[Code of Federal Regulations]
[Title 7 Volume 4]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR272.8]

[Page 575-581]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 272--REQUIREMENTS FOR PARTICIPATING STATE AGENCIES--Table of Contents
 
Sec. 272.8  State income and eligibility verification system.

    (a) General. (1) State agencies shall maintain and use an income and 
eligibility verification system (IEVS), as specified in this section. By 
means of the IEVS, State agencies shall request wage and benefit 
information from the agencies identified in this paragraph and use that 
information in verifying eligibility for and the amount of food stamp 
benefits due to eligible households. Such information shall be requested 
and used with respect to all household members, including any considered 
excluded household members as specified in Sec. 273.11(c) whenever the 
SSNs of such excluded household members are available to the State 
agency. If not otherwise documented, State agencies shall obtain written 
agreements from these information provider agencies that they shall not 
record any information about individual food stamp households and that 
staff in those agencies are subject to the disclosure restrictions of 
Sec. 272.1(c). The wage and benefit information and agencies are:
    (i) Wage information maintained by the State Wage Information 
Collection Agency (SWICA);
    (ii) Information about net earnings from self-employment, wages, and 
payments of retirement income maintained by the Social Security 
Administration (SSA) and available pursuant to section 6103(1)(7)(A) of 
the Internal Revenue Service (IRS) Code; and Federal retirement, and 
survivors, disability, SSI and related benefit information available 
from SSA;
    (iii) Unearned income information from the IRS available pursuant to 
section 6103(1)(7)(B) of the IRS Code; and
    (iv) Claim information from the agency administering Unemployment 
Insurance Benefits (UIB) and any information in addition to information 
about wages and UIB available from the agency which is useful for 
verifying eligibility and benefits, subject to the provisions and 
limitations of section 303(d) of the Social Security Act.
    (2) State agencies shall exchange with State agencies administering 
certain other programs in the IEVS information about food stamp 
households' circumstances which may be of use in establishing or 
verifying eligibility or benefit amounts under the Food Stamp Program 
and those programs. State agencies may exchange such information with 
these agencies in other States when they determine that the same 
objectives are likely to be met. These programs are:
    (i) The Temporary Assistance for Needy Families (TANF);
    (ii) Medicaid;
    (iii) Unemployment Compensation (UC);
    (iv) Food Stamps; and
    (v) Any State program administered under a plan approved under title 
I, X, or XIV (the adult categories), or title XVI of the Social Security 
Act.
    (3) State agencies shall provide information to people administering 
the Child Support Program (title IV-D of the Social Security Act) and 
titles II (Federal Old Age, Survivors, and Disability Insurance 
Benefits) and XVI (Supplemental Security Income for the Aged, Blind, and 
Disabled) of the Social Security Act.
    (4) Agreements. (i) Prior to requesting or exchanging information 
with other agencies, State agencies shall execute data exchange 
agreements with those agencies. The agreements shall specify the 
information to be exchanged and the procedures which will be used in the 
exchange of information. These agreements shall be part of the State 
agency's Plan of Operation, as required by paragraph (i) of this 
section. These agreements shall cover at least the following areas:
    (A) Identification of positions of all agency officials with 
authority to request wage information;

[[Page 576]]

    (B) Methods and timing of the requests for any types of information, 
including the formats to be used;
    (C) The safeguards limiting release or redisclosure as required by 
Federal or State law or regulation as discussed in Sec. 272.1(c) and as 
may be required by other guidelines published by the Secretary; and
    (D) Reimbursement agreements, as appropriate, including new 
developmental costs associated with the furnishing of data.
    (ii) Agreements with SWICA's and agencies providing UIB data shall 
specify State agency access no less frequently than twice a month for 
applicants.
    (5) Uses of data. The State agency shall use information obtained by 
means of the IEVS for the purposes of:
    (i) Verifying a household's eligibility;
    (ii) Verifying the proper amount of benefits;
    (iii) Investigating to determine whether participating households 
received benefits to which they were not entitled; and
    (iv) Obtaining information which will be used in conducting criminal 
or civil prosecutions based on receipt of food stamp benefits to which 
participating households were not entitled.
    (b) State wage information. The wage information maintained by a 
SWICA which is not a UC agency or which is a UC agency but does not use 
wage data for determining UIB shall:
    (1) Contain the Social Security Number (SSN), the last name, wages 
earned for the period of the report for each employee, and an identifier 
of the employer such as name and address;
    (2) Include all employers covered by the State's UC law;
    (3) Be accumulated by employers for no longer periods than calendar 
quarters and be reported by employers to the SWICA within 30 days of the 
end of each quarter;
    (4) Be machine readable; and
    (5) Be accessible to agencies in other States which have executed 
agreements as required in paragraph (a)(4) of this section and to the 
Social Security Administration as specified in paragraph (a)(3) of this 
section for verifying eligibility and benefits under tities II and XVI 
of the Social Security Act.
    (c) Alternate data sources. The Secretary may, upon a State agency's 
application which is included in the attachment to the Plan of Operation 
specified in paragraph (i) of this section, permit a State agency to 
request and use income information from an alternate source or sources 
in order to meet any requirement of paragraph (a) of this section. The 
application shall document that the alternate source or sources provides 
accurate and timely information that is as useful for verifying 
eligibility and benefit amounts. State agencies shall comply with the 
requirements specified in paragraph (a) of this section unless this 
application for an alternate source has been approved. The Secretary 
shall consult with the Secretary of the Department of Health and Human 
Services and with the Secretary of the Department of Labor prior to 
approval of any alternate data source.
    (d) Form of data requests and exchanges. Requests for wage and 
benefit information and exchanges of eligibility and benefit information 
with the programs specified in paragraph (a) of this section shall be in 
the standardized formats established by the Secretary of Health and 
Human Services (in consultation with the Secretary) and required by the 
Secretary for SWICA, UC and other States, and in the formats prescribed 
by the Commissioners of SSA and IRS for SSA and IRS requests.
    (e) Requesting and using information for applicants. State agencies 
shall request and use information about members of all applicant 
households as specified below.
    (1) Information shall be requested at the next available opportunity 
after the date of application even if the applicant household has been 
determined eligible by that time. Information about members of applicant 
households who cannot provide SSNs at application shall be requested at 
the next available opportunity after the State agency is notified of 
their SSN's. Information received within the 30-day application period 
shall be used to determine household eligibility and benefits, if the 
information is received timely enough that it can be used for that 
determination. However, State

[[Page 577]]

agencies shall make eligibility and benefit determinations without 
waiting for receipt of IEVS data so as to comply with the promptness 
standard of Sec. 273.2(g). Information received from a source after an 
eligibility determination has been made shall be used as specified in 
paragraphs (f) and (g) of this section.
    (2) Information from the SWICA, from SSA and IRS, and claim 
information from the agency administering UIB shall be requested and 
used as specified in paragraph (e)(1) of this section. Requests to 
SWICAs shall access the most recent SWICA data available. Requests to 
SSA and IRS shall be submitted according to procedures specified by the 
respective Commissioners of those organizations.
    (3) Any information other than wage and UIB which UC agencies may 
have and which State agencies determine would be useful in verifying 
eligibility or benefits of applicant households shall be requested by 
methods and at intervals to which State agencies and UC agencies agree 
and shall be used as specified in paragraph (e)(1) of this section; and
    (4) Exchanges of information about applicant households with other 
programs specified in paragraph (a) of this section shall be made as the 
State agency and other programs may agree.
    (f) Requesting information about recipients. Except as provided in 
paragraph (f)(7) of this section, with respect to all members of 
recipient households State agencies shall:
    (1) Request information from the SWICA quarterly, such requests 
including all households which participated in any month of the quarter;
    (2) Request information about household members from SSA data bases 
no later than the second month of the certification period, when 
requests at application did not establish automatic reporting to the 
State agency of changes in SSA data. Requests shall be submitted 
according to procedures specified by the Commissioner of SSA;
    (3) Request information from IRS annually for all current 
recipients. Requests shall be submitted to IRS according to procedures 
specified by the Commissioner of IRS;
    (4) Exchange information with other programs specified in paragraph 
(a) of this section as the State agency and these other programs may 
agree;
    (5) Request information about Unemployment Insurance Benefits (UIB) 
from the agency administering that program as follows:
    (i) For all household members about whom requests at application 
indicate no receipt of UIB, information shall be requested for the three 
months subsequent to the month of application or until the receipt of 
UIB is reported, whichever is earlier;
    (ii) For all household members who report a loss of employment, 
information shall be requested for the three months subsequent to the 
month the loss is reported or until the receipt of UIB is reported, 
whichever is earlier; and
    (iii) For all household members receiving UIB, information shall be 
requested monthly until UIB are exhausted; and
    (6) Request from UC agencies any information other than UIB 
information which State agencies determine would be useful in verifying 
eligibility or benefits of recipient households. Requests shall be made 
by methods and at intervals to which the State agencies and the UC 
agencies agree.
    (7) Under certain conditions State agencies may exclude from the 
requests for information specified in this paragraph those members of 
recipient households who are participating in one of the other programs 
listed in paragraph (a)(2) of this section. The conditions for such 
exclusion are that:
    (i) The agency responsible for administering such other program is 
requesting and acting on information on food stamp recipients who are 
participating in that program as required by the pertinent regulations 
for that program, including any concerning selective criteria for 
information items for follow-up action;
    (ii) The other program agency agrees to inform the State agency of 
the information obtained from its follow-up action when that action 
discovers discrepancies between actual circumstances of food stamp 
recipients and circumstances known by the other program agency;

[[Page 578]]

    (iii) The other program agency agrees to make available, upon the 
request of the State agency, information items about food stamp 
recipients which it did not follow up on; and
    (iv) The follow-up action taken by the other program agency is at 
least as beneficial as such action by the State agency.
    (g) Actions on recipient households. With respect to information 
items received as a result of requests made according to paragraph (f) 
of this section, State agencies shall initiate and pursue action 
according to the attachment to the Plan of Operation specified in 
paragraph (i) of this section.
    (1) State agency action on information items about recipient 
households shall include:
    (i) Review of the information and comparison of it to case record 
information;
    (ii) For all new or previously unverified information received, 
contact with the households and/or collateral contacts to resolve 
discrepancies as specified in Secs. 273.2(f)(4)(iv) and 273.2(f)(9)(iii) 
and (iv); and
    (iii) If discrepancies warrant reducing benefits or terminating 
eligibility, notices of adverse action.
    (2) State agencies shall initiate and pursue the actions specified 
in paragraph (g)(1) of this section so that the actions are completed 
within 45 days of receipt of the information items. Actions may be 
completed later than 45 days from the receipt of information items on no 
more than 20 percent of the information items if:
    (i) The only reason that the actions cannot be completed is the 
nonreceipt of verification requested from collateral contacts; and
    (ii) The actions are completed as specified in Sec. 273.12 when 
verification from a collateral contact is received or in conjunction 
with the next case action when such verification is not received, 
whichever is earlier.
    (3) When the actions specified in paragraph (g)(1) of this section 
substantiate an overissuance, State agencies shall establish and take 
actions on claims as specified in Sec. 273.18.
    (4) State agencies shall use appropriate procedures to monitor the 
timeliness requirements in paragraph (g)(2) of this section.
    (5) Except for the claims actions specified in paragraph (g)(3) of 
this section, under the conditions of paragraph (f)(7) of this section, 
State agencies may exclude from the actions required in paragraph (g) of 
this section information items pertaining to household members who are 
participating in one of the other programs listed in paragraph (a)(2) of 
this section.
    (h) IEVS information and quality control. The requirements of this 
section do not relieve the State agency of its responsibility for 
determining erroneous payments and/or its liability for such payments as 
specified in part 275 of this title (which pertains to quality control) 
and in guidelines on quality control established under that part. State 
agencies shall make available to quality control reviewers information 
items which are not selected for follow-up action because of the use of 
targeting methods specified in paragraph (i)(3) of this section 
including any information items not selected by other program agencies 
as provided in paragraph (i)(3)(iii)(C).
    (i) State Plan of Operation. The requirements for the IEVS specified 
in this section shall be included in an attachment to the State Plan of 
Operation as required in Sec. 272.2(d). This document shall include:
    (1) A description of procedures used, and agreements with the other 
agencies and programs specified in paragraph (a) of this section, 
including steps taken to meet requirements of limiting disclosure and 
safeguarding of information obtained from food stamp households and 
third parties as specified in Sec. 272.1;
    (2) Any of the material concerning alternate data sources as 
specified in paragraph (c) of this section;
    (j) Reports and documentation. (1) The agency shall report as the 
Secretary prescribes for determining compliance with these regulations 
and evaluating the effectiveness of the income and eligibility 
verification system.
    (2) The State agency shall document as required by Sec. 273.2(f)(6) 
its use of information obtained through the IEVS

[[Page 579]]

both when an adverse action is and is not initiated.


[Amdt. 264, 51 FR 7204, Feb. 28, 1986, as amended at 53 FR 2822, Feb. 2, 
1988; Amdt. 356, 59 FR 29713, June 9, 1994]

    Effective Date Note: At 53 FR 2822, Feb. 2, 1988, Sec. 272.8, was 
amended by revising paragraph (f) introductory text, adding (f)(7), 
revising (g), adding a sentence to the end of (h) and revising (i) and 
(j)(1), effective in part upon approval by the Office of Management and 
Budget. Paragraphs (i)(3) and (4) and (j)(1) are published below and 
will become effective upon publication of a notice in the Federal 
Register.

Sec. 272.8  State income and eligibility verification system.

                                * * * * *

    (i) * * *
    (3) For each of the data sources specified in paragraphs (c) and (f) 
of this section, a separate description of how the State agency will 
select (target) information items for the actions specified in paragraph 
(g)(1) of this section. The description shall:
    (i) Describe the targeting method which will be used including such 
details as: What selective criteria (thresholds) are used, including 
(when feasible) assurances that the most cost-beneficial data are 
targeted in instances of redundancy across data sources; what program 
standards and/or information about households are used, if any; whether 
the criteria are applied on the basis of individual or groups of 
information items, and about individual household members or households; 
and whether the criteria are applied before any follow-up action 
specified in paragraph (g) of this section are initiated or are applied 
as part of the comparison of match results to casefile information;
    (ii) State the approximate number of information items which will be 
acted on and the approximate percentage that that number is of the 
number of information items received;
    (iii) Include a sufficiently comprehensive and detailed cost-benefit 
analysis to justify the targeting method. If the State agency will 
follow-up on all information items received, it shall certify in its 
Plan of Operation that it performed an analysis which showed that 100 
percent follow up is cost beneficial. If the targeting method will 
select certain information items for follow up, the justification shall 
show that following up on more information items than selected would not 
be cost-beneficial.
    (A) Total costs shall include both the Federal and State share of 
administrative costs. The elements of the total costs shall be limited 
to the costs of targeting and follow-up action. The justification shall 
include an estimate of the cost per follow-up action. No costs for any 
developmental, start-up and other one-time costs or indirect ongoing 
costs shall be included.
    (B) Total benefits shall include such quantifiable factors as the 
amounts of collections on claims established because of IEVS-obtained 
information, and the amounts of overissuances and the total of Federal 
and State administrative costs avoided due to terminating participation 
and reducing benefits.
    (C) As provided in paragraphs (f)(7) and (g)(5) of this section, the 
State agency may exclude household members from match requests or 
exclude information items about them from follow up. If the State agency 
wants to make either of such exclusions, in its cost-benefit 
justification it shall provide certain information. First, the State 
agency shall identify the program involved and state that the agency 
responsible for administering the program meets the conditions of 
paragraphs (f)(7)(i), (ii) and (iii) of this section. Second, the State 
agency shall summarize the methods for targeting, or for otherwise 
selecting information items for follow-up action, used by the other 
program agency as required in paragraph (f)(7)(i) of this section. In 
that summary, the State agency shall explain why those actions are at 
least as beneficial as the action which the State agency would take to 
comply with paragraph (g) of this section. The summary shall be based on 
the State agency's review of the description of the targeting or other 
selection methods as provided by the other program agency; and
    (4) The State agency shall submit revisions to the attachment as 
warranted by information in the annual report required in paragraph 
(j)(l) of this section.
    (j) Reports and documentation. (1) The State agency shall annually 
assess the targeting aspects of its IEVS specified in paragraph (i)(3) 
of this section and shall report that assessment to FNS. Such reports 
shall cover a Federal Fiscal Year (October 1 through September 30) and 
are due to the appropriate FNS Regional Office by December 31 following 
the particular Fiscal Year. In the reports the State agency shall 
provide the following information about its targeting activities 
separately for each data source:
    (i) The actual number of information items acted on and the 
percentage that that number is of the number of items received;
    (ii) A summary of any significant operational events and patterns in 
targeting, and any consequent changes made or planned in such areas as 
automated data processing and targeting methods; and
    (iii) Any change to the cost-benefit justification which is required 
by paragraph (i)(3) of this section.

[[Page 580]]


    Effective Date Note: By Amdt. 388, 65 FR 70192, Nov. 21, 2000, 
Sec. 272.8 was revised, effective January 20, 2001. For the conveniece 
of the user, the revised text is set forth as follows:

Sec. 272.8  State income and eligibility verification system.

    (a) General. (1) State agencies may maintain and use an income and 
eligibility verification system (IEVS), as specified in this section. By 
means of the IEVS, State agencies may request wage and benefit 
information from the agencies identified in this paragraph (a)(1) and 
use that information in verifying eligibility for and the amount of food 
stamp benefits due to eligible households. Such information may be 
requested and used with respect to all household members, including any 
considered excluded household members as specified in Sec. 273.11(c) of 
this chapter whenever the SSNs of such excluded household members are 
available to the State agency. If not otherwise documented, State 
agencies must obtain written agreements from these information provider 
agencies affirming that they must not record any information about 
individual food stamp households and that staff in those agencies are 
subject to the disclosure restrictions of the information provider 
agencies and Sec. 272.1(c). The information provider agencies, at a 
minimum, are:
    (i) The State Wage Information Collection Agency (SWICA) which 
maintains wage information;
    (ii) The Social Security Administration (SSA) which maintains 
information about net earnings from self-employment, wages, and payments 
of retirement income, which is available pursuant to section 
6103(1)(7)(A) of the Internal Revenue Service (IRS) Code; and 
information which is available from SSA regarding Federal retirement, 
and survivors, disability, SSI and related benefits;
    (iii) The IRS from which unearned income information is available 
pursuant to section 6103(1)(7)(B) of the IRS Code; and
    (iv) The agency administering Unemployment Insurance Benefits (UIB) 
which maintains claim information and any information in addition to 
information about wages and UIB available from the agency which is 
useful for verifying eligibility and benefits, subject to the provisions 
and limitations of section 303(d) of the Social Security Act.
    (2) State agencies may exchange with State agencies administering 
certain other programs in the IEVS information about food stamp 
households' circumstances which may be of use in establishing or 
verifying eligibility or benefit amounts under the Food Stamp Program 
and those programs. State agencies may exchange such information with 
these agencies in other States when they determine that the same 
objectives are likely to be met. These programs are:
    (i) Temporary Assistance for Needy Families;
    (ii) Medicaid;
    (iii) Unemployment Compensation (UC);
    (iv) Food Stamps; and
    (v) Any State program administered under a plan approved under title 
I, X, or XIV (the adult categories), or title XVI of the Social Security 
Act.
    (3) State agencies must provide information to those administering 
the Child Support Program (title IV-D of the Social Security Act) and 
titles II (Federal Old Age, Survivors, and Disability Insurance 
Benefits) and XVI (Supplemental Security Income for the Aged, Blind, and 
Disabled) of the Social Security Act.
    (4) Prior to requesting or exchanging information with other 
agencies, State agencies must execute data exchange agreements with 
those agencies. The agreements must specify the information to be 
exchanged and the procedures which will be used in the exchange of 
information. These agreements are not part of the State agency's Plan of 
Operation.
    (b) Alternate data sources. A State agency may continue to use 
income information from an alternate source or sources to meet any 
requirement under paragraph (a) of this section.
    (c) Actions on recipient households. (1) State agency action on 
information items about recipient households shall include:
    (i) Review of the information and comparison of it to case record 
information;
    (ii) For all new or previously unverified information received, 
contact with the households and/or collateral contacts to resolve 
discrepancies as specified in Secs. 273.2(f)(4)(iv) and 273.2 
(f)(9)(iii) and (f)(9)(iv); and
    (iii) If discrepancies warrant reducing benefits or terminating 
eligibility, notices of adverse action.
    (2) State agencies must initiate and pursue the actions on recipient 
households specified in paragraph (c)(1) of this section so that the 
actions are completed within 45 days of receipt of the information 
items. Actions may be completed later than 45 days from the receipt of 
information if:
    (i) The only reason that the actions cannot be completed is the 
nonreceipt of verification requested from collateral contacts; and
    (ii) The actions are completed as specified in Sec. 273.12 of this 
chapter when verification from a collateral contact is received or in 
conjunction with the next case action when such verification is not 
received, whichever is earlier.
    (3) When the actions specified in paragraph (c)(1) of this section 
substantiate an overissuance, State agencies must establish

[[Page 581]]

and take actions on claims as specified in Sec. 273.18 of this chapter.
    (4) State agencies must use appropriate procedures to monitor the 
timeliness requirements in paragraph (c)(2) of this section.
    (5) Except for the claims actions specified in paragraph (c)(3) of 
this section, State agencies may exclude from the actions required in 
paragraph (c) of this section information items pertaining to household 
members who are participating in one of the other programs listed in 
paragraph (a)(2) of this section.
    (d) IEVS information and quality control. The requirements of this 
section do not relieve the State agency of its responsibility for 
determining erroneous payments and/or its liability for such payments as 
specified in part 275 of this chapter (which pertains to quality 
control) and in guidelines on quality control established under that 
part.
    (e) Documentation. The State agency must document, as required by 
Sec. 273.2(f)(6) of this chapter, information obtained through the IEVS 
both when an adverse action is and is not instituted.