(1) Habilitation services may be provided in the following settings:

(a) residential settings. Residential settings include:

(i) community homes for adults;

(ii) community homes for children;

(iii) foster homes; and

(iv) the recipient's own home.

(b) day settings. Day settings include:

(i) day services;

(ii) prevocational services; and

(iii) supported employment, otherwise referred to as supported work services.

(2) Prevocational and supported employment services may be provided to only those recipients who formerly resided an ICF/MR or a nursing facility.

(3) Prevocational services may be provided only to those recipients:

(a) who are compensated for the work they do at a rate that is less than 50% of minimum wage; and

(b) who are not expected to be able to join the general work force within 1 year.