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c) Bonuses. Amounts paid by employers as extra pay for past employment, i.e., outstanding work, length of service, holidays, etc.

d) Severance Pay. Payment made by an employer to an employee whose employment is terminated independently of his wishes.

e) Military Pay. Service member’s wage, which is based solely on the member’s pay grade and length of service.

f) Special payments because of employment. Items such as vacation pay, advance/deferred wages, etc.

B. These payments are treated as follows:

1. Absent evidence to the contrary, if FICA taxes have been deducted from an item assume it meets the definition of wages.

2. Wages are counted at the earliest date of the following:

a) When received, or

b) When credited to the individual’s account, or

c) When set aside for the individual’s use.

Source: Social Security Act §1902 (r)(2); 42 CFR § 435.601(b) (Rev 1994).

Rule 9.3: Cafeteria Plans.

A. A Cafeteria Plan is defined as follows:

1. A written benefit plan offered by an employer in which:

a) All participants are employees, and

b) Participants choose cafeteria-style from a menu of two or more cash or qualified benefits.

1) A qualified benefit is not considered part of an employee’s gross income.

2) Qualified benefits include, but are not limited to:

(a) Accident and health plans, including medical plans, vision plans, dental plans, accident and disability insurance;