Converting Income 430-05-50-15-10

(Revised 09/01/20 ML3587)

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IM 5412

 

Whenever a full months earned and unearned income is received or is anticipated to be received either weekly or biweekly (every two weeks), the income must be converted for benefit determination. This includes situations when income is received early or late because of a holiday or weekend.

 

EXCEPTIONS:

Income conversion does not apply to:

    1. Income paid monthly or twice a month.
    2. Irregular income such as on-call or income from day labor even if they receive a pay check on every pay date.
    3. Self-Employment income.
    4. Child support income.
    5. Income will not be converted when it is known that a household will not receive the income on each of the weekly or biweekly pay dates.

To convert weekly earnings, total the weekly checks and divide by the number of checks (4 or 5) to arrive at the weekly average.  The weekly average is then multiplied by 4.3.

 

To convert biweekly earnings, total the biweekly checks and divide by the number of checks (2 or 3) to arrive at the biweekly average.  The biweekly average is then multiplied by 2.15.

 

If tips, commissions, bonuses or incentives are paid or reported weekly or biweekly and are included in the gross income on the weekly or biweekly paycheck or pay stub, they are converted.

 

If tips, commissions, bonuses or incentives are paid or reported weekly or biweekly and are included on the paycheck or pay stub, but not in the gross income and the paychecks are received weekly or biweekly, they must be added to the gross income and converted.

 

If tips, commissions, bonuses or incentive are not paid weekly or biweekly, they are not converted.  The tips, commissions, bonuses or incentives must be counted separately as earned income.

 

Examples:

  1. Cash tips received daily and reported monthly are not converted.

  2. A household applies for benefits on October 20 and report a household member started a new job, is paid weekly, and received their first paycheck on October 18. October income is not converted for the month of application because the individual did not receive income each week. Actual income along with what is anticipated for the remainder of the month is used for October. Income is converted for the second beginning month of November.

  3. A household applies for benefits on October 10. At the time of application the household reports a household member will be losing a job on October 25, will receive a final paycheck on November 3, and will be searching for a job. October income is converted for the application because the individual received income each week. For November, the income for this individual is not converted, as the individual will not receive income each week in November. The actual anticipated last paycheck on November 3rd is used. 

  4. A household applies for benefits on September 29. At the time of application, the household reports a household member started a new job working 40 hours per week on September 3rd. The household member has received a paycheck on each pay date in September however; one of the paychecks is not 80 hours. Since the household did not receive a full month of income in September, actual income along with what is anticipated for the remainder of the month is used for September. Income is converted for the second beginning month of October.

  5. Ongoing household reports on June 5, that they will not receive all of their weekly paychecks in July as the company will be closed for one week.  Since this change will result in an increase in benefits, the F419 must be sent for verification.  If verification is provided, the actual anticipated income (not converted) must be used for July as the household will not receive income on each of their weekly pay dates. This income would remain in the budget for the remainder of the review period unless the household would report a new change to their income. This income would remain in the budget for the remainder of the review period unless the household would report a new change to their income. If the verification is not provided, the case is closed. A 10-day advance notice must be sent to the household, unless the change was reported in writing and signed by the household.

    In August, the household reports they are now receiving all of their weekly paychecks.

    The F419 must be sent for verification. If verification is provided, the income is converted for for the next month. If the verification is not provided, the change is acted on using client statement.

 

In cases where income is received sporadically, the worker must use base month income, unless the household reports a change.


Example:
On call income even if received on every pay date or child support received on an irregular basis.