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2. Prorating Over Period Intended to Cover-for contractual, self-employment or other income intended to cover more than a single month; 3. Rate/Unit/Frequency-when no other method is allowed or appropriate. FACTORING INCOME: ABD: Factoring is never used to determine monthly income and/or expenses. If the client is paid weekly or bi-weekly, the 3rd or 5th check cannot be averaged and must be counted in the month received. ACA and Family Medically Needy: Income is factored when all weekly/biweekly paystubs are provided for the application month. All income received weekly or bi-weekly (every two weeks) must be factored. It may be necessary to average and then factor if there is a reliable income history that is expected to continue. NOTE: Factor child support income and legally obligated (and paid) child support payments only when they are received/paid weekly or bi-weekly. NOTE: Child support income and legally-obligated child support payments, deductions can only be factored if truly received/paid on a weekly or biweekly basis. Average and factor weekly or bi-weekly checks provided for the application month, even when a 3rd or 5th check is not received that month. INCOME AVERAGING: Income is averaged when there is a reliable history but the income fluctuates from month to month or pay period to pay period. This could include wages, tips and irregular payments (child support, pension, etc.). Before averaging income, always ask the client if they expect the income and current fluctuations to continue and be sure to look for patterns, such as overtime. It may be necessary to average wages separately from overtime. If significant changes are expected in the prospective period, use the rate/unit/frequency option instead of averaging. Exclude payments that are unusually high or low. NOTE: When requesting pay stubs to average, always request pay stubs from a specific date through “present”. PRORATING OVER PERIOD INTENDED TO COVER: Contractual or other income expected to cover more than one month is prorated over the period intended to cover, or contract period. Do not count periodic payment until the first payment is received after Medicaid eligibility is established (CMA 500). ABD and Family Medically Needy: Self- employment income is always annualized (net annual self- employment is divided by 12) regardless of how many months per year the business is in operation (CMA 503-1). Contractual income is always prorated over the contract period (for example, a 9 month teaching contract is divided by 9). When significant income changes are expected for any payments included in the prospective period, the payments are still prorated over the period intended to cover, but the amount prorated will change.