210.1 Purpose

This section describes income factors that the case manager must consider when determining Supplemental Nutrition Assistance Program (SNAP) eligibility and benefit levels. It defines income that must be included in the eligibility determination.

210.2 General Information

When determining eligibility for the SNAP the local department will:

Evaluate the household’s total income. Some of the household’s income may be excluded from consideration (see Section 211, Excluded Income).

Determine the excluded income first, as it will have no impact on the household’s eligibility.

Identify and verify all included income and correctly enter the income on E&E.

210.3 Included Income

All earned income and unearned income of each household member are included unless specifically excluded.

Identification of income as earned, self-employment, or unearned helps you determine whether the household is entitled to the earned income deduction.

210.31 Earned Income

The case manager will use the gross amount of earned income.

No deductions are given for taxes, etc.

A 20 percent earned income deduction is applied to earned income.

Earned income includes:

Wages, including tips;

Salaries;

Vacation pay;

210.31 Earned Income (continued)

Garnishments from wages, such as child support payments.

Garnishments may appear as deductions from gross pay. Count the gross wages.

Do not count an amount withheld to repay a prior overpayment received from that same source.

Sick benefits paid by an employer to an employee who expects to return to work;

Striker’s income prior to the strike as if it were still being received;

Training Allowances

Training allowances from vocational and rehabilitative programs recognized by federal, state, or local governments are earned income when they are not reimbursements, or to the extent, they exceed the expenses they are intended to reimburse. (See Section 211 (G) for treatment of reimbursements.)

Earnings from the Workforce Innovation and Opportunity Act programs.

Consider earned income (EI) earnings of individuals who are participating in on-the-job training programs under the Workforce Innovation and Opportunity Act. This does not apply to household members under age 19 who are under the parental control of another adult member, regardless of school attendance. (See Section 211.3 (K) for a complete listing of excludable income under Federal statute.)

In certain special households, income may be treated differently. These special households are described in the following sections:

Section 101 – Strikers

Section 102 – Students

Section 103 – Residents of Shelters

Section 104 – Self-employed Households/Farmers

Section 105 – Households with Boarders

210.31 Earned Income (continued)

Section 108 – Households with Non-Members or Disqualified Members

Section 109 – Residents of Group Living Arrangements, Veterans and Spouses/Children; Elderly and Disabled Living with others

Section 401 – Expedited Households

Military Re-Enlistment Bonuses may be paid in two ways and it is up to the branch of the military to decide who is eligible to receive a bonus and how it is paid:

A lump sum which is considered a non-recurring lump sum payment (resource) in the month received, or

As a 50% lump sum and the balance in annual payments. The entire bonus amount is counted as earned income.

Average the initial lump sum over a 12 month period

Treat remaining payments as an annuity and average over 12 months.

210.32 Self-employment Income

Consider self-employment income as a type of earned income.

Calculate self-employment income in the following manner:

Households with self-employment income receive a 50 percent earned income deduction applied to its gross self-employment earnings. The deduction is intended to cover the self-employed household’s cost to do business. If entered correctly, E&E will compute the deduction. (See Section 104 for more information about self-employed households.)

Apply the 20% earned income deduction to the net income amount.

Example: A self-employed daycare provider had $12,000 gross annual income from her business. The annualized amount is $1,000 per month. 50% of $1,000 is $500. $1,000 minus $500 equals $500. 20% of $500 is $100. $500 minus $100 equals $400. $400 is this customer’s net earned income from self-employment.

NOTE: Consider self-employment (SE) income rental payments received by individuals who own rental property. If the individual is actively engaged in management of the rental property at least 20 hours per week, treat the income as earned income, and allow the 50 percent cost-to-produce income deduction. If the individual spends less than 20 hours per week managing the property, treat the income as unearned income after subtracting the 50 percent deduction for cost-to-produce.

Example: Mr. and Mrs. Brown own a duplex. They live in duplex A and rent out duplex B. They receive $500 monthly in rental payments from duplex B. They do not spend 20 hours per week in the management of the property. They are entitled to a 50 percent self-employment deduction. ($500x.50=$250). The household’s countable rental income is $250.

Treat room and/or board income as self-employment income regardless of the time spent in this activity, if the roomers and/or boarders live with the SNAP household. Deduct 50 percent of the gross roomer and/or boarder income as the cost-to-produce. Then apply the 20 percent earned income deduction. The remainder is the adjusted net income and is countable earned income for the household.

210.33 Unearned Income

The local department will use the gross amount of unearned income. No deductions are given.

Example: No deduction is made from Social Security benefits for Medicare. No deduction is made for taxes withheld from Unemployment Insurance or retirement benefits or from Worker’s Compensation.

Unearned income, to which the earned income deduction cannot be applied, includes the following:

Assistance payments based on need, such as:

Temporary Cash Assistance (TCA),

Temporary Disability Assistance Program (TDAP)

Supplemental Security Insurance (SSI),

Foster care and guardianship care only when the child is included in the SNAP household,

Adoption subsidies;

Public Assistance to Adults (PAA).

Annuities,

Pensions,

Retirement benefits,

Severance pay,

Veteran’s benefits,

Disability payments,

Unemployment insurance benefits,

Strike benefits,

Gross rental income less the 50 percent cost-to-produce from rental property when the household member is not actively engaged in the management of the property at least 20 hours per week,

Child support payments made directly to the household by non-household members,

Child Support Pass-Through payments received from the Child Support Administration (CSA),

Beginning July 1, 2019, all or a portion of child support payments received through DHS’s CSA will be passed through to eligible TCA households’ EBT cards. This pass-through benefit is countable toward SNAP benefits as unearned income. E&E calculates the average of three consecutive months of child support payments and determines the unearned income amount that will be counted toward the household’s SNAP benefit calculation. Should the non-custodial parent miss a child support monthly payment, E&E will stop counting the pass-through toward the SNAP benefits. There must be at least three consecutive months of child support payments received before E&E can recalculate the unearned income and begin counting it toward SNAP benefits again. This pass-through benefit is applicable only to child support payments made directly from CSA to the TCA household for minors receiving TCA.

Note: More information on the child support pass-through benefit can be found in TCA Manual Section 1312.

Alimony payments made directly to the household by non-household members,

Payments from government-sponsored programs,

Income from annuities or dividends, even when not withdrawn,

Interest and royalties,

Assistance payments from programs that require as a condition of eligibility the actual performance of work without compensation, other than the assistance payment,

Unearned income of a sponsor and the sponsor’s spouse (if living with the sponsor) that is deemed available to the sponsored immigrant, and

All other direct money payments that can be construed to be a gain or benefit to the household.

210.34 Income of an Ineligible or Disqualified Individual

Count the earned or unearned income in its entirety, minus the appropriate deductions, of an individual disqualified from the household for an individual:

Disqualified for Intentional Program Violation as described in Section 480,

During any period he or she is fleeing to avoid prosecution, custody or confinement after conviction for a felony, or violating a condition of parole or probation,

Convicted of an offense that is classified as a drug felony, occurring after August 22, 1996,

Noncompliance with work requirements as described in Section 130.

Count as income the earned or unearned income, less a pro-rata share for the individual or individuals who are ineligible:

For failure to comply with social security requirements as described in Section 405,

For failure to comply with the Able-Bodied Adults Without Dependents (ABAWD) work requirements (such as failing to be employed an average of 80 hours per month) as described in Section 130.24, or

Because they do not meet citizenship or immigrant requirements as described in Section 120.

210.35 Third Party Payments

The local department will count third party payments as household income.

A third party payment is money owed to a household, but paid directly to someone outside the household for a household expense.

Third party payments include:

Wages that are withheld by the employer and paid directly to a third party for household expenses such as rent, property taxes, or child support,

Public Assistance payments that are sent to a third party or to a protective payee for a purpose such as managing the household’s expenses,

Money deducted from a court order or binding written support or alimony payment and sent to a third party for household expenses, and

Money deducted to repay a prior underpayment of taxes to the IRS. This includes any payments specified by a court order to go directly to a third party rather than the household.

210.36 Failure to Comply with Requirements of a Federal, state or Local Means-tested Assistance Program

Reduction of Public Assistance Benefits

When a household’s means-tested public assistance is reduced or terminated because a household member fails to perform an action required under the assistance program, count the full amount of the public assistance payment as phantom income for SNAP benefits. This is done so that the SNAP benefits will not increase. Examples of means-tested programs include TCA, TDAP, and PAA.

Note: SSI is not a public assistance program for the purposes of phantom income policy.

The failure to comply with a requirement of the means-tested program does not have to be intentional.

If the local department is unsuccessful in obtaining the necessary cooperation from another State, federal or local means-tested program, it will not be held responsible for noncompliance with the rule as long as a good faith effort has been made to get the information.

The income from the means-tested program is frozen at the same amount received before the penalty.

Procedural vs. Substantive Requirements.

A procedural requirement, which does not trigger phantom income, is a step that a customer must take to continue to get assistance, such as providing verification. Do not use phantom income for not complying with a procedural requirement.

A substantive requirement, which triggers SNAP phantom income, is a behavioral requirement that is designed to improve the well being of the household. Examples include:

Work and child support requirements,

Requirements for school attendance,

Requirements for health checkups for children under age 6,

Compliance with substance abuse requirements.

Limits on Imposing the Sanction.

This policy does not apply to customers who fail to perform a required action at the time of application;

This policy applies at the time of redetermination for continued benefits if there is no break in participation;

The customer must be certified for SNAP benefits at the time of the failure to perform the required action.

Example: Mr. B receives TCA for himself, his wife, and children. They do not receive SNAP benefits. In April Mr. B refused to participate in a work activity and the TCA was closed. In May Mr. B applied for SNAP benefits. The case manager will not use phantom income in this situation.

Assistance payments are “reduced” if they are decreased, suspended or terminated.

Penalty Periods for TCA

Failure to Comply with a Child Support Requirement - Failure to comply without good cause results in a full family sanction. The penalty will end upon compliance with the program requirement.

Failure to Comply with a Work Requirement - For noncompliance with a work activity the penalty period will end as follows:

For the first instance of noncompliance, the penalty ends upon compliance.

For the second instance of noncompliance, the penalty ends 10 days after compliance with the activity.

For the third and subsequent instance of noncompliance, the penalty period ends after 30 days of compliance with the work requirement.

Finding of Fraud - An assistance unit is ineligible for the following periods of time upon a finding of fraud by a court of law:

For six months after the first finding of fraud or until full repayment of the overpayment,

For 12 months after the second finding of fraud or until full repayment of the overpayment,

Permanently after the third finding of fraud.

Failure to comply with substance abuse requirements.

Failure to obtain preschool health or to ensure the school attendance of children in the home. This is a $25 disallowance.

After a finding of fraud in the TCA program, continue the SNAP certification period until it expires. If the household reapplies for SNAP benefits during the TCA penalty period, when possible, establish a certification period that ends at the same time the TCA penalty ends.

Example: An assistance unit that had received a $648 TCA grant is terminated because of a second fraud finding. The family is ineligible for TCA for 12 months. The TCA amount countable for SNAP benefits until the end of the penalty period is $648.