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15.5 Earned Income Earned income is income from employment. The gross earned income before any deductions are taken out is counted. Count earned income only for the month in which it is received, except when the average number of payments increase due to mailing cycle adjustments. Note Occasionally, a regular periodic payment (e.g., wages, Title II, or VA benefits) is received in a month other than the month of normal receipt. As long as there is no intent to interrupt the regular payment schedule, consider the funds to be income in the normal month of receipt. 15.5.1 Income In-Kind Count in-kind benefits as earned income if they meet all of the following criteria: • Regular • Predictable • Received in return for a service or product Do not count meals and lodging for armed services members. To determine the value of in-kind benefits, use the prevailing wage (but not less than the minimum wage) in the community for the type of work the person does to earn the benefits. In order to determine the value of the in-kind benefits, the verification must include the amount of time the person does the work activity each month. Example 1 Sue weeds her neighbor’s garden about an hour a week in exchange for a hot meal. The in-kind value of this exchange is the prevailing wage, not less than minimum wage, for the weekly hour of weeding that Sue does for her neighbor. The value is not based on the value of the hot meal. Sue is not a landscape architect or a master gardener, so the prevailing wage would be minimum wage. The required verification for this in-kind income is documentation, such as a signed statement, from her neighbor that Sue weeds an hour a week for her neighbor in exchange for a hot meal.

Example 2 Roy walks his neighbor’s dog a few times a month in exchange for transportation to and from his doctors’ appointments. Roy tells the worker that he thinks this is worth $20 a month for the 8 hours a month he walks the dog, which would equal $2.50 an hour. The worker would ask for verification that includes how often and for how long each time Roy walks the dog in exchange for transportation to and from appointments. Since Roy is not a bonded dog walker or a professional dog trainer, the worker would enter minimum wage as a reasonable prevailing wage for this exchange. 15.5.2 Contractual Income This provision applies primarily to teachers and other school employees. When an employed Medicaid group member is paid under a contract, either written or verbal, rather than on an hourly or piecework basis, determine the period of the contract and then prorate the income from the contract over that period. For example, if the contract is for 18 months, prorate the contract's income over 18 months regardless of the number of installments made in paying the income. Do this even if any of the following are true: • There are predetermined vacation periods. • He or she will only be paid during work periods. • He or she will be paid only at the end of the work period, season, semester, or school year.