3.605.2 Earned Income A.

Earned In-kind Income Earned in-kind income shall be income resulting from the performance of services by the client for which he or she is compensated in shelter or other items in lieu of wages. B. Consideration of Earned Income “Earned Income” is still considered when: 1. Money payments obligated to the employee are diverted to a third-party for the employee’s household or other expenses; 2. Wages are being garnished by a court order. With the exception of contract employment, wages that are paid to an employee for a period for which services were rendered are considered available when paid rather than when earned, except that wages held at the request of the employee are considered income in the month they would otherwise have been paid. C. Income from Short-Term Employment Income received from short-term employment such as temporary employment (ninety days or less) and subsidized employment shall not be considered to determine eligibility as long as the client has not been terminated or has terminated the employment due to a fault of their own. This employment may be documented in the Individualized Plan. D. Countable Earned Income 1. Consideration of Earned Income Against the Program Income Standard Unless otherwise specified, any earned income is countable and the applicable earned income must be considered against the applicable needs standard. 2. Determining Earned Income The amount of wages, salaries, or commissions available to the client after the applicable disregards is considered the net earned income. 3. Wages for Providing Home Care Allowance Services When a client is the care provider to another client for whom a Home Care Allowance (HCA) payment is made, the HCA payment is considered earned income to the client who is the care provider. 4. Earned Income of a Dependent Child not in School All earned income of dependent children who are not students or making satisfactory progress in an equivalent activity shall be considered in determining eligibility for Colorado Works. E. Self-Employment Income 1. A client who is self-employed shall have the following applied to their income: a. To determine the net profit of a self-employed client, deduct the cost of doing business from the gross income. 1) These expenses include, but are not limited to, the rent of business premises (if working out of the home, the cost of the room used when doing business shall be used to determine the amount of the expense), wholesale cost of merchandise, utilities, interest, taxes, labor, and upkeep of necessary equipment. 2) Depreciation of equipment shall not be considered as a business expense. 3) The cost of and payments on the principal of loans for capital assets or durable goods shall not be considered as a business expense. 4) Personal expenses such as personal income tax payments, lunches, and transportation to and from work are not business expenses, and are included in the applicable earned income disregards computation. b. Appropriate allowances for the cost of doing business for clients who are licensed, certified, or approved day care providers are: 1) For the first child for whom day care is provided, deduct $55, and 2) For each additional child deduct $22. If the client can document a cost of doing business that is greater than the amounts above, the procedure described in (a), above, shall be used. c. The result net profit amount, secured after the appropriate deductions described above, shall be treated as described in section 3.605.2.D, concerning earned income. d. An allowable form of verification for self-employment is a client’s ledger of income and expenses. 2. Income Received From Self-Employment All self-employment income that is received regularly shall be considered income in the month it is received. 3. Irregular Receipt of Self-Employment Income If receipt of self-employment income is irregular or varies significantly from month to month, it shall be averaged over a twelve-month period. 4. Other Types of Self-Employment Income Some different types of self-employment income and how they are considered include, but are not limited to, the following: a. Self-employment income earned by the owner of a farm – shall be considered in the month it is received. b. Rental income – shall be considered as self-employment income only if the client actively manages the property for an average of twenty (20) hours per week or more. c. Board (to provide a person with regular meals only) payments shall be considered earned income in the month received to the extent that the board payment exceeds the maximum Food Assistance allotment for a one-person household per boarder and other documented expenses directly related to the provision of board. d. Room (to provide a person with lodging only) payments shall be considered earned income in the month received to the extent that the room payment exceeds other documented expenses directly related to the provision of room. e. Room and board payments shall be considered earned income in the month received to the extent that the payment for room and board exceeds the Food Assistance allotment for a one-person household per room and boarder and other documented expenses directly related to the provision of room and board. F. In-Kind Countable Earned Income 1. Donated in-kind earned income is countable when it: a. Is regular and for a specific time period; b. Is a necessary service; and, c. If not performed by the client, someone would have to be hired to perform the service. 2. If donated services meet these requirements, the value of these services is determined by: a. The going rate in the community; or b. From two employers of like services. 3. The client shall be informed that the continuation of donation of services will result in an income deduction from the assistance grant after all applicable earned income disregards have been applied. G. In-Kind Income In Exchange For Employment In-kind income received in exchange for employment is employment income and shall have the appropriate earned income disregards applied to the total value of the income. The amount considered as earned income when a client is paid in-kind is the value of the item supplied. The current market value of the item is used if the value of the item is not provided.