(1) An individual who meets all of the following requirements is eligible for family independence program assistance:

    (a) Is a member of a family or a family independence program assistance group.

    (b) Is a member of a program group whose income and assets are less than the income and asset limits set by the department. Except as provided in section 57a(6) and (7), when determining a program group's income and assets, the department shall disregard the income and assets of a new parent or new stepparent, who becomes a new program group member as the result of marriage, from 1 month after the date of the marriage until 18 months after that date unless the income and assets disregard results in a decrease of eligible assistance. The disregard of a new parent's or new stepparent's income and assets only applies if the program group's income and assets do not exceed twice the income and asset limits set by the department.

    (c) In the case of a minor parent, meets the requirements of subsection (2).

    (d) Is a United States citizen, a permanent resident alien, or a refugee. If the applicant indicates that he or she is not a United States citizen, the department shall verify the applicant's immigration status using the federal systematic alien verification for entitlements (SAVE) program.

    (e) Is a resident of this state as described in section 32.

    (f) Meets any other eligibility criteria required for the receipt of federal or state funds or determined by the department to be necessary for the accomplishment of the goals of the family independence program.

    (g) Is a member of a program group that meets the requirements of subsection (6).

    (2) A minor parent and the minor parent's child shall not receive family independence program assistance unless they live in an adult-supervised household. The family independence program assistance shall be paid on behalf of the minor parent and child to an adult in the adult-supervised household. Child care in conjunction with participation in education, employment readiness, training, or employment programs, that have been approved by the department, shall be provided for the minor parent's child. The minor parent and child shall live with the minor parent's parent, stepparent, or legal guardian unless the department determines that there is good cause for not requiring the minor parent and child to live with a parent, stepparent, or legal guardian. The department shall determine the circumstances that constitute good cause, based on a parent's, stepparent's, or guardian's unavailability or unwillingness or based on a reasonable belief that there is physical, sexual, or substance abuse, or domestic violence, occurring in the household, or that there is other risk to the physical or emotional health or safety of the minor parent or child. If the department determines that there is good cause for not requiring a minor parent to live with a parent, stepparent, or legal guardian, the minor parent and child shall live in another adult-supervised household. A local office director may waive the requirement set forth in this subsection with respect to a minor parent who is at least 17 years of age, attending secondary school full-time, and participating in a department service plan or a teen parenting program, if moving would require the minor parent to change schools.

    (3) If a recipient who is otherwise eligible for family independence program assistance under this section is currently applying for supplemental security income and seeking exemption from the PATH program, the recipient shall be evaluated and assessed as provided in this section before a family self-sufficiency plan is developed under section 57e. Based on a report resulting from the evaluation and assessment, the caseworker shall make a determination and referral as follows:

    (a) A determination that the recipient is eligible to participate in the PATH program and a referral to the PATH program.

    (b) A determination that the recipient is exempt from PATH program participation under section 57f and a referral to a sheltered work environment or subsidized employment.

    (c) A determination that the recipient is exempt from PATH program participation under section 57f and a referral for supplemental security income advocacy.

    (4) The department may contract with a legal services organization to assist recipients with the process for applying for supplemental security income. The department may also contract with a nonprofit rehabilitation organization to perform the evaluation and assessment described under subsection (3). If the department contracts with either a nonprofit legal or rehabilitation services organization, uniform contracts shall be used statewide that include, but are not limited to, uniform rates and performance measures.

    (5) The auditor general shall conduct an annual audit of the evaluation and assessment process required under this section and submit a report of his or her findings to the legislature.

    (6) Except as provided in subsection (7) and beginning after the date on which the department implements the policy described in subsection (7), a family independence program assistance group shall not receive family independence program assistance if a member of the program group does not meet the attendance requirements of section 1561 of the revised school code, 1976 PA 451, MCL 380.1561, with respect to a child under the age of 16. Except as provided in subsection (7) and beginning after the date on which the department implements the policy described in subsection (7), if a member of the program group does not meet the attendance requirements of section 1561 of the revised school code, 1976 PA 451, MCL 380.1561, with respect to a child age 16 and above, the child shall be removed from the program group. The department shall implement policies in accordance with this subsection that are effective and binding on all program groups and are exempt from the rule promulgation requirements of the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

    (7) Not later than June 11, 2016, the department shall implement a policy that it must follow before terminating a family independence program assistance group from receiving family independence program assistance as provided in subsection (6) or before removing a child from the program group as provided in subsection (6). The department shall apply the policy described in this subsection before removing a family independence program assistance group from receiving family independence program assistance as described in subsection (6) and before removing a child from a family independence program assistance group as described in subsection (6).