section-v BUDGETING INCOME

When a family reports income, verify and document the income and determine the payment amount by projecting income following the instructions below. When projecting income, the case manager will use income that represents the client’s anticipated income. Representative income means that there are no anticipated changes, and the verification represents the budget unit’s expected income during the certification period. A. Prospective Budgeting Budget all prospective income when determining the Work First Cash Assistance payment. The payment for a month is based on 25 the income projected to be received in that month and, therefore, reflects as accurately as possible the family's need for that month. For example, July's Work First cash assistance payment is based on the income projected to be received in July. B. Base Periods Base periods are the periods of time that are the basis for determining income eligibility. The base period: • establishes a set time period for case managers to create a “snapshot” of a budget unit’s income. • should be an accurate representation of the income the household is expected to have available during the certification period. Budget ongoing income using information from the base period to estimate the projected income for future months. Use the following base periods: 1. One Month: The base period for most income is the month prior to the month of application or recertification. 2. Three Months: The base period for the following types of income is three months prior to the month of application, recertification, or the quarterly report: • child support, • spousal support and alimony For Work First Cash Assistance, add the months together and divide by 3. 3. Twelve Months: If the income is received annually or from self-employment, the base period is 12 months. Exception: If client has been self-employed for less than 12 months, use months in business, if representative. NOTE: If a full month of actual income is available for any month, budget the actual income for that month. (This may happen at application or administrative reopen.) Enter this income as actual income in the budget. NC FAST does not convert this income. For guidance on entering income evidence refer to the FAST Help Income & Expense Evidence Wizards-Income Support Job Aid. 26 Base Periods for Nonrepresentative Income When determining a base period for nonrepresentative income: 1. Explore alternative budgeting methods for projecting or averaging income. 2. Determine which budgeting method is the most representative estimate of the budget unit’s income over the certification period. 3. Project income using the best available information about the number of hours, rate of pay, and frequency of pay expected to be received over the certification period. 4. If you use an alternate budgeting method, you must document why the base period is not representative and how you determined what is. All income shall be counted in the calendar month the household receives the income unless otherwise stated. C. Evaluating Base Period Income Income received in the base period must be verified. Once income information from the base period has been identified and verified, the case manager must determine whether this income is representative of the income expected to be received during the month(s) for which eligibility is being determined. Examples of determining Base Periods: 1. Application is received on March 5. Applicant is receiving ongoing income from earned wages. What is the base period? ▪ February 1- February 28 if the income is representative and anticipated. 2. Application is received on June 29. Applicant is receiving ongoing child support. What is the base period? ▪ The base period is the full three months prior: March, April, and May if the income is representative and anticipated. 3. Application is received on October 8. Applicant is receiving SSA each month. What is the base period? ▪ September 1 – September 30 if the income is representative and anticipated. 4. Application is received on December 12. Applicant is receiving ongoing earned income wages; they are paid monthly. What is the base period? ▪ November 1- November 30 if the income is representative and anticipated. 5. Application is received on July 16. Applicant has been self-employed for 18 months. What is the base period? 27 • June - July (12 months prior to application) if the income is representative and anticipated. If the base period income is not representative, do not use it to project income. If there is new, terminated or changed income during or after the base period, the base period income may not be representative, and the case manager must move the base period forward and adjust the income. See VI. below. If a pay period in the base period is uncharacteristically high or low, determine how often such occurrences can be expected and document the decision whether to count the nonrepresentative pay period in budgeting. Example: A Work First applicant is paid weekly and has pay stubs for July, the base period, as follows: Pay: Date: $ 80.00 July 5 $ 0.00 July 12 $ 75.00 July 19 $ 100.00 July 26 The applicant states she received no income the week of July 12 due to the annual closure of the company which is not expected to occur again until next July. The applicant also states that the variation between the $75.00 and $100.00 amounts is typical of the variation that normally occurs from week to week. Document the reason for the zero-pay period in the case record and use the other three payment amounts to project ongoing income beginning in August. $ 80.00 + 75.00 + 100.00 = $255.00 Actual July Income $255.00 ÷ 3 = $85.00 Weekly Average $85.00 x 4.3 = $365.50 Projected Monthly Income NOTE: To determine when income that is mailed is received, direct deposit transmissions generally require a processing time of two (2) business days once the payment is disbursed from the Custodial Parents (CP) participant account. EXAMPLE: If a child support payment is disbursed from the CP's participant account on Monday, the payment is deposited into the CP's account on Wednesday. However, the processing time can be longer than two (2) business days for smaller banks, and it also can be affected by the holidays, give three mailing days. To determine when income that is paid by electronic fund transfer 28 (EFT) is received, give two business days from the date of authorization by the payer. However, for income that is mailed or transferred by EFT; accept the family’s statement of when they received the income if they state they received the income earlier. D. Computation of Income Enter the income received in NC FAST to calculate a family’s projected income. NC FAST averages the income from each pay or benefit period and converts it to a monthly amount. The income is converted to a monthly amount according to the frequency of receipt. The automated budget multiplies the averaged amount by: • 4.3 if the income is received weekly. • 2.15 if the income is received biweekly (every two weeks). • 2 if the income is received twice a month. • 1 if the income is received monthly. For guidance on how to enter income in NC FAST refer to Income & Expense Evidence Wizards-Income Support Job Aid. To compute a monthly income amount, enter the base period amounts and the correct indicator for the frequency of receipt into NC FAST. Enter this income in NC FAST until the next Work First Family Assistance Report or change in income, whichever occurs first. EXAMPLE 1: Ongoing Case - The following earned income is reported on the Work First Family Assistance Report. Pay: Date: $ 125.00 April 2 130.00 April 9 110.00 April 16 150.00 April 23 100.00 April 30 Enter each amount in NC FAST and the indicator for weekly income. The automated budget averages the income and multiplies it by 4.3 to get a monthly amount. Continue to count this income until the next Work First Cash Assistance Report or change in income, whichever occurs first. EXAMPLE 2: 29 The family is receiving ongoing Work First Cash Assistance. The family has ongoing UIB. The family reports on the Work First Family Assistance Report returned in May that they received $150 on April 12 and $150 on April 26. This is verified by viewing OVS. Enter both amounts in NC FAST along with the indicator reflecting payment is received weekly. Continue to count this income until the next Work First Family Assistance Report or change in income, whichever occurs first.