Financial standard of need.

A. The secretary shall adopt a financial standard of need based upon the availability of federal and state funds and based upon appropriations by the legislature of the available federal temporary assistance for needy families grant made pursuant to the federal act in the following categories: (1) cash assistance; (2) child care services; (3) other services; and (4) administrative costs. The legislature shall determine the actual percentage of each category to be used annually of the federal temporary assistance for needy families grant made pursuant to the federal act. Within the New Mexico works program, the department may provide cash assistance or services to specific categories of benefit groups from general funds appropriated to cash assistance or services. The department may exclude these funds from temporary assistance for needy families maintenance of effort. The department shall identify alternative state spending to claim as maintenance of effort and make necessary arrangements to allow reporting of that spending. B. The following income sources are exempt from the gross income test, the net income test and the cash payment calculation: (1) medicaid; (2) food stamps; (3) government-subsidized foster care payments if the child for whom the payment is received is also excluded from the benefit group; (4) supplemental security income; (5) government-subsidized housing or housing payments; (6) federally excluded income; (7) educational payments made directly to an educational institution; (8) government-subsidized child care; (9) earned income that belongs to a person seventeen years of age or younger who is not the head of household; (10) child support passed through to the participant by the child support enforcement division of the department in the following amounts: (a) fifty dollars ($50.00) per month through December 31, 2008; and (b) no later than January 1, 2009, a minimum of one hundred dollars ($100) for one child and two hundred dollars ($200) for two or more children as based on the availability of state or federal funds; (11) earned income deposited in an individual development account by a member of the benefit group or money received as matching funds for allowable uses by the owner of the individual development account pursuant to the Individual Development Account Act [58-30-1 NMSA 1978]; and (12) other income sources as determined by the department. C. The total countable gross earned and unearned income of the benefit group cannot exceed eighty-five percent of the federal poverty guidelines for the size of the benefit group. D. For a benefit group to be eligible to participate: (1) gross countable income that belongs to the benefit group must not exceed eighty-five percent of the federal poverty guidelines for the size of the benefit group; and (2) net countable income that belongs to the benefit group must not equal or exceed the financial standard of need after applying the disregards set out in Paragraphs (1) through (4) of Subsection E of this section. E. Subject to the availability of state and federal funds, the department shall determine the cash payment of the benefit group by applying the following disregards to the benefit group's earned income and then subtracting that amount from the benefit group's financial standard of need: (1) one hundred twenty-five dollars ($125) of monthly earned income and one-half of the remainder, or for a two-parent family, two hundred twenty-five dollars ($225) of monthly earned income and one-half of the remainder for each parent; (2) monthly payments made for child care at a maximum of two hundred dollars ($200) for a child under two years of age and at a maximum of one hundred seventy-five dollars ($175) for a child two years of age or older; (3) costs of self-employment income; and (4) business expenses. F. In addition to the disregards specified in Subsection E of this section, and between June 28, 2007 and June 30, 2008, or until implementation of the employment retention and advancement bonus program described in Subsection G of this section, the department shall apply the following income disregards to the benefit group's earned income and then subtract that amount from the benefit group's financial standard of need: (1) for the first two years of receiving cash assistance or services, if a participant works over the work requirement rate set by the department pursuant to the New Mexico Works Act, one hundred percent of the income earned by the participant beyond that rate; and (2) for the first two years of receiving cash assistance or services, for a two- parent benefit group in which one parent works more than thirty-five hours per week and the other works more than twenty-four hours per week, one hundred percent of income earned by each participant beyond the work requirement rate set by the department. G. No later than July 1, 2008, New Mexico employment incentives shall be as follows: (1) the department shall implement an employment retention and advancement bonus program based on availability of state or federal funds that includes financial incentives to encourage a participant to: (a) leave the New Mexico works program and move into an employment retention and advancement bonus incentive program; (b) maintain a minimum of thirty hours per week employment; and (c) leave the employment retention and advancement bonus incentive program due to increased earnings above the income eligibility standard and continue employment; (2) the employment retention and advancement bonus incentive program shall provide a cash bonus and employment services to a former participant who, upon application: (a) is currently engaged in paid work for a minimum of thirty hours per week; (b) has received cash assistance for at least three months and one of the last three months; (c) has had a gross income of less than one hundred fifty percent of the federal poverty guidelines; and (d) has participated in the employment retention and advancement bonus incentive program for no longer than eighteen months; (3) for continued eligibility in the employment retention and advancement bonus incentive program, a participant shall: (a) be engaged in paid work for thirty hours per week for at least one of the past three months; (b) be engaged in paid work for thirty hours per week for at least four of the past six months; (c) have had gross income less than one hundred fifty percent of the federal poverty guidelines; and (d) have participated in the program no more than eighteen months; (4) the department shall provide employment services to assist participants in gaining access to available work supports, maintain employment and advance to higher-paying employment; and (5) the department shall: (a) establish the amount of bonus to be paid to participants in the employment retention and advancement bonus program based on availability of state and federal funds; (b) propose rules to implement the employment retention and advancement bonus incentive program of this subsection no later than January 1, 2008; and (c) begin implementation of the employment retention and advancement bonus incentive program of this subsection no later than July 1, 2008. H. The department may recover overpayments of cash assistance on a monthly basis not to exceed fifteen percent of the financial standard of need applicable to the benefit group. I. Based upon the availability of funds and in accordance with the federal act, the secretary may establish a separate temporary assistance for needy families cash assistance program that may waive certain New Mexico Works Act requirements due to a specific situation. J. Subject to the availability of state and federal funds, the department may limit the eligibility of benefit groups that are eligible because a legal guardian is not included in the benefit group.