Income Eligibility and Calculations

Income Eligibility and Calculations. A. Income is money received on a regular and recurring basis by any household member. Income may be earned or unearned. B. A household’s total gross income shall be used to determine eligibility. The total gross income received for the thirty (30) days prior to application date must be verified. C. Countable Income is income (earned or unearned) that must be included when determining eligibility for LIHEAP. The following types of income shall be used: 1) Salaries and wages, including overtime, tips, bonuses, commission, and 13th check; 2) Self-employment income; 3) Contract income; 4) Unemployment insurance; 5) Social Security benefits (including Medicare deduction); 6) SSI,; 7) SSDI; 8) Retirement benefits; 9) Alimony; 10) VA benefits; 11) Workers Compensation; 12) Private Disability (Short/Long Term Disability); 13) Money given to household; and 14) Any income whereas a W2 or 1099 is not received or otherwise documented. D. Exempt income is income that should not be included when determining eligibility for LIHEAP. The following types of income shall not be considered: 1) Loans/Grants; 2) In-kind income; 3) Earnings from employment of a child under the age of 18, unless emancipated; 4) Infrequent income- if an individual receives it only once during a calendar year from a single source and the individual did not receive that type of income in the month immediately before that month or in the month immediately following that month (Examples of this would also be repayment of personal loans, etc.); 5) Reimbursement for business or medical expenses; 6) Payments made by others on behalf of household, unless payments were directly received by household; 7) Benefits received that must be excluded by federal law or incentives paid by TANF or Workforce Investment, earnings and allowances paid under Title IV-A, benefits received under Title VII, HUD, and educational grants; 8) Child support; 9) Payments made to the household for the care of a foster child; 10) Adoption assistance payments; and 11) Refunds such as energy refunds, income tax refunds and EITC, insurance refunds, etc. E. Earned income is income that is received from wages or self-employment income and shall be used in determining eligibility. Computation of the monthly income shall be done by one (1) of the following methods, depending upon the frequency: 1) Regular Income- Frequency does not change from week to week, or month to month. a. Weekly: The four most recent consecutive paycheck stubs covering the four-week period prior to application, or the signed/dated statement from the employer. To calculate: Sum the weekly gross earnings; Divide by 4, then multiply by 4.3333 to determine the monthly amount. Multiply the monthly amount by 12 to get the annual income. Example: WK1 through WK4: ($412+ 436+ 485+ 520)/4 * 4.333 *12 Monthly: $2,007.26* 12 = Annual income: $24,087.15 b. Semi-Monthly (Twice a month): The two most recent consecutive paycheck stubs covering the month prior to application. Individuals receive checks 24 times a year. To calculate: Sum the gross amounts of two checks, multiply by 12 to get the annual income. Example: Check for first 2 weeks- $1,500 and Check for second 2 weeks- $1,700. (1,500+ 1,700) = 3,200 monthly. $3,200* 12= Annual income: $38,400 c. Bi-Weekly (Paid every other week): The two most recent paycheck stubs covering a month prior to application. Individuals receive checks 26 times a year. To calculate: Sum the gross amounts of two (2) checks and divide by 2 to get an average. Multiply by 2.1667 to get the monthly income. Multiply by 12 to get the annual income. Example: Check for the first 2 weeks- $1,000 and Check for the second 2 weeks- $1,200. (1,000+1,200)/2= 1,100. Next- 1,000*2.1667= 2,383.37 months. Next- 2,383.37*12= Annual income: $28,600.44 d. Monthly: The most recent paycheck stub. To calculate: Multiply the gross amount by 12 to get annual income. Example: $900* 12= Annual income: $10,800 F. Unearned Income - is all income that is not earned. Unearned income shall be used in determining eligibility. Some common examples are: 1) Money and Inheritances given to an individual, a contribution statement is required; 2) Private pensions and annuities; 3) Payments such as Social Security benefits, Railroad Retirement benefits, Department of Veterans Affairs benefits, civil service annuities, workers' compensation, unemployment insurance, retirement benefits, and payments based on need involving federal funds; 4) Life insurance proceeds and other death benefits, to the extent that the total amount is more than the expenses of the deceased person's last illness and burial, and other debts paid by the individual; 5) Support (not child support) and alimony payments in cash; 6) Prizes, awards and winnings; 7) Dividends and interest; 8) Rents and royalties (except those defined as earned income); 9) Certain payments not considered wages for Social Security purposes; 10) In-kind payments to certain agricultural worker; and/or 11) Jury duty payment. G. Inconsistent Income - frequency varies from week to week, or from month to month due to hours worked. It is considered to be received regularly if an individual can reasonably expect to receive it. Calculation of this income should follow the policy of regular income. Occupations that may fit this description are horticulturist, woodcutter, or substitute teacher, and Gig economy (i.e. ride-share services, food or package delivery, sale of crafts and handmade items, etc.). H. Seasonal Income – income that is regularly received for only part of the year. Calculation of this income should follow the policy of regular income. I. Self-Employment Income – If an applicant is self-employed, a copy of the past year’s federal income tax return (to include Schedule C), purchase and sales receipt, or accounting books must be used to establish the source and amount of income. 1) The amount to be used in determining eligibility will be the net income available after deduction of business expenses. Subgrantee should include the amount on the Net Profit or (Loss) line from the Schedule C (Form 1040) Profit or Loss from Business (sole proprietorship), divided by 12. 2) If it is proven that a self-employed applicant’s current situation has substantially changed in either size or type of operation from the previous year, the current income should be used. Example: A farmer farmed 40 acres in 2017, but because of ill health did not plant a crop in 2018. The income earned in 2017 should not be considered. The farmer should be considered to have zero income. 3) If the applicant cannot provide the above items, a notarized statement of income must be provided. J. Income of Minors 1) Earned Income – A minor’s (under 18 years of age) income is excluded in the determination of income eligibility. 2) Unearned Income - A minor who receives unearned income such as Social Security or SSI must be included and is listed under the parent or legal guardian in the household. K. A zero-income household is one in which the applicant reports no income is being received by any household members. the subgrantee must confirm additional information from the applicant: 1) The applicant must verify how household bills and personal expenses are being paid for. If applicant is receiving money or in-kind assistance from someone, a Contribution Statement Form must be completed and notarized. Money given to the household must be counted as unearned income. If the person pays the bills directly to the vendor, this is not included as unearned income. 2) Households may report zero income because of a recent layoff, medical issues, or other events that have occurred within the last 30 days. Documentation shall be submitted to verify the event, and an affidavit signed by the applicant to declare unemployment or zero-income status. Layoff documentation must be on the employer’s letterhead and state the date of the layoff. 3) Non-priority households that report zero income may be referred to the Community Services Block Grant (CSBG) program to be put into case management, if the client agrees and the subgrantee determines eligibility. Case management is not a requirement for the LIHEAP program.