slot must be made available and the ABAWD
must be served even if the State agency exhausts all of its 100 percent
Federal E&T funds and must use State funds to guarantee an opportunity
for all at-risk ABAWDs to remain eligible beyond the 3-month time limit.
State funds expended in accordance with the approved State E&T Plan
are eligible for 50 percent Federal match. If a participating State agency
fails, without good cause, to meet its commitment, it may be disqualified
from participating in the subsequent fiscal year or years.

(4) Participant reimbursements. The State agency must provide
payments to participants in its E&T program, including applicants and
volunteers, for expenses that are reasonably necessary and directly
related to participation in the E&T program. The Federal government
will fund 50 percent of State agency payments for allowable expenses,
except that Federal matching for dependent care expenses is limited to the
maximum amount specified in paragraph (d)(4)(i) of this section. These
payments may be provided as a reimbursement for expenses incurred or in
advance as payment for anticipated expenses in the coming month. The State
agency must inform each E&T participant that allowable expenses up to
the amounts specified in paragraphs (d)(4)(i) and (d)(4)(ii) of this
section will be reimbursed by the State agency upon presentation of
appropriate documentation. Reimbursable costs may include, but are not
limited to, dependent care costs, transportation, and other work, training
or education related expenses such as uniforms, personal safety items or
other necessary equipment, and books or training manuals. These costs must
not include the cost of meals away from home. If applicable, any allowable
costs incurred by a noncompliant E&T participant after the expiration
of the noncompliant participant's minimum mandatory disqualification
period, as established by the State agency, that are reasonably necessary
and directly related to reestablishing eligibility, as defined by the
State agency, are reimbursable under paragraphs (d)(4)(i) and (d)(4)(ii)
of this section. The State agency may reimburse participants for expenses
beyond the amounts specified in paragraphs (d)(4)(i) of this section;
however, only costs that are up to but not in excess of those amounts are
subject to Federal cost sharing. Reimbursement must not be provided from
E&T grants allocated under paragraph (d)(1)(i) of this section. Any
expense covered by a reimbursement under this section is not deductible
under §273.10(d)(1)(i).

(i) The State agency will reimburse the cost of dependent care it
determines to be necessary for the participation of a household member in
the E&T program up to the actual cost of dependent care, or the
applicable payment rate for child care, whichever is lowest. The payment
rates for child care are established in accordance with the Child Care and
Development Block Grant provisions of 45 CFR 98.43, and are based on local
market rate surveys. The State agency will provide a dependent care
reimbursement to an E&T participant for all dependents requiring care
unless otherwise prohibited by this section. The State agency will not
provide a reimbursement for a dependent age 13 or older unless the
dependent is physically and/or mentally incapable of caring for himself or
herself or is under court supervision. The State agency must provide a
reimbursement for all dependents who are physically and/or mentally
incapable of caring for themselves or who are under court supervision,
regardless of age, if dependent care is necessary for the participation of
a household member in the E&T program. The State agency will obtain
verification of the physical and/or mental incapacity for dependents age
13 or older if the physical and/or mental incapacity is questionable.
Also, the State agency will verify a court-imposed requirement for the
supervision of a dependent age 13 or older if the need for dependent care
is questionable. If more than one household member is required to
participate in an E&T program, the State agency will reimburse the
actual cost of dependent care or the applicable payment rate for child
care, whichever is lowest, for each dependent in the household, regardless
of the number of household members participating in the E&T program.
An individual who is the caretaker relative of a dependent in a family
receiving cash assistance under title IV-A of the Social Security Act in a
local area where an employment, training, or education program under title
IV-A is in operation is not eligible for such reimbursement. An E&T
participant is not entitled to the dependent care reimbursement if a
member of the E&T participant's food stamp household provides the
dependent care services. The State agency must verify the participant's
need for dependent care and the cost of the dependent care prior to the
issuance of the reimbursement. The verification must include the name and
address of the dependent care provider, the cost and the hours of service
(e.g., five hours per day, five days per week for two weeks). A
participant may not be reimbursed for dependent care services beyond that
which is required for participation in the E&T program. In lieu of
providing reimbursements for dependent care expenses, a State agency may
arrange for dependent care through providers by the use of purchase of
service contracts, by providing vouchers to the household or by other
means. A State agency may require that dependent care provided or arranged
by the State agency meet all applicable standards of State and local law,
including requirements designed to ensure basic health and safety
protections (e.g., fire safety). An E&T participant may refuse
available appropriate dependent care as provided or arranged by the State
agency, if the participant can arrange other dependent care or can show
that such refusal will not prevent or interfere with participation in the
E&T program as required by the State agency.

(ii) The State agency will reimburse the actual costs of transportation
and other costs (excluding dependent care costs) it determines to be
necessary and directly related to participation in the E&T program up
the maximum level of reimbursement established by the State agency. Such
costs are the actual costs of participation unless the State agency has a
method approved in its E&T Plan for providing allowances to
participants to reflect approximate costs of participation. If a State
agency has an approved method to provide allowances rather than
reimbursements, it must provide participants an opportunity to claim
actual expenses up to the maximum level of reimbursements established by
the State agency.

(iii) No participant cost that has been reimbursed under a workfare
program under paragraph (m)(7)(i) of this section, title IV of the Social
Security Act or other work program will be reimbursed under this
section.

(iv) Any portion of dependent care costs that are reimbursed under this
section may not be claimed as an expense and used in calculating the
dependent care deduction under §273.9(d)(4) for determining benefits.

(v) The State agency must inform all mandatory E&T participants
that they may be exempted from E&T participation if their monthly
expenses that are reasonably necessary and directly related to
participation in the E&T program exceed the allowable reimbursement
amount. Persons for whom allowable monthly expenses in an E&T
component exceed the amounts specified under paragraphs (d)(4)(i) and
(d)(4)(ii) of this section are not required to participate in that
component. These individuals will be placed, if possible, in another
suitable component in which the individual's monthly E&T expenses
would not exceed the allowable reimbursable amount paid by the State
agency. If a suitable component is not available, these individuals will
be exempt from E&T participation until a suitable component is
available or the individual's circumstances change and his/her monthly
expenses do not exceed the allowable reimbursable amount paid by the State
agency. Dependent care expenses incurred that are otherwise allowable but
not reimbursed because they exceed the reimbursable amount specified under
paragraph (d)(4)(i) of this section will be considered in determining a
dependent care deduction under §273.9(d)(4).

(5) Workfare cost sharing. Enhanced cost-sharing due to
placement of workfare participants in paid employment is available only
for workfare programs funded under paragraph (m)(7)(iv) of this section at
the 50 percent reimbursement level and reported as such.

(6) Funding mechanism. E&T program funding will be disbursed
through States' Letters of Credit in accordance with §277.5 of this
chapter. The State agency must ensure that records are maintained that
support the financial claims being made to FNS.

(7) Fiscal recordkeeping and reporting requirements. Total
E&T expenditures are reported on the Financial Status Report (SF–269)
in the column containing “other” expenses. E&T expenditures are also
separately identified in an attachment to the SF–269 to show, as provided
in instructions, total State and Federal E&T expenditures;
expenditures funded with the unmatched Federal grants; State and Federal
expenditures for participant reimbursements; State and Federal
expenditures for E&T costs at the 50 percent reimbursement level; and
State and Federal expenditures for optional workfare program costs,
operated under section 20 of the Food Stamp Act and paragraph (m)(7) of
this section. Claims for enhanced funding for placements of participants
in employment after their initial participation in the optional workfare
program will be submitted in accordance with paragraph (m)(7)(iv) of this
section.

(e) Employment and training programs. Work registrants not
otherwise exempted by the State agency are subject to the E&T program
participation requirements imposed by the State agency. Such individuals
are referred to in this section as E&T mandatory participants.
Requirements may vary among participants. Failure to comply without good
cause with the requirements imposed by the State agency will result in
disqualification as specified in paragraph (f)(2) of this section.

(1) Components. To be considered acceptable by FNS, any
component offered by a State agency must entail a certain level of effort
by the participants. The level of effort should be comparable to spending
approximately 12 hours a month for two months making job contacts (less in
workfare or work experience components if the household's benefit divided
by the minimum wage is less than this amount). However, FNS may approve
components that do not meet this guideline if it determines that such
components will advance program goals. An initial screening by an
eligibility worker to determine whom to place in an E&T program does
not constitute a component. The State agency may require Food Stamp
Program applicants to participate in any component it offers in its
E&T program at the time of application. The State agency must not
impose requirements that would delay the determination of an individual's
eligibility for benefits or in issuing benefits to any household that is
otherwise eligible. In accordance with section 6(o)(1)(A) of the Food
Stamp Act and §273.24, job search and job search training, when offered as
components of an E&T program, are not qualifying activities relating
to the participation requirements necessary to maintain food stamp
eligibility for ABAWDs. However, job search or job search training
activities, when offered as part of other E&T program components, are
acceptable as long as those activities comprise less than half the total
required time spent in the components. An E&T program offered by a
State agency must include one or more of the following components:

(i) A job search program. The State agency may require an individual to
participate in job search from the time an application is filed for an
initial period established by the State agency. Following this initial
period (which may extend beyond the date when eligibility is determined)
the State agency may require an additional job search period in any period
of 12 consecutive months. The first such period of 12 consecutive months
will begin at any time following the close of the initial period. The
State agency may establish a job search period that, in its estimation,
will provide participants a reasonable opportunity to find suitable
employment. The State agency should not, however, establish a continuous,
year-round job search requirement. If a reasonable period of job search
does not result in employment, placing the individual in a training or
education component to improve job skills will likely be more productive.
In accordance with section 6(o)(1)(A) of the Food Stamp Act and §273.24, a
job search program is not a qualifying activity relating to the
participation requirements necessary to maintain food stamp eligibility
for ABAWDs. However, such a program, when operated under title I of the
WIA, or under section 236 of the Trade Act, is considered a qualifying
activity relating to the participation requirements necessary to maintain
food stamp eligibility for ABAWDs.

(ii) A job search training program that includes reasonable job search
training and support activities. Such a program may consist of job skills
assessments, job finding clubs, training in techniques for employability,
job placement services, or other direct training or support activities,
including educational programs determined by the State agency to expand
the job search abilities or employability of those subject to the program.
Job search training activities are approvable if they directly enhance the
employability of the participants. A direct link between the job search
training activities and job-readiness must be established for a component
to be approved. In accordance with section 6(o)(1) of the Food Stamp Act
and §273.24, a job search program is not a qualifying activity relating to
the participation requirements necessary to maintain food stamp
eligibility for ABAWDs. However, such a program, when operated under title
I of the WIA or under section 236 of the Trade Act, is considered a
qualifying activity relating to the participation requirements necessary
to maintain food stamp eligibility for ABAWDs.

(iii) A workfare program as described in paragraph (m) of this
section.

(A) The participation requirements of section 20(b) of the Food Stamp
Act and paragraphs (m)(5)(i)(A) and (m)(5)(i)(B) of this section for
individuals exempt from Food Stamp Program work requirements under
paragraphs (b)(1)(iii) and (b)(1)(v) of this section, are not applicable
to E&T workfare components.

(B) In accordance with section 20(e) of the Food Stamp Act and
paragraph (m)(6)(ii) of this section, the State agency may establish a job
search period of up to 30 days following certification prior to making a
workfare assignment. This job search activity is part of the workfare
assignment, and not a job search “program.” Participants are considered to
be participating in and complying with the requirements of workfare,
thereby meeting the participation requirement for ABAWDs.

(C) The sharing of workfare savings authorized under section 20(g) of
the Food Stamp Act and paragraph (m)(7)(iv) of this section are not
available for E&T workfare components.

(iv) A program designed to improve the employability of household
members through actual work experience or training, or both, and to enable
individuals employed or trained under such programs to move promptly into
regular public or private employment. Such an employment or training
experience must:

(A) Not provide any work that has the effect of replacing the
employment of an individual not participating in the employment or
training experience program; and

(B) Provide the same benefits and working conditions that are provided
at the job site to employees performing comparable work for comparable
hours.

(v) A project, program or experiment such as a supported work program,
or a WIA or State or local program aimed at accomplishing the purpose of
the E&T program.

(vi) Educational programs or activities to improve basic skills or
otherwise improve employability including educational programs determined
by the State agency to expand the job search abilities or employability of
those subject to the program. Allowable educational activities may
include, but are not limited to, high school or equivalent educational
programs, remedial education programs to achieve a basic literacy level,
and instructional programs in English as a second language. Only
educational components that directly enhance the employability of the
participants are allowable. A direct link between the education and
job-readiness must be established for a component to be approved.

(vii) A program designed to improve the self-sufficiency of recipients
through self-employment. Included are programs that provide instruction
for self-employment ventures.

(2) Exemptions. Each State agency may, at its discretion, exempt
individual work registrants and categories of work registrants from
E&T participation. Each State agency must periodically reevaluate its
individual and categorical exemptions to determine whether they remain
valid. Each State agency will establish the frequency of its periodic
evaluation.

(3) Time spent in an employment and training program. (i) Each
State agency will determine the length of time a participant spends in any
E&T component it offers. The State agency may also determine the
number of successive components in which a participant may be placed.

(ii) The time spent by the members of a household collectively each
month in an E&T work program (including, but not limited to, those
carried out under paragraphs (e)(1)(iii) and (e)(1)(iv) of this section)
combined with any hours worked that month in a workfare program under
paragraph (m) of this section must not exceed the number of hours equal to
the household's allotment for that month divided by the higher of the
applicable Federal or State minimum wage. The total hours of participation
in an E&T component for any household member individually in any
month, together with any hours worked in a workfare program under
paragraph (m) of this section and any hours worked for compensation (in
cash or in kind), must not exceed 120.

(4) Voluntary participation. (i) A State agency may operate
program components in which individuals elect to participate.

(ii) A State agency must not disqualify voluntary participants in an
E&T component for failure to comply with E&T requirements.

(iii) The hours of participation or work of a volunteer may not exceed
the hours required of E&T mandatory participants, as specified in
paragraph (e)(3) of this section.

(f) Failure to comply —(1) Ineligibility for failure to
comply. A nonexempt individual who refuses or fails without good
cause, as defined in paragraphs (i)(2) and (i)(3) of this section, to
comply with the Food Stamp Program work requirements listed under
paragraph (a)(1) of this section is ineligible to participate in the Food
Stamp Program, and will be considered an ineligible household member,
pursuant to §273.1(b)(7).

(i) As soon as the State agency learns of the individual's
noncompliance it must determine whether good cause for the noncompliance
exists, as discussed in paragraph (i) of this section. Within 10 days of
establishing that the noncompliance was without good cause, the State
agency must provide the individual with a notice of adverse action, as
specified in §273.13. If the State agency offers a conciliation process as
part of its E&T program, it must issue the notice of adverse action no
later than the end of the conciliation period.

(ii) The notice of adverse action must contain the particular act of
noncompliance committed and the proposed period of disqualification. The
notice must also specify that the individual may, if appropriate, reapply
at the end of the disqualification period. Information must be included on
or with the notice describing the action that can be taken to avoid the
disqualification before the disqualification period begins. The
disqualification period must begin with the first month following the
expiration of the 10-day adverse notice period, unless a fair hearing is
requested.

(iii) An E&T disqualification may be imposed after the end of a
certification period. Thus, a notice of adverse action must be sent
whenever the State agency becomes aware of an individual's noncompliance
with Food Stamp Program work requirements, even if the disqualification
begins after the certification period expires and the household has not
been recertified.

(2) Disqualification periods. The following disqualification
periods will be imposed:

(i) For the first occurrence of noncompliance, the individual will be
disqualified until the later of:

(A) The date the individual complies, as determined by the State
agency;

(B) One month; or

(C) Up to three months, at State agency option.

(ii) For the second occurrence, until the later of:

(A) The date the individual complies, as determined by the State
agency;

(B) Three months; or

(C) Up to six months, at State agency option.

(iii) For the third or subsequent occurrence, until the later of:

(A) The date the individual complies, as determined by the State
agency;

(B) Six months;

(C) A date determined by the State agency; or

(D) At the option of the State agency, permanently.

(3) Record retention. In accordance with §272.1(f) of this
chapter, State agencies are required to retain records concerning the
frequency of noncompliance with FSP work requirements and the resulting
disqualification actions imposed. These records must be available for
inspection and audit at any reasonable time to ensure conformance with the
minimum mandatory disqualification periods instituted.

(4) Disqualification plan. In accordance with §272.2(d)(1)(xiii)
of this chapter, each State agency must prepare and submit a plan
detailing its disqualification policies. The plan must include the length
of disqualification to be enforced for each occurrence of noncompliance,
how compliance is determined by the State agency, and the State agency's
household disqualification policy.

(5) Household ineligibility. (i) If the individual who becomes
ineligible to participate under paragraph (f)(1) of this section is the
head of a household, the State agency, at its option, may disqualify the
entire household from Food Stamp Program participation.

(ii) The State agency may disqualify the household for a period that
does not exceed the lesser of:

(A) The duration of the ineligibility of the noncompliant individual
under paragraph (f)(2) of this section; or

(B) 180 days.

(iii) A household disqualified under this provision may reestablish
eligibility if:

(A) The head of the household leaves the household;

(B) A new and eligible person joins the household as the head of the
household, as defined in §273.1(d)(2); or

(C) The head of the household becomes exempt from work requirements
during the disqualification period.

(iv) If the head of the household joins another household as its head,
that household will be disqualified from participating in the Food Stamp
Program for the remaining period of ineligibility.

(6) Fair hearings. Each individual or household has the right to
request a fair hearing, in accordance with §273.15, to appeal a denial,
reduction, or termination of benefits due to a determination of nonexempt
status, or a State agency determination of failure to comply with Food
Stamp Program work requirements. Individuals or households may appeal
State agency actions such as exemption status, the type of requirement
imposed, or State agency refusal to make a finding of good cause if the
individual or household believes that a finding of failure to comply has
resulted from improper decisions on these matters. The State agency or its
designee operating the relevant component must receive sufficient advance
notice to either permit the attendance of a representative or ensure that
a representative will be available for questioning over the phone during
the hearing. A representative of the appropriate agency must be available
through one of these means. A household must be allowed to examine its
E&T component casefile at a reasonable time before the date of the
fair hearing, except for confidential information (that may include test
results) that the agency determines should be protected from release.
Confidential information not released to a household may not be used by
either party at the hearing. The results of the fair hearing are binding
on the State agency.

(7) Failure to comply with a work requirement under title IV of the
Social Security Act, or an unemployment compensation work requirement.
An individual exempt from Food Stamp Program work requirements by
paragraphs (b)(1)(iii) or (b)(1)(v) of this section because he or she is
subject to work requirements under title IV-A or unemployment compensation
who fails to comply with a title IV-A or unemployment compensation work
requirement will be treated as though he or she failed to comply with the
Food Stamp Program work requirement.

(i) When a food stamp household reports the loss or denial of title
IV-A or unemployment compensation benefits, or if the State agency
otherwise learns of a loss or denial, the State agency must determine
whether the loss or denial resulted when a household member refused or
failed without good cause to comply with a title IV-A or unemployment
compensation work requirement.

(ii) If the State agency determines that the loss or denial of benefits
resulted from an individual's refusal or failure without good cause to
comply with a title IV or unemployment compensation requirement, the
individual (or household if applicable under paragraph (f)(5) of this
section) must be disqualified in accordance with the applicable provisions
of this paragraph (f). However, if the noncomplying individual meets one
of the work registration exemptions provided in paragraph (b)(1) of this
section (other than the exemptions provided in paragraphs (b)(1)(iii) or
(b)(1)(v) of this section) the individual (or household if applicable
under paragraph (f)(5) of this section) will not be disqualified.

(iii) If the State agency determination of noncompliance with a title
IV-A or unemployment compensation work requirement leads to a denial or
termination of the individual's or household's food stamp benefits, the
individual or household has a right to appeal the decision in accordance
with the provisions of paragraph (f)(6) of this section.

(iv) In cases where the individual is disqualified from the title IV-A
program for refusal or failure to comply with a title IV-A work
requirement, but the individual meets one of the work registration
exemptions provided in paragraph (b)(1) of this section, other than the
exemption in paragraphs (b)(1)(iii) of this section, the State agency may,
at its option, apply the identical title IV-A disqualification on the
individual under the Food Stamp Program. The State agency must impose such
optional disqualifications in accordance with section 6(i) of the Food
Stamp Act and with the provisions of §273.11(1).

(g) Ending disqualification. Except in cases of permanent
disqualification, at the end of the applicable mandatory disqualification
period for noncompliance with Food Stamp Program work requirements,
participation may resume if the disqualified individual applies again and
is determined by the State agency to be in compliance with work
requirements. A disqualified individual may be permitted to resume
participation during the disqualification period (if otherwise eligible)
by becoming exempt from work requirements.

(h) Suitable employment. (1) Employment will be considered
suitable unless:

(i) The wage offered is less than the highest of the applicable Federal
minimum wage, the applicable State minimum wage, or eighty percent (80%)
of the Federal minimum wage if neither the Federal nor State minimum wage
is applicable.

(ii) The employment offered is on a piece-rate basis and the average
hourly yield the employee can reasonably be expected to earn is less than
the applicable hourly wages specified under paragraph (h)(1)(i) of this
section.

(iii) The household member, as a condition of employment or continuing
employment, is required to join, resign from, or refrain from joining any
legitimate labor organization.

(iv) The work offered is at a site subject to a strike or lockout at
the time of the offer unless the strike has been enjoined under section
208 of the Labor-Management Relations Act (29 U.S.C. 78) (commonly known
as the Taft-Hartley Act), or unless an injunction has been issued under
section 10 of the Railway Labor Act (45 U.S.C. 160).

(v) It fails to meet additional suitability criteria established by
State agencies.

(2) In addition, employment will be considered suitable unless the
household member involved can demonstrate or the State agency otherwise
becomes aware that:

(i) The degree of risk to health and safety is unreasonable.

(ii) The member is physically or mentally unfit to perform the
employment, as documented by medical evidence or by reliable information
from other sources.

(iii) The employment offered within the first 30 days of registration
is not in the member's major field of experience.

(iv) The distance from the member's home to the place of employment is
unreasonable considering the expected wage and the time and cost of
commuting. Employment will not be considered suitable if daily commuting
time exceeds 2 hours per day, not including the transporting of a child to
and from a child care facility. Nor will employment be considered suitable
if the distance to the place of employment prohibits walking and neither
public nor private transportation is available to transport the member to
the jobsite.

(v) The working hours or nature of the employment interferes with the
member's religious observances, convictions, or beliefs.

(i) Good Cause. (1) The State agency is responsible for
determining good cause when a food stamp recipient fails or refuses to
comply with Food Stamp Program work requirements. Since it is not possible
for the Department to enumerate each individual situation that should or
should not be considered good cause, the State agency must take into
account the facts and circumstances, including information submitted by
the employer and by the household member involved, in determining whether
or not good cause exists.

(2) Good cause includes circumstances beyond the member's control, such
as, but not limited to, illness, illness of another household member
requiring the presence of the member, a household emergency, the
unavailability of transportation, or the lack of adequate child care for
children who have reached age six but are under age 12.

(3) Good cause for leaving employment includes the good cause
provisions found in paragraph (i)(2) of this section, and resigning from a
job that is unsuitable, as specified in paragraphs (h)(1) and (h)(2) of
this section. Good cause for leaving employment also includes:

(i) Discrimination by an employer based on age, race, sex, color,
handicap, religious beliefs, national origin or political beliefs;

(ii) Work demands or conditions that render continued employment
unreasonable, such as working without being paid on schedule;

(iii) Acceptance of employment by the individual, or enrollment by the
individual in any recognized school, training program or institution of
higher education on at least a half time basis, that requires the
individual to leave employment;

(iv) Acceptance by any other household member of employment or
enrollment at least half-time in any recognized school, training program
or institution of higher education in another county or similar political
subdivision that requires the household to move and thereby requires the
individual to leave employment;

(v) Resignations by persons under the age of 60 which are recognized by
the employer as retirement;

(vi) Employment that becomes unsuitable, as specified in paragraphs
(h)(1) and (h)(2) of this section, after the acceptance of such
employment;

(vii) Acceptance of a bona fide offer of employment of more than 30
hours a week or in which the weekly earnings are equivalent to the Federal
minimum wage multiplied by 30 hours that, because of circumstances beyond
the individual's control, subsequently either does not materialize or
results in employment of less than 30 hours a week or weekly earnings of
less than the Federal minimum wage multiplied by 30 hours; and

(viii) Leaving a job in connection with patterns of employment in which
workers frequently move from one employer to another such as migrant farm
labor or construction work. There may be some circumstances where
households will apply for food stamp benefits between jobs particularly in
cases where work may not yet be available at the new job site. Even though
employment at the new site has not actually begun, the quitting of the
previous employment must be considered as with good cause if it is part of
the pattern of that type of employment.

(4) Verification. To the extent that the information given by
the household is questionable, as defined in §273.2(f)(2), State agencies
must request verification of the household's statements. The primary
responsibility for providing verification, as provided in §273.2(f)(5),
rests with the household.

(j) Voluntary quit and reduction of work effort —(1) Period
for establishing voluntary quit and reduction of work effort. For the
purpose of establishing that a voluntary quit without good cause or
reduction in work effort without good cause occurred prior to applying for
food stamps, a State agency may, at its option, choose a period between 30
and 60 days before application in which to determine voluntary quit or
reduction in work effort.

(2) Individual ineligibility. An individual is ineligible to
participate in the Food Stamp Program if, in a period established by the
State agency between 30 and 60 day before applying for food stamp benefits
or at any time thereafter, the individual:

(i) Voluntarily and without good cause quits a job of 30 hours a week
or more; or

(ii) Reduces his or her work effort voluntarily and without good cause
and, after the reduction, is working less than 30 hours per week.

(3) Determining whether a voluntary quit or reduction of work effort
occurred and application processing. (i) When a household files an
application for participation, or when a participating household reports
the loss of a source of income or a reduction in household earnings, the
State agency must determine whether any household member voluntarily quit
his or her job or reduced his or her work effort. Benefits must not be
delayed beyond the normal processing times specified in §273.2 pending the
outcome of this determination.

(ii) The voluntary quit provision applies if the employment involved 30
hours or more per week or provided weekly earnings at least equivalent to
the Federal minimum wage multiplied by 30 hours; the quit occurred within
a period established by the State agency between 30 to 60 days prior to
the date of application or anytime thereafter; and the quit was without
good cause. Changes in employment status that result from terminating a
self-employment enterprise or resigning from a job at the demand of the
employer will not be considered a voluntary quit for purposes of this
paragraph (j). An employee of the Federal Government, or of a State or
local government who participates in a strike against such government, and
is dismissed from his or her job because of participation in the strike,
will be considered to have voluntarily quit his or her job without good
cause. If an individual quits a job, secures new employment at comparable
wages or hours and is then laid off or, through no fault of his own, loses
the new job, the individual must not be disqualified for the earlier
quit.

(iii) The reduction of work effort provision applies if, before the
reduction, the individual was employed 30 hours or more per week; the
reduction occurred within a period established by the State agency between
30 and 60 days prior to the date of application or anytime thereafter; and
the reduction was voluntary and without good cause. If the individual
reduces his or her work hours to less than 30 a week, but continues to
earn weekly wages that exceed the Federal minimum wage multiplied by 30
hours, the individual remains exempt from Program work requirements, in
accordance with paragraph (b)(1)(vii) of this section, and the reduction
in work effort provision does not apply. Minor variations in the number of
hours worked or in the weekly minimum wage equivalent wages are inevitable
and must be taken into consideration when assessing a recipient's
compliance with Program work rules.

(iv) In the case of an applicant household, the State agency must
determine if any household member subject to Food Stamp Program work
requirements voluntarily quit his or her job or reduced his or her work
effort within a period established by the State agency between 30 and 60
days prior to date of application. If the State agency learns that a
household has lost a source of income or experienced a reduction in income
after the date of application but before the household is certified, the
State agency must determine whether a voluntary quit or reduction in work
effort occurred.

(v) Upon determining that an individual voluntarily quit employment or
reduced work effort, the State agency must determine if the voluntary quit
or reduction of work effort was with good cause as defined in paragraph
(i) of this section.

(vi) In the case of an individual who is a member of an applicant
household, if the voluntary quit or reduction in work effort was without
good cause, the individual will be determined ineligible to participate
and will be disqualified according to the State agency's established
minimum mandatory sanction schedule. The ineligible individual must be
considered an ineligible household member, pursuant to §273.1(b)(7). The
disqualification is effective upon the determination of eligibility for
the remaining household members. If the individual who becomes ineligible
is the head of the household, as defined in §273.1(d)(2), the State agency
may choose to disqualify the entire household, in accordance with
paragraph (f)(5) of this section. If the State agency chooses to
disqualify the household, the State agency must provide the applicant
household with a notice of denial in accordance with §273.2(g)(3). The
notice must inform the household of the proposed period of
disqualification; its right to reapply at the end of the disqualification
period; and of its right to a fair hearing. The household's
disqualification is effective upon the issuance of the notice of
denial.

(vii) In the case of an individual who is a member of a participating
household, if the State agency determines that the individual voluntarily
quit his or her job or reduced his or her work effort without good cause
while participating in the program or discovers that the individual
voluntarily quit his or her job or reduced his or her work effort without
good cause during a period established by the State agency between 30 and
60 days prior to the date of application for benefits or between
application and certification, the State agency must provide the
individual with a notice of adverse action as specified in §273.13 within
10 days after the determination of a quit or reduction in work effort. The
notification must contain the particular act of noncompliance committed,
the proposed period of ineligibility, the actions that may be taken to
avoid the disqualification, and it must specify that the individual, if
otherwise eligible, may resume participation at the end of the
disqualification period if the State agency determines the individual to
be in compliance with Program work requirements. The individual will be
disqualified according to the State agency's established minimum mandatory
sanction schedule. The ineligible individual must be considered an
ineligible household member, pursuant to §273.1(b)(7). The
disqualification period will begin the first month following the
expiration of the 10-day adverse notice period, unless the individual
requests a fair hearing. If a voluntary quit or reduction in work effort
occurs in the last month of a certification period, or is determined in
the last 30 days of the certification period, the individual must be
denied recertification for a period equal to the appropriate mandatory
disqualification period, beginning with the day after the last
certification period ends and continuing for the length of the
disqualification, regardless of whether the individual reapplies for food
stamps. Each individual has a right to a fair hearing to appeal a denial
or termination of benefits due to a determination that the individual
voluntarily quit his or her job or reduced his or her work effort without
good cause. If the participating individual's benefits are continued
pending a fair hearing and the State agency determination is upheld, the
disqualification period must begin the first of the month after the
hearing decision is rendered.

(viii) If the individual who voluntarily quit his or her job, or who
reduced his or her work effort without good cause is the head of a
household, as defined in §273.1(d), the State agency, at its option, may
disqualify the entire household from Food Stamp Program participation in
accordance with paragraph (f)(5) of this section.

(4) Ending a voluntary quit or a reduction in work disqualification.
Except in cases of permanent disqualification, following the end of
the mandatory disqualification period for voluntarily quitting a job or
reducing work effort without good cause, an individual may begin
participation in the program if he or she reapplies and is determined
eligible by the State agency. Eligibility may be reestablished during a
disqualification and the individual, if otherwise eligible, may be
permitted to resume participation if the individual becomes exempt from
Program work requirements under paragraph (b)(1) of this section.

(5) Application in the final month of disqualification. Except
in cases of permanent disqualification, if an application for
participation in the Program is filed in the final month of the mandatory
disqualification period, the State agency must, in accordance with
§273.10(a)(3), use the same application for the denial of benefits in the
remaining month of disqualification and certification for any subsequent
month(s) if all other eligibility criteria are met.

(k) Employment initiatives program —(1) General. In
accordance with section 17(d)(1)(B) of the Food Stamp Act, qualified State
agencies may elect to operate an employment initiatives program, in which
an eligible household can receive the cash equivalent of its food stamp
coupon allotment.

(2) State agency qualification. A State agency qualifies to
operate an employment initiatives program if, during the summer of 1993,
at least half of its food stamp households also received cash benefits
from a State program funded under title IV-A of the Social Security
Act.

(3) Qualified State agencies. The State agencies of Alaska,
California, Connecticut, the District of Columbia, Massachusetts,
Michigan, Minnesota, New Jersey, West Virginia, and Wisconsin meet the
qualification. These 10 State agencies may operate an employment
initiatives program.

(4) Eligible households. A food stamp household in one of the 10
qualified State agencies may receive cash benefits in lieu of a food stamp
coupon allotment if it meets the following requirements:

(i) The food stamp household elects to participate in an employment
initiatives program;

(ii) An adult member of the household:

(A) Has worked in unsubsidized employment for the last 90 days, earning
a minimum of $350 per month;

(B) Is receiving cash benefits under a State program funded under title
IV-A of the Social Security Act; or

(C) Was receiving cash benefits under the State program but, while
participating in the employment initiatives program, became ineligible
because of earnings and continues to earn at least $350 a month from
unsubsidized employment.

(5) Program Provisions. (i) Cash benefits provided in an
employment initiatives program will be considered an allotment, as defined
at §271.2 of this chapter.

(ii) An eligible household receiving cash benefits in an employment
initiatives program will not receive any other food stamp benefit during
the period for which cash assistance is provided.

(iii) A qualified State agency operating an employment initiatives
program must increase the cash benefit to participating households to
compensate for any State or local sales tax on food purchases, unless FNS
determines that an increase is unnecessary because of the limited nature
of items subject to the State or local sales tax.

(iv) Any increase in cash assistance to account for a State or local
sales tax on food purchases must be paid by the State agency.

(6) Evaluation. After two years of operating an employment
initiatives program, a State agency must evaluate the impact of providing
cash assistance in lieu of a food stamp coupon allotment to participating
households. The State agency must provide FNS with a written report of its
evaluation findings. The State agency, with the concurrence of FNS, will
determine the content of the evaluation.

(l) Work supplementation program. In accordance with section
16(b) of the Food Stamp Act, States may operate work supplementation (or
support) programs that allow the cash value of food stamp benefits and
public assistance, such as cash assistance authorized under title IV-A of
the Social Security Act or cash assistance under a program established by
a State, to be provided to employers as a wage subsidy to be used for
hiring and employing public assistance recipients. The goal of these
programs is to promote self-sufficiency by providing public assistance
recipients with work experience to help them move into unsubsidized jobs.
In accordance with §272.2(d)(1)(xiv) of this chapter, State agencies that
wish to exercise their option to implement work supplementation programs
must submit to FNS for approval a plan that complies with the provisions
of this paragraph (l). Work supplementation programs may not be
implemented without prior approval from FNS.

(1) Plan. (i) Assurances. The plan must contain the
following assurances:

(A) The individual participating in a work supplementation program must
not be employed by the employer at the time the individual enters the
program;

(B) The wage subsidy received under the work supplementation program
must be excluded from household income and resources during the term the
individual is participating in work supplementation;

(C) The household must not receive a separate food stamp allotment
while participating in the work supplementation program;

(D) An individual participating in a work supplementation program is
excused from meeting any other work requirements;

(E) The work supplementation program must not displace any persons
currently employed who are not supplemented or supported;

(F) The wage subsidy must not be considered income or resources under
any Federal, State or local laws, including but not limited to, laws
relating to taxation, welfare, or public assistance programs, and the
household's food stamp allotment must not be decreased due to taxation or
any other reason because of its use as a wage subsidy;

(G) The earned income deduction does not apply to the subsidized
portion of wages received in a work supplementation program; and

(H) All work supplemented or supported employees must receive the same
benefits (sick and personal leave, health coverage, workmen's
compensation, etc.) as similarly situated coworkers who are not
participating in work supplementation and wages paid under a wage
supplementation or support program must meet the requirements of the Fair
Labor Standards Act and other applicable employment laws.

(ii) Description. The plan must also describe:

(A) The procedures the State agency will use to ensure that the cash
value of food stamp benefits for participating households are not subject
to State or local sales taxes on food purchases. The costs of increasing
household food stamp allotments to compensate for such sales taxes must be
paid from State funds;

(B) State agency, employer and recipient obligations and
responsibilities;

(C) The procedures the State agency will use to provide wage subsidies
to employers and to ensure accountability;

(D) How public assistance recipients in the proposed work
supplementation program will, within a specified period of time, be moved
from supplemented or supported employment to employment that is not
supplemented or supported;

(E) Whether the food stamp allotment and public assistance grant will
be frozen at the time a recipient begins a subsidized job; and

(F) The procedures the State agency will use to ensure that work
supplementation program participants do not incur any Federal, State, or
local tax liabilities on the cash value of their food stamp benefits.

(2) Budget. In addition to the plan described in paragraph
(l)(1) of this section, an operating budget for the proposed work
supplementation program must be submitted to FNS.

(3) Approval. FNS will review the initial plan and any
subsequent amendments. Upon approval by FNS, the State agency must
incorporate the approved work supplementation program plan or subsequent
amendment into its State Plan of Operation and its operating budget must
be included in the State agency budget. No plan or amendment may be
implemented without approval from FNS.

(4) Reporting. State agencies operating work supplementation and
support programs are required to comply with all FNS reporting
requirements, including reporting the amount of benefits contributed to
employers as a wage subsidy on the FNS–388, State Issuance and
Participation Estimates; FNS–388A, Participation and Issuance by Project
Area; FNS–46, Issuance Reconciliation Report; and SF–269, Addendum
Financial Status Report. State agencies are also required to report
administrative costs associated with work supplementation programs on the
FNS–366A, Budget Projection and SF–269, Financial Status Report. Special
codes for work supplementation programs will be assigned for reporting
purposes.

(5) Funding. FNS will pay the cash value of a participating
household's food stamp benefits to a State agency with an approved work
supplementation program to pay to an employer as a wage subsidy, and will
also reimburse the State agency for related administrative costs, in
accordance with Section 16 of the Food Stamp Act.

(6) Quality control. Cases in which a household member is
participating in a work supplementation program will be coded as not
subject to review.

(m) Optional workfare program —(1) General. This
paragraph (m) contains the rules to be followed in operating a food stamp
workfare program. In workfare, nonexempt food stamp recipients may be
required to perform work in a public service capacity as a condition of
eligibility to receive the coupon allotment to which their household is
normally entitled. The primary goal of workfare is to improve
employability and enable individuals to move into regular employment.

(2) Program administration. (i) A food stamp workfare program
may be operated as a component of a State agency's E&T program, or it
may be operated independently. If the workfare program is part of an
E&T program it must be included as a component in the State agency's
E&T plan in accordance with the requirements of paragraph (c)(4) of
this section. If it is operated independent of the E&T program, the
State agency must submit a workfare plan to FNS for its approval. For the
purpose of this paragraph (m), a political subdivision is any local
government, including, but not limited to, any county, city, town or
parish. A State agency may implement a workfare program statewide or in
only some areas of the State. The areas of operation must be identified in
the State agency's workfare or E&T plan.

(ii) Political subdivisions are encouraged, but not required, to submit
their plans to FNS through their respective State agencies. At a minimum,
however, plans must be submitted to the State agencies concurrent with
their submission to FNS. Workfare plans and subsequent amendments must not
be implemented prior to their approval by FNS.

(iii) When a State agency chooses to sponsor a workfare program by
submitting a plan to FNS, it must incorporate the approved plan into its
State Plan of Operations. When a political subdivision chooses to sponsor
a workfare program by submitting a plan to FNS, the State agency is
responsible as a facilitator in the administration of the program by
disbursing Federal funding and meeting the requirements identified in
paragraph (m)(4) of this section. When it is notified that FNS has
approved a workfare plan submitted by a political subdivision in its
State, the State agency must append that political subdivision's workfare
plan to its own State Plan of Operations.

(iv) The operating agency is the administrative organization identified
in the workfare plan as being responsible for establishing job sites,
assigning eligible recipients to the job sites, and meeting the
requirements of this paragraph (m). The operating agency may be any public
or private, nonprofit organization. The State agency or political
subdivision that submitted the workfare plan is responsible for monitoring
the operating agency's compliance with the requirements of this paragraph
(m) or of the workfare plan. The Department may suspend or terminate some
or all workfare program funding, or withdraw approval of the workfare
program from the State agency or political subdivision that submitted the
workfare plan upon finding that that State agency or political
subdivision, or their respective operating agencies, have failed to comply
with the requirements of this paragraph (m) or of the workfare plan.

(v) State agencies or other political subdivisions must describe in
detail in the plan how the political subdivision, working with the State
agency and any other cooperating agencies that may be involved in the
program, will fulfill the provisions of this paragraph (m). The plan will
be a one-time submittal, with amendments submitted as needed to cover any
changes in the workfare program as they occur.

(vi) State agencies or political subdivisions submitting a workfare
plan must submit with the plan an operating budget covering the period
from the initiation of the workfare program's implementation schedule to
the close of the Federal fiscal year. In addition, an estimate of the cost
for one full year of operation must be submitted together with the
workfare plan. For subsequent fiscal years, the workfare program budget
must be included in the State agency's budget.

(vii) If workfare plans are submitted by more than one political
subdivision, each representing the same population (such as a city within
a county), the Department will determine which political subdivision will
have its plan approved. Under no circumstances will a food stamp recipient
be subject to more than one food stamp workfare program. If a political
subdivision chooses to operate a workfare program and represents a
population which is already, at least in part, subject to a food stamp
workfare program administered by another political subdivision, it must
establish in its workfare plan how food stamp recipients will not be
subject to more than one food stamp workfare program.

(3) Operating agency responsibilities. (i) General. The
operating agency, as designated by the State agency or other political
subdivision that submits a plan, is responsible for establishing and
monitoring job sites, interviewing and assessing eligible recipients,
assigning eligible recipients to appropriate job sites, monitoring
participant compliance, making initial determinations of good cause for
household noncompliance, and otherwise meeting the requirements of this
paragraph (m).

(ii) Establishment of job sites. Workfare job slots may only be
located in public or private nonprofit agencies. Contractual agreements
must be established between the operating agency and organizations
providing jobs that include, but are not limited to, designation of the
slots available and designation of responsibility for provision of
benefits, if any are required, to the workfare participant.

(iii) Notifying State agency of noncompliance. The operating
agency must notify the State agency of noncompliance by an individual with
a workfare obligation when it determines that the individual did not have
good cause for the noncompliance. This notification must occur within five
days of such a determination so that the State agency can make a final
determination as provided in paragraph (m)(4)(iv) of this section.

(iv) Notifications. (A) State agencies must establish and use
notices to notify the operating agency of workfare-eligible households.
The notice must include the case name, case number, names of
workfare-eligible household members, address of the household,
certification period, and indication of any part-time work. If the State
agency is calculating the hours of obligation, it must also include this
in the notice. If the operating agency is computing the hours to be
worked, include the monthly allotment amount.

(B) Operating agencies must establish and use notices to notify the
workfare participant of where and when the participant is to report, to
whom the participant is to report, a brief description of duties for the
particular placement, and the number of hours to be worked.

(C) Operating agencies must establish and use notices to notify the
State agency of failure by a household to meet its workfare
obligation.

(v) Recordkeeping requirements. (A) Files that record activity
by workfare participants must be maintained. At a minimum, these records
must contain job sites, hours assigned, and hours completed.

(B) Program records must be maintained, for audit and review purposes,
for a period of 3 years from the month of origin of each record. Fiscal
records and accountable documents must be retained for 3 years from the
date of fiscal or administrative closure of the workfare program. Fiscal
closure, as used in this paragraph (m), means that workfare program
obligations for or against the Federal government have been liquidated.
Administrative closure, as used in this paragraph (m), means that the
operating agency or Federal government has determined and documented that
no further action to liquidate the workfare program obligation is
appropriate. Fiscal records and accountable records must be kept in a
manner that will permit verification of direct monthly reimbursements to
recipients, in accordance with paragraph (m)(7)(iii) of this section.

(vi) Reporting requirements. The operating agency is responsible
for providing information needed by the State agency to fulfill the
reporting requirements contained in paragraph (m)(4)(v) of this
section.

(vii) Disclosure. The provisions of §272.1(c) of this chapter
restricting the use and disclosure of information obtained from food stamp
households is applicable to the administration of the workfare
program.

(4) State agency responsibilities. (i) If a political
subdivision chooses to operate a workfare program, the State agency must
cooperate with the political subdivision in developing a plan.

(ii) The State agency must determine at certification or
recertification which household members are eligible for the workfare
program and inform the household representative of the nature of the
program and of the penalties for noncompliance. If the State agency is not
the operating agency, each member of a household who is subject to
workfare under paragraph (m)(5)(i) of this section must be referred to the
organization which is the operating agency. The information identified in
paragraph (m)(3)(iv)(A) of this section must be forwarded to the operating
agency within 5 days after the date of household certification.
Computation of hours to be worked may be delegated to the operating
agency.

(iii) The State agency must inform the household and the operating
agency of the effect of any changes in a household's circumstances on the
household's workfare obligation. This includes changes in benefit levels
or workfare eligibility.

(iv) Upon notification by the operating agency that a participant has
failed to comply with the workfare requirement without good cause, the
State agency must make a final determination as to whether or not the
failure occurred and whether there was good cause for the failure. If the
State agency determines that the participant did not have good cause for
noncompliance, a sanction must be processed as provided in paragraphs
(f)(1)(i) and (f)(1)(ii) of this section. The State agency must
immediately inform the operating agency of the months during which the
sanction will apply.

(v) The State agency must submit quarterly reports to FNS within 45
days of the end of each quarter identifying for that quarter for that
State:

(A) The number of households with workfare-eligible recipients referred
to the operating agency. A household will be counted each time it is
referred to the operating agency;

(B) The number of households assigned to jobs each month by the
operating agency;

(C) The number of individuals assigned to jobs each month by the
operating agency;

(D) The total number of hours worked by participants; and

(E) The number of individuals against which sanctions were applied. An
individual being sanctioned over two quarters should only be reported as
sanctioned for the earlier quarter.

(vi) The State agency may, at its option, assume responsibility for
monitoring all workfare programs in its State to assure that there is
compliance with this section and with the plan submitted and approved by
FNS. Should the State agency assume this responsibility, it would act as
agent for FNS, which is ultimately responsible for ensuring such
compliance. Should the State agency determine that noncompliance exists,
it may withhold funding until compliance is achieved or FNS directs
otherwise.

(5) Household responsibilities. (i) Participation
requirement. Participation in workfare, if assigned by the State
agency, is a Food Stamp Program work requirement for all nonexempt
household members, as provided in paragraph (a) of this section. In
addition:

(A) Those recipients exempt from Food Stamp Program work requirements
because they are subject to and complying with any work requirement under
title IV of the Social Security Act are subject to workfare if they are
currently involved less than 20 hours a week in title IV work activities.
Those recipients involved 20 hours a week or more may be subject to
workfare at the option of the political subdivision; and

(B) Those recipients exempt from Food Stamp Program work requirements
because they have applied for or are receiving unemployment compensation
are subject to workfare.

(ii) Household obligation. The maximum total number of hours of
work required of a household each month is determined by dividing the
household's coupon allotment by the Federal or State minimum wage,
whichever is higher. Fractions of hours of obligation may be rounded down.
The household's hours of obligation for any given month may not be carried
over into another month.

(6) Other program requirements. (i) Conditions of employment.
(A) A participant may be required to work a maximum of 30 hours per
week. This maximum must take into account hours worked in any other
compensated capacity (including hours of participation in a title IV work
program) by the participant on a regular or predictable part-time basis.
With the participant's consent, the hours to be worked may be scheduled in
such a manner that more than 30 hours are worked in one week, as long as
the total for that month does not exceed the weekly average of 30
hours.

(B) No participant will be required to work more than eight hours on
any given day without his or her consent.

(C) No participant will be required to accept an offer of workfare
employment if it fails to meet the criteria established in paragraphs
(h)(1)(iii), (h)(1)(iv), (h)(2)(i), (h)(2)(ii), (h)(2)(iv), and (h)(2)(v)
of this section.

(D) If the workfare participant is unable to report for job scheduling,
to appear for scheduled workfare employment, or to complete the entire
workfare obligation due to compliance with Unemployment Insurance
requirements; other Food Stamp Program work requirements established in
paragraph (a)(1) of this section; or the job search requirements
established in paragraph (e)(1)(i) of this section, that inability must
not be considered a refusal to accept workfare employment. If the workfare
participant informs the operating agency of the time conflict, the
operating agency must, if possible, reschedule the missed activity. If the
rescheduling cannot be completed before the end of the month, that must
not be considered as cause for disqualification.

(E) The operating agency must assure that all persons employed in
workfare jobs receive job-related benefits at the same levels and to the
same extent as similar non-workfare employees. These are benefits related
to the actual work being performed, such as workers' compensation, and not
to the employment by a particular agency, such as health benefits. Of
those benefits required to be offered, any elective benefit that requires
a cash contribution by the participant will be optional at the discretion
of the participant.

(F) The operating agency must assure that all workfare participants
experience the same working conditions that are provided to non-workfare
employees similarly employed.

(G) The provisions of section 2(a)(3) of the Service Contract Act of
1965 (Public Law 89–286), relating to health and safety conditions, apply
to the workfare program.

(H) Operating agencies must not place a workfare participant in a work
position that has the effect of replacing or preventing the employment of
an individual not participating in the workfare program. Vacancies due to
hiring freezes, terminations, or lay-offs must not be filled by workfare
participants unless it can be demonstrated that the vacancies are a result
of insufficient funds to sustain former staff levels.

(I) Workfare jobs must not, in any way, infringe upon the promotional
opportunities that would otherwise be available to regular employees.

(J) Workfare jobs must not be related in any way to political or
partisan activities.

(K) The cost of workers' compensation or comparable protection provided
to workfare participants by the State agency, political subdivision, or
operating agency is a matchable cost under paragraph (m)(7) of this
section. However, whether or not this coverage is provided, in no case is
the Federal government the employer in these workfare programs (unless a
Federal agency is the job site). The Department does not assume liability
for any injury to or death of a workfare participant while on the job.

(L) The nondiscrimination requirement provided in §272.6(a) of this
chapter applies to all agencies involved in the workfare program.

(ii) Job search period. The operating agency may establish a job
search period of up to 30 days following certification prior to making a
workfare assignment during which the potential participant is expected to
look for a job. This period may only be established at household
certification, not at recertification. The potential participant would not
be subject to any job search requirements beyond those required under this
section during this time.

(iii) Participant reimbursement. The operating agency must
reimburse participants for transportation and other costs that are
reasonably necessary and directly related to participation in the program.
These other costs may include the cost of child care, or the cost of
personal safety items or equipment required for performance of work if
these items are also purchased by regular employees. These other costs may
not include the cost of meals away from home. No participant cost
reimbursed under a workfare program operated under Title IV of the Social
Security Act or any other workfare program may be reimbursed under the
food stamp workfare program. Only reimbursement of participant costs up to
but not in excess of $25 per month for any participant will be subject to
Federal cost sharing as provided in paragraph (m)(7) of this section.
Reimbursed child care costs may not be claimed as expenses and used in
calculating the child care deduction for determining household benefits.
In accordance with paragraph (m)(4)(i) of this section, a State agency may
decide what its reimbursement policy shall be.

(iv) Failure to comply. When a workfare participant is
determined by the State agency to have failed or refused without good
cause to comply with the requirements of this paragraph (m), the
provisions of paragraph (f) of this section will apply.

(v) Benefit overissuances. If a benefit overissuance is
discovered for a month or months in which a participant has already
performed a workfare or work component requirement, the State agency must
apply the claim recovery procedures as follows:

(A) If the person who performed the work is still subject to a work
obligation, the State must determine how may extra hours were worked
because of the improper benefit. The participant should be credited those
extra hours toward future work obligations; and

(B) If a workfare or work component requirement does not continue, the
State agency must determine whether the overissuance was the result of an
intentional program violation, an inadvertent household error, or a State
agency error. For an intentional program violation a claim should be
established for the entire amount of the overissuance. If the overissuance
was caused by an inadvertent household error or State agency error, the
State agency must determine whether the number of hours worked in workfare
are more than the number which could have been assigned had the proper
benefit level been used in calculating the number of hours to work. A
claim must be established for the amount of the overissuance not “worked
off,” if any. If the hours worked equal the amount of hours calculated by
dividing the overissuance by the minimum wage, no claim will be
established. No credit for future work requirements will be given.

(7) Federal financial participation —(i) Administrative
costs. Fifty percent of all administrative costs incurred by State
agencies or political subdivisions in operating a workfare program will be
funded by the Federal government. Such costs include those related to
recipient participation in workfare, up to $25 per month for any
participant, as indicated in paragraph (m)(6)(iii) of this section. Such
costs do not include the costs of equipment, capital expenditures, tools
or materials used in connection with the work performed by workfare
participants, the costs of supervising workfare participants, the costs of
reimbursing participants for meals away from home, or reimbursed expenses
in excess of $25 per month for any participant. State agencies must not
use any portion of their annual 100 percent Federal E&T allocations to
fund the administration of optional workfare programs under section 20 of
the Food Stamp Act and this paragraph (m).

(ii) Funding mechanism. The State agencies have responsibility
for disbursing Federal funds used for the workfare program through the
State agencies' Letters of Credit. The State agency must also assure that
records are being maintained which support the financial claims being made
to FNS. This will be for all programs, regardless of who submits the plan.
Mechanisms for funding local political subdivisions which have submitted
plans must be established by the State agencies.

(iii) Fiscal recordkeeping and reporting requirements.
Workfare-related costs must be identified by the State agency on the
Financial Status Report (Form SF–269) as a separate column. All financial
records, supporting documents, statistical records, negotiated contracts,
and all other records pertinent to workfare program funds must be
maintained in accordance with §277.12 of this chapter.

(iv) Sharing workfare savings —(A) Entitlement. A
political subdivision is entitled to share in the benefit reductions that
occur when a workfare participant begins employment while participating in
workfare for the first time, or within thirty days of ending the first
participation in workfare.

(1) To begin employment means to appear at the place of employment and
to begin working.

(2) First participation in workfare means performing work for the first
time in a particular workfare program. The only break in participation
that does not end the first participation will be due to the participant's
taking a job which does not affect the household's allotment by an entire
month's wages and which is followed by a return to workfare.

(B) Calculating the benefit reductions. The political
subdivision will calculate benefit reductions from each workfare
participant's employment as follows.

( 1 ) Unless the political subdivision knows otherwise, it will
presume that the benefit reduction equals the difference between the last
allotment issued before the participant began the new employment and the
first allotment that reflects a full month's wages, earned income
deduction, and dependent care deduction attributable to the new job.

( 2 ) If the political subdivision knows of other changes
besides the new job that affect the household's allotment after the new
job began, the political subdivision will obtain the first allotment
affected by an entire month's wages from the new job. The political
subdivision will then recalculate the allotment to account for the wages,
earned income deduction, and dependent care deduction attributable to the
new job. In recalculating the allotment the political subdivision will
also replace any benefits from a State program funded under title IV-A of
the Social Security Act received after the new job with benefits received
in the last month before the new job began. The difference between the
first allotment that accounts for the new job and the recalculated
allotment will be the benefit reduction.

( 3 ) The political subdivision's share of the benefit reduction
is three times this difference, divided by two.

( 4 ) If, during these procedures, an error is discovered in the
last allotment issued before the new employment began, that allotment must
be corrected before the savings are calculated.

(C) Accounting. The reimbursement from workfare will be reported
and paid as follows:

( 1 ) The political subdivision will report its enhanced
reimbursement to the State agency in accordance with paragraph (m)(7)(iii)
of this section.

( 2 ) The Food and Nutrition Service will reimburse the
political subdivision in accordance with paragraph (m)(7)(ii) of this
section.

( 3 ) The political subdivision will, upon request, make
available for review sufficient documentation to justify the amount of the
enhanced reimbursement.

( 4 ) The Food and Nutrition Service will reimburse only the
political subdivision's reimbursed administrative costs in the fiscal year
in which the workfare participant began new employment and which are
acceptable according to paragraph (m)(7)(i) of this section.

(8) Voluntary workfare program. State agencies and political
subdivisions may operate workfare programs whereby participation by food
stamp recipients is voluntary. In such a program, the penalties for
failure to comply, as provided in paragraph (f) of this section, will not
apply for noncompliance. The amount of hours to be worked will be
negotiated between the household and the operating agency, though not to
exceed the limits provided under paragraph (m)(5)(ii) of this section. In
addition, all protections provided under paragraph (m)(6)(i) of this
section shall continue to apply. Those State agencies and political
subdivisions choosing to operate such a program shall indicate in their
workfare plan how their staffing will adapt to anticipated and
unanticipated levels of participation. The Department will not approve
plans which do not show that the benefits of the workfare program, in
terms of hours worked by participants and reduced food stamp allotments
due to successful job attainment, are expected to exceed the costs of such
a program. In addition, if the Department finds that an approved voluntary
program does not meet this criterion, the Department reserves the right to
withdraw approval.

(9) Comparable workfare programs. In accordance with section
6(o)(2)(C) of the Food Stamp Act, State agencies and political
subdivisions may establish programs comparable to workfare under this
paragraph (m) for the purpose of providing ABAWDs subject to the time
limits specified at §273.24 a means of fulfilling the work requirements in
order to remain eligible for food stamps. While comparable to workfare in
that they require the participant to work for his or her household's food
stamp allotment, these programs may or may not conform to other workfare
requirements. State agencies or political subdivisions desiring to operate
a comparable workfare program must meet the following conditions:

(i) The maximum number of hours worked weekly in a comparable workfare
activity, combined with any other hours worked during the week by a
participant for compensation (in cash or in kind) in any other capacity,
must not exceed 30;

(ii) Participants must not receive a fourth month of food stamp
benefits (the first month for which they would not be eligible under the
time limit) without having secured a workfare position or without having
met their workfare obligation. Participation must be verified timely to
prevent issuance of a month's benefits for which the required work
obligation is not met;

(iii) The State agency or political subdivision must maintain records
to support the issuance of benefits to comparable workfare participants
beyond the third month of eligibility; and

(iv) The State agency or political subdivision must provide a
description of its program, including a methodology for ensuring
compliance with (m)(9)(ii) of this section. The description should be
submitted to the appropriate Regional office, with copies forwarded to the
Food Stamp Program National office.

[67 FR 41603, June 19, 2002, as amended at 71 FR 33382, June 9,
2006]

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