A State shall compute the amount of the AFDC payment for the initial month of eligibility:

1. (a) Prospectively (except as in paragraphs (b) and (c) of this section); or
2. (b) Retrospectively if the applicant received assistance (or would have except for the prohibition on payments of less than $10) for the immediately preceding payment month (except where the State pays the second month after application prospectively); or

3. (c) Retrospectively if:

   1. (1) Assistance had been suspended as defined in paragraph (d) of this section; and
   2. (2) The initial month follows the month of suspension; and
   3. (3) The family's circumstances for the initial month had not changed significantly from those reported in the corresponding budget month, e.g., loss of job.

4. (d) A State may suspend, rather than terminate, assistance when:

   1. (1) The agency has knowledge of, or reason to believe that ineligibility would be only for one payment month; and
   2. (2) Ineligibility for that one payment month was caused by income or other circumstances in the corresponding budget month.
5. (e) If the initial month is computed prospectively as in paragraph (a) of this section, the second month shall be prospective if the State elects a 2-month retrospective budgeting system.

[47 FR 5679, Feb. 5, 1982]