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VIRGINIA DEPARTMENT OF SOCIAL SERVICES SPECIAL INCOME DETERMINATIONS

10/25 VOLUME V, PART XII, PAGE 2

Note: It may be difficult to determine if self-employment income represents a household's annual support when the household has income from other sources. Consider other factors, in addition to the household's statement, to indicate how long the household could sustain itself on such income. Factors include, but are not limited to, the previous year's business and personal expenses, tax records, anticipated expenses for the current year, income expected to be received from other sources during the coming year, and so on. These factors, when compared with the income from seasonal self- employment, should provide a basis for determining how long the income is intended to support the household.

For example, if the previous year's expenses were proportionate to the household's income from self-employment, it could be an indication that the income would sustain the household for a year; therefore, the household's income should be annualized. If expenses were not proportionate with the income, it might be determined that such income could not sustain the household for a year; therefore, income should be averaged over the period of time the income is intended to cover.

b. Self-employment income received on a monthly basis but representing a household's annual support must normally be averaged over a 12-month period. Examples of this type of self-employment includes most small businesses, such as grocers, or some farmers. If the averaged amount does not accurately reflect the household's true monthly circumstances because of a substantial increase or decrease in business, the self-employment income must be calculated based on anticipated earnings.

c. Self-employment income that does not represent a household's annual support must be averaged over the period of time the income is intended to cover. This type of seasonal self-employment includes vendors who receive their income in the summer or during the tourist season and supplement it through another source during the rest of the year.

d. Households with newly formed enterprises that have been in existence less than a year must have their self-employment income averaged over the amount of time the business has been in operation, and the monthly amount projected for the coming year. If the business has been in operation for such a short time that there is insufficient information to make a reasonable projection, a certification period should be assigned which allows for a timely review of the household's circumstances.

If a household farming for the first year has not yet received its first income, or an established farming household has not yet realized a change in income due to a change in the amount or type of crops raised, the BPS should not anticipate the amount of the expected income from the new crop when determining the household's income.

TRANSMITTAL #35