901 Definition of Income

Household income shall mean all income from whatever source excluding only items specified in Section 903. A. Earned Income Earned income shall include: 1. All wages and salaries of an employee. a) “Sick pay” is counted as earned income when wages continue despite the fact an individual is not working due to illness, but plans to return to work. Sick pay from an outside source other than the employer, such as an insurance company is not earned income. b) Allocated tips (as shown on an employee’s W-2 form, (Box 6) should not be counted as income. The allocated amount is used for IRS audit purposes only. Based on the allotted amount, if it appears the employee reported less than he/she should have reported for income tax purposes, IRS will request the employee to provide an explanation. If the explanation is satisfactory, no further action is taken. If the employee cannot substantiate the lesser amount, IRS may conduct an audit to determine the amount of tips. Since the amount of tips that will be taxed as income by IRS will not be known until after an audit is conducted, only the amount of tips reported by the employee should be counted as income for food assistance purposes. 2. Gross income from a self-employment enterprise, including the total gain from the sale of any capital goods or equipment related to the business, excluding the costs of doing business as provided in Section 1100. a) Ownership of rental property shall be considered a self-employment enterprise in accordance with Section 1100. However, income derived from the rental property shall be considered earned income only if a member of the household is actively engaged in the management of the property at least an average of 20 hours per week. b) Payments from a roomer or boarder shall also be considered self-employment income. 3. Jury duty payment provided: The jury pay is dispersed over a time period of a day or several days or weeks in a specific amount, such as $15 per day. (If the jury pay does not exceed $30 in a quarter and cannot be reasonably anticipated, it may be excluded for prospectively budgeted households only.) 4. Training allowances from vocational and rehabilitative programs recognized by Federal, State, or local governments, such as the work incentive program except for allowances received through programs authorized by the Workforce Innovation and Opportunity Act (WIOA) , to the extent they are not a reimbursement. 5. Payments under Title I (VISTA, etc.), of the Domestic Volunteer Service ACT of 1973 (Pub. L. 93-113 Stat., as amended) shall be considered earned income and subject to the earned income deduction excluding payments made to those households specified in Section 902. 6. Earnings to individuals participating in on-the-job training programs under Section 129 (c) (2)(C)(iv) or Section 134 (c)(3)(D)(ii)of WIOA shall be considered income for food assistance purposes. For the purpose of this provision, earnings include moneys paid under the WIOA and moneys paid by the employer. This provision does not apply to household members under 19 years of age who are under the parental control of another adult member, regardless of school attendance and/or enrollment. 7. Payments received for the sale of blood. 8. Money which is diverted from an employee’s earnings through a cafeteria plan or other flexible benefit program to a third party to pay certain expenses such as child care or medical expense is counted as income. The money is legally obligated and otherwise payable to the employee. 9. Military special pay and allowances such as “jump pay” or housing allowances Basic Allowance for Quarters (BAQ) which are received in addition to base pay. NOTE: Marines living on base in adequate quarters are not entitled to receive a Basic Allowance for Quarters (BAQ). However, the Marine Corp has been showing an equivalent amount under entitlements and a similar amount under deductions on the Leave and Earnings Statement (LES). The BAQ shall be disregarded, provided the applicant/recipient provides a written statement from his/her commanding officer stating the BAQ is incorrectly listed on the pay record and the applicant does not actually receive it. Marines living in inadequate quarters are entitled to a full BAQ and must pay rent. The BAQ is income for food assistance purposes and the rent should be used in determining the household’s correct shelter costs. 10. Armed Forces Family Subsistence Supplemental Allowance (FSSA). B. Unearned Income Unearned income shall include, but not be limited to: 1. Assistance payments from Federal or federally aided public assistance programs, such as Supplemental Security Income (SSI) or Family Assistance (FA); General Assistance (GA) programs (as defined in the Glossary Manual), or other assistance programs based on need. a) Such assistance is considered to be unearned income even if provided in the form of a vendor payment (provided to a third party on behalf of the household), unless the vendor payment is specifically exempt from consideration as countable income under the provisions in Section 902. b) GA vendor payments provided to cover housing expenses, other than energy assistance or utility expenses are considered as unearned income. c) Payments made under a State law to provide energy assistance are considered unearned income unless excluded under provisions in Section 902. d) FA payments made to a parent shall be considered the income of the parent. Proration of FA benefits among those individuals included in the FA budget is appropriate when the parties included in the FA budget reside in different households [see Section 902(14)]. The case file should contain documentation of the reason and method of proration. e) Assistance payments from programs which require, as a condition of eligibility, the actual performance of work without compensation other than the assistance payments themselves, shall be considered unearned income. 2. Annuities; pensions; retirement, veteran’s or disability benefits; worker’s or unemployment compensation; old-age, survivors, or social security benefits; strike benefits; gross income minus the cost of doing business derived from rental property in which a household member is not actively engaged in the management of the property at least 20 hours a week; foster care payments (both the service payment and the maintenance payment) for children or adults who are considered members of the household. 3. Agent Orange Veteran Payments to veterans. Public Law 102-4, Agent Orange Act of 1991, authorizes veteran’s benefits to veterans of the Viet Nam War with service connected disability resulting from exposure to Agent Orange. These monthly VA payments are counted as unearned income. The checks are from the Department of Veterans Affairs. 4. Support or alimony payments made directly to the household from non-household members: Child support is considered the income of the person to whom it is legally obligated, usually the custodial parent. The total amount of the child support shall be counted as income to the person to whom it is legally obligated regardless of whether the child is a household member or a non-household member. If the child is a non-household member, any payments in money made directly to the child’s household from the child support shall be counted as income to that household. If the child is a non-household member, any payments from the child support made on behalf of the child are excluded from vendor payments and would not be counted as income to the child’s household. The amount of child support, which is paid through the Family Court System (or an attorney), to be budgeted is the amount that is legally obligated and otherwise payable to the household. For example, a divorce decree specifies that the absent parent pay the household $100 per month and this payment is made through the Family Court. If the court withholds $10 for court cost and the household receives $90, then $100 is budgeted to the household because that is the amount legally obligated. However, if the divorce decree specifies that the absent parent pay $100 per month and the court requires the parent to pay $1.00 to cover court cost, and then $100 is still the amount to be budgeted to the household. Any identified arrearages due to the nonpayment of court cost shall not be counted as income when received by the client even if a specified arrearage amount is added to the regular child support payments. If the arrearage is paid in a lump sum payment, it shall be considered a nonrecurring lump sum payment. For example, an absent parent is ordered to pay child support in the amount of $40.00 weekly to the Family Court. The order further stipulates that the father is responsible for the court processing fee of $1.00 weekly in addition to the $40.00 weekly child support. The father sends the $40.00 each week but does not include the extra $1.00 processing fee. The Family Court deducts the processing fee from the $40.00 and sends the client a check for $39.00. The $1.00 is reflected by the court as uncollected, overdue child support, and becomes a part of any arrearage payments subsequently collected and paid to the client. When the client receives this identified arrearage payment, it is excluded as income. The $40.00 weekly child support is the amount which is legally obligated to the client, and the amount which is counted in the food stamp budget. 5. Payments from Government-sponsored programs, dividends, interest, royalties, and all other direct money payments from any source which can be construed to be a gain or benefit. a) Interest income must be considered as having been received in the month in which it is credited to the account for both prospectively and retrospectively budgeted households. The date credited means the date it is posted to the account rather than when the household is notified of the amount through bank statements. 6. Under prospective budgeting the interest must be counted as unearned income if it can be reasonably anticipated, such as when a household maintains a relatively constant balance in its account. The interest income may be averaged over the certification period. 7. Moneys which are withdrawn or dividends which are or could be received by a household from trust funds are considered to be excludable resources under Section 902. a) Such trust withdrawals shall be considered income in the month received, unless otherwise exempt under the provision in Section 902. b) Dividends which the household has the option of either receiving as income or reinvesting in the trust are to be considered as income in the month they become available to the household unless otherwise exempt under the provisions in Section 902. 8. Money which is regularly received from a guardianship or conservatorship account is considered unearned income. This provision applies when the guardian or conservator is not a household member. 9. Payments made by an insurance company directly to the landlord/mortgage holder shall be counted as income to the household if the client is named as the beneficiary of the insurance policy. The insurance policy should be reviewed to determine who the beneficiary is. 10. Payments from sources other than an employer which an employee receives when he is unable to work due to illness; these payments may include disability insurance payments, etc. even if the insurance premium was paid by the employer or the employee. 11. The income of the sponsor and the sponsor’s wife which is deemed to be the income of the sponsored eligible adult alien. Refer to Chapter 11, Section 1108 for the budgeting of this income. C. Income of Non-household Member See Chapter 11, Sections 1102 and 1103, for the handling of earned and unearned income of individuals who have been determined to be: 1. Disqualified for intentional program violation. 2. Disqualified for failure to provide a social security number in accordance with Chapter 6. 3. An ineligible alien. 4. Other individuals such as ineligible students, roomers, etc. See Chapter 11, Section 1108, for handling of the income for households containing sponsored alien members. D. Certain Income Withholdings Not Counted Income shall not include the following money: 1. Moneys withheld from an assistance payment, earned income, or other income source, or moneys received from any income source which is voluntarily or involuntarily returned, to repay a prior overpayment received from that income source, provided that the overpayment was not excludable as described in Section 902. However, money withheld from another means tested program due to the household’s failure to comply with the other program’s requirement or to recover an overpayment due to client error shall be included as income as described in Chapter 11, Section 1110. 2. Child support payments received by FA recipients, which must be transferred to the Department of Human Resources to maintain FA eligibility.