Prospective budgeting uses the best estimate of income and circumstances to determine eligibility and the amount of the assistance payment.
Estimated income or expenses may include verified, actual amounts already received or paid by the budget group plus any amounts that can reasonably be anticipated to be received or paid. Income also includes the income of others living with the budget group as of the authorization date when their income must be considered in the eligibility determination.
NOTE: The case narrative must include an explanation of how the actual, anticipated, or averaged income was determined.
Income received more frequently than monthly, such as weekly or every two weeks, is converted to a monthly amount. See Section 167.22.
Do not convert new or terminated income that is not received for a full month. Use the anticipated or actual amount.
Example: Mr. Green applies for TANF for his family on June 3. He recently lost his job. He was paid once a week. His final pay is due on June 14. The CAO counts expected pays for June 7 and June 14. June’s income is not converted.
When anticipating income and expenses, the CAO must use the past 30 days as an indicator of future amounts unless a change has taken place or can be anticipated.
NOTE: The CAO may use a period longer than 30 days to establish an average if that predicts future circumstances more correctly.
At application, the CAO must ask the budget group what it expects its income and expenses to be in the month of application and in following months. Base the estimate of income and expenses for these months on any actual amounts already received or paid plus the best information about what the budget group expects to receive or pay.
Example: Ms. Jones applies for Cash Assistance and SNAP benefits on November 3. At the application interview, Ms. Jones shows proof that she will begin work on November 10. Her first pay is expected on November 28. The CAO uses her expected pay for November to determine her November benefit and uses a full month of expected wages to determine her December benefit.
At the SAR review or at renewal, the CAO must use information provided on the SAR or renewal form and by the person to anticipate income or expenses.
Example: In November, a SAR form is sent to Ms. Green requesting information about income and circumstances in October. Ms. Green reports on the SAR form that she is starting a job on November 22. The CAO contacts Ms. Green for job verification. Verification shows that Ms. Green’s first pay is expected on December 5. Verification reflects earnings expected for the SAR period. Therefore, the CAO determines the benefit amount for the SAR period using the anticipated income for December without waiting until the first pay is received.
Anticipated income reported at any other time must not be adjusted until after actual receipt of the first pay.
Example: Ms. Smith, who is receiving Cash Assistance, reports on October 17 that she will begin work on November 3. She will receive her first pay November 14. She expects to work 30 hours per week. On November 17, Ms. Smith provides her pay stub. Wages for the new job are adjusted to the first issuance date that can be met with proper notice after verification and receipt of her first pay.
Anticipated income must be verified. Acceptable verification includes a written statement from, or telephone contact with, the employer or the person or organization that is the source of the income.
If the person cannot provide sufficient information about anticipated income and expenses, the CAO must arrive at an estimate that most accurately reflects the budget group's situation. The following information is needed from the person:
What are the name, address, and phone number of the income source?
Does the CAO have permission to contact the income source, if necessary?
On what date will the first check be received or expense paid?
On what day of the week will income be received or expense paid?
Is payment made daily, weekly, biweekly, monthly or other?
How long is the income or expense expected to last?
If employment, how many hours per day and/or days per week? Is it hourly wage, salary, or piece rate? Is it full time or part time? Will there be dependent care expenses?
The CAO must count income and expenses only if the receipt or payment can be reasonably anticipated. The CAO must estimate future income for those dates in the calendar month on which a scheduled payment is expected to be received.
When the CAO later verifies that the actual income received or expenses paid are different from those anticipated, it must:
adjust the benefit for the next payment date that can be met with proper notice if the amount of actual income or expenses is expected to continue; and
review the case for a possible overpayment if the person failed to report a required change timely.
The CAO must convert income and expenses to a monthly amount if the income is received or the expense is billed either weekly or biweekly and is expected to continue for the whole month. Use the 4.0 multiplier to compute the monthly amount.
The CAO must determine an average weekly amount if weekly or biweekly amounts vary, before converting.
Reduce biweekly amounts to a weekly amount before conversion.
NOTE: The CAO must not convert income received and expenses billed semimonthly (twice each month).
Examples:
1. Mr. Melon is paid weekly by his employer. He is participating in SAR. In August he completes his SAR form and provides verification of his five pays in July. The average weekly pay for July is calculated to be $98. The average weekly pay is multiplied by 4.0 to arrive at the monthly income amount ($392). The July wages are:
July 3—$90
July 10—$110
July 17—$95
July 24—$95
July 31—$100
2. The Johnson family applies for Cash Assistance and SNAP on March 19. Mrs. Johnson is working. She is paid weekly and has already received three paychecks in March. The IMCW uses these three pays to determine the best estimate of continuing gross weekly earned income by adding the three actual pays and dividing by three. The resulting amount is the estimated average weekly pay. The CAO enters the average weekly amount on the Employment and Wage Screen for the fourth and fifth (if applicable) pay dates in March and all pay dates in April. eCIS determines the gross monthly earned income using the 4.0 multiplier. If Mrs. Johnson verifies that one or more of her pays include overtime hours that are not expected to continue, exclude the overtime pay when determining the best estimate of gross monthly earned income.
The CAO must determine calendar month income by averaging the following:
Income paid under an employment contract if the contract provides for payment of the income in fewer months than the contract covers.
Intermittent income such as interest, dividend, and royalty payments paid quarterly, semiannually, or yearly.
The CAO must average the income or expenses using these steps:
1. Determine the period of the contract or the period covered by the fluctuating or intermittent income.
2. Determine the total gross income or expense for the period.
3. Divide the total gross income by the number of months (or weeks) in step 1.
NOTE: If the amount payable under the contract changes during the period over which the income is averaged, reassess income averaging.
Examples:
Rev. Roberts has a contract of employment with his congregation. The contract provides for a payment of $12,000 to be made the beginning of the calendar year for his services for the entire year.
Average monthly income = $1,000 ($12,000¸12 months)
Mr. Ames is employed under a yearly contract as an aide for a local school district. He is paid his annual salary of $3,600 over a 10-month period. The contract says that the $300 ($3600¸12) is paid only if Mr. Ames works a full month. In January, Mr. Ames works only 14 days and receives $200.
Average monthly income = $300
January monthly income = $200
Mrs. Ray receives $700 from a local gas company each January as an annual payment for the sale of gas rights to her property.
Average monthly income = $58.33 ($700¸12 months)
Mr. Ollie and his family receive a quarterly dividend check in the amount of $45 the first week of each quarter beginning with the month of January.
Average monthly income = $15 ($45¸3 months)
The CAO must count actual or anticipated terminated income up until the date of the final pay. The CAO must adjust the benefit for the first payment date that can be met after verification of the termination. If the person cannot verify that employment ended and the pay provided is the final pay, process the benefit change based on the person’s statement. Complete a Request for Employment Information (PA 78) to verify the statement.
Example: On April 4, Ms. Match provides a letter verifying that her weekly disability payments end on April 20. The CAO must count only three pays for April (April 6, April 13, and April 20). No disability payments will be counted for May. If an adjustment cannot be made for the first cash benefit date in April and the CAO acted timely on the information, an underpayment does not exist.
All income must be counted that is received the first month a cash benefit is authorized, even if the income is not expected to continue.
Examples:
Mr. Jones applies for Cash Assistance on March 20. He was working but lost his job on March 19. The last pay from this employment will be received on March 25. The IMCW uses the three actual pays to determine the income received in March. Beginning with the first payment date in the second month (April), the terminated income is no longer counted.
Ms. Common applies for Cash Assistance on June 15. She had been working but was laid off June 2. Ms. Common was paid weekly and received her last pay on June 10. The IMCW authorizes Cash Assistance beginning June 15, counting Ms. Common’s actual pays for June 3 and June 10. The income is removed beginning with the first payment date in July.
Ms. Keys applies for Cash Assistance on August 25. She had been working but was laid off on August 23. Ms. Keys will receive her last pay on September 7. The IMCW authorizes Cash Assistance beginning August 28, when all verifications were provided. Ms. Keys’ actual income is averaged and adjusted to determine August benefits. The IMCW estimates the pay for September 7 and adjusts this figure to the September benefit. Beginning in October, the terminated income is not adjusted.
Disregard income that starts and stops before it can be budgeted and is reported timely.
Example: Ms. Keys and her two children receive TANF. On February 5, Ms. Keys reports that she will start a job on February 10. She will receive her first pay on February 21. On February 24, Ms. Keys:
provides verification of the pay received on February 21.
verifies that this is her first and last pay.
explains that her youngest child was sick and she could not go to work.
verifies that she was terminated for failure to report to work.
Her next cash grant is due on March 4. Because the pays start and stop before wages can be adjusted, pay received on February 21 is not counted and has no effect on the grant.
Generally, a person who works through one or more temporary agencies is considered to be employed unless there is no work available. Consider all income from temporary employment agencies when determining the monthly cash benefit.
The IMCW must use recent work history and current work assignments to estimate the average gross monthly earned income. The person is advised to report:
an increase of more than $100 in gross monthly earned income for Cash Assistance and Medical Assistance.
A decrease in income that, when verified, will result in an increase in Cash Assistance effective the next payment date that can be met with proper notice.
Reviewed June 14, 2016. Reissued September 12, 2012, replacing January 31, 2012.