5160-5         ESTIMATING A FULL MONTH’S INCOME

5160-5 A.   Payment Amounts Do Not Vary

When the individual receives or expects to receive a full month’s income from a source and the payment amount does not vary, estimate the monthly income by multiplying the payment amount by the number of payments expected in the month.

Example #1:

Jim applies on April 4 and is interviewed on April 7.  His only income is unemployment benefits of $200 every two weeks.  For April, he’ll get two payments on April 8 and April 22.  He’ll receive a full month’s income in April and expects a full month’s income in May.  Estimate April’s income by multiplying his bi-weekly payment of $200 by the bi-weekly conversion factor of 2.15 ($200 x 2.15 = $430) and count $430 for April and subsequent months.

Example #2:

Joan applies on March 28th and is interviewed on April 2nd.  She receives weekly worker’s compensation checks of $250, and provides verification of her March payments received on the 1st, 8th, 15th, 22nd, and 29th.  Her next check will be received on April 5th.  She received a full month’s income in March and expects a full month’s income in April.  Estimate the income by multiplying the weekly payment by the weekly conversion factor 4.3 ($250 x 4.3 = $1075.)  Count $1075 income for March, April, and subsequent months.  

5160-5 B.   Payment Amounts Vary

When the individual will receive or expects to receive a full month’s income from the source and the payment amounts vary, calculate an average payment amount by adding together payments from the same source and dividing this total by the number of payments.  Then estimate the monthly income by multiplying the average payment amount by the number of payments expected in the month.

Example #1:  

Ron applies on May 7 and is interviewed on May 10.  Ron has been working a part-time job since February and gets paid every other Friday.  He’ll receive two checks in May - on May 14 and May 28.  He provides three pay stubs showing he grossed $350 April 2, $325 April 16, and $360 April 30.  Estimate May’s income by calculating an average paycheck.   ($350 + $325 + $360 = $1035 divided by 3 = $345)  Multiply this average check by the bi-weekly conversion factor 2.15, since he gets paid every two weeks ($345 x 2.15 = $741.75).  Count $741.75 monthly income from this job for May and for subsequent months.  

Example #2:  

Carolyn applies on September 15th and is interviewed on September 19th.  She works at the video store about 20 hours a week at $8.00 an hour.  She gets paid on the 5th and 20th of each month.  Her August 5th check was $320, her August 20th check was $336, and her September 5th check was $352.  Estimate September’s income by calculating an average paycheck.   ($320 + $336 + $352 = $1008 divided by 3 = $336)  Multiply this average check by 2, since she is paid twice a month.   ($336 x 2 = $672)  Count $672 for September and for subsequent months.

5160-5 C.   Estimating New Earned income

When an individual starts a new job and will receive a full month’s income, initially estimate the monthly income by using the individual’s anticipated work schedule and hourly rate of pay.  Multiply the hourly rate of pay by the number of hours the individual is expected to work per week.  Multiply this estimated weekly wage by the weekly conversion factor 4.3 to get an estimated monthly amount.

At review, determine a new income estimate by calculating an average payment using recent payments.

Example:  

Kathy applies on July 10th.  She started a new job on July 5th, and will get her first paycheck on July 20th.  She gets paid by the hour and paydays are on the 5th and 20th.  The employer verifies that she will work an average of 30 hours per week at $7 per hour.  She will receive a partial month’s income in July, and a full month’s income beginning August.  For July, use the income she is expected to receive in July based on scheduled hours, pay period end dates, and pay dates.  For August and subsequent months, estimate the income by calculating a weekly wage (30 hours x $7 = $210) and applying the weekly conversion factor of 4.3 ($210 x 4.3 = $903).  

5160-5 D.   Estimating Earned Income that has Changed

When the individual will receive a full month’s income and the rate of pay has changed but the number of hours is expected to remain about the same, estimate the monthly income by calculating the average number of hours per pay period using paychecks already received and multiplying this average number of hours by the new hourly rate.

Example:  

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).

5160-5 E.   Change in Income Occurs During the Month

When a change occurs during a month and the individual will get a full month’s income, calculate an average payment using the amounts received and expected to be received in the month.  Then, multiply this average payment by the number of payments expected in the month to get an estimated monthly income for this month.

Example:

Yvonne applies for assistance on June 17th.  She started a job on May 16th, works 40 hours a week, and is paid every other Friday.  She was paid a training wage of $8.00/hour for the first two weeks.  Since May 28th, she is now being paid $12.00/hour.  Her first check received June 10th for pay period ending May 27th was 40 hours x 2 weeks x $8.00/hour = $640.  Her June 24th check for pay period ending June 10th will be 40 hours x 2 weeks x $12.00/hour = $960.

Since June income will include pay at two different rates, June’s income is estimated by calculating an average payment using the $640 received June 10, and the $960 expected on the June 24th check, $640 + $960 = $1600 divided by 2 = $800.  Multiply this average payment by the appropriate conversion factor, $800 x 2.15 =$1720.  For July, estimate the income using only the higher rate of pay, $960 x 2.15 = $2064.

5160-5 F.   Estimating Salary Income

When an individual receives a salary and will receive a full month’s income, estimate the monthly income based on the monthly salary the individual expects to receive.

Example:  

Jon works for the State of Alaska and receives a salary of $1,000 twice a month.  Calculate his monthly earnings by multiplying his salary by two ($1,000 x 2 = $2,000) and count $2,000 gross earned income from this job.