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Page | 219 C. Bonus Income Bonus payments are counted if the household receives it in the application month (actual income) or can anticipate receiving it in future month(s) based on the known timing or the past history of payments (recurring bonus payment). Irregular bonus payments that cannot be reasonably anticipated (non-recurring bonus payment) are not included as income as they are considered a non-recurring lump sum payment and counted as a resource. If the recurrence of the bonus is questionable, the Specialist must contact the employer to verify whether or not the bonus payment is a recurring or non-recurring bonus.

Recurring Bonus payments – Countable Income At application, six-month report and renewal, the Specialist must verify the last bonus received. The verified amount is always prorated over the period of time it is intended to cover and prospected as income over the review period. The household does not need to report in interim months when the next bonus is received.

In order for the bonus payment to be considered countable income, the following criteria must be met:  The individual must still be employed by the employer who paid the bonus to the individual.  If income is received from a bonus, it must be reasonably expected to be received on a recurring basis (e.g. quarterly or annually).

Example 1: Countable Bonus (Annual Bonus) Sarah works for a seed company. She receives a base salary of $3,000 per month. In December of every year, the seed company pays Sarah an annual bonus. Last year, Sarah received a $15,000 bonus. Sarah’s bonus is countable income as it is recurring and can be reasonably expected. Since Sarah receives a bonus once per year, the total bonus amount is divided by 12 (the period of time it is intended to cover) to determine a monthly amount ($15,000/12=$1,250). Sarah’s prospected monthly income is $4,250 ($3,000 base + $1,250 bonus). Example 2: Countable Bonus (Quarterly Bonus) Kevin works for a grocery store. He receives a monthly wage of $1,600. He also receives a quarterly bonus but does not know the amount prior to receipt. The last bonus Kevin received was $300. Kevin’s bonus is countable income as it is recurring and can be reasonably expected. Since Kevin receives a bonus every 3 months, the last bonus received is divided by 3 (the period of time it is intended to cover) to determine a monthly amount ($300/3=$100). Kevin’s prospected monthly income is $1,700 ($1,600 base + $100 bonus). Note: If a bonus payment is received in the application month, then it is counted in the following ways:  Recurring Bonus (can reasonably anticipate): averaged as income over the period it is intended to cover (including the application month).  Non-recurring (cannot reasonably anticipate): counted as a resource in the month received (and future months as long as household maintains the resource).