44-100.I Countable Income of the AU

 

Table of Contents

 

Topic

Section

Requirements

44-100.I.1

Earned Income Disregards

44-100.I.2

Computation of Net Nonexempt Income (NNI)  

44-100.I.3

EID Examples

44-100.I.3.1

Earned Income Disregards from 07/01/11 to 09/30/13

44-100.I.4

Self-Employment Income

44-100.I.5

Garnishment of Wages

44-100.I.6

Reception and Placement (R&P) Cash

44-100.I.7

 

 

 

44-100.I.1 Requirements

State regulations require all nonexempt income must be counted towards the cash grant.  Disregard shall be allowed for certain disability-based income (DBI) and other earned income for determination and computation of the Net Nonexempt Income (NNI).

 

44-100.I.2 Earned Income Disregards

 

 

 

 

 

 

 

 

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$225 and 50% Earned Income Disregards

 

·         Family has earned income only

 

If the family has earned income only, the first $225 and 50% of the earned income is disregarded when determining the NNI to calculate the family’s grant amount.

 

·         Family’s DBI is less than $225

 

If the family’s DBI is less than $225, all of the DBI is disregarded and the unused amount of the $225 plus 50% of the remaining earned income is disregarded.  Any remaining earned income is treated as part of the family NNI.

 

·         Family’s DBI is more than $225

 

If the family’s DBI exceeds $225, only the first $225 of the DBI and 50% of any earned income is disregarded.  Any remaining DBI and remaining earned income is treated as part of the family’s NNI.

 

44-100.I.3 Computation of Net Nonexempt Income (NNI)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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To determine the amount of Net Nonexempt Earned Income (NNI) for the month, the following steps shall be taken:

 

Step

                                      Action

1

Determine the reasonably anticipated monthly DBI of both the AU and non-AU members.

2

Subtract $225 DBI Disregard.

3

Total is the Nonexempt Disability Income (if positive amount), or Remainder of the $225 DBI Disregard (if negative amount).

4

Determine the total amount of commissions, wages or salary earned as an employee, and/or net profit of self-employment, that the AU and non-AU members reasonably anticipate receiving during each month of the QR Payment Quarter (i.e., total income irrespective of expenses, voluntary or involuntary deductions).

5

Determine the remainder of the $225 DBI Disregard (negative amount from line 3).

6

Subtract line 5 from line 4.

7

Deduct 50% of the remaining earned income (divide total in line 6 by 2).

8

Add any Nonexempt Disability Income (remaining DBI amount after the $225 is deducted: positive amount from line 3), and any nonexempt unearned income of both the non-AU and AU members.

9

Remainder equals NNI.

 

 

 

44-100.I.3.1 EID Examples

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Example 1 – DBI less than $225:

A nonexempt Assistance Unit (AU) of three (an adult and two children) has gross earned income of $800 per month. The children each receive $100 per month in unearned income from the absent parent's disability claim.

 

 

1

DBI.

 

$200

2

Minus DBI Disregard.

-

225

3

Nonexempt Disability Income

(If positive amount); or

Remainder of the $225 DBI Disregard

(If negative amount).

=

($25)

 

In this example the $25 on line 3 (remainder of the $225 DBI disregard) shall be the disregard for the non-exempt earned income on line 5.

 

 

 

4

Gross Earned Income.

 

$800

5

Minus the remainder of the $225 DBI Disregard.

-

25

6

Subtotal (line 4 minus 5).

=

$775

7

Minus 50% EID (line 6 divided by 2).

Round down to the next lower dollar.                        

-

387

8

Add the Nonexempt Disability Income (positive amount from line 3.  In this example, there is no nonexempt disability income).

+

0

9

NNI (line 6 minus line 7, plus line 8).

=

$387

 

10

Nonexempt Maximum Aid Payment (MAP) for 3.

 

$638

11

Minus NNI (from line 9).

-

387

12

Grant Amount (line 10 minus line 11).

=

$251

 

 

Example 2 – DBI greater than $225:

A nonexempt AU of three (an adult and two children) has gross earned income of $600 per month. The children each receive $200 per month in DBI from the absent parent's disability claim.

 

 

1

DBI.

 

$400

2

Minus DBI Disregard.

-

225

3

Nonexempt Disability Income

(If positive amount); or

Remainder of the $225 DBI Disregard

(If negative amount).

=

$175

 

In this example the $175 on line 3 (nonexempt disability income) shall be treated as part of the family’s net nonexempt income.

Because there is no remaining amount from the $225 DBI disregard, $0 (zero) shall be the disregard for the non-exempt earned income on line 5.

 

 

 

4

Gross Earned Income.

 

$600

5

Minus the remainder of the $225 DBI Disregard.

-

0

6

Subtotal (line 4 minus 5).

=

$600

7

Minus 50% EID (line 6 divided by 2).

Round down to the next lower dollar.

-

300

8

Add Nonexempt Disability Income (positive amount from line 3).

+

175

9

NNI (line 6 minus line 7, plus line 8).

=

$475

 

10

Nonexempt (MAP) for 3.

 

$638

11

Minus NNI (from line 9).

-

475

12

Grant Amount (line 10 minus line 11).

=

$163

 

 

Example 3 – Earned Income Only:

A nonexempt AU of three (an adult and two children) has gross earned income of $800 per month.

 

 

1

DBI.

 

$0

2

Minus DBI Disregard.

-

225

3

Nonexempt Disability Income (line 1 minus 2)

=

($225)

 

In this example the $225 on line 3 (remainder of the $225 DBI disregard) shall be the disregard for the non-exempt earned income on line 5.

 

 

 

4

Gross Earned Income.

 

$800

5

Minus the remainder of the $225 DBI Disregard.

-

225

6

Subtotal (line 4 minus 5).

=

$575

7

Minus 50% EID (line 6 divided by 2).

Round down to the next lower dollar.

-

287

8

Add the Nonexempt Disability Income (positive amount from line 3.  In this example, there is no nonexempt disability income).

+

0

9

NNI (line 6 minus line 7, plus line 8).

=

$287

 

10

Nonexempt (MAP) for 3.

 

$638

11

Minus NNI (from line 9).

-

287

12

Grant Amount (line 10 minus line 11).

=

$351

 

 

Scenario 4 – Minor Parent

Minor parent is receiving aid for herself and her dependent child. Minor parent lives with both her parents and a sibling. One senior parent earns $1300 per month from full-time employment. The other senior parent $125 in State Disability Insurance benefits.  The minor parent has no income. This is a nonexempt AU.

 

 

1

DBI.

 

$125

2

Minus DBI Disregard.

-

225

3

Nonexempt Disability Income (line 1 minus 2)

=

($100)

 

In this example the $100 on line 3 (remainder of the $225 DBI disregard) shall be the disregard for the non-exempt earned income on line 5.

 

 

 

4

Gross Earned Income.

 

$1300

5

Minus the remainder of the $225 DBI Disregard.

-

100

6

Subtotal (line 4 minus 5).

=

$1200

7

Minus 50% EID (line 6 divided by 2).

Round down to the next lower dollar.

-

600

8

Add the Nonexempt Disability Income (positive amount from line 3.  In this example, there is no nonexempt disability income).

+

0

9

NNI (line 6 minus line 7, plus line 8).

=

$600

 

10

Nonexempt (MAP) for 5.

 

$866

11

Minus NNI (from line 9).

-

600

12

Grant Amount (line 10 minus line 11).

=

$266

 

 

 

44-100.I.4 Earned Income Disregards from 07/01/11 to 09/30/13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Allow the following Earned Income Disregards for any grant computation between July 1, 2011 and September 30, 2013:

·         $225 Income Disregard

Use as a deduction from Disability-Based Income.

·         $112 Earned Income Disregard

Use any remainder from the $225 DBI Disregard or $112 (whichever is less) as a deduction from the Earned Income.

·         50% Earned Income Disregard

Use as a deduction from Earned Income.

 

To determine the amount of NNI for any month during July 2011 and September 2013, the following steps are required to be taken:

 

Step

Action

1

Determine the reasonably anticipated monthly disability-based income of both the non-AU and AU members.

2

Subtract $225 DBI Disregard.

3

Total is the Nonexempt Disability Income (if positive amount), or Remainder of the $225 DBI Disregard (if negative amount).

4

Determine the total amount of commissions, wages or salary earned as an employee, and/or net profit of self-employment, that the AU and non-AU members reasonably anticipate receiving during each month of the payment period (i.e., total income irrespective of expenses, voluntary or involuntary deductions).

5

Determine the lesser of:

·         $112; or

·         The remainder of the $225 DBI Disregard.

6

Subtract line 5 from line 4.

7

Deduct 50% of the remaining earned income (divide total in line 6 by 2).

8

Add any Nonexempt Disability Income (remaining disability-based income amount after the $225 is deducted), and any nonexempt unearned income of both the non-AU and AU members.

9

Remainder equals NNI.

 

 

44-100.I.5
Self-Employment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Self-employed recipients have the choice of basing their business expenses on a standard deduction of:

·           40% of gross income; or

·           Actual verified expenses.

 

Once the self-employed person chooses, the recipient cannot change the method until renewal or every 6 months, whichever occurs first.

 

40% Disregard

 

Self-employed recipients who choose the 40% disregard, shall be allowed a 40% disregard on gross self-employed income.

 

Actual Expense

 

Allowable business expenses include, but are not limited to:

·           Identifiable costs of labor;

·           Stock;

·           Raw material;

·           Interest paid to purchase income producing property;

·           Insurance premiums; and

·           Taxes paid on income producing property.

 

The following are not allowed as a business expense:

·         Payments on the principal of the purchase price of income producing real estate and capital assets;

·         Equipment;

·         Machinery;

·         Other durable goods;

·         Net losses from previous periods;

·         Federal, state and local income taxes;

·         Money set aside for retirement purposes;

·         Other work related personal expenses (i.e., transportation to and from work); and depreciation.

 

To determine the disregard, deduct the allowable business expenses from the gross income (including capital gains).

 

Income Averaging

 

·           Self-employment income received less often than monthly which represents the assistance unit’s (AU’s) annual income is to be averaged over a 12-month period, even if the AU receives income from other sources.

·           Self-employment income that is intended to meet the AU’s needs for only part of the year is to be averaged over the period of time the income is intended to cover.

 

For the period of time over which self-employment is averaged, the Human Services Specialist (HSS) shall add gross self-employment income (including capital gains), exclude the cost of producing the self-employment income, and divide the self-employment income by the number of months the income is to be averaged.

 

Room and Board Payments

 

Payments made to recipients for room and board are considered self-employment income.

     

44-100.I.6 Garnishment of Wages

Money deducted from an applicant/recipient’s wages as a result of garnishment is not allowed as deduction.

 

44-100.I.7 Reception and Placement (R&P) Cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Reception and Placement (R&P) Cash/Voluntary Agency (VOLAG) funds may be considered resources or unearned income, depending on how they are disbursed.

·           Funds given to the AU as a non-recurring (one-time) lump sum payment, or issued in more than one payment in the same month, are counted as a resource.

·           Funds given to the AU in several payments in more than one calendar month are counted as unearned income in the month received, even if disbursed as vendor payments.  The income shall be anticipated according to Quarterly Reporting/Prospective Budgeting regulations.

 

Examples:

 

If R&P income is received:

Then count as:

Non-recurring (one time) lump sum payment

Resource

Multiple payments in the same month

Resource

Multiple payments over multiple months

Unearned Income