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TANF POLICY MANUAL

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8.3 Determination of Benefits A. Gross Income Limit. Gross monthly countable earned and unearned income of the TANF benefit group must not exceed 185 percent of the need standard by family size. The gross income limit is an initial screen of eligibility for assistance.

B. Earned Income and Unearned Income 1. Earned income means gross earned income prior to any deductions for taxes or for any other purposes. Such earned income may be derived from an applicant’s or recipient’s own employment, such as a business enterprise, or farming; or derived from wages or salary received as an employee. It includes earnings over a period of time for which settlement is made at one given time, as in the instance of the sale of farm crops, livestock, or poultry.

2. With reference to commissions, wages, or salary, earned income means the total amount, irrespective of personal expenses, such as income-tax deductions, lunches, and transportation to and from work, and irrespective of expenses of employment which are not personal, such as the cost of tools, materials, special uniforms, or transportation to call on customers.

3. With respect to self-employment income, earned income means the total profit from a business enterprise, farming, etc., resulting from a comparison of the gross receipts with the business expenses (i.e., expenses directly related to producing the goods or services and without which the good or services could not be produced). The profit shall be as determined using Internal Revenue Service methods. (see 8.9 Self-Employment)

4. With regard to the degree of activity, earned income is income produced as a result of the performance of services by a recipient; in other words, income which the individual earns by his own efforts, including managerial responsibilities, would be properly classified as earned income, such as management of capital investment in real estate. Conversely, in the instance of capital investment wherein the individual carries no specific responsibility, such as where rental properties are in the hands of rental agencies and the check is forwarded to the recipient, the income would not be classified as earned income.

5. Unearned income is any income that does not meet the definitions of earned income above, such as direct child support, social security benefits, interest, dividends and gifts.

6. Unemployment compensation benefits are treated as unearned income in the budgeting process.

8.4 Verification Verification of income is determined as follows:

1. Earned Income Use available pay stubs, if representative or contact the employer to verify the following if pay stubs are not available:

A. Hourly pay rates B. Pay dates/frequency of pay