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Income and
Eligibility
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B. Defining and using income
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| Revised: March 28, 2008 |
Effective May 28, 2004
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WAC 170-290-0065 How does the WCCC program define and use my income?
We use your countable income when determining your eligibility and
copayment. Your countable income is the sum of all income listed in
WAC 170-290-0060
minus any child support paid out (through a court order, division of
child support administrative order, or tribal government order).
To determine your income we:
Determine the number of months, weeks or pay periods it took your family to earn the income and divide the income by the number of months, weeks or pay periods to get an average monthly amount; or Use the best available estimate of your family's current income when you begin new employment or if you don't have an income history to make an accurate estimate of your future income, we may ask your employer to verify your income.
If you receive a lump sum payment (such as money from the sale of property or back child support payment) in the month of application or during your WCCC eligibility we:
Divide the lump sum payment by twelve to come up with a monthly amount; and Add the monthly amount to your expected average monthly income for the month it was received and the remaining months of the current authorization period.
You must meet income guidelines for WCCC after the lump sum payment is applied to remain eligible for WCCC.
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Note: This is a reprint of the official rule as published by the Office of the Code Reviser.
If there are previous versions of this rule, they can be found using the Legislative Search page.
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clarifying information
This section covers two types of income:
Ongoing wages / salary
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For information on how to verify a consumer's income please see the 'Verifications' section of the manual.
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Use the following WCAP functions to calculate earned income:
Use the "Averaging" function
within the activity / schedule screen of WCAP to give projected income when there is prior pay history information, and at reapplication.
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Allows worker to input any combination of
totals for up to 3 months and have that information divided by up to 3.
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The "divide by" must match the number
of months that income is entered for.
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"Total earned" amount = All income
for months entered divided by the number indicated in "Divide by"
field.
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"Total Earned" amount transfers to
the income screen.
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EXAMPLE 1
Deryl, a non-TANF consumer, applies for child care in March. Deryl has been working as a substitute teacher for the past five months. He expects no changes in his employment situation and the school district confirms this. Deryl doesn't have all his pay stubs, but his employer reports his past gross earnings to be $1200 in December, $1400 in January, and $1325 in February. Use the "Averaging" function to enter his last three months of income and divide by three.
Average Deryl's income across multiple months because historical wage information is available. Deryl's expected average monthly income is about $1293 (the average of the 5 months of income above).
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EXAMPLE 2
Candy is self-employed and has been receiving WCCC for the past year and a half. Her case is due for reapplication on 9/30. Candy has had an unusual dip in business over the past 3 months. Candy's last three months of income do not provide the best estimate of future income. Total her income from the past 9 months, and divide by 9 to get an estimate of future income. Base her new eligibility and copayment on this estimate. |
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Example 3
Stacey is an approved self employed WCCC consumer. At her reapplication she turns in the self employment form (07-042B) and supplies receipts to verify her deductions. Stacey reports she has a gross income of $1,500 for May, $1,600 for June and $2,500 for July. She had work related deductions of $300 each month. Use the averaging function and enter $1,200, $1,300 and $2,200 for each month. Her average income for the last three months is $1,567. |
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Example 4
Using Example 3 above, Stacey turns in receipts she has received from her clients and the gross income for May through July is as noted above. She does not claim any deductions. Allow a $100 standard deduction for each month
(per memo dated November 29, 2001). Use the averaging method and
enter $1,400, $1,500 and $2,400. Her expected average monthly income is $1,767. |
- Use the "Pay Check Averaging"
function within the activity / schedule screen of WCAP to average multiple paychecks for a single month.
- "Paid" drop down box lists payment cycles as weekly, every
two weeks, two times a month, and monthly.
- Allows up to 15 paycheck entries.
- The system adds the paycheck entries, divides by the total number of entries, and multiplies the result using current calculations: 4.3 if paid 1x a week; 2.15 if paid every 2 weeks; 2 if paid 2x a month; and 1x if paid monthly.
- "Total Earned" amount transfers to the income screen.
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Use the "Estimate"
function within the activity / schedule screen of WCAP to give projected income when there is new employment and no current pay history or the income changes and they expect their future income to be different than actual earned income. Do not use this function at reapplication when pay history or an employer statement of actual gross earnings can be used to determine expected average monthly income.
- "Paid" drop down box lists payment cycles as weekly, every
two weeks, two times a month, and monthly.
- "Hours" total should coincide with payment cycle. For
example: 25 hours weekly, 70 hours every 2 weeks, 80 hours 2x a month,
or 165 hours a month.
- "Total Earned" amount = ("Wage" x
"Hours") x 4.3 if paid 1x a week; 2.15 if paid every 2 weeks;
2 if paid 2x a month; and 1x if paid monthly.
- "Tips" amount is multiplied by "Paid" and
added to the monthly total.
- Example: $50.00 in tips x 4.3; 2.15, etc. + "Total
earned."
- "Total Earned" amount transfers to the income screen.
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EXAMPLE 1
Robert, a new WCCC applicant, reports he will start a new job on July 15. You receive an employer statement that states Robert will be paid once a month. He will receive $0.00 in July, approximately $1500 in August and approximately $3000 in September. To figure the expected average monthly income using the WCAP, choose "paid" one time a month. Enter the approximate number of hours to be worked in a month, and the hourly wage. Given the following figures (165 hours a month X $18.00 an hour) X one payment cycle a month, the expected average monthly income will be $2970. Use the $2970 figure to determine eligibility for the program beginning July 15 and the ongoing copayment.
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EXAMPLE 2
Regina's case is up for reapplication on 2/28. Over the past three months she was on a reduced work week due to a physical injury. She is now returning to her normal schedule on 3/1 at her previous wage. Regina's last three months of income do not provide the best estimate of her expected average monthly income. You can verify her wage and hours with the employer. |
Using the last 3 months of income to determine eligibility is a general practice or standard.
You can accept less verification or more verification, as the case needs.
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EXAMPLE
1
A self-employed family shows a net loss of income at reapplication. At previous reapplications they have had enough income to warrant full time child care hours. The family can verify their income for the last 12 months (instead of just the last 3 months). You can divide this income by 12 then apply WAC 170-290-0050 to the amount to determine the number of child care hours allowed.
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EXAMPLE
2
At reapplication in October, Bill turns in only his most current pay stub. You can use Bill's year-to-date (YTD) total gross income to determine his expected average monthly income amount:
Bill’s YTD
total gross income is $15,875.37. You know that Bill is paid twice a
month and his pay stub covers 17 pay periods. You calculate his income as
follows:
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Lump Sum payments
Examples of lump sum payments are back child support, gambling winnings, an inheritance, or money from property sales. Divide lump sum payment totals by 12 months, consider it expected average monthly income and only count against the month it is received and the remaining months in the current eligibility period. Do not count income tax returns, cash diversion payments, TANF Early Exit bonuses and other payments listed in WAC 170-290-0070 as lump sum payments.
You may determine a consumer ineligible at application or reapplication due to a lump sum payment received the month they apply. When this occurs, the consumer is ineligible only for the month they apply. Do not count the lump sum payment towards eligibility if they apply the following months.
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EXAMPLE 1
Mary Lou is a non-TANF consumer receiving child care. Her expected average monthly income is $1032.
Her countable income is also $1032. Her WCCC copayment is $50. She
is authorized for care from May 1 to September 30.
Mary Lou reports that on June 5th she received a lump sum payment of $4,800 for back child support. The AW averages Mary Lou's lump sum over 12 months ($4,800÷12 = $400), and adds $400 to Mary Lou's average monthly-expected income. In addition, she is now receiving her regularly scheduled child support payments of $300 per month. This raises her countable income to $1,732 ($1,032 + 400 + 300). While Mary's income has increased significantly, she remains eligible for WCCC and her copayment remains the same through the current authorization period (See WAC 170-290-0085).
The lump sum amount divided by 12 ($400) is counted toward the period of June 5th to September 30th. Do not count any of the lump sum toward income for the next eligibility period.
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EXAMPLE 2
In the previous example, Mary Lou was still eligible for
child care.
If Mary Lou's lump sum payment had put her over 200% of the FPL for her family size, she would be ineligible only
for the remaining months of the current eligibility period. She reports the
lump sum on June 5th. Given a ten-day notice, she would be
ineligible June 15th through September 30th. She could
reapply for child care in October.
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EXAMPLE 3
In the same case as examples 1 and 2, Mary Lou does not report the change. The worker discovers it at Mary Lou's reapplication in September. Apply the lump sum payment to her income in June to determine if she remains under 200% of the FPL from June 16th-September 30th. If she is over the program eligibility level, process an overpayment. Do not count any of the lump sum payment received in June towards her new eligibility period if she applies for care after September. |
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EXAMPLE 4
In the same case as examples 1, 2 and 3 Mary Lou applies for WCCC in May. She reports a lump sum payment received in May. Divide the payment amount by 12 and apply to her expected average monthly income. The total income places her over 200% of the FPL. We deny WCCC for May, but she could re-apply for eligibility starting June 1st. |
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worker responsibilities
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When there is no previous wage information available, such as pay stubs or a W-2, the consumer may provide an employer's statement (verbal or written) that shows current hourly wage. If the consumer has a new job, take their statement of expected wages instead of an employer's statement. However, if the consumer gives you contradictory information then you may request employer statement. Determine the expected average monthly income by:
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Multiplying weekly income by 4.3 if the
consumer is paid once a week;
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Multiplying bi-weekly income by 2.15 if the
consumer is paid every two weeks;
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Multiplying semi-monthly income by 2 if the
consumer is paid twice a month; or;
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Using monthly income if the consumer is
paid once per month.
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Allow the consumer to itemize or use the
standard $100.00 deduction when they are self-employed. The Clarifying Information under WAC 388-450-0085 lists
examples of deductions.
Please see memo from November 29, 2001.
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If the consumer has commission or overtime pay in addition to an hourly / monthly wage, consider if the:
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Commission pay will be on-going, and
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Amount will vary due to seasonality of the industry.
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EXAMPLE 1
Sara works in retail and averages 34 hours a week and $1400 a month (gross). During Nov., Dec., and Jan., she averaged 50 hours a week and received commission on her sales. Her reapplication was due in December. Looking at Sara's recent income, the AW must determine if the increased income in Nov. Dec., and Jan. would have made Sara ineligible. If not, we do not take any action.
Determine future eligibility beginning January 1st. Sara's overtime and commission pay has ended and she will resume her 34-hour a week schedule. Base future eligibility on Sara's normal 34-hour work-week.
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EXAMPLE 2
Chuck receives both a base wage and commission each month. His commissions vary considerably. The AW must include the commissions to determine expected average monthly income. Average past earned commissions over the time it took to earn them, to get an accurate idea of how much to count toward the average monthly expected income.
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- If the consumer has bonus pay in addition to an hourly / monthly wage, consider how he receives the bonuses. He may receive them as regularly scheduled payment (such as monthly or quarterly) or at certain times of the year (such as during the holidays). Count all bonuses as income regardless of how received (either as ongoing income or lump sum payments).
There is no way to predict how much bonuses will be. Use the following as a guideline when dealing with employee bonuses:
Bonuses paid on a monthly schedule:
Treat like ongoing wages/salary according to the WCCC handbook. If the consumer has received previous bonuses, average the amount and apply to the monthly countable income. Project bonuses without any pay history based on employer information and apply to monthly countable income.
Bonuses received on a time schedule other than monthly:
Treat as a lump sum payment and apply lump-sum payment process to
determine monthly countable income.
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EXAMPLE 1
Patsy's employer pays out bonuses on a monthly schedule based on the previous month's profit. At her reapplication, her pay stubs show she received a bonus for 2 of the last 3 months. Divide the total bonus amount by 3 to determine the amount to add to her monthly income. |
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EXAMPLE 2
Patsy's employer pays bonuses twice a year based on the company's profits. At reapplication, one of her pay stubs shows she received a bonus of $3,000. Divide the bonus by 12 to determine the amount to add to her monthly income.
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| NOTE: |
You can include commission and bonus pay as part of the "total income" by placing the amount in the "Other" column on the Income Eligibility Screen or by adding it to the averaging or pay check averaging functions on the Activity/Schedule screen in the WCAP. |
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Countable income includes earned income and unearned income. Enter all countable income on the Income/Eligibility Information screen.
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To determine countable income and eligibility:
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Subtract verifiable child support paid out
(including arrears)
from the expected monthly income;
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Determine whether the family is income
eligible by comparing countable income to 200% of the FPL. If countable income
exceeds 200% of the FPL for
their family size, the family is ineligible for WCCC.
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The WCAP determines eligibility and copayment when you enter the necessary information. Use the WCAP program at all times. |
If eligible, send the consumer the
DSHS
07-066(X), The Award / Change Letter. The system automatically images a copy into the electronic case record (ECR).
If ineligible, send the consumer the DSHS
15-247(X), Working Connections Child Care Denial/Termination Notice.
The system automatically images a copy into the ECR.
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