(a) No, the State may not reduce or terminate assistance based on an individual's refusal to engage in required work if the individual is a single custodial parent caring for a child under age six who has a demonstrated inability to obtain needed child care, as specified at Sec. 261.56.
(b) A State that fails to comply with the penalty exception at section 407(e)(2) of the Act and the requirements at Sec. 261.56 may be subject to the State penalty specified at Sec. 261.57.