Income Budgeting section from the IEM 4000 section

1. Food & Nutrition Services
Income Budgeting
OPERATIONAL SUPPORT TEAM
JANUARY 2016

2. 2
Overview
• Correct income budgeting is vital in the determination of eligibility,
ineligibility and benefit level for each Food & Nutrition Services (FNS)
case.
• Quality Control reviews the income of each case reviewed and
determines if the income has been budgeted correctly.
• Correct budgeting includes using the correct base period as well as
income that can be reasonably anticipated to be received during the
certification period.

3. 3
Ongoing Earned & Unearned
Income
• Use the appropriate base income period, if it is representative
• Do not include non-representative income, such as bonus, vacation, etc.
• Use one month base period income prior to the month of application or
redetermination except for the following:
– Three months base period for child support, spousal support and alimony income.
– Twelve months base period if income is received annually or self-employment.
• Obtain verification of base period income; determine frequency of pay.
• Do not round the income; enter the actual income amount into NC
FAST.
• NC FAST will automatically calculate the monthly base period income.

4. 4
Ongoing Earned & Unearned
Income
Ex. Client is paid weekly and the base period month
is January 2016 1st 215.34; 8th 225.94; 15th
210.10; 22nd 231.75; 29th 218.25
Total $1101.38 / 5 = 220.27.
Enter the actual average weekly income amount into
NC FAST

5. 5
New Income at Application &
Recertification
Count actual
gross income
received during
first month of
application.
Enter the
representative
amount for the
2nd and ongoing
months. NC
FAST will convert
to monthly
amount.
• Example: Date of Application 1-25-16
• Began new job 1-13-16 with first pay of
$75.00 received 1-15-16. Paid weekly on
Friday. First full pay of $150.00 received 1-
22-16. Anticipates pay of $150.00 to be
received 1-29-16.
• January countable income:
75 + 150 +150 = 375.00
• February & ongoing countable income:
150 weekly.

6. 6
• Income that is received annually or from self-employment, the base
period is 12 months.
• Use the last schedule C of the Income tax return to determine the
income and the allowable deductions. Not all deductions on schedule
are allowable deductions.
• When client has not filed an tax form that includes the self-employment
income, use client’s records for the last 12 months to determine
countable income and deductions.
• If in business for less than 12 months, use months in business, if the
income is representative.
Self-Employment

7. 7
Child Support
• Child Support is considered the income of the child.
• Base period is the three months prior to the application or
recertification month, if representative.
• Calculate and convert child support income based on the
frequency of pays received in the three month base period. Do not
use a three month average unless the child support is received
monthly or sporadically.
• When the child support is paid weekly, add the weeks paid together
and divide by that # of weeks to determine the weekly amount
during the base period. Then enter that weekly amount into NC
FAST with a frequency of weekly and NC FAST will complete the
necessary conversion.

8. 8
Ineligible
• Include prorated countable
gross income.
• To pro-rate, divide the ineligible
individual’s gross countable
income evenly for all potential
FNS unit members. Multiply the
prorated share by the number of
persons included in the FNS
unit
Disqualified
• Count all of the
disqualified person’s
income in the FNS
budget unit.
Income of Ineligible / Disqualified Person

9. 9
Terminated Income
• Example:
• Date of Application 1-14-16. Client was paid weekly on
Friday. Last pay received 1-8-16. No new employment.
• Income to be counted from employer for January:
– 1-1-16 $325.00
– 1-8-16 $295.00
– 1-15-16 0
– 1-22-16 0
– 1-29-16 0
– Countable January income is $620.00
Unless new income is reported $0 income will be shown
beginning February through the remainder of certification
period.
Verify last
date pay will
be received.
Do not count
terminated
beyond the
last month
the income
is received.

10. 10
When a change is reported react to changes based
on program policy.

11. 11
Earned Income
A Change in earned income is gained from the
performance of service, labor, or work is:
• New employment (which includes initial employment as
well as a change of job with the same or a different
employer)
• An increase or decrease in rate of pay.
• An increase or decrease in the required number of hours
worked.
• Termination of income

12. 12
Unearned Income
Change in unearned income is:
– Beginning or termination of unearned income.
– An increase or decrease in the amount of unearned
income.

13. 13
• Decreases Benefit:
– Accept clients statement of
change.
– Send Notice of Adverse
Action (DSS-8553)
– Make change effective
month following expiration
of adverse action.
• Increases Benefit:
– Verify changed income.
Make effective the month
following month reported.
When verification is not
provided timely, make
change effective the month
following when required
verification is received.
Reacting to Changes
Note: Normal fluctuating income such as working varying shift hours
is not considered a change in income.

14. 14
Documentation of Verification
• Documentation means the type of verification and a
summary of the information obtained has been entered in
the appropriate evidences in NC FAST. Documentation
must be detailed so that a County, State, or Federal
reviewer is able to determine the reasonableness of the
determination.
• For example, when income is verified by the presentation
of pay stubs, the gross amount of income on each pay
stub, and the frequency of receipt of income is
documented in NC FAST evidence(s) or case record.

15. 15
Document the Following:
– Statements regarding available income; including client’s
statement of no income.
– The source and type of income, and a collateral contact if one is
necessary.
– Efforts to determine employment and exploration of potential
unearned income.
– Copies of correspondence, documents, forms, and
notifications.
– Amount and type of earned and unearned income.
– Base period (the set period of time for which income verification
is required) used and the income available.
– Changes which may occur in the future. Flag the case.
– Other facts, information, or dates used to support your decision.

16. 16

17. 17
Knowledge Check 1
Client receives child support of $150.00 monthly for a child
who is no longer in the home. Is this income countable?
– Yes
– No

18. 18
Knowledge Check 1 - Answer
The correct answer is

19. 19
Knowledge Check 2
Fill in the blank:
Correct budgeting includes using the correct ______
________as well as income that can be _________
____________ to be received during the certification
period.
A. Base period; reasonably anticipated
B. Gross income; clearly verified
C. Verified amount; unexpectedly projected

20. 20
Knowledge Check 2 - Answer
The correct answer is: – A -
Correct budgeting includes using the correct base
period as well as income that can be reasonably
anticipated to be received during the certification
period.

21. 21
Knowledge Check 3
Client reports an increase in weekly pay from his
current employer. When should the change be
effective?
– A – Next certification period
– B - Next issuance
– C – Month after Notice of Adverse Action Timely
(DSS-8553) Notice expires

22. 22
Knowledge Check 3 - Answer
The correct answer is:
C – Month after notice of Adverse Action Timely
(DSS-8553) expires.

23. 23
Questions
ost.policy.questions@dhhs.nc.gov