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Child Care Assistance Program Policy Manual Income verification Issued 08/2022 7.9

When a client statement can be used to verify income A client statement cannot be used to verify income except in the following circumstances:

• Self-employment income: If existing verification is insufficient to accurately predict self-employment income (for example in the start-up phase of self-employment), the family must choose the 50% of gross income method (see Chapter 6.15.6 (Annualizing Self-Employment Income)) and a client statement may be used to verify self-employment income. • Child support income: In cases where there is a previously agreed upon child support arrangement and the absent parent refuses to sign a verification of payment, the applicant may self-declare child support income during the initial application. • Earned Income Ending: A signed client statement can be used to verify the date that employment ended and the date the last paycheck was received.

Earned income • Paycheck Stubs - Ask if the applicant or recipient has paycheck stubs for the timeframe that is the best indicator of future income. The recommended standard is the most current 30 days of verification. If the most current 30 days is not reflective of expected future income, such as for seasonal or temporary income, a different timeframe can be used. The paycheck stubs should specifically identify the number of hours worked, gross income based on those hours, payroll period covered, client and employer name. - The worker may also use year-to-date totals as the best indicator of future income. - If something other than the recommended standard is used to calculate the income components, it is recommended that the worker case note what was used and how it was used to determine the income components. • Employer Statement - If paycheck stubs are not available, or do not contain all the necessary information, ask the applicant or recipient to provide a letter from the employer on company letterhead with the necessary information. It is recommended that the worker case note what was used and how it was used to determine the income components. - For seasonal or temporary income, paycheck stubs may not be reflective of expected future income. An employer statement can be used in combination with paycheck stubs to determine expected future income. The worker is not required to use the information on the paycheck stubs when calculating income if the paychecks are not reflective of expected future income. It is recommended that the worker case note what was used and how it was used to determine the income components. • Multiple Verification Sources - The worker may use multiple verification sources to determine expected future income. It is recommended that the worker case note what was used and how it was used to determine the income components.

Self-employment income Documentation of self-employment income must meet the following criteria: