(a) When the terms of an award, the legislative intent of a government benefit, the rules of an organization paying a benefit, the nature of a trust fund, or the agreed upon intent of a friend, nonlegally responsible relative, social agency or other organization limits the use of cash income, the social services official shall abide by such restriction, when verified. The restriction may limit the use of the income to a specified purpose or to a particular member or members of the household. However, whenever any contribution from a nonlegally responsible relative or friend is sought to be restricted for the purpose of supplementing a State-prescribed or -approved standard it shall not qualify as a permissible restriction of income, unless the social services official determines that the health and welfare of the recipient would be specifically and materially enhanced thereby.

(b) No grant or loan to an undergraduate student for educational purposes made or insured under any program administered by the United States Secretary of Education shall be considered as income or resources in determining need and amount of assistance.

(c) No grants or loans, including but not limited to undergraduate or graduate school grants, loans or scholarships, which are obtained and used under conditions that preclude their use for current living costs, shall be considered to be income or resources in determining need and the amount of assistance.

(d) For SSI recipients applying for HR: