5164-5        BUDGETING SELF-EMPLOYMENT INCOME

After an estimate has been made of a person’s expected adjusted gross self-employment income, the income is budgeted based on whether it is or can be received every month (monthly self-employment income) or is only received during certain times of the year (seasonal self-employment income).

5164-5 A.   BUDGETING MONTHLY SELF-EMPLOYMENT INCOME

Count the estimated monthly-adjusted gross self-employment income in each month the income is expected to be received.

5164-5 B.   BUDGETING SEASONAL SELF-EMPLOYMENT INCOME

To budget seasonal self-employment income, divide each individual's estimated adjusted gross seasonal self-employment income by the number of months in the period of self-employment. The result is the person’s prorated self-employment income. This prorated amount is counted for the same number of months as the period of self-employment.

If the income is available during the season, this prorated amount counts in each month of the season.

If the income is not available during the season, no seasonal self-employment income is counted during that time.

For recipient households, the prorated self-employment income counts beginning with the month following receipt of the income and notice of adverse action.

• For applicant households, the prorated self-employment income counts beginning with the month the income is received.

In these cases, actual income and costs for the completed season are used. Determine the season’s income by subtracting the actual allowable costs of doing business from the end-of-season payment. Divide this by the number of months in the self-employment period and count the prorated amount for the appropriate months.

Example:

Ms. Jones, an ongoing FM recipient, is a self-employed fisherperson. She fishes for salmon in June, July and part of August. She cannot receive draws or advances on her fishing earnings, and will not be paid for the fish until the end of the season. No fishing income is counted for June, July or August.

On August 15, Ms. Jones reports she received $4500 from the processor. She provides verification of this income and $1500 in allowable costs of doing business. On August 23, the caseworker subtracts the allowable expenses from the gross fishing income to arrive at an adjusted gross income of $3000. The caseworker divides this income by three months (the length of the period of self-employment), and $1000 is counted in each month - October, November and December - following notice of adverse action.

If an individual earns seasonal self-employment income during more than one season, the income is counted based on when the income for each season is paid.

Example:

Mr. Harper, an ongoing FM recipient, is a self-employed fisherperson. He fishes for herring in February, halibut in June, and salmon in July, August, and September. He is paid during the period of self-employment for his herring and halibut seasons, but does not receive income for salmon fishing until the end of that season. Mr. Harper’s self-employment income is counted during the months of February (herring), June (halibut), and for three months following receipt of his salmon income and notice of adverse action.

5164-5 C.   FISH PRICE ADJUSTMENTS

Some seasonally self-employed fisher people receive retroactive price adjustment payments after the season is over.  These payments are counted only if:

• The month the payment will be received is known; and
   

• The amount of the payment can be reasonably anticipated.

These payments are not included in the amount of anticipated income that is prorated over the self-employment period.  Count these payments in the month they are expected to be received.  See Manual Section 5160-1.