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Rule 5.4 How Income is Calculated

All countable income, excluding non-countable income (see below) received by the parent(s) or responsible adults of the child will be used when determining if a parent meets the income eligibility requirements. The processes for calculating income will be as follows:

1. Calculating Income

• The CCPS calculates income automatically based on documentation provided by the applicant and entered into the system by MDHS staff. The following business rules are applied for calculations:  All income above or less than forty (40) hours per week is considered irregular income. Irregular income and commissions shall be averaged.  For commissions and tips, the amount on the check stub or statement from an employer shall be averaged over a period of twelve (12) months and added to regular work income. • Eligibility is based on gross income. • Parents who experience seasonal fluctuations in income must submit income documentation at initial application or redetermination which shows the increase is seasonal or irregular. A temporary increase in income, even if it exceeds 85 percent of SMI, will not affect the eligibility of the parent. Irregular hours of employment, seasonal increase in income, commissions, bonuses, and tips are added to regular work income and averaged over a period of twelve months.

2. Countable Income

• Wages or salary (gross income of all adults in the family unit as defined in Chapter 2) • Base pay for military personnel • Gross income from self-employment • Unemployment compensation (redetermination only) • Worker’s compensation • Alimony (regular and ongoing payments) • Veteran’s benefits • Military allotments • Capital gains • Rental income (regular and ongoing payments) • Dividends (regular and ongoing payments) • Retirement/pension • Commission, bonuses, tips (averaged over 12 months) • Lump sum payments • Supplemental Security Income (SSI) benefits for both the parent(s) and child(ren) • Social Security Administration (SSA) benefits for both the parent(s) and child(ren)