Sanctions.

A. The department shall sanction a member of a benefit group for noncompliance with work requirements or child support requirements. B. The sanction shall be applied at the following levels: (1) twenty-five percent reduction of cash assistance for the first occurrence of noncompliance; (2) fifty percent reduction of cash assistance for the second occurrence of noncompliance; and (3) termination of cash assistance and ineligibility to reapply for six months for the third occurrence of noncompliance. C. Prior to imposing the first sanction, if the department determines that a participant is not complying with the work participation requirement or child support requirements, the participant shall be required to enter into a conciliation process established by the department to address the noncompliance and to identify good cause for noncompliance or barriers to compliance. The conciliation process shall occur only once prior to the imposition of the sanction. The participant shall have ten working days from the date a conciliation notice is mailed to contact the department to initiate the conciliation process. A participant who fails to initiate the conciliation process shall have a notice of adverse action mailed to him after the tenth working day following the date on which the conciliation notice is mailed. Participants who begin but do not complete the conciliation process shall be mailed a notice of adverse action thirty days from the date the original conciliation notice was mailed. D. Reestablishing compliance shall allow full payment to resume. E. Noncompliance with reporting requirements may subject a participant to other sanctions, except that an adult member of the benefit group shall not be sanctioned for the failure of a dependent child to attend school. F. Effective October 1, 2001, the department shall not terminate the medicaid benefits of any member of a benefit group due to imposition of a sanction pursuant to the provisions of this section.