F

Free and Reduced-Price Benefits Administration

All children with access to meal or milk service operated as a pricing program must be given the opportunity to apply for free and reduced-price meals and free milk benefits. No child may be denied benefits if he or she has submitted a properly completed valid application that has subsequently been approved by the LEA or has been directly certified as eligible as a recipient of food stamps, assistance from the Family Employment Program (FEP) or assistance from the Food Distribution Program on Indian Reservations (FDPIR).

Applications for free and reduced-price meal benefits must be distributed to all students on or about the beginning of each school year. The income reported by the parents/guardians should represent any funds that were earned during the month prior to completing the application. When an application is received, it must be reviewed and an eligibility determination made within 10 operating days of receiving the application. LEAs may accept faxed applications from the households. All households that submit an application must be notified of their eligibility status. If benefits are denied, a written notice of denial, with appeal rights, must be sent.

The household is no longer required to report changes in circumstances, such as an increase in income, a decrease in household size or when the household is no longer certified eligible for food stamps or FEP. An approved application is valid for the entire school year, unless the LEA has given only temporary approval, the application is discovered to have been incorrectly approved for benefits, or subsequent verification requirements indicate the household is not eligible.

LEAs are encouraged to approve households on a temporary basis when their need to assistance appears to be short-term, such as when the household reports zero income or a temporary reduction in income. A suggested time period for temporary approvals is 45 days.

Homeless, runaway and migrant youth may be directly certified for free meals by the LEA's homeless coordinator or the migrant youth coordinator (a dated list of names with the coordinator's signature is sufficient). The LEA should keep a list of youth so certified by the coordinator. Once a child is certified as eligible to receive free meals, eligibility remains effective for the remainder of the school year. The child is considered directly certified and is not subject to verification requirements. (See Homeless Children.)

If a mistake has been made when declaring a youth eligible for free meals based on homeless, migrant or runaway status, the LEA should take steps to advise the household of the change by issuing a notice of adverse action which explains the household's right to appeal and inform the household that it can reapply for benefits. Households that were mis-classified do not have to repay the LEA for the difference between their correct eligibility and their free status. Meal counts and reimbursement claims also do not need to be adjusted.

Once a child's eligibility has been determined, it is in effect for the entire school year. In the case of joint custody where the child lives in one parent's home part of the week and the other parent's home for the rest of the week, it is no longer necessary to change eligibility according to the home in which the child is living. As long as both parents live in the same district, either the mother's or the father's income can be used to qualify the child.

By July, 2008, all LEAs will be required to use direct certification for those households receiving food stamps. If the LEA has access, direct certification may also be used for those households receiving Family Employment Program (FEP) funds or the Food Distribution Program on Indian Reservations (FDPIR). LEAs with at least 25,000 students are required to begin this practice by July, 2006; LEAs with at least 10,000 students by July, 2007.

If an LEA receives both documentation for direct certification and an application submitted on behalf of the child, school officials should disregard the application. Direct certification takes precedence over the application submitted by the household.

For complete information on determining student eligibility for free and reduced-price meals and free milk, see Eligibility Guidance for School Meals Manual in Supplementary Materials.

Disclosure of Eligibility
LEAs may disclose, without parent/guardian consent, children's names and eligibility status (whether they are eligible for free meals or free milk or reduced-price meals) to persons directly connected with the administration or enforcement of a federal or state education program, as permitted by section 9(b)(2)(C)(iii) of the Richard B. Russell National School Lunch Act. The term "persons directly connected" for the purpose of disclosure includes federal, state and local program operators responsible for program administration or program compliance and their contractors. This does not imply that these persons have routine access to participants' eligibility status. There must be a "need to know" for legitimate purposes.

The number of individuals provided access to free and reduced-price eligibility must be minimal. Only those whose function requires eligibility status or information may access the data. They include support personnel, such as those performing automated data processing.

LEAs are strongly encouraged to enter into a written agreement with officials using the information (see Appendix E of the USDA Eligibility Guidance for School Meals manual for a prototype). Anyone using the information must be informed that it is confidential and may not be disclosed or used for unauthorized purposes. In addition, users should be told that criminal penalties are stipulated for misuse of the information. Although disclosure within these limits is authorized, the final decision to reveal free and reduced-price eligibility information rests with the LEA.

Fair Hearing Procedures
A family can appeal an adverse decision made by the LEA with respect to its free and reduced-price meal or free milk application. Prior to initiating a hearing, school officials or the parent or guardian may request a conference to discuss the situation, present information, obtain an explanation of data submitted in the application, and clarify the decisions rendered. Such a conference will not in any way prejudice nor diminish the right to a fair hearing. Information on hearing procedures must be sent to parents and guardians who have been denied free milk or meal benefits when they are informed they must pay full price for milk or full or reduced-price for meals. The fair hearing procedures are itemized in the Free and Reduced-Price Meal Policy, which is part of each LEA's permanent program agreement.

Food Stamps Electronic Benefit Transfer Numbers
Electronic Benefit Transfer (EBT) numbers may not be used to replace food stamp case numbers when determining categorical eligibility for free meals. Using the EBT card number in place of a food stamp case number is not an accurate representation of a household's eligibility for benefits.

The EBT number (which also may be called a primary account number or PAN) is never the household's case number. That number is assigned by the company that provides the cards and is used to tie the household into its food stamp balance using a personal identification number (PIN). There is also no expiration date on the EBT card because food stamps never expire. Once benefits have been issued to a food stamp household, they can remain active on the card even after the household is no longer eligible to receive food stamps.

Lost and Stolen Ticket Policy and Plastic Cards
Despite the relative cost of "credit"-type cards, the policy for handling lost, stolen and misused plastic cards used as a medium of exchange must allow for a minimum of three meals or special meal replacements for each free or reduced-price student within each school year when a ticket or card is lost or stolen. It is not necessary to replace a lost plastic card with another plastic card if the school chooses to make special meal arrangements.

The school may issue an inexpensive replacement card, such as one made of paper, instead of a regular plastic one in circumstances where the less expensive replacement card can be accommodated by the automated system. If it wishes to do so, the school can offer to sell the student a replacement plastic card if the student would prefer to have a full replacement. If a student declines this option, the school must meet the minimum requirements of the replacement policy, even if there is no alternative to issuing up to three replacement regular plastic cards to the student.

Policy
Each LEA must have a free and reduced-price meal policy statement. This statement is a permanent document that may be amended as changes occur. If an LEA has an approved policy on file with the USOE for the NSLP, it only needs to confirm in writing that the policy will also apply to any SBP and/or SMP sites it may add. Updated income guidelines and any other policy or regulation changes are issued annually by the USOE as they become available.

The USOE has drafted a prototype policy. This policy states the institution's administrative procedures and responsibilities in offering free or reduced-price meals or free milk to children in accordance with current federal regulations. A copy of the complete prototype is included with each LEA's permanent agreement. If a LEA does not adopt this prototype, it must submit one for approval, including (1) its public press release about free and reduced-price meals, (2) the notification letter to parents about the program, and (3) the free and reduced-price meals application form for parents and any accompanying information. If the prototype is used, the press release is issued by USOE.

Prevention of Overt Identification of Eligible Children
Schools must take whatever measures are necessary in collecting applications or payments or serving food to ensure that there is no overt identification of children eligible for free or reduced-price meals.

There can be no physical segregation of any child, nor any other discrimination, because of inability to pay full price for meals or milk. The names of children eligible to receive free or reduced-price meals or free milk shall not be published, posted, or announced, and these children cannot be overtly identified by special tokens, tickets, or other means. Eligible children shall not be required to work for meals or milk, use a separate service area, go through a separate serving line, enter the service area through a separate entrance or at a different time, or be served meals or milk that vary from what is sold to children paying the full price.

A "reasonable" notice of sale of meal tickets or other forms of exchange means that advertisements or announcements must be made on a regular basis to the whole student body. If cash payments are widely used by full-price students, it is strongly recommended that schools consider such options as offering a discount price on multiple meal-ticket sales, working with local parent/teacher organizations to increase sales, or utilizing a different collection procedure.

Prior Year Application Approvals
Applications from a prior year are valid for the first 30 operating days of the new school year. An individual LEA can specify an earlier date for prior year applications to expire; however, the USDA is revising the current regulations to require a 30 day carryover of prior year benefits. When the new regulations take effect, LEAs will not be allowed to establish earlier dates for the expiration of prior year benefits. In year-round schools, the prior year's application may only be used for 30 operating days after a new track begins. When a new application is submitted, it must be evaluated within 10 operating days and it takes precedence over the prior year's eligibility. Once approved, households remain eligible for those benefits for a maximum of 30 days after the first operating day in the subsequent school year or when a new eligibility determination is made in the new school year, whichever comes first.

Reduced-Price Charge
LEAs cannot charge more than 40 cents for lunch, 30 cents for breakfast, or 15 cents for after school snack, and the reduced-price must be less than the full price. The reduced-price may be as low as zero for the student; however, the reimbursement rate remains the same. The reduced-price meal charge must be the same in high schools and elementary schools to ensure that all children from the same household receive equal benefits. (The charge for a full-price meal may be different in secondary and elementary schools, however.)

Special Situations
Some special situations are not addressed in the Eligibility Guidance for School Meals Manual.

Acceptable Signatures for Foster Children. The Department of Human Services has employees known as trackers who monitor some foster children in the system. If the tracker is an adult, his or her signature on the free and reduced-price meal application is acceptable. All foster children's applications must have an indication of income (or a statement that the child has "no income" or "zero"). If DHS submits a letter for the foster child, the letter must contain the child's name, the child's income, the statement, "I certify that the information is true and correct and that all income is reported. I understand that this information is being given for the receipt of federal funds, that school officials may verify the information on this application, and that deliberate misrepresentation of the information may subject me to prosecution under applicable state and federal laws," and the signature of the caseworker. All foster child applications are a part of the pool of applications considered for verification.

Indian Children Placement Program. Eligibility for foster Indian children placed by the LDS Church is based on the income of the family with whom they are living. These foster children should be counted as part of the household.

LDS Church Missionaries. Missionaries living away from home are part of the economic unit of a family applying for free or reduced-price meals if the family is providing financial support for them. In this situation, the missionary should be included in the household size.

Military Families. Instruct families completing the meal benefit forms to include the name and the portion of income of deployed service members make available to the household. The determining official should count the service member as a part of the household in establishing a child's eligibility for meals. Family Subsistence Supplemental Allowance (FSSA) received by a household should not be treated as income in determining eligibility for free and reduced-price meals through the end of fiscal year 2006.

Self-Employed Individuals - Use of IRS 1040. When using the IRS Form 1040 to determine income, the deduction of losses is not permitted in determining eligibility for benefits in any of the Child Nutrition Programs. Eligibility is determined by treating any losses as "zero income" (rather than subtracting them from other earned income). In self-employment income from a farm or business, losses are allowed to be computed when determining if that farm operation or business earned a profit or showed a loss; however, any loss may not be used to decrease other earned income.

For example, if a self-employed person reported the following on the Form 1040, all from his/her self-employment: line 12, -$5,000; line 13, -$2,000; and line 17, $4,000, the determining official would first combine these figures for gains and loses to derive a net business loss of -$3,000. Note that the Form 1040 itself does not isolate these particular calculations, so the determining official must calculate this separately. If the taxpayer's spouse is a wage earner reporting $30,000 in income, the IRS would view their "household income" as $27,000. However, the USDA CNPs would count the self-employment income "loss" as "zero," so the "household income" would be $30,000. Note that these lines may show other income and the determining official should carefully calculate the net self-employment income and perform calculations separate from the ones found on the Form 1040.

Verification
Verification of a sample of applications is required yearly. LEAs must select and verify the information on a sample of 3 percent of all approved applications selected from "error prone" applications ("error prone" applications are those within $100 per month of the eligibility limit for free or reduced-price benefits). There are alternate methods for determining the sample size. Ask the SA for further information on this procedure.

Beginning with the SY 05-06 verification process, an LEA must conduct a two-step process. The first step is for a person (one who did not make the original eligibility determination) to review the information on applications chosen for verification to assure that the eligibility determination is correct. If the confirmation review shows that there should be a decrease in benefits (free to reduced-price or paid), the LEA proceeds with and completes all verification before any notification of a new eligibility status is given. These procedures are designed to avoid a possibility of unnecessary reduction in benefits.

The second step is to begin to verify the information on the application. LEAs may verify the information on the application in one of two ways. The LEA may use direct verification to confirm the status of any household using income reported to food stamps, FDPIR, FEP, or state Medicaid. If direct verification is not used, the individual household must be contacted. Households must be allowed to provide documentation of income for any point in time between the month prior to the date the application was completed and the time when the household was required to provide income documentation. LEAs are required to provide a telephone number the household can call free of charge if they have questions regarding verification. LEAs are required to make at least one additional attempt to obtain verification from households that do not respond to the first request for information.

Verification for cause may still be conducted if the LEA has information indicating that income was not reported correctly. For more information, see Eligibility Guidance for School Meals and USDA Guidance for Verification Reporting and Recordkeeping Requirements.