820-2        CALCULATING A MONTHLY INCOME AMOUNT

The method used to calculate a monthly income amount depends on a number of factors, including:

• When the payments started;

• If it is a scheduled or irregular payment;

• If it is a fixed, salaried, or hourly income;

• Whether all the payments paid cover a full payment period;

• Whether all the scheduled payments will be received in the month; and

• Known and verified upcoming changes that might affect the amount of the payment or when the payment will be received.

Note:

This policy applies when determining income amounts for all benefit months, including the application month.

Whenever possible, the ETEligibility Technician uses payment history to determine a normal or average payment to use in estimating monthly income. This history may be in the form of paycheck stubs or a statement showing payments made.

When the payment history shows that the payment amounts vary, the ETEligibility Technician calculates an average payment amount by adding together recent payments from the same source and dividing this total by the number of payments.

Example: Averaging Payments

Ellie provides her last three pay stubs showing gross earnings of $456, $398, and $430. The ETEligibility Technician averages these amounts by adding the three figures together ($456 + $398 + $430 = $1284) and dividing by three ($1284/3=$428).

Use recent payments that represent what is likely to be received through the months of the certification period. Past payments that do not represent what is anticipated to occur in the period for which income is estimated, such as unusual payments not expected to continue, may be excluded in the calculation, for example, one-time overtime or a one-time increase in hours.

Example: Excluding an Unusual Payment

David works varying hours depending on when his employer needs him. He provides his last three pay stubs, showing gross earnings of $600, $900, and $660. David explained that the $900 check was unusually high because he was covering for another shift. The employer confirmed this was a one-time situation and stated that the $600 and $660 checks were the norm. The ETEligibility Technician excludes the $900 check since it does not represent an amount that can be anticipated in the months for which income is being estimated, and calculates an average payment by adding the two other checks together and dividing by two ($600 + $660 = $1260 divided by 2 payments = $630).

To estimate earnings when the person has new employment or a change in hours for which there is no payment history, the ETEligibility Technician uses the number of hours that will be worked each pay period or each week, and multiplies this by the hourly rate to calculate a per payment or per week estimate. This amount is then multiplied by the appropriate conversion factor to determine the estimated monthly income. When the change is in the hourly rate, the payment history can be used to estimate the number of hours that will be worked under the new wage rate.

Example: Income from a New Job

Maggie reports that she started a new part-time job. She will be paid every two weeks earning $12 an hour. Her schedule will vary but the employer estimates that she will work an average of 20 hours each week. Multiply the number of hours per week by the rate of pay to get an estimate of weekly pay (20 hours x $12/hour = $240). Multiply this weekly estimate by 4.3 to get a monthly estimate of income.

Example: Increase in Hourly Wage

Terri reports she got a raise to $10 an hour starting July 1. She gets paid twice a month, and provides her last three pay stubs that show 45 hours for pay period ending May 31, 36 hours for pay period ending June 15, and 42 hours for pay period ending June 30. Average the number of hours by adding them together and dividing by three. (45 + 36 + 42 = 123 divided by 3 = 41). Multiply this average number of hours by the new rate of pay to get an average payment per pay period (41 hours x $10/hour = $410).