10 Participant Financial Participation

Revised: 08/03

10-02 Requirements for Financial Needs Test

A financial needs test may not be applied and no financial participation is required as a condition for furnishing the following vocational rehabilitation services:

Assessment for determining eligibility and priority for services.

Note: an exception would be for those non-assessment services that are provided to a participant with a significant disability during either an exploration of participant's abilities, capabilities, and capacity to perform in work situations through the use of Trial Work Experiences or Extended Evaluation.
Assessment for determining vocational rehabilitation needs.
Vocational rehabilitation counseling and guidance.
Referral and other services.
Interpreter services.
Reader services.
Job-related services, including job search and placement assistance, job retention services, follow-up services, and follow-along services.
Personal assistance services.

Additionally, a financial needs test may not be applied and no financial participation is required as a condition for furnishing any vocational rehabilitation service if the participant in need of the service has been determined eligible for Social Security benefits under Title II or Title XVI of the Social Security Act.

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10-02-01 Guidelines

The following vocational rehabilitation services/purchases require the application of a financial needs test:

Dental procedures.
Computer related equipment and software.
Maintenance.
Medications.
Mental/physical restoration services.
Purchase of work tools, supplies, uniforms.
Rehabilitation Engineering/Technology.
Self-employment purchases of goods or services.
Services to family members.
Training tuition and supplies - vocational and college.
Transportation.
Vehicle modifications.
Other capital outlay purchases

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10-02-02 Procedures

A determination as to whether the financial needs test is necessary is made at the time that the participant and counselor are developing an Individualized Plan for Employment (IPE) for Trial Work Experiences, for service status, for Amendments, and for Post Employment Services. If the services to be provided under the IPE require a financial needs test, it is applied. If the services to be provided on the IPE do not require a financial needs test, it is not necessary to apply the test.
The financial needs test form must be reviewed and revised when the participant's financial situation changes significantly (income increases or decreases) and during the annual IPE review, if necessary.
The Financial Needs Test is completed to determine whether the participant meets the financial needs requirement or not. If the participant meets the financial needs test, he/she is not required to contribute to the cost of the service(s). If the participant does not meet the financial needs test, he/she is expected to contribute to the cost of the services.
Once the financial needs test form is completed, the AWARE "Application" datapage should be updated to reflect the verified information at the time of application including: number in family, number of dependents, family income amount, primary source of support, whether the participant meets the financial needs test, and if medical insurance is available/supplied by the employer.
The criteria used to determine if the participant meets or does not meet the financial needs test are based on the Federal Poverty Rate as published by the Department of Health and Human Services. If the participant/family’s income is at or below the identified poverty rate, they meet the financial needs test. If the income is higher, then they do not meet the financial needs test and will be required to participate in the cost of the good or service.

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10-02-03 Requirements Related to Monthly Income and Expenses

10-02-03-01 Countable Income

Personal and household income (when applicable) are taken into consideration. Any individual residing in the household, whether related or not, is considered part of the household. The VR counselor should make every effort to include all household income, however, in instances when family or other household members refuse to divulge financial information, the participant cannot be penalized. In those instances, the VR counselor can only factor the participant's income into the financial needs test. The VR counselor must also document their efforts to include the household income and the reason(s) that this could not be accomplished in a case note.
Wages - net wages of participant and family members (if applicable).
Family contribution - contributions from family or individuals in cash or in kind on a regular basis.
Public assistance - TANF, General Assistance, Food Stamps.
SSDI and SSI received by family/household members.
Veterans Benefits.
Worker's Compensation.
Income from room and board, and rental property.
Assistance from private welfare agencies, service clubs, or church groups.
Income from stocks, dividends, bonds, interest, or other financial investments.
Insurance benefits, retirement benefits, pensions.
Social Security other than SSDI.
Liquid assets in the form of cash and savings accounts.
Student financial aid, including grants, scholarships, fellowships, etc.

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10-02-03-02 Allowable Expenses

Monthly allowable expenses are those that are directly related to living expenses and subsistence costs. Luxury items and/or indebtedness unrelated to subsistence should not be considered when completing the financial needs test form. The following are considered allowable expenses:

Rent or a monthly housing expense.
Utilities including electricity, gas or other heating fuel, water, garbage and sewage, home telephone basic service (excluding long-distance).
Monthly grocery expenses.
Room and Board including dormitory and cafeteria expenses.
Transportation including car payments, maintenance, gas and insurance.
Medical including payment for treatment and on-going monthly expenses such as prescriptions, medical treatment, doctor office visits, physical and occupational therapy, health insurance, etc.
Disability related including interpreter services, attendant care, etc.
Miscellaneous personal including monthly expenses for sundries, laundromat expenses, etc.
Other expenses including child care, educational expenses, child support, and alimony.
Other expenses related to the safety and well being of the participant and considered to be necessary by the counselor.

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10-02-04 Requirements for Verifying Income

In the event that the counselor suspects that a participant is not providing truthful or accurate information, they should require verification of income. Examples of income verification include:

Check stubs
Award letters for TANF, Food Stamps, or any other form of public assistance.
Copies Veterans, or other public assistance checks, SSI/SSDI checks.
Income tax return statements
Bank statements
Receipts from renters or in-kind services.
Financial investment report

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10-02-05 Procedures for Calculating Excess Income

Once income and expenses are totaled, the excess household or participant income is used to determine the amount of financial contribution that is required. The excess income is that monthly net participant or household/participant income that remains after subtracting the allowable expenses from current household income.

Note: If a deficit exists after subtracting allowable expenses from household income, this should not automatically be made up in the form of maintenance to the participant.

The amount of DVR financial contribution is based on a percentage of the total cost of the service or good. The percentage of contribution is determined by the calculated excess income of the participant or household. The participant is expected to contribute up to 20% of their excess income.
If the participant/household excess income is less than the cost of the service or good, they must contribute 20% of their excess income. For example, if the service or good costs $500.00 and the participant's excess income is $100.00, they would contribute $20.00 ($100.00 x .20% = $20.00).

If the participant/household excess income exceeds the cost of the service or good, they must contribute up to 20% of their excess income. This could mean paying for 100% of the service or good. It could also mean that by contributing 20% of their excess income, the participant does not pay the full 100% of the service/good. In the first example, if the service/good costs $100.00 and the participant's excess income is $510.00, the participant would pay for 100% of the services. By calculating $510 by 20%, the contribution amount is $102.00 (exceeds $100.00 so the entire amount is required to be paid). In the second example, if the service/good costs $100.00 and the participant's excess income is $110.00, the participant would pay for $22.00 of the service. By calculating $110.00 by 20%, the contribution amount is less than the cost of the service/good.
In the case of Amendments, the same 20% requirement applies. With Amendments, however, if the participant is already contributing to the cost of an on-going service, the amount of contribution should be considered as an expense. This would decrease the amount of the excess income.

Note: If a deficit exists after subtracting allowable expenses from household income, this should not automatically be made up in the form of maintenance to the participant.

Application of financial contribution when service is occurring over multiple months (as opposed to a one-time only service):

To calculate participant/DVR contribution in instances where a one time purchase or service is provided, the above procedure should be straightforward. In instances when a service may be on-going such as tuition for school, however, excess income should be applied on a monthly basis for the duration of the service. For example, if a participant is attending college where a semester lasts up to four months, the excess income and the cost of the service should be averaged on a monthly basis for the four-month period. In this case, if the tuition is $2,000 and the participant shows an excess income of $200 per month, then the $2,000 would be divided by four months, which calculates to a cost of $500 per month. Applying 20% of the excess income to the cost, this would calculate to a contribution of $40 per month ($200 multiplied by .20% = $40) for a total of $160 in participant contribution.

Note: This example assumes that comparable benefits do not apply. If they do apply, the award amount would be subtracted from the grand total and this would then be averaged out in the same manner.

Fraud: Counselors who question a participant's income or expenses based upon information in the case record, counselor observation, or information provided by other sources are obligated to discuss the situation with the participant. Any such discussion should be documented in a case note. The counselor may request copies of the documentation above to verify the financial status. If the counselor is unable to verify the reported income or assets, or needs additional help, the matter should be referred to the Area Program Manager for further action.

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