Okla. Admin. Code § 340:50-7-31

Current through Vol. 42, No. 7, December 16, 2024

Section 340:50-7-31 - Deductions

(a)Deductible expenses. Households are allowed certain deductible expenses from income as described in (1) through (6) of this subsection and per Section 273.9(d) of Title 7 of the Code of Federal Regulations ( 7 C.F.R. § 273.9(d)) . The household reports current medical, dependent care, legally-binding child support, and shelter expenses at certification, mid-certification renewal, and certification renewal. The household must also report current shelter costs when the household moves.

(1)Standard deduction. All households are allowed a standard deduction, per Oklahoma Department of Human Services (DHS) Appendix C-3, Maximum Food Benefits Allotments and Standards for Income and Deductions.

(2)Earned income deduction. Households with earned income are allowed an earned income deduction, per DHS Appendix C-3, to cover the cost of state and local income taxes, pensions, union dues, and work related expenses. Refer to Oklahoma Administrative Code (OAC) 340:50-7-30 for information regarding business expenses for self-employed persons.

(3)Medical expense deduction. A medical expense deduction is only allowed for household members meeting the definition of elderly or disabled, per OAC 340:50-5-4. For these household members, medical expenses exceeding $35 per month are deductible when verified. The $35 is subtracted from medical expenses once per household, not per person, when the household has more than one elderly or disabled member.

(A)Allowable medical expenses. Allowable medical expenses must be prescribed or approved by a state licensed or qualified practitioner and include:

(i) medical and dental care, including psychotherapy and rehabilitation services provided by a licensed practitioner or other qualified health professional authorized by state law;

(ii) hospitalization or outpatient treatment, nursing care, and nursing home care, including payments by the household for a person who was a household member immediately prior to entering a hospital or nursing home provided by a facility recognized by the state;

(iii) prescription drugs and other over-the-counter medication including insulin, when approved by a licensed practitioner or other qualified health professional authorized by state law. This does not include the cost of a Schedule I controlled substance under the Controlled Substances Act, Section 801 et. seq. of Title 21 of the United States Code, or any expenses associated with its use;

(iv) costs of medical supplies, sick-room equipment including rentals, or other prescribed equipment;

(v) health, dental, and hospitalization policy premiums;

(vi) Medicare premiums and any cost-sharing or spend-down expenses incurred by Medicare or SoonerCare (Medicaid) recipients;

(vii) dentures, hearing aids, and prosthetics;

(viii) eye glasses prescribed by a licensed practitioner;

(ix) reasonable cost of lodging and transportation to obtain medical treatment or services. Lodging costs are allowed when the elderly or disabled member is required to spend the night away from home to receive medical services. Reasonable transportation costs are based on the type of transportation used. When the elderly or disabled member:

(I) uses his or her vehicle, the state's current mileage reimbursement is allowed;

(II) uses public transportation, the actual cost of the transportation is allowed; or

(III) pays a non-household member for transportation, the amount charged by the person is allowed;

(x) maintaining an attendant, homemaker, home-health aide, child care services, or housekeeper due to age, infirmity, or illness. When this expense also qualifies as a dependent care expense per (4) of this subsection, it is considered a medical expense rather than a dependent care expense. Additionally, when the household furnishes a majority of the caretaker's meals, an amount equal to one allotment is added to the medical expense for meals provided. The allotment used is the amount in effect at certification; and

(xi) costs associated with all service animals specially trained to serve the needs of elderly or disabled program participants. This includes maintenance costs, such as veterinary bills, food, and other expenses for these service animals.

(B)Medical expenses not allowed. Expenses not allowed include:

(i) costs associated with special diets;

(ii) premiums for health and accident insurance policies, such as those payable in lump sum settlements for death or dismemberment;

(iii) premiums for income maintenance policies, such as those that continue mortgage or loan payments while the beneficiary is disabled;

(iv) items that can be purchased with food benefits, such as dietary supplements;

(v) the cost of meals or other incidentals when the person spends the night away from home to receive medical services; and

(vi) medical marijuana or any expenses associated with its use.

(C)Medical expense verification requirements. Households are required to report and verify medical expenses at certification and certification renewal. Households are not required to report changes in medical expenses during the certification period.

(i) When a household voluntarily reports a reduction in medical expenses that will decrease the food benefit allotment, no verification is needed. However, the change requires notice of adverse action, per OAC 340:50-9-5.

(ii) When a household voluntarily reports additional medical expenses that will increase the food benefit allotment, the household must verify the additional expenses before the worker changes the medical expense deduction.

(iii) When the additional medical expenses are one-time expenses, such as hospital costs, dental expenses, or the purchase of prescription eyeglasses, the expense is only allowed when the person reports and verifies the expense before it becomes past due. When a portion of the expense will be paid by a vendor or insurance payment, the worker does not allow the expense until the amount owed by the person is verified. Once verified, the household may choose to:

(I) deduct the entire expense in the month incurred or when it becomes due;

(II) average the expense over the remaining months of the certification period; or

(III) average the expense over the scheduled length of a payment plan.

(iv) When the worker finds out about a change from a source other than the household, the change is acted on when verified upon receipt, such as when the worker is notified via data exchange of a Medicare premium change. The worker does not contact the household for additional information. When the change requires household contact for additional information or verification, the worker does not make the change.

(v) When a household reports but does not verify an anticipated medical expense, the worker informs the household the expense will be allowed when the household provides verification.

(4)Dependent care. Dependent care is payment for the actual cost for the care of a child under 18 years of age or other dependent of any age with disabilities when necessary for a household member to seek, accept, or continue employment or to attend training or education preparatory to employment. Dependent care costs may include activity fees and the cost of transportation to and from the dependent care facility.

(A) The deduction applies regardless of whether the household member is subject to the Supplemental Nutrition Assistance Program Employment and Training requirements.

(B) When the expense also qualifies as a medical expense per (a)(3) of this Section, it is considered a medical expense rather than a dependent care expense.

(C) There is no maximum dependent care deduction. The total reported by the client is an allowable expense as long as it meets the criteria in this Section.

(D) Dependent care is only verified when the expenses claimed actually result in a deduction and other information available to the worker is inconsistent with the household's claim that it incurs a dependent care expense.

(5)Legally-binding child support. A deduction is allowed for verified legally-binding child support payments paid by a household member to or for a non-household member, including payments made to a third party on behalf of the non- household member.

(6)Shelter costs. A household is allowed a shelter deduction when the monthly shelter cost exceeds 50 percent of the household's income after all other deductions are allowed, per 7 C.F.R. § 273.9(d)(6)(ii). The shelter deduction cannot exceed the maximum amount allowed per DHS Appendix C-3, unless the household includes an elderly or disabled member. Households with an elderly or disabled member receive an excess shelter deduction for the monthly cost exceeding 50 percent of the household's income after the deductions listed in (1) through (6) of this subsection are allowed. When the household includes a non-household member or disqualified member, refer to (b)(5) and (6) of this Section to determine whether to prorate shelter costs.

(A)Allowable rent or mortgage costs. Allowable rent or mortgage costs for the

(i) monthly rent or mortgage payment, or other continuing charges leading to the ownership of the shelter, such as loan repayments for the purchase of a mobile home, including interest on such payments;

(ii) charge for renting or buying the land on which a mobile home is located;

(iii) property taxes, state and local assessments, and insurance on the structure. A mobile home is taxed as part of the property tax when the land is owned or being purchased;

(iv) personal property tax for unregistered mobile homes on rented land; or

(v) standard homeless shelter deduction, per DHS Appendix C-3, or the excess shelter deduction described, per (a)(6) of this Section, whichever results in the most food benefits for the household, when a homeless household incurs or expects to incur a shelter cost.

(B)Expenses not considered as shelter costs. The worker does not consider as shelter costs, the cost for:

(i) insuring furniture or personal belongings when paid separately from the insurance on the home;

(ii) vehicle registration or a tag for a mobile or motor home; or

(iii) personal property tax except as allowed, per (6)(A)(iv) of this subsection.

(C)Allowable utility costs. When the household incurs utility expenses, it is eligible for one of three standard utility allowances based on criteria in (i) through (iii) of this subparagraph. The applicable utility standard amount is specified, per DHS Appendix C-3.

(i) The standard utility allowance (SUA) is based on annual averages that include costs for heating or cooling; and cooking fuel, electricity, basic phone service, water, sewage, and garbage. This includes households that receive Low Income Heat Energy Assistance Payments (LIHEAP).

(I) The household is eligible for the SUA when the household is billed for heating or cooling during the year. Households billed less often than monthly for heating costs, such as butane or propane may continue to use the utility standard between billing months.

(II) When a household reports they no longer incur a heating or cooling expense, but still have a utility expense, the standard must be changed to the basic utility allowance (BUA) or telephone standard.

(III) When a household's heating or cooling expenses are partially reimbursed or paid by an excluded payment, such as a vendor payment, Housing and Urban Development (HUD), or Farmers Home Administration (FmHA) payment, the household remains eligible for the SUA.

(ii) The BUA includes utility charges the household incurs other than for heating and/or cooling, such as cooking fuel, water, sewage, garbage collection, and basic phone service.

(iii) The telephone standard is used when the household is not entitled to use the SUA or BUA, but has a phone cost.

(D)When shelter costs for an unoccupied home are allowed. Shelter costs for an unoccupied home may be allowable when the household is temporarily away from home because of illness, a disaster or casualty loss to the home, or to attend an employment or training opportunity.

(i) For the cost of a vacated home to be included in shelter costs the:

(I) household must intend to return to the home;

(II) current occupants of the home, if any, must not claim the shelter costs during the household's absence; and

(III) home must not be rented or leased during the household's absence.

(ii) A household that has an occupied home and an unoccupied home is only allowed one standard utility deduction.

(b)Expense calculation. The worker calculates a household's expenses based on the expenses the household expects to be billed for during the certification period. The worker anticipates expenses based on the most recent month's bills unless the household is reasonably certain a change will occur.

(1)Billing fluctuations. The household may elect to average expenses when the billed amount fluctuates monthly, is billed less often than monthly, or as in the case of some medical expenses, the expense changes throughout the certification period.

(2)When expenses are owed but not paid. The household is allowed a deduction in the month the expense is billed or otherwise becomes due, regardless of when the household intends to pay the expense. A particular expense may be deducted only once.

(3)Reimbursed expenses. The portion of an expense paid by an excluded reimbursement or vendor payment is not deductible. The amount left after deducting the excluded payment is deductible and includes HUD and Farmers Home Administration (FmHA) rent and utility payments. Expenses are only deductible when the service is provided by someone outside of the household and the household makes a monetary payment for the service.

(4)One-time expenses. The household may choose to average one-time expenses over the entire certification period in which they are billed, per 7 C.F.R. § 273.10(d)(3). When the household reports a one-time expense during the certification period, the household may choose to:

(A) deduct the entire expense for the next effective month; or

(B) average the expense over the remaining months in the certification period beginning with the next effective month. When the household is certified for 24 months and the one-time expense was incurred in the:

(i) first 12 months of the certification period, the household may elect to deduct the expense in one month, average the expense over the remaining months in the first 12 months of the certification period or average the expense over the remaining months in the certification period; or

(ii) the second 12 months of the certification period, the household may elect to have the expense deducted in one month or averaged over the remaining months in the certification period.

(5)When the household includes a disqualified household member. When the household includes a disqualified household member, per OAC 340:50-5-10.1, the worker does not prorate allowable deductions because the disqualified member's income is counted in its entirety, per OAC 340:50-7-29(d).

(6)When the household includes an ineligible household member. When the household includes an ineligible household member, per OAC 340:50-5-10.1, the worker prorates the allowable deductions evenly between the household members, including the ineligible member , with the exception of (A) and (B) of this subparagraph, because the ineligible member's income is also prorated, per OAC 340:50-7-29(d). When the household is:

(A) responsible for utility expenses, the household is allowed the full utility standard deduction for which it qualifies per (a)(6)(C) of this Section; or

(B) homeless and incurs shelter costs, the household is eligible for the full standard homeless shelter deduction or for a prorated share of excess shelter deduction, whichever results in more food benefits for the household.

(7)When the household includes a non-household member. When the household shares deductible expenses with a non-household member, the worker only deducts the amount the household actually pays or contributes toward household expenses with the exception of the utility expenses. When the household pays part of the utility expenses, the household is allowed the full utility standard deduction for which it qualifies, per (a)(6)(C) of this Section. When the payments or contributions cannot be differentiated, the worker prorates the expenses evenly among persons actually paying or contributing to the expense and deducts only the household's pro rata share with the exception of the utility expenses.

Okla. Admin. Code § 340:50-7-31

Amended at 9 Ok Reg 3405, eff 5-13-92 (preemptive); Amended at 9 Ok Reg 3843, eff 8-24-92 (emergency); Amended at 10 Ok Reg 1821, eff 5-13-93; Amended at 11 Ok Reg 345, eff 10-15-93 (emergency); Amended at 11 Ok Reg 2667, eff 6-13-94; Amended at 11 Ok Reg 4587, eff 9-1-94 (emergency); Amended at 11 Ok Reg 4811, eff 9-14-94 (preemptive); Amended at 13 Ok Reg 185, eff 10-2-95 (preemptive); Amended at 14 Ok Reg 220, eff 10-1-96 (preemptive); Amended at 17 Ok Reg 473, eff 10-12-99 (preemptive); Amended at 19 Ok Reg 1767, eff 6-14-02; Amended at 20 Ok Reg 872, eff 6-1-03; Amended at 20 Ok Reg 2924, eff 10-1-03 (emergency); Amended at 21 Ok Reg 841, eff 4-26-04; Amended at 23 Ok Reg 2665, eff 8-1-06; Amended at 26 Ok Reg 840, eff 6-1-09; Amended at 27 Ok Reg 1241, eff 6-1-10; Amended at 28 Ok Reg 850, eff 6-1-11

Amended by Oklahoma Register, Volume 33, Issue 24, September 1, 2016, eff. 9/15/2016

Amended by Oklahoma Register, Volume 34, Issue 24, September 1, 2017, eff. 9/15/2017

Amended by Oklahoma Register, Volume 36, Issue 24, September 3, 2019, eff. 9/16/2019

Amended by Oklahoma Register, Volume 37, Issue 24, September 1, 2020, eff. 9/15/2020