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Child Care Assistance Program Policy Manual Issued 02/2023 Annualizing income 6.15 If an income change starts after the date of eligibility but becomes known while the application is in the application processing period, 12-month eligibility policies apply. Changes that occur after the start date of eligibility must be processed after the application has been approved for the system to correctly apply 12- month eligibility policies. See Chapter 3.7.4 (Changes during the application processing period). An increase in income during the application processing period does not impact the family’s copay until the redetermination. See Chapter 6.21 (Family Copayment). Method 1: Enter new income in future period Enter the new income in the biweekly period it starts and approve the future copay increase as part of the application eligibility package. Considerations for this approach: • Preferred method for a parentally responsible individual (PRI) starting a new job. • Family will not have a copayment until income starts. • If income increases in a future biweekly period that brings the family’s income over 47% of SMI, the family is still eligible at application as long as income is under 85% of SMI. • If the biweekly period is unavailable, do not hold up processing the application. It is appropriate to approve the application without the future income entered. After the application is approved, enter the future income when the period becomes available. The copay will not increase until redetermination. Method 2: Annualize new income offline Annualize the new income offline, accounting for the weeks without income. Enter the annual income in MEC2, and case note how the income was annualized. This results in stable income and copay amounts for the biweekly periods in the eligibility approval package (unless other changes in income or family size were made). Considerations for this approach: • Preferred method for a PRI on leave or has seasonal/temporary income. • Family will have a copayment before income starts. Changes in income during the 12-month eligibility period You must re-annualize income during the 12-month eligibility period when: • The reported change results in the family’s income exceeding 85% of SMI. See Chapter 7.4 (Verification – 12-month eligibility period) OR • The family verifies a decrease in income. See Chapter 8.1.12 (Changes in income or expenses). Do not enter unverified income decreases in MEC². See Chapter 6.21 (Family copayment).