When determining the net monthly food stamp income for households with a member engaged in a farming enterprise, farming losses will be deducted from any other countable income the household has if:

1. The farmer's cost of producing the farm income exceeded the gross income from the enterprise, and
2. The farmer received or expects to receive annual gross proceeds of $1,000 or more from the farming enterprise.

Only allowable costs of producing self-employment income will be excluded when determining if the farmer had losses which may be deducted.

When a household's farm operation shows a loss, complete the following actions:

1. Determine the monthly amount of the loss. This is calculated by excluding the allowable costs of producing the income from the gross farm income. If the net amount is a "loss", prorate the loss over a 12 month period. Enter the prorated amount in field 50 of the EMS-233, Food Stamp Authorization Document, and subtract it from all other household income.

NOTE: If the net amount is a gain (not a loss) it will be handled as earned income and entered in field 35 of the EMS-233 along with any other earned income declared by the household.

2. Apply the Gross Income Eligibility Pretest after the farm loss has been subtracted if the household is classified as a "regular" household (no aged or disabled members).

To determine if the household meets the pretest level, add gross earned income (field 35) to total unearned income (field 49) and subtract farm losses (field 50). The result is the household's gross income for purposes of the pretest.

3. If the household is eligible after the pretest subtract the earned income deduction (if applicable), the standard deduction, dependent care, medical deduction and shelter costs will be deducted in the same manner as for any other household.

See the "Food Stamp Basis of Issuance Tables, Exhibit A" for the current pretest income levels.

Person who are self-employed in a farm enterprise may receive cash payments, loans, and/or commodity certificates from a variety of government sponsored programs. Any loan received, including low-interest loans received as disaster assistance, will be excluded as income. See [FSC 5408] for discussion of loans. Any payments received under the Disaster Assistance Act of 1988 will be excluded as income and resources, provided a farm emergency is determined due to a natural disaster. See FSC 4450 for resources excluded by law and FSC 5405 for income exclusions. Any insurance settlement received as a result of a loss, including a crop loss, will handled as a lump-sum payment. When the Secretary of Agriculture determines that a farm emergency exists due to a natural disaster, any payment to farmers made as a result will be excluded from income and resources for food stamp purposes. Certificates received from such programs as the Payment-In-Kind Program or programs administered through the Commodity Credit Corporation (CCC) will be handled as instructed below.

PIK payments and commodity certificates are based upon specific crop years. When a household reports receipt of a PIK or CCC payment, the caseworker must determine if the payment is based on the crop year used to compute the income currently being shown in the household's food stamp budget. If the payment is based on the crop year currently reflected in the food stamp budget, the caseworker must recalculate the household's self-employment income to include the payment. If the reported payment is for the current crop year (e.g. - payment received in 1987 for the crop year 1987), the payment will be included as income when the farm income for that crop year is calculated.

The household may receive a commodity certificate. These are certificates which represent so many bushels of a commodity. When issued, the certificate has a face value. based upon the current per-bushel cost of the commodity represented. For example, a commodity certificate may represent 500 bushels of soybeans. The farmer may sell these certificates, hold the certificates or may exchange the certificate for seed or feed to be used in the farm enterprise.

If the commodity certificate is based on the crop year used to compute the income currently being shown in the household's food stamp budget, the worker will handle receipt of the certificate in one of the methods stipulated below.

• If the household plans to cash in the certificate and use the funds for anything other than feed or seed during the certification period, include the value of the certificate will be included as part of the household's gross self-employment income.

• If the household plans to exchange the certificate for feed or seed or plans to cash it in and use the proceeds for feed or seed, the value of the certificate will be disregarded as income or as a resource.

• If the household plans to hold the certificate, the face value of the certificate will be disregarded for up to one year from the date of issue. Any certificate held for longer than 12 months from the date of issue will be considered a non-liquid resource.

If the commodity certificate is not for the crop year used in the household's current food stamp budget, the certificate or any income resulting from the sale of the certificate will be disregarded until the self-employment income for that crop year is calculated.

When self-employment income is derived from two or more separate enterprises with no farm operations involved, combine the gross income and the costs from each business to determine net self-employment income.

When farm operations are involved, calculate net self-employment as instructed below:

Step 1. Determine the gross income from the farm operation;

Step 2. Determine the allowable costs of producing the farm income.

Step 3. Exclude the allowable costs from the gross income.

If the farming operation shows a profit, combine the farming operation with the other enterprises as instructed above.

If the farming operation shows a loss, do not combine the farming operation with the other enterprises. The loss will be deducted as specified in above.

When a household member is involved in a self-employment enterprise with one or more partners, determine the household's share of the income by:

1. Determining the gross income for the enterprise;
2. Determining the net income by excluding the allowable costs of producing the income; and
3. Dividing the net income by the number of partners involved in the enterprise with the following exception.

EXCEPTION: When the profits of a partnership are prorated rather than divided equally, prorate the net income in the same manner.

The household's share of the income from the partnership will be used in the food stamp budget.

For food stamp purposes, a closely-held corporation is one with only one shareholder or just a few shareholders. Normally, stock from a closely-held corporation is not placed on the market. An owner or employee of a closely held corporation or other corporation is not a self-employed person. If the person receives a salary from the corporation, he is considered an employee of the corporation and the salary will be counted as earned income as specified in FSC 5501. Shareholders who receive dividends will have the dividends counted as unearned income as specified FSC 5711. Shareholders are entitled to deduct neither the costs of producing self-employment income nor the earned income deduction. Income from a closely-held corporation may be verified through the corporation's books, or the employee's pay stubs, or the tax records of the corporation and the employee. This includes Form 1120, U.S. Corporation Income Tax Return, or Form 1120-A, U.S. Corporation Short-Form Income Tax Return, or Form 11205, U.S. Income Tax Return for an S Corporation, and Schedule K-1 Form 11205, Shareholder's Share of Income Credits, Deductions, Etc.

The resources of a corporation belong to the corporation and not the individual regardless of whether or not they are income producing. This includes bank accounts which are in the name of the corporation.

If an individual owns stock in a closely-held corporation, the stock is counted as a resource unless it is essential to the individual's employment. To the extent that an employee of a corporation must hold stock in the corporation as a condition of employee, the stock will be considered essential to employment. For example, a farmer has incorporated his farm, all of the corporation's assets are related to the farm, and the farmer is the corporation's sole employee. The corporation's stock is excluded as a resource to the farmer. To qualify for the stock exemptions, an individual must be working a minimum of 30 hours weekly or receiving weekly earnings at least equal to the Federal minimum wage multiplied by 30 hours. If the value of closely-held corporate shares is not readily available, the value may be determined by subtracting corporate liabilities from assets and prorating the difference among the various shareholders based upon the percentage of shares held.

Generally, self-employment income may be verified by viewing the household's federal income tax return for the previous year. The household's income tax return may be used as verification if it reflects a full year's income or the income can be divided over the months the business has been in existence. The "Schedule C" attached to the return will contain a complete statement of the household's self-employment income and expenses. (Not all expenses listed will be excludable under food stamp policy.) If a tax return is not available, ledgers, bank books or other accounting records maintained by the household or prepared by a bookkeeper or accountant may be used. Receipts for the sale of goods and services along with receipts for allowable costs of producing the income may also be accepted.

If the household states it has no records at all, the EMS-226 or EMS-227 based will be completed upon the household's declared income and expenses. This method may only be used temporarily so the household must be instructed to furnish records of income and receipts to verify costs at the next scheduled recertification. As soon as an Income Tax Return reflecting self-employment income is available, it will be requested.

Document:

1. Type of self-employment enterprise;
2. How the household receives this income - e.g. monthly, annually;
3. The length of time the enterprise has been in existence;
4. The figures used to arrive at the net self-employment income (EMS-226 or EMS-227) and the figures used to determine the monthly income;
5. The figures used to calculate any farm loss; and
6. The verification obtained.

A 12-month certification period is assigned to self-employed households when all the following conditions are present:

- The household's self-employment income represents their annual support;

- The household has no other source of income;

- The income is such that it has been prorated or averaged over a 12 month period;

- The income can be readily predicted; and

- The household's circumstances are not likely to change.

Do not assign a 12 month certification period unless all these conditions are met.

For those self-employed households that receive their annual income in a short period of time, the initial certification period will be assigned to bring the households into an annual cycle. In order to accomplish this, schedule the recertification at the time the household normally receives all or a majority of its annual income or have the annual cycle coincide with the filing of the household's income tax return.

Unearned income is income received by a household which has not been earned through employment or self-employment. Households in receipt of only unearned income will not receive the earned income deduction.

Common sources of unearned income are listed below in alphabetical order:

TEA (Transitional Employment Assistance) Program cash assistance payments are counted as unearned income. TEA cash assistance is paid on a monthly basis and is based on a standard of need for a particular household size.

Food stamp benefits will not be increased when a household member's TEA benefits are reduced, suspended or terminated due to non-compliance with the program requirements, or for non-cooperation with the Office of Child Support Enforcement or for an intentional program violation. See FSC 12110 for instructions.

Diversion Assistance is a one-time payment to, or on behalf of, the family to resolve a financial problem so that the adult can maintain and/or obtain employment. Diversion Assistance is available to an adult only once during his or her lifetime. Under Arkansas state law, a Diversion Assistance payment is a loan which a client should repay to the state of Arkansas when able to do so. Diversion Assistance is excluded as income in the Food Stamp Program.

Allotments are monthly payments received by a dependent of a member of the armed forces (e.g. Army, Air Force, Marines). Allotments are deducted from the military pay and sent directly to the dependent on a monthly basis. Allotments are considered unearned income.

Annuities are unearned income. Lottery winnings received on a one-time basis are considered a resource in the month received. Lottery winnings paid over several years are unearned income.

Annuities and lottery winnings paid annually will be averaged over a 12-month period of time. Annuities and lottery winnings received less often than annually may either be counted in the month received or averaged over the certification period.

Alimony payments made directly to the household from someone outside the household are counted as unearned income.

Child support payments made directly to a household member from someone outside the household are unearned income. This includes payments made voluntarily by the absent parent, as well as payments ordered by a court. When child support payments are directed through a court, the entire gross amount collected is unearned income. Collection fees, postage expenses or other fees charged by the court are neither deducted nor excluded from the child support payment.

When child support is received sporadically by individuals not receiving TEA, the worker must try to establish some pattern of payment. If a pattern of payment can be established, the payment will be averaged forward over the period of intended use. For example, if a $100 child support payment is received every other month, $50 per month will be counted as income.

When the payments are so sporadic that receipt cannot be reasonably anticipated, no child support will be included in the food stamp budget. Households receiving sporadic child support payments must be carefully instructed to report the receipt of child support payments in a timely manner. If later the worker can establish a pattern of payment, the child support income will be added to the food stamp budget.

Child support received as the result of the interception of a state or federal income tax refund is a lump sum payment. See FSC 4950 for instructions on handling lump sum payments.

Legally obligated child support paid by a household member to someone who is not a household member is deductible. See FSC 6550 for instructions.

Under Title IV-D, the state is assigned the rights to all child support payments received by the recipients of TEA Cash Assistance. Through the Office of Child Support Enforcement (OCSE), the state seeks child support payments on the behalf of TEA Cash Assistance recipients.

OCSE refunds to the TEA recipient any child support remaining after deduction of the TEA payment. These refunds are automatically calculated into the client's food stamp budget as long as the client receives TEA Cash Assistance.

If the total child support collected, alone or with other countable income, exceeds the Income Eligibility Standard of $223, the TEA case will close.

If the TEA case closes, the gross child support payment will be counted as income in the food stamp budget.

Child support received directly from the absent parent on behalf of Medicaid recipients may be sent by the household to OCSE. OCSE later returns the child support payments to the household. These payments will not be counted as income until they are returned to the household by OCSE.

OCSE provides services to individuals who are not receiving TEA. Child support payments collected for children not included in a TEA case are considered unearned income. OCSE charges non-TEA households a collection fee; however, this fee can be neither deducted nor excluded. The entire gross amount collected and disbursed to the household will be counted in the food stamp budget. Exception: Non-recurring lump sum payments issued to make up for a missed payment already counted in the food stamp budget or payments held in error by OCSE will be handled as a lump sum payment in the month of receipt. See FSC 4950.

EXAMPLE - A household normally receives $100 per month child support through OCSE. This amount has been included in the food stamp budget for the certification period June through November. On December 15, the household submits another food stamp application. Child Support of $300 is declared on the application. At its interview, the household states that the $300 child support payment was received on December 10th. However, $200 of that amount was to make up for the months of October and November when no payments were received. Since $200 of the $300 payment has already been counted in the food stamp budget, only $100 will be shown as income in the budget for December. $100 will be anticipated as child support income in the prospective budget.

At times, OCSE withholds support received by individuals no longer receiving TEA in order to reimburse previous TEA or AFDC payments. Such individuals are considered to have an "AFDC or TEA arrearage." Any child support monies, whether intended for the current month or a month prior to the current month, will be excluded as income when applied to an AFDC or TEA arrearage. See FSC 5401.

At other times, an absent parent pays child support in excess of the court-ordered amount to make up for previously missed payments. If these payments need not be applied to an AFDC or TEA arrearage, OCSE will send the extra money to the household. If this money has not already been counted in the household's food stamp budget, it will be counted as income in the month received. When it is anticipated that the absent parent will continue to make support payments in excess of the court-ordered amount due to the number of missed payments, the extra money will continue to be counted in the food stamp budget. A variable budget will be prepared as instructed in FSC 7523.3 if the household's child support payments are anticipated to decrease.

When OCSE receives more than the court-ordered amount of child support and there is no arrearage, only the court-ordered amount will be disbursed. The balance of the money will be held by OCSE in an "advance account" and used to pay the court-ordered support amount when the absent parent is unable to pay due to lack of work or other circumstances. Only the amount actually disbursed to the household by OCSE plus the collection fee will be counted in the food stamp budget.

For verification of non-TEA related child support received through OCSE, see the WFTC screen. Information about accessing and reading the WFTC screen may be found at DCOUM 20370.

Contributions are recurring payments received by a household member from a friend, relative or organization. Loans, gifts, lump sum payments, and irregular or infrequent income will not be considered contributions.

Cash donations, based on need, which are received from one or more private, non-profit charitable organization are excluded as income to the extent that such donations do not exceed $300 in a Federal fiscal year quarter. (See FSC 5405, number 9.) The Federal fiscal year quarters are listed below.

First Quarter - October, November, December

Second Quarter - January, February, March

Third Quarter - April, May, June

Fourth Quarter - July, August, September

Those donations which exceed $300 in any Federal fiscal year quarter will be considered unearned income.

Example - A household received $100 donations in July from a church. In August, the same church gave the household another $100 donation. In September the ministerial alliance gave the household $250. The donations received in July and August would be excluded as income. $100 of the September donation would also be excluded. For September, the household would have $150 in countable unearned income from charitable donations.

Contributions will be considered income in the month received when received on a monthly basis. When received less often than monthly, contributions will be averaged forward over the period of intended use.

Monies legally obligated and payable to the household will be counted as income when diverted by the payor to a third party for a household expense.

Examples:

1. Public assistance grants (AFDC or SSI) diverted to a protective payee for the purpose of managing the household's expenses.
2. Monies diverted from court-ordered support or alimony payments to a third party for a household expense - e.g. the rent payment is made from the support payment by the court. (This applies only when there is not a court order or other legally binding agreement which requires direct payment to a third party.)
3. Monies diverted from funds owed to the household to pay a third party for a household expense - e.g. VA deposits the Veteran's check in a special account and the bank authorized payments for household expenses.

Some states have a General Assistance (GA) Program. (Arkansas does not have a GA Program.) In those states, some GA vendor payments are provided for living expenses. Only those GA vendor payments provided to cover housing expenses, exclusive of energy or assistance expenses, will be included as income. GA vendor payments provided for the purpose of energy assistance will be excluded as income. (Also see FSC 5405, item 4.)

Scholarships, fellowships, grants, deferred payment loans, Veterans and Social Security educational benefits are considered unearned income to the extent that such benefits exceed the amount which may be excluded for tuition, mandatory fees and/or specific educational costs. For further information about determining the amount of educational benefits to be counted as income, refer to FSC 1622.3.

This policy applies only to those households into which foster care placements have been made by a Federal, State or local governmental foster care program - e.g., Division of Children and Family Services or Mental Health Services (Children "taken in" by neighbors, friends or relatives without any type of formal placement are not considered foster children for the purpose of applying this policy. They will be included as household members if otherwise eligible.) Households which provide foster care will have two options.

Option 1 - The household may elect to consider the person in foster care as a boarder. If the person in care is considered to be a boarder, the foster care payment will be excluded as income to the household.

Option 2 - The household may elect to include the person in foster care as a household member. If the person in care is included as a household member, the foster care payment will be included as income to the household.

When a person in foster care is excluded as a household member, this person will be listed on the EMS-233 but will be coded as a ineligible member by entering a code 4 in the member status field. The foster care payment will be shown in the member segment only as other income.

If a household member receives a monetary gift or prize on a one-time basis, it will not be considered income to the household in either a prospective or a retrospective budget. (A monetary gift received for a birthday present or a Christmas present is an example of a one-time gift.)

Gifts received on a one-time basis will be considered a lump sum payment and handled as instructed in FSC 4950.

If a household member receives a recurring gift or prize which exceeds $30 per quarter, the gift or prize will be considered unearned income and counted in the household's budget. Recurring gifts or prizes in excess of $30 per calendar quarter may either be averaged forward over the period of intended use or counted as income in the month received.

Income resulting from an owner-financed sale of property is counted as unearned income in a food stamp budget. (This means that the earned income deduction will not be applied to such income.) However, for the purpose of determining the portion of the payment received which is to be counted as monthly income, the installment contract will be considered a self-employment enterprise.

To determine the amount to be considered as monthly income in the food stamp budget, the caseworker may exclude the following items as costs of doing business.

1. Costs incurred by the holder of the installment contract for real estate taxes and/or insurance on the financed property.
2. Costs incurred by the holder of the installment contract for interest payments on a pre-existing mortgage on the financed property - (e.g. - a man sells a house upon which he is still making payments).
3. On a one-time, as-incurred basis, broker's fees paid by the holder of the installment contract. (For example, if a property is sold on June 11, and the household reports this sale on June 18, the broker's fees may be excluded from the July payment.)

Example 1 - Mr. Green owns 20 acres of land which he purchased in 1980. His payments on the land are $150 per month which includes $60 per month interest and a $30 escrow payment. The escrow account is used to pay real estate taxes of $200 and annual insurance payments of $100.

In 1986, Mr. Green sold this land to Mr. Redd. Mr. Redd paid Mr. Green $1,000 down and agreed to pay $175 per month for 240 months. Mr. Green will continue to pay the bank $150 per month on the original mortgage. Since the taxes and insurance are included in this payment, Mr. Green will continue to incur these costs until the original mortgage is paid. Mr. Redd agreed to pay all brokerage fees.

The $1,000 down payment will be excluded as income since it is considered a lump sum payment. The full $175 payment (less exclusions for the allowable costs of doing business) will be counted as unearned income. The allowable costs of doing business are the costs of taxes and insurance incurred by Mr. Green and the interest Mr. Green pays on the original mortgage.

Taxes       $200
Insurance $100
                 $300           Yearly Costs - 12 months = $25 per month

Monthly Interest Payments Made by Mr. Green     $60 per month
Monthly Costs of Taxes and Insurance                     25 per month
Total Excludable Costs Per Month                         $85

Monthly Payments Received by Mr. Green         $175
Total Monthly Costs of Doing Business                 - 85
Portion of Payment to be Counted in Budget      $ 90

Example 2 - Mr. Long also sold 20 acres of land to Mr. Redd. He will also receive $1,000 down and $175 per month for 240 months.

There are no mortgages on the property Mr. Long sold. Mr. Redd pays all taxes and insurance costs on the property and paid all brokerage fees at the time of the sale.

The entire $175 monthly payment will be counted as income in Mr. Long's food stamp budget.

The following are examples of interest, dividend, or royalty payments which are considered unearned income to the household:

1. Interest

Interest received by a household for monies held in a savings/checking account or any other account on which interest is paid to the household are considered unearned income. This is true even if the interest is not paid directly to the household but added to the account's balance.

An interest payment will be counted as unearned income in the month received, or prorated over the period of time it is intended to cover, whether received on a quarterly or annual basis. The household selects the method to be used.

Example: On 11/10 a household member received a quarterly interest payment in the amount of $15.00 from his savings account. He may choose to either consider the entire $15.00 as income for the month of November, or may have it prorated over the three-month period of November, December, and January.

2. Dividends

Dividends are payments received from shares of stocks, bonds or insurance owned by the household. Such payments may be received on a monthly, quarterly or annual basis. They are considered as a gain or benefit to the household and are counted as unearned income either in the month received or prorated over the period of time the payment was intended to cover.

3. Royalties

Royalties are payments received as profits from the sale of a product, payments from oil or gas leases, or payments made from the sale of items under a patent.

These payments may be issued on a monthly, quarterly, or annual basis and will either be included as income in the month of receipt or prorated over the period of time the payment is intended to cover.

NOTE: When the household is subject to monthly reporting as specified in interest, dividends, and/or royalties are counted as income in the budget month of receipt.

 

A pension is defined as a fixed sum paid regularly under certain conditions to a person or a surviving dependent following years of military service or employment.

Examples of households with members who may receive pensions are:

1. Households with aged or disabled members with a prior military service or members who are disabled or under age 18 and who are a surviving dependent of a person with prior military service;
2. Households with members retired (by age or disability) from a private firm like a factory or a utility company;
3. Households with members who retired from Federal or State employment by reasons of age or disability and their surviving dependents if the dependents are aged, disabled or minor children; or
4. Households with members retired from a school, college, or university due to age or disability.

When a portion of a pension is awarded to an ex-spouse by the court in a divorce or legal separation settlement, the portion diverted to the ex-spouse is excluded as income as long as the payment goes directly to the ex-spouse.

Example - Mr. G. is in receipt of civil service retirement benefits. The court awarded 49 percent of his retirement to his ex-wife. Mr. G. receives only the 51 percent which the court allocated to him. He receives an annual statement which indicates his total benefit and the wife's portion of the total amount. Only the portion of his retirement benefits Mr. G. actually receives will be counted in his food stamp budget.

Railroad Retirement Benefits are paid to individuals and spouses covered under the Railroad Retirement Act. An individual may receive both Railroad Retirement and Social Security, if covered under both programs. The spouse of a Railroad Retirement beneficiary may receive a spouse's pension while receiving Social Security under his or her own record.

See the Unearned Income Appendix for additional information.

If a household is reimbursed for normal household expenses such as rent, mortgage, personal items or food which is eaten at home, the reimbursement is considered to be a gain or benefit and is counted as unearned income. (For situations which reimbursements are excluded, see FSC 5411.)

NOTE: If the reimbursement is provided by an employer and considered compensation for actual work performance, the income will be counted as earned income.

NOTE: This section does not deal with income from boarders. See FSC 5622 for instructions on handling income from boarders.

Rental income is money received as the result of the rent or lease of property owned by a household member or members. The amount of the rental income to be shown in the food stamp budget will be the gross amount of rental income received less the "costs of doing business". The costs of doing business include real estate taxes on the property, insurance premiums paid for insurance to cover the property, and interest paid on a loan on the rental property. If the costs of doing business cannot be distinguished from a household's shelter costs, then these costs will not be allowed. For example, a household owns a house with a garage apartment. The garage apartment is rented for $200 per month. The household makes one payment on the property. The taxes and insurance are included in the payment. The household states there is no way to identify the portion of taxes, insurance or interest paid on the garage apartment; therefore, the county allows the entire property payment as a shelter cost. The entire $200 payment received for rent on the garage apartment is shown as income.

If a household member is engaged in the management of the property at least 20 hours per week, rental income is considered earned income. Otherwise, the rental income is considered unearned income. If rental income is considered earned income, the earned income deduction explained in FSC 6200 will be applied to the net rental income.

Land rent is income received on an annual basis for the rental of property used in an agricultural endeavor. Since an agreement must be reached regarding the amount of land rent to be received, land rent is considered to be contractual income and will be annualized as instructed in FSC 7517.

In some situations, an individual will live in a house owned by someone else and will make the payments on that house in lieu of a rental payment. In situations like this, the house payment will be considered rental income to the owner. All allowable costs of doing business will be excluded from the gross amount of the house payment before it is added to the owner's food stamp budget.

Severance pay is defined as an allowance (or income) payable to an employee upon termination of employment. Severance pay is usually based upon length of service.

Severance payments designated to be paid in monthly installments are considered unearned income in the month(s) received. If, however, a terminated employee receives a lump sum severance payment, it must be counted as a resource. (Refer to FSC 4950 for handling lump sum severance payments counted as a resource.)

Sick pay will be considered unearned income when it is not paid directly by the employer but is paid through an insurance company. See FSC 5508 for additional information.

Social Security Benefits are monthly checks paid to retired or disabled individuals based upon contributions the individual made while employed. Social Security Benefits are also payable to the individual's spouse and/or children in particular instances. (Social Security benefits are rounded down to the nearest dollar by SSA prior to payment.)

A full description of the criteria for receipt of SSA may be found in the Unearned Income Appendix.

Payments by a labor union to a member as a result of a strike. See FSC 1730.

SSI is a Federally administered cash assistance program for aged, blind or disabled individuals with little or no income or resources. SSI is paid on a monthly basis.

A full description of the SSI program may be found in the Unearned Income Appendix.

Under PASS (Plans for Achieving Self-Support) any blind or disabled SSI claimant or recipient may set aside income for a work goal such as education, vocational training, work related equipment or starting a business. Monies set aside under a PASS are excluded as income and as a resource in the Food Stamp Program.

See FSC 4450, item 12, for the resource exclusion provisions.

See FSC 5405, item 18, for the income exclusion provisions.

Food stamp benefits will not be increased when a household's SSI benefits are reduced, terminated or suspended due to an intentional failure to comply with SSI Program rules. See FSC 12110.

Unemployment insurance is defined as compensation to an unemployed worker in the form of a sum of money paid at regular intervals by a union, employer, or government agency. For a full explanation of Unemployment Compensation benefits, see the Unearned Income Appendix.

VA benefits are monthly checks issued to certain individuals who served in a branch of the United States Armed Services. VA checks are also issued to a veteran's dependents under certain conditions.

For VA disability pensions, a monthly check and an annual "adjustment" check is sent. At the end of the year (October for most disabilities), the VA sends out a letter asking the household to verify the past year's income and out-of pocket medical and educational expenses for the veteran and his/her spouse. The VA will either establish a claim for any overissuance or make a retroactive income payments. Monthly amounts in the coming year may also be adjusted. If the household receives an income adjustment lump-sum payment, the payment will be excluded as income. Since this is considered an retroactive income adjustment and not a reimbursement for medical expenses, out-of-pocket expenses may be deducted by the household if the member who incurred the expense is aged or disabled.

See the Unearned Income Appendix for additional information.

Worker's compensation payments are insurance payments made as a result of injury or death on a work site. Such payments may be received by the injured individual on a bi-weekly basis or as a lump sum payment. When a death occurs, a lump sum payment will be made to the individual's survivors. (Lump sum payments are considered a resource - See FSC 4950.)

Not all work sites are covered by Worker's Compensation. However, whenever a household claims a job-related injury, or death, the possible receipt of Worker's Compensation Benefits must be explored with the household. See the Unearned Income Appendix, "Workman's Compensation", for additional information. 

Unearned income must be verified at initial application. At recertification, income must be verified if the source of the income has changed or the amount has changed by more than $25.00. Unearned income reported to be unchanged or changed by less than $25.00 must be verified only when information regarding this income is considered incomplete, inaccurate, inconsistent or outdated.

Acceptable verification of unearned income is listed below in order of preference.

1. Award letters or notices when the current income is indicated on the letter or notice.
2. Correspondence from the source of the income when the correspondence indicates the current income amount.
3. A properly completed EMS-70, Check Verification Form.
4. Viewing the check. (When making copies of checks, ensure that the signature on the check is properly masked.)
5. Collateral contact with the source of the income.
6. Collateral contact with someone other than the source of the income who can verify the amount.

1. AFDC

Use the WADC screen, case record, or the current payroll. All are available in the county office. The household is not responsible for verification of AFDC amounts.

2. Child Support/Alimony

Child support may be verified through the Child Support Enforcement Unit (CSEU) if collection occurs through CSEU. Use the WDDS or WDPH screens, whenever possible. Other agencies such as Master-In-Chancery, Friend of the Court, etc., may also verify child support collected through their agency. Accept the divorce decree only if the current amount is indicated. Child Support paid on an individual basis may be verified by a written statement from the individual who pays the support. The statement must specify the current amount of child support and the frequency of the payment. It must be signed.

3. Foster Care Payments

Verification may be obtained through letters or notices from the agency providing the payment. If no letters or notices or available, verification may be obtained through direct contact with the Agency.

4. SSA

SSA income may be verified through letters or notices presented by the household. If no other verification is available or if the current amount of the check is in question, a Query Card may be submitted to the local Social Security Office.

5. SSI

SSI income is normally verified through the "SSI Printout" located in the county office. (If the individual receives a combination of SSI and SSA benefits, both may be verified through this printout.) If the SSI amount is not on the printout or if the amount shown is questionable, inquire the WASM screen or submit a Query Card to the local Social Security Office.

Verification of the existence of a PASS (Plans for Achieving Self-Support) and the amounts of resources and income set aside by the plan may be obtained from SSA.

6. Unemployment Compensation (UI)

   UI benefits will normally be verified via the WESD screen. If the information does not appear on the screen or the information on the screen appears to be inaccurate, the household will be asked to furnish verification. The local ESD office will not be contacted.

7. Charitable Donations

   The amount of the charitable donation received in each month of the current Federal fiscal quarter must be verified. See FSC 5705 for a list of the Federal fiscal quarters.

5727  Documentation

Document:   1.  The name of the person who receives the unearned income;

2.  The source of the unearned income; and

3.  The verification obtained.

When unearned income is not reverified at recertification, the location of the original verification in the case record must be documented.  For example, if verification was obtained in an earlier certification, documentation would read "See certification completed 1/20/90."

If verification is requested, the reason information was considered incomplete, inaccurate, inconsistent or outdated must be documented.

A reference list is provided to assist the caseworker in locating the section of policy which describes the process for determining countable income.

Process Reference
Income........................................FSC 7100
.................................................... FSC 7512

Special Processes

Institutions.................................. FSC 1800
Battered Women........................FSC 1841
Boarders.....................................FSC 5621
Disqualified Individuals

IPV............................................FSC 1623.2
SSN Requirement...................FSC 1623.1
Workfare Sanction..................FSC 1623.3
Income From Odd Jobs..........FSC 5512.1

Ineligible Alien.............................FSC 1621.6
Installment Contracts..................FSC 5710
Rental Income.............................FSC 5715
Self-Employment........................FSC 5640
Sponsored Aliens......................FSC 1621.7
Strikers..................................…..FSC 1730
Students

Eligible...........................……FSC 1622.3
Ineligible............................…FSC 1622.9
Foster Children.............……FSC 5708