440-4 DETERMINING ELIGIBILITY AND BENEFIT LEVEL
For non- SSI recipients, the caseworker determines a household's eligibility and benefit level on a calendar month basis by considering the household’s circumstances for the entire month. The caseworker estimates the amount of monthly income used in this determination by following the guidance in this chapter.
440-4 A. COMMON TERMS AND DEFINITIONS USED IN THIS SECTION
The following terms are specific to this section. Refer to these terms frequently to gain a full understanding of the policy and examples in this section.
Anticipate means expecting a future event; predicting an event. For example, an applicant anticipates receiving child support each month.
Average payment is a basic math calculation that adds payments in a period and divides the total by the number of payments added.
Bi-weekly payments are payments received every other week.
Conversion factor is a basic math calculation used to change (convert) a weekly or bi-weekly payment amount into a monthly amount. It factors in the 3rd and 5th pay check received in some months by multiplying by 4.3 weeks when using a weekly payment, and 2.15 weeks when using a bi-weekly payment.
Estimate means calculating an approximate value. For example, a caseworker will estimate how much income to count.
Full payment period is the period a payment is intended to cover. For example, the full payment period for earnings is the pay period defined by the employer. The full payment period for public assistance payments is a calendar month. The full payment period for unemployment benefits is generally a two-week period, based on the claimant receiving two weekly benefits per payment. Payments cover a full payment period even if the individual did not receive the maximum payment he or she could have received. For example, lower payments are for full payment periods when the employee is employed continuously and was on unpaid leave (including illness) for part of the pay period; or a person is disqualified for part of the UIB two-week benefit period.
Irregular income is income received in unpredictable amounts, on unpredictable dates, or infrequently, and typically not in consecutive months. Unexpected income that cannot reasonably be expected to recur, such as a cash gift, also is irregular income.
Monthly payment is a payment received once a month.
Normal payment is a payment in a typical or usual amount.
Scheduled payment is a payment that will be made by the source at prescribed intervals or on specific dates. For example, unemployment benefits are scheduled to be paid every two weeks; a weekly paycheck is scheduled to be paid once a week; and salaries are paid on specific dates decided by the employer. With new or ending income, the individual may not receive all of the scheduled payments in a month, or some of the scheduled payments they receive may not be for a full payment period.
Twice a month payments are payments received two times in the month on specific dates. For example, the monthly pay dates are the 5th and 20th of each month.
Weekly payment is a payment received once a week.
440-4 B. ESTIMATING THE HOUSEHOLD’S MONTHLY INCOME
The caseworker makes a reasonable estimate of the household’s monthly income based on the information available from the household and the source of the income. The caseworker must confer with the individual to find out about income already received, as well as about income anticipated for the month of application and for subsequent months in the certification or review period.
Once the caseworker has information about the types of income, and when and how much will be received, the caseworker will confirm it by getting verification from the source of the income.
Income is included:
If the household has received it or anticipates receiving it in the month; and
The worker can estimate how much the household will receive in the month and/or in subsequent months.
To anticipate and estimate the household’s monthly income, the caseworker must know:
What is the source of the income?
What is the amount of each payment?
Which household members receive income?
When will the income be received - i.e., pay dates?
What is the period of time the payment covers - i.e., pay period start and end dates?
If the income is ending, when is the last payment expected?
When is the first payment expected?
Will payments continue?
How often will the household receive payments - i.e., monthly, twice a month, bi-weekly, weekly, irregularly?
The estimated income amount used in the benefit calculation will be considered correct if:
It is reasonable;
It is based on all available information;
The caseworker applied correct policy; and
How the estimated income amount was determined is documented in the Case Notes (CANO). See MS 400-5 for more on documentation requirements.
The caseworker adjusts the monthly income estimate for subsequent months when a change is reported that affects the amount of anticipated income.
1. CALCULATING 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 caseworker 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 worker 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 caseworker 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/review 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 caseworker 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 caseworker 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 twice a month 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).
When the individual will receive all the scheduled payments in the month and all the payments cover a full payment period, estimate the monthly income by using the normal or average payment amount. Payments received once a month do not need to be converted. If payments are made more than once a month, multiply by a conversion factor to get a monthly amount:
By 2 if the payment is for a half month (i.e., paid twice a month)
By 2.15 if the payment is for a period of two weeks (i.e., paid every other week)
By 4.3 if the payment is for a period of one week (i.e., paid weekly)
Confirm pay period start and end dates and pay dates to ensure the correct conversion factor is used. The distinction between twice a month and every two weeks may be missed if the caseworker simply asks the payroll clerk how often an employee is paid.
If the payment amounts do not vary, multiply the normal payment received each pay day by the appropriate conversion number based on the frequency of payment.
Example: Payment Amounts Do Not Vary
Rachel is paid twice a month, on the 4th and the 20th. Her salary is $1000 a pay period. To calculate her monthly income, $1000 is multiplied by 2 ($1000 x 2 = $2000).
If the payment amounts vary, calculate an average payment first, and then multiply it by the appropriate conversion number based on the frequency of payments in the month.
Example: Payment Amounts Vary
Val is paid every other Saturday. Her average pay is $428. To calculate her monthly income based on payments every two weeks, $428 is multiplied by 2.15 ($428 x 2.15 = $ 920.20).
Notes:
Two pay days in the month that are normally on the same dates, such as on the 5th and 20th, indicate the individual is paid twice a month.
Pay days that are 14 days apart and normally on the same day of the week, such as every other Friday, indicate the individual is paid every other week (bi-weekly).
Pay days that are 7 days apart and normally on the same day of the week, such as every Monday, indicate the individual is paid weekly.
Pay dates may vary when the normal pay date falls on a holiday or weekend.
Some individuals have unusual work schedules, like working one week on and one week off. In these situations when there is no pay history, the caseworker will calculate a monthly estimate of income by determining the amount of income that will be received during a time period and converting this amount into a monthly amount.
Example #1: Unusual Work Schedule
Erin works three weeks on and one week off. She just started working and the employer statement indicates she’ll work 10 hour shifts, seven days a week, and will be paid $12 an hour for the first 40 hours per week, and $18 an hour for the remaining hours.
The worker calculates she’ll work 120 hours at $12 an hour ($1440) and 90 hours at $18 an hour ($1620) during this 21-day period, for a total amount of $3060. She’ll earn no money during the seven days she has off, so for the four-week period, she’ll earn $3060. The worker divides this amount by 4 to get a weekly average ($3060 divided by 4 = $765), and multiplies this amount by 4.3 to get a monthly estimate of income ($765 times 4.3 = $3289.50).
Example #2: Unusual Work Schedule
Pat’s work schedule is one week on and one week off. He normally works 12-hour shifts for seven days, and gets paid $10 an hour regular time (40 hours times $10 = $400) plus $15 an hour overtime (44 hours times $15 = $660), for a total of $1060 per week. Since he works one week on and one week off, this $1060 represents two weeks of employment. The worker multiplies this by 2.15 to get a monthly estimate of income ($2279).
Six months later, Pat submits his review application and provides his pay stubs for the pay periods ending May 9 ($1030), May 23 ($1280), and June 6 ($1090). Since these represent two-week pay periods (one week on and one week off), and worker totals them ($3400), divides this amount by 3 to get an average payment ($1133.33 and multiplies this average two-week payment by 2.15 to get a monthly estimate of income ($2436.65).
Full payment periods include pay periods when there is a temporary decrease in the payment amount due to unpaid leave or work schedule changes, or a one-week gap in unemployment insurance benefits. These situations result in a change in the amount of the scheduled payment, but the payment still covers a full payment period. In these situations, the caseworker calculates an average payment just for that month to estimate the month’s income. Another average payment is calculated to estimate income for subsequent months in which the payment amounts return to normal.
Example: Temporary Decrease in Earnings
Carolyn works a 40-hour per week job, but the amounts of her last three checks vary significantly due to leave without pay she took for a family emergency. She does not expect to miss any more work. She is paid every two weeks and received $400 gross (40 hours) on August 3, $600 (60 hours) on August 17, and expects a normal pay check of $800 (80 hours) on August 31. Since August income is significantly lower than normal, the caseworker must do a separate budget for this one month. For August the caseworker totals the three payments received in August and divides the amount by three to get an average payment amount ($400 + $600 + $800 = $1800/3 = $600). Carolyn is paid bi-weekly (every other week). The caseworker multiplies this average payment amount by 2.15 to get an estimated monthly income amount for August ($600 x 2.15 = $1290). Since low paychecks are not expected to continue, the caseworker anticipates $800 every two weeks and recalculates an estimated monthly income of $1720 for September and beyond. ($800 x 2.15 = $1720).
Example: Temporary Decrease in Unemployment Benefits
Bob is receiving unemployment insurance benefits ( UIB ) of $210 a week, which is paid every two weeks in the amount of $420. He will receive UIB payments on the 2nd, 16th, and 30th of November. However, he did not claim one week of benefits so one of these payments is for $210. He expects to claim every week of benefits in the future. Since November income is lower than normal, the caseworker must do a separate budget for this one month. The caseworker totals the three payments in November and divides the amount by three to get an average payment amount ($420 + $210 + $420 = $1050/3 = $350). Since the payments are bi-weekly (every other week), the caseworker multiplies this average payment amount by 2.15 to get an estimated monthly income amount for November ($350 x 2.15 = $752.50). Since the lower UIB payment is not expected to continue, the caseworker anticipates $420 every two weeks for December and beyond and recalculates an estimated monthly income of $ 903 ($420 x 2.15 = $ 903 ).
Notes:
• If an individual is paid once a month and the amount varies, such as child support
payments, calculate an average monthly amount to use in estimating total monthly income.
• If the caseworker and client anticipate that the lower payment is only for one month, the
caseworker recalculates the income using the amount normally received to determine
income for subsequent months.
• All anticipated changes in income reported and verified at the time of application, review or
recertification, or during the recert/review period must be considered when calculating the
estimate of income. This may require the worker to calculate multiple budgets for
subsequent months until the income stabilizes.
a. When the individual will receive all the scheduled payments in the month, but one or some of the payments do not cover a full payment period, total the income already received and any additional amount anticipated to be received during the month, and use this amount for the month. This situation often occurs when the individual begins employment after the pay period starts, or stops working before the pay period ends, resulting in the first or last paycheck covering less than a full pay period. It may also occur when individuals begin receiving or stop receiving unemployment insurance benefits.
When the person is not employed for the full pay period, anticipate the number of hours that will be worked in the pay period and multiply this number of hours by the hourly wage. Use this amount in the estimate of income for this month.
Example: Starting Employment
Sue applies for benefits on June 6. She recently started working on May 28. She gets paid $10 an hour and works 5 hours a day, Monday through Friday. She’ll be paid twice a month on the 5th and 20th. Pay periods are the 1st through the 15th and the 16th through the end of the month. Her June 5 check was only $200 for the four days she worked in May (4 days x 5 hours/day = 20 hours x $10 = $200). Her June 20 check is anticipated to be $550 for the eleven work days she anticipates working during the June 1 through 15th pay period (11 days x 5 hours/day = 55 hours x $10 = $550). Sue’s June income is determined by adding the payment she received on June 5 to the payment she expects to receive on June 20. ($200 + $550 = $750).
Income in future months will be estimated based on information from Sue and the employer about the amount of pay that is expected.
Example: Starting Unemployment Benefits
Elizabeth applies for benefits on April 16. She filed for unemployment benefits last month and received her first unemployment payment on April 13. The caseworker verifies the payments on the Dept of Labor UIB interface, noting that Elizabeth’s UIB ”r;waiting week” was March 25 and she received a $120 payment for only one week on April 13. She will receive another payment on April 27 for $240, representing two benefit weeks. Since the first payment was for only one benefit week due to the waiting week required when benefits begin, for April the caseworker will count $360 unemployment income. For May and beyond, the caseworker anticipates she will get all of the scheduled payments, and will multiply the regular $240 bi-weekly payment by 2.15 to convert it into a monthly income estimate of $516. This amount will be used to determine benefits for subsequent months, unless a change is reported.
Example: Ending Unemployment Benefits
Elizabeth reports on June 15 that her unemployment benefits are ending and that she will get her last payment on July 20. It will be for only one week in the amount of $120. She will also get a payment of $240 for two weeks of unemployment benefits on July 6. Since the last payment will be for only one benefit week, for July the caseworker will count $360 unemployment income ($240 + $120 = $360).
Exception:
When an individual is paid weekly or bi-weekly and receives a fifth or third payment that covers less than a full payment period, estimate this month’s income by totaling the payments received in the month, dividing this amount by the number of payments to get an average amount, and then multiply the average amount by 4.3 weekly or 2.15 bi-weekly to get an estimated monthly amount.
Example: Exception for Third or Fifth Payment
Peggy was laid off from work for the summer. Her last day of work was May 16. She was paid every other week and received $1000 on May 2 (80 hours at $12.50/hour for pay period ending April 25) and $1000 May 16 (for pay period ending May 9). She expects one more check on May 30 for $500 for the 40 hours worked during the pay period ending May 23. The caseworker totals the three checks and divides by three ($1000 + $1000 + $500 = $2500/3 = $833.33) to determine an average payment amount, then multiplies this amount by 2.15 since she is paid every other week ($833.33 x 2.15 = $1791.65). The worker counts $1791.65 earnings for May. No income from this source would be counted in subsequent months. The caseworker must recalculate benefits for June using the amount of anticipated income from other sources, if any.
b. When the individual does not receive all the scheduled payments in the month, total the income already received and anticipated to be received during the month and use this estimated amount for that month. Situations when this may occur include:
The employee is on unpaid leave for an entire pay period due to sickness, temporary lay-off, or vacation;
School district employees have an unpaid holiday break that covers an entire pay period;
UIB "stops" because of ”excess earnings” for two benefit weeks in a row, causing the UIB recipient to miss one or more two-week payment(s).
Example: All Scheduled Pay Checks Not Received
Dan reports on December 16 that he will be on unpaid leave for two weeks, December 20 through 31. He normally gets paid every two weeks, but this unpaid leave will cause him to miss one paycheck. For January, he will receive only one two-week paycheck on January 21. The caseworker calculates the January income by counting only the amount anticipated on the January 21 check. For February, the caseworker will estimate a new earned income amount based on regularly scheduled paychecks issued every two weeks.
Example #1: All Unemployment Payments Not Received
Jenny is receiving unemployment benefits, but recently got a temporary part-time job. She received her regularly scheduled $200 UIB check on May 7th for the two benefit weeks April 22 and April 29. She was not eligible for unemployment benefits for the next two weeks because of her earnings. She is no longer working and expects to get another $200 UIB check around June 5. Since she only got one unemployment payment in May, the worker counts $200 unemployment income for May and her earnings paid in May. The caseworker must recalculate June benefits based on anticipated income for that month.
Example #2: All Unemployment Payments Not Received
Marjie applies for assistance on August 20. She is receiving unemployment benefits of $130 a week, but payments are expected to end next month. According to the DOL system, she was issued $260 on August 10th for benefit weeks ending July 28 and August 4. Her balance remaining is $390. $260 is expected to be issued on August 24, and the remainder in September. The caseworker calculates August income by multiplying the $260 bi-weekly payment by 2.15 ($260 x 2.15 = $559) since both payments covered full payment periods. For September, the caseworker counts only the remaining $130 unemployment income she anticipates receiving ($390-$260=$130) since she will not receive all of the scheduled payments in September. The caseworker must do another estimate for October to remove the unemployment benefit that ends in September.
The income is considered irregular when the payments are not made on a regular schedule. An individual may receive income on an irregular or sporadic basis. Examples of irregular income include day labor, on-call work (such as substitute teaching), craft sales, and receipt of child or spousal support. It may also include payments like cash awards or prizes, gifts, and winnings from bingo. Irregular income is counted if the household has already received it in the month or can anticipate receiving it in the month based on the known timing of a payment, or the past history of payments such as child support or craft sales.
The caseworker should thoroughly explore irregular income situations. When the caseworker and the individual can arrive at a reasonable estimate of how much income can be anticipated for the month, that amount of income is included in the estimate. Irregular income that cannot be reasonably anticipated is not included in the estimate of income.
Example: Countable Irregular Child Support Income
Terry received multiple child support payments during four of the last six months – two $50 payments in February, two $100 payments in April, one $50 payment in May, and two $100 payments and one $50 payment in July. The caseworker must average the income by totaling all the payments and dividing them over the six-month period the payments were received ($600/6 months). The household received an average payment of $100 a month. The caseworker discusses this with Terry and both agree it would be reasonable to anticipate an average $100 per month.
Example: Countable Irregular Craft Income
Aina creates craft items and sells them at a craft store that carries the items on consignment. She receives this self-employment income only after an item is sold. Sales are irregular most of the year; however, sales pick up during the summer tourist season from June to September, and again in November and December. After paying expenses, she normally receives an average of $400 for her craft items during those months. If the period for which the caseworker is determining eligibility includes the months in which sales normally occur based on past sales history, the caseworker would explore anticipated income from the sales and include that amount in the estimate of monthly income to determine benefits. In other months of the year, no income from craft sells would be anticipated.
Example: Irregular Child Support Income That Cannot Be Anticipated:
JoLynn applies for assistance in December. She received a child support check in November. Prior to that, the last check she received was in May. She tells the caseworker that she can never predict when the checks will arrive. In this case, payments cannot be reasonably anticipated so no child support income is counted.
Example: Irregular Earned Income That Cannot Be Anticipated:
Dave applies for assistance on November 5th. He works on-call for the city shoveling snow during the winter, but has not worked nor received any income in November. Since it cannot be reasonably anticipated when snow will fall, when he will be called into work, or when income from this source will be received, income from this source cannot be included in his estimate of income.
For policy on determining self-employment income, see MS 441-1D.
All countable income available to the household must be verified. Verification obtained must be documented in the Case Notes (CANO). Income can be verified using check stubs, written or oral statements from the source of the income, or data interface information. For self-employment income verification, see MS 441-1D.
Pay stubs are the primary source of verification for earned income. Occasionally pay stubs are not available because the individual may have just started work and have no pay stubs, or may have lost some or all of the stubs. In these circumstances, verification of the individual’s income is obtained from the employer, either by phone or an employment statement completed by the employer.
7. DOCUMENTING HOW THE CASEWORKER DETERMINED MONTHLY INCOME
Good documentation is an essential part of establishing how the household's eligibility was determined. In every situation, the caseworker must document:
Any anticipated changes in the income and what effects, if any, the changes have on the estimate of income.
The source, amount, and frequency (when it is received and how often, i.e., pay period start and end dates and pay dates) of the household’s income, and how this information was verified.
The method used by the caseworker to estimate the monthly income. This must include the reasons certain payments were used or not used in calculating an average payment. This is a key part of documenting self-employment and irregular income where client statements often become part of the verification.
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