Earned Income Introduction

 

Note:

Earned income is a mandatory verification.

 

The following types of income are considered earned income for SNAP purposes:

 

Wages

Wages and salaries paid to an employee are counted as earned income.

 

Self-Employment

The total gross incomefrom a self-employment enterprise, including the total gain from the sale of any capital goods or equipment related to the business, excluding the cost of doing business, is counted as earned income.

Payments from roomers and boarders are counted as earned self-employment income.

Income from rental property is counted as earned self-employment income only if a household member actively engages in the management of the property for an average of at least 20 hours per week.

 

Work Study that is not Title IV

State work-study earnings and earnings from a fellowship or an assistantship with a work requirement that are not used to pay educational expenses are counted as earned income.

 

Note:

Cases that have earned income, with the exception of cases with self-employment income, must be placed on Simplified Reporting (SR).

 

Verification of Income

The amount of all gross countable earned income must be verified prior to certifying a household eligible to participate in SNAP.  However, when all attempts to verify the income have been unsuccessful because a third party providing the income verification has failed to cooperate with you or the household, and all other sources of verification are unavailable, you must determine an amount to be used for certification purposes based on the best available information.

 

Note:

If the client has missing pay information you can use year-to-date figures on paystubs to determine the amount of the missing information

 

Earned Income

The earned income verification must display the gross wages.  The following are examples of acceptable verifications of earnings:

 

Flexible Credits

Some employers provide credits, flexible benefits, or flex credits as a benefit to offset the costs of medical insurance, life insurance, etc.  The term varies among employers.  Flex credits are generally identified separately as “credits” on the pay stub, but are added to the employee’s total gross income.

Flex credits are non-countable, provided that they are used for benefits such as health insurance or life insurance, but cannot be taken as cash by the employee.

Due to differences among employers in the administration of flex credits you must check pay stubs closely to see if credits or flex credits or flexible benefits are identified in the earnings section of the pay stub.  If so, follow-up is required to determine the correct amount of countable income on the pay stub.  You must be sure to annotate the Narratives tab and retain the documentation from the employer or collateral contact in the case record.

 

Self-employment Income

Self-employment income is verified by:

Earned Income Deduction

Twenty percent of gross monthly earned income is allowed as a deduction.  There are no additional deduction(s) from earned income.

 

Income Anticipated in the Certification Period

To determine a household’s eligibility and benefit level, you must take into account the income already received by the household during the certification period and any anticipated income the household is reasonably certain will be received during the remainder of the certification period.  If the amount of income that will be received or when it will be received is uncertain, that portion of the household’s income that is uncertain must not be counted.

 

Example:

A household anticipating income from a new source, such as a new job or a recent application for public assistance benefits may be uncertain as to the timing and amount of the initial payment.  These monies cannot be anticipated as countable income unless there is reasonable certainty of the amount of the payment and the month in which payment will be received.

If the exact amount of the income is not known, that portion of it which is anticipated with reasonable certainty is considered income.  Where receipt of income is reasonably certain but the monthly amount may fluctuate, the household may elect to income average.

 

Anticipating Income

Income received during the previous four (4) consecutive weeks must be used as an indicator of anticipated income.  If income fluctuates to the extent that a consecutive four (4) week period alone cannot provide an accurate indication of anticipated income, you may review a longer period of past time as an indicator of future income.

 

Example:

Collect pay information from the last three months.  Add all paystubs together and divide the answer by three (three months) for a monthly pay amount.  Divide the monthly amount by four (four weeks) for a weekly amount.  Use this weekly amount as the weekly pay in BEACON.

You cannot use past income as an indicator of anticipated income when changes in income have occurred or can be anticipated during the certification period.

 

Example:

A client provides four consecutive pay-stubs but the last paystub in the series indicates the client has received a raise.  The anticipated income should be based on the average hours times the new hourly rate.

 

Income from Steady Employment

The four (4) consecutive weeks prior to initial certification or prior to the recertification date must be used as an indication of anticipated income in the month of application and subsequent months, unless:

 

Income from Hourly and Piecework Employment

When income is received on an hourly wage or piece work basis, weekly income may fluctuate if the wage earner works less than eight (8) hours some days or is required to work overtime on others.  In this case, you should consult with the household to determine the “normal” amount of income to be expected as a result of one (1) week’s work.  This amount should be used to determine monthly income.

 

Income from Seasonal Employment

In cases where the household’s income is seasonal, you may find it more appropriate to use the income from the most recent earning season comparable to the certification period, rather than the four (4) consecutive weeks prior to the application/ recertification date or tax returns from a prior season as an indicator of anticipated income.  You must exercise particular caution in using income from a past season as an indicator of income for the certification period. In many cases of seasonally fluctuating income, the income also fluctuates from one season in one year to the same season in the next year.

 

Income Counted in the Month Received

Income anticipated during the certification period will be counted as income only in the month it is expected to be received, unless the income is averaged

 

Note:

Nonrecurring lump sum payments are counted as an asset starting in the month received and not counted as income.

 

Income Averaging

In some cases, income averaging is required.  In other cases, the household may elect to average fluctuating income over the certification period.  In any destitute household case, income cannot be averaged.

Whenever a full month's income is anticipated but is received on a weekly or biweekly basis, once you have entered the information, BEACON will automatically convert the income to a monthly amount by multiplying weekly amounts by 4 1/3 or by 4.333 and biweekly amounts by 2.167.

 

Mandatory Income Averaging

Annual Income in Shorter Period:

Households that derive their annual income in a period of time shorter than one year must have their income averaged over a twelve (12) month period provided the income is not received on an hourly or piecework basis.  These households may include:

 

Optional Income Averaging

 

Example:

If fluctuating income over the previous three months is known, and you are reasonably certain that this income is representative of the fluctuations anticipated in the coming months, the income from the three known months may be averaged over a certification period of longer than three months.

 

Entering Earned Income Data in BEACON on the Employment Status Page and Employed Page Tab

 

Earned Income Policy and Procedures

 

 

  Last Update:  October 27, 2017