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To determine eligibility or amount of payment, count income as indicated below. Complete SOLQ and ESC/UI Inquiry.
2. Cash contributions (including support or alimony)
3. Deemed Income from Institutionalized Spouse
5. Interest and dividends from stocks, bonds, other investments
10. Sick Pay
11. Social Security benefits- RSDI
12. Tobacco Buyout-Tobacco Transition Payment Program (TTPP)
14. Work Release Payments- income from an inmate directed to SA recipient.
15. Other types of countable income:
a. Annuities
b. Black Lung benefits
c. Brown Lung benefits
d. Cherokee Reservations- Gaming Proceeds
e. Military Allotments
f. Pensions
g. Private disability or unemployment benefits
h. Railroad Retirement benefits
i. Retirement
j. Trade Readjustment benefits
k. Unemployment Insurance (UI)
B. Non- Countable Unearned Income
1. Agent Orange settlement payments.
2. Assistance and Real Property Acquisition Act of 1970.
3. Assistance from other agencies and organizations. This includes financial assistance, in-kind goods (clothing, food, etc.) or services received from a governmental, civic, or charitable organization-as long as such aid is for rehabilitation purposes, special training, or educational opportunities, and no duplication exists. This includes:
a. VA aid and attendance and UME (unusual medical expenses).
b. VA aid to the homebound.
c. VA clothing allowance.
4. Benefits received by an a/r as a representative payee for another individual who is incompetent or incapable of handling his affairs. Such benefits must be accounted for separately from the a/r's own income/resources.
5. Bills paid by a third party to a vendor/provider.
6. Clothing, no matter what the source, whether given directly to the a/r or not.
7. Disaster assistance.
8. Experimental Housing Allowance Program (EHAP) payments made under Annual Contributions Contracts entered into prior to January 1, 1975, under Section 23 of the U.S. Housing Act of 1937, as amended.
9. German Reparation payments.
10. Housing improvement grants to low income families approved by the North Carolina Commission of Indian Affairs or any funds distributed per capita to or held in trust for members of any Indian tribe under P.L. 92-254, P.L. 93-134, or P.L. 94-540.
11. HUD Community Development Block Grant funds received to finance the renovation of a privately owned residence.
12. HUD Section 8 payments.
13. Income diverted to a plan for achieving self-support (PASS) through the SSI. The PASS must be a written, formal plan, for a specified period of time, for eventual economic self- sufficiency.
14. In-kind Support and Maintenance (food, and shelter) from any source not paid directly to the a/r.
15. Irregular or infrequent income. To be excluded as irregular or infrequent, it must not be received more than once in a calendar quarter and be $20 or less.
16. Japanese-American and Aleutian restitution payments.
17. Payments for supportive services or reimbursement of out-of pocket expenses made to volunteers serving as/in:
a. Foster grandparents,
b. Senior health aides,
c. Senior companions,
d. Service Corps of Retired Executives (SCORE),
e. Active Corps of Executives (ACE),
f. Retired Senior Volunteer Program (RSVP),
g. Action Cooperative Volunteer Program (ACVP),
h. University Year for Action Program (UYA),
i. Volunteers In Service To America (VISTA),
j. Other programs under Titles I, II, and 111 of Public Law 93-113
18. Payments made by Medicare to a home renal dialysis patient as medical benefits.
19. Payments to certain Indian tribes as permitted by Public Law 94-114.
20. Payment received under Title II of the Uniform Relocation.
21. Radiation Exposure Compensation Trust Fund (RECTF) payments. RECTF payments which provide compensation for injuries and death resulting from exposure to radiation from nuclear testing and uranium mining.
22. Reverse mortgage payments. A reverse mortgage is an agreement in which a lending company agrees to make a lump sum, provide a line of credit or regular payments to a homeowner during a specific period of time. The amount of payment is determined by the amount of equity the homeowner has in his home. The homeowner is allowed to remain in his home until his death or at a negotiated future date. At that time, the home is sold, and the lender is repaid.
Note: Count as an available resource any proceeds from a reverse mortgage payment which the a/r retains at the first of the month following receipt. If the proceeds of a reverse mortgage are given away in the month of receipt, apply transfer of resource policy in SA 3205.
23. Social Services Block Grant funds used to pay for services rendered by another individual or agency.
24. Special one-time payments such as energy or weatherization assistance.
25. That portion of educational loans, grants, or scholarships including a payment under the Veterans Educational Assistance Program (G.I. Bill), programs administered by the U.S. Department of Education, or the Bureau of Indian Affairs used actually for tuition, books, fees, equipment, transportation, required school insurance, and child care services necessary for school attendance.
26. Value of the coupon allotment received under the Food Assistance Program.
C. Verification and Determination of Unearned Income
a. Alimony
(1) When the a/r is receiving or has been awarded alimony, this amount is countable income.
(2) When the a/r is paying alimony, do not exclude the amount paid when determining countable income.
Example:
Mr. Brown is an a/r and receives $800 Social Security monthly. He pays $200 alimony per month. His countable income is $800.
b. Child Support
(1) When the a/r is receiving or has been awarded a child support payment, the payment amount received is countable income. Child support paid for a child is always payment to the child. It is never payment to the parent, guardian, or relative.
(2) When the a/r is paying child support, do not exclude the amount of support payments when determining countable income.
Example: Mr. Brown is an a/r and receives $800 Social Security monthly. He pays $200 a month court ordered child support. His countable income is $800.
c. To verify alimony or child support, use the following sources:
(1) Clerk of Court (if the person receives alimony or pays the support through that office).
(2) For child support, use ACTS.
(3) Statement from spouse or ex-spouse/absent parent when the a/r receives the alimony directly from him.
(4) Provisions of the separation agreement/divorce decree.
d. Disagreements
If the a/r’s statement and the available records disagree, try to resolve the differences. If you are unable to resolve the difference, use the lower amount.
NOTE: A/R may need referral to legal aid.
At application and review, determine if the a/r receives cash on a consistent basis to help meet his needs.
a. Verify the monthly cash contribution by contacting the provider of the cash. Ask him to submit a statement showing the amount of the contribution and for what period. If the a/r's statement and the provider's statement disagree, accept the a/r's statement.
b. Count the monthly cash contribution received by the a/r.
EXAMPLE OF A CASH CONTRIBUTION:
Mr. Brown's family sends him $10 per week spending money.
This must be counted as income. Convert to a monthly amount by multiplying $10 times 4.3. Show $43.00 as countable unearned income.
3. Deemed Income from Institutionalized Spouse
Count income deemed from the Medicaid budget of an institutionalized spouse to a SA a/r who is the community spouse.
At application and review, determine if the a/r is receiving or will receive income from a trust fund. Count trust income received or anticipated by the a/r. To verify trusts:
a. Contact the executor or administrator of the fund who may be:
(1) A family relative,
(2) The Clerk of Court,
(3) A lawyer,
(4) The trust department of a local bank; or
b. Contact the lawyer who handled the legal aspects of the trust fund; or
c. If questions, contact the attorney who represents DSS.
5. Interest Income or Dividends from Stocks, Bonds, and Other Investments
At application and review, determine if the a/r is receiving or will receive dividends.
To verify dividends or other investments:
a. Review the most current dividend check, or
b. Review the dividend statement, or
c. Contact the stockbroker or brokerage firm that sold the stock or bonds to the a/r, or
d. Contact the company in which the a/r owns the stocks, bonds, or other investments.
A living needs benefit is a provision that allows a terminally ill person (or in some cases, individuals permanently confined to a medical institution) to receive all or part of the proceeds of his/her life insurance policy while living. Depending on the circumstances, these payments can be received either as a lump sum or on an ongoing basis.
a. If an a/r has a life insurance policy that allows him to receive his/her death benefit while living and he meets the insurance company's requirements for receiving the proceeds, he will not be required to file for such proceeds.
b. If the a/r does file for and receives the proceeds, the payment is considered income in the month received. Any portion remaining in the following month is considered an available resource.
c. If payment is received on an ongoing basis, verify proceeds with the insurance company administering the policy and count as a monthly benefit.
7. Loans and Promissory Notes (A/R Is Holder of the Loan or Note)
a. When the loan is a non-countable resource, count payments received as unearned income. This includes any interest payments.
b. When the loan is counted as reserve to the a/r, count only the interest received as unearned income.
c. When the a/r receives a loan, it is not countable income. Treat as a lump sum. Refer to 8. below.
A lump sum payment is a one-time payment received by or awarded to the a/r, not expected to recur.
a. If a lump sum payment of unearned income is received or awarded in the month of application or during the application process, determine the months it covers. For the months the applicant is eligible for SA, count the amount of the lump sum that is designated for that month of eligibility as income.
b. A lump sum received for an ongoing case is not counted as income. It is considered as reserve the following month. Benefits received prior to receipt of a lump sum payment cannot be reduced. See SA-3200 Resources for RSDI or SSI lump sums.
c. If a lump sum is received as a loan, other than educational loan by the a/r, do not count as income if there is an agreed upon timetable and plan for repayment. Obtain a written statement from the parties involved if there is no formal loan agreement.
At application and review, determine if the a/r has income from rentals of real or personal property such as land, housing, machinery, or leased farmland.
a. Verify income by reviewing:
(1) The a/r's tax statements,
(2) The a/r's business records,
(3) Renter's statements or receipts, or
(4) Information available from banks or real estate agents.
b. Verify actual paid operational expenses directly related to producing the income for the corresponding base period. For instructions on calculating base period, refer to XI . Use the a/r's records, including tax records, or information from banks, real estate agents, or collateral contacts with renters. These actual operational expenses include but are not limited to:
(1) Interest and escrow portions of a mortgage payment (at the point the payment is made to the mortgage holder),
(2) Property taxes,
(3) Insurance,
(4) Maintenance,
(5) Utilities, if paid by the a/r,
(6) Labor costs,
(7) Real estate agent's fees,
(8) Repairs (i.e., minor correction to an existing structure),
(9) Sales taxes,
(10) Advertising for tenants,
(11) Verified transportation costs related to rental property operation,
(12) Interest payments on loans for equipment necessary to produce the rental income, and
(13) Replacement of an existing feature that cannot be repaired or the cost of the repair exceeds cost of replacement, with a feature of comparable value and function (i.e., furnace that cannot be repaired). Obtain a statement of a knowledgeable source to verify whether the feature can be repaired.
c. Non-deductible expenses
(1) Principal portion of a mortgage payment.
(2) The depreciation amount claimed as a federal income tax deduction.
(3) Capital expenditures (i.e., an expense for an addition or increase in the value of property, which is subject to depreciation for income tax purposes).
(4) Replacement of an existing feature of property which could have been repaired (i.e., furnace could be repaired but is replaced with new heating system).
(5) Replacement of an existing feature of the property, which could not be repaired with one, that is not of comparable value (i.e., replacement of shingle roof with brick tile roof) which results in improvement and increases the value of the property.
d. Determination of Net Rental Income
(1) Determine gross rent received and deductible expenses month-by-month.
(2) Subtract operational expenses paid in a month from gross rent received in the same month.
(3) If deductible expenses exceed gross rent in a month, subtract the excess expenses from the next month's gross rent and continue doing this as necessary until the end of the tax year in which the expenses are paid.
At application and review, ask the a/r if he has received or has been awarded sick pay from an employer for more than 6 months after work stopped.
Note: Sickness and accident disability payments made during the first six months are treated as earned income. Refer to XIID.
a. Sickness and accident disability payments made after the first six months, paid from an employer or the employee’s own contribution are treated as unearned income.
b. To verify benefits:
(1) Examine a current check stub, or
(2) Contact with the employer
c. Count the gross monthly amount of sick pay for the a/r.
At application and review, ask the a/r or his/her representative if a/r is receiving or has been awarded Social Security (RSDI). Even if a/r denies receiving such benefits, explore the possibility.
a. Use one of the following methods to verify Social Security benefits:
(1) Use the Online Verification system (OLV) SOLQ tab or the Beneficiary Data Exchange Sheet. Refer to EIS 1104 or EIS 1107 for instructions on how to access this information.
(2) Examine the current award letter. Be aware that an increase may have occurred since the date of the award letter.
(3) If there is a conflict between information obtained, use the DMA-5049, Referral to Local SSA Office form to clarify.
b. Determine the gross monthly benefit received by or awarded to the a/r. Deduct the amount withheld to recoup an SSA overpayment. Do not make any other deductions.
SA counts income for budgeting purposes the way SSI policy does. Under SSI policy, unearned income garnished for any reason other than to recoup an SSA overpayment is still counted as received income when budgeting.
c. The a/r is responsible for applying for RSDI if he is potentially eligible. Complete a DMA-5049, Referral to Local SSA OfficeA-5049 to assist with the application.
d. If a/r chooses to waive, delay or renounce RSDI benefits, count the amount to which he would be entitled as unearned income.
e. SSA Recoupment of RSDI Overpayment/s:
SA policy provides for SSA overpayment recoupment of the SA a/r’s RSDI (Title II) benefit. If it is discovered that the a/r‘s RSDI benefits are subject to recoupment for overpayment, the recoupment must be waived by SSA or reduced to the minimum amount. See VI. F. above for further instructions.
12. Tobacco Buyout-Tobacco Transition Payment Program (TTPP)
Tobacco allotments were administered by the Farm Service Agency and provided the right to produce a certain number of pounds of tobacco for harvest. Effective November of 2005 the Tobacco Transition Payment Program (TTPP) eliminated the tobacco quota or allotment system, calculating the value of lost quota and providing compensation in the form of cash installment payments to both owners and producers. Essentially the quotas were bought by the federal government. An initial payment was made to each quota owner and to each quota producer in November 2005.
Beginning January 2006, both tobacco quota owners and tobacco quota producers were given the option to receive annual payments over a ten year period or receive all payments in one lump sum.
Payments are distributed during the first two months each calendar year. Based on SSI policy, it has been determined that these payments will be treated differently for quota owners than they will be for quota producers.
a. TTPP payments to quota owners are a conversion of a resource, i.e., quota for cash. The rationale for treating the compensation to quota owners as a conversion of a resource is that the quota is assigned to the land ownership. Land meets the definition of a resource.
(1) Count as a resource the first moment of the first day of the month following the month of receipt.
(2) If the quota owner converts the quota to like property, i.e., another resource, treat the transaction as a conversion of a resource.
(3) If the quota owner assigns the contract to a third party because he or she does not want the payments, i.e., gives it away, follow the transfer of resources policy in SA-3205.
b. TTPP payments to quota producers, or those who rent the land, are counted as net earned self-employment income (NESE). The compensation for producers represents the value of lost price support in the sale of tobacco and should be treated as NESE.
(1) Count as annualized net income beginning the month of receipt. Project out for 12 months.
(2) If the quota producer assigns the contract to a third party because he or she does not want the payments, i.e., gives it away, count as a transfer of resources. Follow the transfer of resources policy in SA-3205.
An SA a/r with potential for VA benefits must complete an application for any Veteran’s payments, whether it is retirement benefits, disability compensation, or dependent benefits, in order to qualify for SA benefits.
At application and review, ask the a/r if he is receiving or has been awarded VA benefits. Discuss whether he or any family member served in the military. Explore any possible survivor benefits.
a. Use one of the following methods to verify benefits:
(1) Examine a current VA benefit check stub.
(2) Examine the current award letter. Be aware that an increase may have occurred since the date of the award letter.
(3) Contact the local VA service officer; or
(4) Contact the VA Regional Office Claims Division, 251 N. Main Street, Winston-Salem, North Carolina 27155, to verify the amount and type of VA received or awarded. The toll free number is 800-827-1000. The a/r's consent is not required. Include the following information with your request.
(a) The a/r's full name and social security number.
(b) The a/r's VA claim number or any two of the following:
(i) Veteran's military service number, verified by the local VA service office, or
(ii) Veteran's social security number, or
(iii) Veteran's date of birth.
b. If VA rates are increased, the new pension rates are not automatic. The veteran or survivor must file an application with VA to establish entitlement to increased benefits under the Pension Improvement Act.
(1) Count monthly VA benefits the a/r is entitled to receive.
(2) Pension payments are based on a combination of service and a nonservice-connected disability or death. With a few rare exceptions noted below, VA pension payments are also based on need. All VA pension payments except those listed (a)-(c) below are federally funded income based on need. As such, these payments are unearned income to which the $20 general income exclusion does not apply. Assume that a VA pension is partly or entirely needs based unless there is evidence to the contrary.
(a) Pension payments resulting from aid and attendance or housebound allowances. VA aid and attendance and housebound allowances are not income.
(b) Pension payments resulting from unusual medical expenses.
When computing some needs-based pension payments, VA deducts unusual medical expenses from any countable income. This computation may result in an increase in a pension payment or in an extra payment. An increase or extra payment resulting from this computation is not income
(c) Certain pensions paid to veterans or their dependents are not needs based. This exception applies only to pensions paid on the basis of a Medal of Honor; or a special act of Congress. These pensions are unearned income and the $20 general exclusion applies.
(3) Pension payments are usually paid monthly; however, when the monthly payment due is less than $19, VA will pay quarterly, biannually, or annually. VA may also make an extra payment if an underpayment is due. Count such VA payments as income in the month the payment is received.
(4) Veterans’ compensation payments to a surviving parent of a veteran are federally funded income based on need. As such, these payments are unearned income to which the $20 general income exclusion does not apply.
(5) Veteran’s compensation payments to a veteran, spouse, child, or widow(er) are unearned income subject to the $20 general income exclusion.
At application and review, determine if the a/r receives work release payments.
a. To verify:
(1) Check county DSS records.
(2) On-line Department of Correction inquiry. Refer to the EIS Manual.
b. Determine the gross amount of work release payment received by or awarded to the a/r.
15. Other types of Unearned Income:
a. At application and review, ask the a/r if he is receiving or has been awarded any of the benefits listed below.
(1) Annuities
(2) Black Lung
(3) Brown Lung
(4) Cherokee Reservations – Gaming Proceeds
Payments are generally received twice a year in June and December. If the payment is received during an application month, count the full amount of the payment as income in the month received. Any amount remaining after the month of receipt is a countable resource. If received in an ongoing case, do not count as income in the month received. Count the amount remaining after the month of receipt as a resource.
(5) Military Allotments
(6) Pension (count gross benefit amount)
(7) Private Disability or Unemployment Benefits
(8) Railroad Retirement Benefits: Social Security Numbers that begin with a 7 indicate the possibility of Railroad Retirement Benefits.
(9) Retirement
(10) Trade Readjustment
(11) Unemployment Insurance
(12) Worker’s Compensations
b. To verify benefits:
(1) Examine a current check stub, or
(2) Examine the current award letter, or
(3) Contact a representative of the source of the benefit.
(a) Social Security District Office
(b) Railroad Retirement Regional Offices
(c) Authentication Office US Department of State
(d) NC Disability Determination Services
(e) NC Vital Records
(f) DHHS Controllers Office Program Benefits/Payments
c. Count the gross monthly benefits received by or awarded to the a/r. Deduct the amount withheld to recoup an RSDI or SSI overpayment.
1. Farm income
2. Incentive payments from the Division of Vocational Rehabilitation (VR)
4. Supplemental payments in excess of State maximum rates for Foster Care payments to SA a/rs who serve as foster parents
5. Wages from:
a. Adult Developmental Activities Program (ADAP).
b. Annual leave pay subject to tax deductions.
c. Employment, tips, seasonal employment, baby-sitting in another person’s home, domestic employment.
d. Sheltered workshops.
e. Sick pay for the first six months after work stops due to disability or illness (Sick pay is unearned income after six months. Refer to XII.C.10
f. Title V Program for adults age 55 or older (through U.S. Department of Labor).
g. Training allowances, earnings, and payments received by an a/r.
E. Non-Countable Earned Income
1. Earned Income Tax Credits.
2. Tax refunds
3. Foster Care payments equal to or less than the State maximum rates to SA a/r’s who serve as foster parents.
4. Income for supportive services or reimbursement of out-of-pocket expenses to volunteers serving as foster grandparents, senior health aides, senior companions, Service Corps of Retired Executives (SCORE), and Active Corps Executives (ACE), and any other programs under Titles I, II, and III of Public Law 93-113.
5. Income that is unpredictable, or which is received irregularly or infrequently. (Examples are occasional yard work, sporadic babysitting, winnings from gambling or bingo, etc.)
F. Verification and Determination of Gross Earned Income
a. At application and review, determine if the a/r has farm income from production of crops or livestock.
b. Income from a farm that is leased to another individual is counted as rental income. Refer to unearned rental property income.
c. To verify:
(1) Use tax statements or business records.
(2) Determine all income received from the sale of farm products such as:
(a) Crops,
(b) Livestock such as beef, poultry, etc.,
(c) Livestock products such as milk, eggs, etc.,
(d) Proceeds from the Soil Bank,
(e) Cash rent, or
(f) Other sources of farm income such as insurance payments for damaged crops.
(3) Verify actual paid operational expenses directly related to producing the income. This includes:
(a) Fertilizer, insecticides, seed, crop insurance
(b) Livestock maintenance
(c) Rent payments
(d) Taxes on farm property or equipment
(e) Building and equipment maintenance/insurance
(f) Labor
(g) Interest payments on debts or loans directly related to producing the income such as interest on loans for seed and fertilizer
(h) Interest portion of mortgage (principal not allowed)
(i) Verified costs of transportation related only to the farm operation.
d. Use the previous year’s tax statement if it is used to verify the income, or
NOTE: Operational expenses included on tax returns, which are not allowable, must be added back in when computing gross countable income. Do not allow depreciation as an operational expense.
e. Use the a/r’s records or landlord’s records or information from farm suppliers, banks, Production Credit Association, farm agents, ASCS office, and purchasers of farm products if business records are used to verify the income.
f. Determination of Countable Gross Farm Income
(1) If the a/r states there has been no change in the farm earnings in the past year,
(a) Base the current year’s profits on the prior year’s profits.
(b) Subtract the total operational expenses paid from gross income received in the base period.
(c) Divide by 12 (or the number of months used) to determine a countable net monthly income.
(2) If the a/r states there has been a change in income, apply the Gross Net Ratio.
(3) Determine the ratio between the net profit and gross income for last year from the a/r’s tax return or business records
Example: Mr. Brown stated that his income in this calendar year is different from last year. Last year’s net profit was $1,200 and the gross income was $6,000 for a 20% profit.
Net Profit |
1200 |
Gross Income |
÷ 6000 |
Gross Net Ratio |
20% |
(4) Determine the actual gross receipts for the current taxable year thus far from the a/r’s records and project it for the remainder of the year.
Example:
Mr. Brown has $4,000 in net profit for the first 6 months of current calendar year, projecting an assumed gross of $8,000 for the entire year).
Net Profit (first 6 months) |
4000 |
# of Months for which you have receipts |
÷ 6 |
Average monthly profit |
666.67 |
# Months in the Year |
x 12 |
Estimated Gross Annual Income |
$8000 |
(5) Apply the gross-net ratio (e.g., 20% of $8,000 is $1,600) to the gross receipts projected for the current calendar year to obtain an estimate of net profit.
Annual Gross |
8000 |
Gross Net Ratio |
x 20% |
Net Profit |
$1600 |
(6) Prorate the net profit equally into the 12 months of the taxable year.
Net Profit |
1600 |
Gross Income |
÷ 12 |
Gross Net Ratio |
$133.33 |
2. Incentive payments from the Division of Vocational Rehabilitation (VR)
a. At application and review, verify the amount the a/r receives from Division of Vocational Rehabilitation.
b. Count the gross monthly benefit received by the a/r
a. At application and review, determine if the a/r has income from a small business or is self-employed.
b. Verify income by using the tax statement or business records as determined by the base period.
c. Verify actual paid operational expenses related directly to producing the income for the corresponding base period. Use the previous year’s tax statement if it is used to verify the income. Use the a/r’s records or information from suppliers, banks, and purchasers of the goods or services if business records are used to verify the income. These actual operational expenses include but are not limited to:
(1) Taxes required to operate the business (only the percentage that can be claimed as a business expense)
(2) Licenses and permit fees
(3) Rent payments
(4) Insurance on stock, personal and real property
(5) Labor costs and employee benefits such as Worker’s Compensation and Social Security
(6) Maintenance of real and personal property
(7) Products required to operate the business
(8) Interest payments on loans for equipment, etc., necessary for producing the income
(9) Food costs for self-employed baby sitters who babysit in their own homes. Use the a/r’s records of food costs.
(10) Interest portion of mortgage (principal not allowed)
(11) Utility costs paid by the a/r
(12) Business related transportation costs
d. Operational expenses included on tax returns, which are not allowable, must be added back in when computing gross countable income. Do not allow depreciation as an operational expense.
e. Determination of Countable Gross Business Income
(1) If the a/r states there has been no change in the business earnings in the past year, base the current year’s profits on the prior year’s profits.
(a) If there are no tax records, use the a/r’s business records to determine gross income and operational expenses.
(b) Subtract the total operational expenses paid from gross income.
(c) Divide by 12 (or the number of months used) to determine a countable net monthly income.
(2) If the a/r states there has been a change in income, apply the Gross Net Ratio.
(a) Determine the ratio between the net profit and gross income for last year from the a/r’s tax return or business records
Example:
Mr. Brown stated that his income in this calendar year is different from last calendar year. The net profit was $1,200 and the gross income was $6,000 for a 20% profit).
Net Profit |
1200 |
Gross Income |
÷ 6000 |
Gross Net Ratio |
20% |
(b) Determine the actual gross receipts for the current taxable year thus far from the a/r’s records and project it for the remainder of the year.
Example:
Mr. Brown has $4,000 in net profit for the first 6 months projecting an assumed gross of $8,000 for the entire year.
Net Profit (first 6 months) |
4000 |
# of Months for which you have receipts |
÷ 6 |
Average monthly profit |
666.67 |
# Months in the Year |
x 12 |
Estimated Gross Annual Income |
$8000 |
(c) Apply the gross-net ratio to the gross receipts projected for the current calendar year to obtain an estimate of net profit.
Annual Gross |
8000 |
Gross Net Ratio |
x 20% |
Net Profit |
$1600 |
(d) Prorate the net profit equally into the 12 months of the taxable year.
Net Profit |
1600 |
Gross Income |
÷ 12 |
Gross Net Ratio |
$133.33 |
4. Supplemental Payments In Excess of State Maximum Rates for Foster Care Payments Paid by the County to SA A/R’s
a. At application and review ask a/r if he receives any supplemental foster care payments.
b. Verify using county records.
c. Count the full amount of the supplemental payment as gross income.
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For questions or clarification on any of the policy contained in these manuals, please contact your local county office.
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