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Child Care Assistance Program Policy Manual Issued 02/2023 Annualizing income 6.15 Annualizing income at redetermination At redetermination, annualize the family’s current income or the income that is the most accurate assessment of income available to the family. Do not reconcile the family’s income annualization for the previous year unless there is evidence the family’s income exceeded 85% of SMI during their 12-month eligibility period. Verify the income that is annualized for the next 12-month eligibility period. See Chapter 7.6 (Verification – Eligibility redetermination). Annualizing expected future income at redetermination When a family has income starting in a future biweekly period, determine if including the expected future income would be the best assessment of income available to the family at redetermination. If including the expected future income would be the best assessment of income available to the family, then annualize the new income offline, accounting for the weeks without income. Enter the annualized income in MEC2 in the biweekly period with the redetermination due date, and case note how 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). See Method 2 under “Annualizing expected future income at application” above. Do not enter expected future income in a future biweekly period and approve as part of the redetermination package. This will result in system errors. Treat all families in similar situations the same. Case example of annualized income Worker receives four earned income pay stubs as verification from the parent. Each pay stub shows the following gross wages per week at an hourly wage of $12.00 per hour and hours worked per week. Pay Period Gross Wages Hours Worked Pay period 1 $300 25 Pay period 2 $420 35 Pay period 3 $312 26 Pay period 4 $360 30

After discussions with the parent, the worker has determined the most accurate assessment of income available to the family should be the average of the data from pay periods three and four. The worker would enter in the following information into MEC2: • Payment Frequency: Weekly (parent receives payment weekly) • Income Projection Amount: $336 (average of $312 and $360) • Income Projection Payment Frequency: Weekly • Income Projection Hours per Week: 28 (average of 30 and 26)