Page 3

Families and Children Manual Policy Manual Number: 010.020 Section: Financial Eligibility Chapter: Countable and Excluded Income

September 1, 2026 Division of Tenncare 3 viii. Sick/Disability Pay Countable. Income an employee receives during a temporary absence from work due to an injury, sickness or disability. Sick/Disability pay is considered part of an individual’s wages for tax purposes. Sick/Disability Pay received within the first 6 months of the individual being unable to work is earned income. Sick/Disability Pay received more than 6 months after the individual is unable to work is considered unearned income. ix. In-Kind Wages Countable. Non-cash compensation, including food or shelter, received by an individual for work performed in place of, or in addition to, wages, profit or payment in cash. The value of in-kind wages is determined by the current market value of the item minus the amount of the outstanding balance due on the item, if any. x. In-Kind Not Food/Shelter Countable. Clothing or other goods received by an individual for work performed in place of, or in addition to, wages, profit or payment in cash. xi. Severance Pay Countable. Severance pay is countable earned income in the month received. xii. Census Wages Countable. Income paid to an individual by the Census Bureau for temporary employment activities in connection with the full Census that occurs every 10 years. b. Self-Employment i. Net Earnings Net earnings from self-employment are countable income when determining eligibility. Self-employment is the act of engaging in a trade or business. A trade or business is generally an activity carried on for a livelihood or in good faith to make a profit. Individuals may be contractors, franchise holders, owners, operators, partners, etc. An individual must meet all of the following criteria to be considered self-employed: 1. Earns income directly from a business or trade, not from wages or salary from an employer; 2. Responsible for the payment of their entire Social Security and federal withholding taxes; 3. Does not have an employee/employer relationship with another individual and the services performed cannot be controlled by an employer; and 4. Should file self-employment tax forms (Schedule F, C, C-EZ, SE, etc.).