Earned Income 430-05-50-20-05
(Revised 12/01/08 ML3164)
Earned income includes, but is not limited to:
- All wages and salaries of an employee, including individuals under the age of 18 who are not attending school. This includes wages paid by the Census Bureau for temporary employment related to census activities and short term disability payments from the employer.
Exception:
Short-term disability payments from an outside source other than the employer are considered unearned income.
- Gross self-employment income, including the total gain from the sale of capital goods or equipment related to the business, excluding the costs of doing business.
Ownership of rental property is considered a self-employment enterprise. Income derived from rental property will be treated as earned income only if a member of the household is actively engaged in the management of the property at least an average of 20 hours per week.
Exception:
Payments from a roomer or boarder, except foster care boarders are also considered as self-employment income.
- Payments under Title I (VISTA, University Year for Action, etc.) of the Domestic Volunteer Services Act of 1973. These payments are subject to the earned income deduction, excluding vendor payments.
Exception:
These payments are excluded for individuals receiving SNAP or TANF at the time they joined the Title I program. Temporary interruptions in SNAP participation will not alter the exclusion once an initial determination has been made.
- Earnings of individuals who are participating in on-the-job training programs under Title I of WIA.
Exception:
Earnings of individuals under the age of 19 and are under parental control of a household member whether or not they are in school.
- Military re-enlistment bonus.
If a household receives up to 50% of the bonus amount as an initial payment with the remainder paid in equal annual installments, the initial payment and the annual installments are annualized.
If a household receives the bonus as a lump-sum payment, it is exempt as a non-recurring lump-sum payment. The lump-sum payment is counted as a resource in the month it is received.
- Department of Human Services (DHS) payments made to a member of the household for providing care for an individual.
- Wages that are diverted to pay an expense when an individual has the option.
Example:
Housing provided by an employer in lieu of wages, when the employee has the option of either being paid or having his wage applied toward an expense (free or reduced rent, day care bill, car repairs, etc).
- Wages that are garnished by the employer.
- Bonuses received on a recurring basis must be counted as earned income.
For a recurring bonus, at application or review, the worker must verify the last bonus received. The verified amount is then prorated over the period of time intended to cover and used in the new review period.
If the bonus is a one-time payment or the household cannot reasonably anticipate receipt of it again, it is treated as a non-recurring lump sum.
If the bonus is received on a sporadic basis, the bonus must be base month budgeted or prorated over the period of time intended to cover and the monthly prorated amount must be counted, unless the household reports a change.
Examples:
- At application in February, the household reports their employer pays monthly performance bonuses based on the office quota. The household reports they received their last bonus in November and does not know whether they will receive a future bonus. Since the household is not receiving a recurring bonus and does not anticipate receipt of a bonus, no bonus income is counted.
In March the household turns in a change report form along with pay stubs for Medicaid. The pay stubs indicate the household received a performance bonus in February. Since the bonus is now recurring, the bonus income must be anticipated for April. The worker must determine if using the bonus along with any other changes results in an increase or decrease in benefits.
- At review in February for March, the household reports they continue to receive a monthly performance bonus. The bonus received in February is verified and used for the new review period.
- Advances will be counted as income when received, unless previously counted as income. Advances on wages will count as income in the month received only if reasonably anticipated.
- Money received from the sale of an individual’s blood or blood plasma.
- Family Subsistence Supplemental Allowance (FSSA) payments made to members of the Armed Forces.
- Variable Housing Allowances (VHA), Basic Allowance for Quarters (BAQ) and Basic Allowance for Housing (BAH) paid to military personnel for housing costs.
