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.
Determine the season’s income by subtracting the self-employment standard deduction or 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 $6500 from the processor.
She provides verification of this income. Ms. Jones allowable cost
of doing business using the standard deduction is $3,250 ($6,500 x 50%).
Because Ms. Jones expenses were $4,000 this season, she tells her
caseworker to use her actual expenses. She provides verification
of her expenses and the caseworker allows actual deductions on the case.
The family’s countable self-employment income is $2,500 ($6,500
- $4,000). On August 23, the caseworker subtracts the allowable expenses
from the gross fishing income to arrive at an adjusted gross income of
$2500. The caseworker divides this income by three months (the length
of the period of self-employment), and $833 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.
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