State of Wisconsin |
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The policy on this page is from a previous version of the handbook.
4.3.4.1 Unearned Income Introduction
4.3.4.2 Counted Unearned Income
4.3.4.3 Disregarded Unearned Income
7 CFR 273.9(b)(2)
Unearned income is income not gained by work or delivery of a service or product. Count all unearned income unless it must be disregarded. Some unearned income is disregarded because of source, type, or the reason for which it is received.
Count unearned income as income in the month that it is received, except when:
It is not available to the food unit;
Specific instructions in this handbook state otherwise; or
When two payments from the same income source are received the same month due to mailing cycle adjustments, count each payment only for the month it is intended. Income sources commonly affected by such mailing cycle fluctuations include general assistance, other public assistance programs, SSI , and SSA benefits.
Note: Occasionally, a regular periodic payment (e.g. Title II,or VA benefits) is received in a month other than the month of normal receipt. As long as there is no intent to interrupt the regular payment schedule, consider the funds to be income in the normal month of receipt.
VA disability and pension benefits, COLA and other adjustments made to the payments. "Aid and Attendant Allowances” referenced in 4.3.4.3 Disregarded Unearned Income are excluded.
W-2 payments received under W-2T, CSJ full and prorated placements, CMF+, ARP, or as the custodial parent of an infant (CMC). See 8.1.6 System Generated Payments.
Note: CMF+ is an incentive payment for job retention services and is not considered a paid placement for TFS eligibility.
Note: See 7.1.1.7 Deny Benefit Increases Due to Penalties in Other Programs.
Example 1: Dawn receives $500 quarterly from the Potawatomi Tribe. The frequency of the payment is regular and the amount is predictable. To calculate the monthly amount to be budgeted prospectively, prorate the amount over the time period intended: $500/3 = $166.67 per month to be prospectively budgeted. |
Counted as income in the month received, or
Averaged over the number of months between payments. For example, average a quarterly payment received in January over January, February, and March. The food unit must choose one of the above methods. Document the choice in the case record.
If someone receives rental income and the property is managed more than 20 hours per week, see Self-Employment 4.3.3.4. However, if someone manages the property for less than 20 hours a week, treat the income as unearned and budget it as listed below.
Include gross receipts minus allowable business expenses as earned income.
Tax Forms 1040 Schedule C or 1040 Schedule E are used to determine rental income.
If using tax form Schedule E, use recorded rental income plus the principal paid, to estimate future income. If the applicant or member has not completed a Schedule C or Schedule E tax form, use the following method to calculate earned income.
When the owner is not an occupant, "net rent" is the total rent payment(s) received minus the total mortgage payment (principal and interest) and other verified operational costs such as (but not limited to) hazard insurance, mortgage insurance, and taxes.
When income is received from a multi-unit property and the owner lives in one of the units, compute "net rent" as follows:
Step 1: Add the total mortgage payment (principal and interest) and other verified operational costs such as (but not limited to) hazard insurance, mortgage insurance, and taxes common to the entire operation.
Step 2: Multiply the number of rental units by the total in Step 1.
Step 3: Divide the result in Step 2 by the total number of units, to get the proportionate share.
Step 4: Add the proportionate share in Step 3 to any operating costs paid that are unique to the rental unit. This equals total expenses.
Step 5: Subtract total expenses in Step 4 from gross rent payments to get net rent.
CARES will budget self-employment income from rental property as earned income if the property is self-managed 80 or more hours per month. If the monthly hours entered are less than 80, the income will be treated as unearned income even if the self-managed switch is "Y ".
Verify unearned rental income using available documentation. It is not necessary to collect Self-Employment Income Report Forms (SEIRF) for unearned income.
Disregard means do not count. When you are calculating the total amount of unearned income a person has received, you should exempt or exclude any of the following kinds of unearned income:
Housing and related income:
Disregard rent paid by the Department of Housing and Urban Development (HUD ) and Farmer's Home Administration (FMHA ) directly to a landlord as income. Do not include these payments as a deduction. Only include as a rent expense what the food unit owes to the landlord after the HUD or FMHA payments.
Disregard rent paid by HUD to residents in the experimental housing program in Green Bay.
Disregard HUD or FMHA utility reimbursement payments made directly to a food unit or utility provider as income.
Disregard HUD utility reimbursement payments diverted by a Native American housing authority directly to the utility provider without permission, consent, or agreement of the food unit.
Under the Family Investment Centers program, HUD provides grant money to public housing agencies and Indian housing authorities. In turn, they provide access to education and job opportunities to public housing residents. Disregard as income services provided to these residents. Services include:
Disregard free rent, no income is counted and no rent deduction is allowed.
A tenant may be billed utility expenses for common electrical devices, for the benefit of any number of tenants, but wired through his or her meter. A notice from the landlord identifies that cost and the tenant's reimbursement. Disregard the reimbursement.
Income received as a result of participation in the Fresh Start Program.
Employment Training and Education:
Educational aid for students is not counted as income.
Disregard educational expense reimbursements.
Disregard income produced by an educational trust.
Disregard W-2 TSP (stipends for non-custodial parents) received for W-2 education and training activities.
Loans:
Disregard as income any loan to the food unit. This includes loans from private individuals and commercial institutions. A legally executed document is not required to verify that income is a loan. A statement signed by both parties is enough to verify the income is a loan, if it contains: the amount of the loan; that the payment is a loan, and that repayment is required.
Medical and Dependent Care:
Disregard reimbursements for medical or dependent care. Some examples of medical or dependent care reimbursements that should be disregarded are:
Reimbursements from the Medical Assistance (MA), also known as Medicaid or Title 19 Community Integration Program (CIP).
Reimbursements from the Alzheimer’s Family Caregiver Support Program (AFCSP) and National Family Caregiver Support Program (NFCSP).
Disregard dependent care payments as income for a food unit member's care when a county agency:
Pays a dependent care provider directly,
Reimburses the food unit after the food unit has incurred or paid a dependent care expense.
Disregard payments from the Wisconsin Family Support Program, which assists families by covering medical, dependent and other allowable expenses for in-home support for children with severe disabilities. Payments may be issued in several ways, including by voucher or direct payment to the vendor, or direct payment to the family as a reimbursement for allowable expenses. Do not confuse this program with "family support", a court-ordered obligation that combines child support and maintenance.
SSA programs:
Disregard reimbursements for services provided by the Social Services Block Grant Program.
Disregard retroactive SSI payments which are paid in installments.
Disregard income of an SSI recipient necessary to fulfill a Plan to Achieve Self-Support (PASS) regardless of the source. This income may be spent in accordance with an approved PASS or deposited into a PASS account. The SSA must approve the individual's PASS in writing, identifying the amount of income that must be set aside each month to fulfill the PASS. It is the member's responsibility to report and verify that such income is necessary to fulfill its PASS in order for the income to be disregarded.
A qualified organization may collect a fee for acting as the representative payee for an SSI or OASDI recipient. Disregard the amount withheld from the SSI or OASDI payment as income to the recipient. Reduce the SSI or OASDI amount by the amount withheld instead.
SSI-E
Disregard SSI-E income for FoodShare. It is not necessary to determine if a SSI-E payment is being used for its intended purpose in order to disregard the income.
Energy Assistance Program
Disregard all payments provided by the Low Income Home Energy Assistance Program (LIHEAP) or Wisconsin Home Energy Assistance Program (WHEAP).
Community Options Program
Disregard Community Options Program (COP) reimbursement for long-term care services. If a food unit member is receiving COP payments for providing services, count the money as earned income.
Tribal / Native American Payments
Disregard payments to individual tribal members of the following tribes and/or from the following federal settlements:
Exclude as income any lump sum or periodic payments received under the Cobell v. Salazar Class Action Trust Case during the one-year period beginning on the date of receipt (PL 111-291).
Disregard up to $2,000 per calendar year held by an individual Native American which is derived from restricted land or land held in trust by the Department of Interior, Bureau of Indian Affairs (PL 103-66, 92-203, and 100-241).
Disregard the first $2,000 of individual shares for the following:
Child Nutrition Act of 1966 and the National School Lunch Act
Disregard the value of assistance received from programs under the Child Nutrition Act of 1966 and the National School Lunch Act. These are:
Disaster and Emergency Assistance Payments
Disregard major disaster and emergency assistance payments made by federal, state, county, and local agencies, and other disaster assistance organizations, including National Flood Insurance Program (NFIP).
Disregard Emergency Assistance or emergency General Assistance when either is given to a migrant or seasonal farm worker food unit if:
The payment is provided to a third party (vendored) on behalf of the migrant or seasonal farm worker; and,
The food unit was in the job stream when (for example, working) it was provided.
Disregard disaster unemployment benefits to any individual who is unemployed as a result of a major disaster. Individuals cannot be eligible for any other unemployment compensation and also receive disaster unemployment benefits. Payments are limited to 26 weeks.
Veterans Benefits
Exclude VA aid and attendance and homebound allowances if:
The payment is for a past or future expense.
The payment is not in excess of the actual expense.
The payment is not for a normal household living expense.
The payment is used for the intended purpose.
Disregard aid and attendance and housebound allowances received by veterans, spouses of disabled veterans, and surviving spouses.
GI Bill
All military personnel fund the GI Bill through mandatory payroll deductions in their first year of service. Disregard these deductions when counting income.
Example 2: During Joe’s first year of military service, his gross pay is $1,000 per month. One hundred dollars is deducted from his paycheck each month for the GI Bill. The IM worker disregards the $100 deduction and budgets his pay as $900 per month. |
Combat Pay
IM workers are required to determine if a military allotment made available to a food unit by an absent member deployed to a combat zone should be excluded when determining eligibility. Disregard any amount of combat zone pay that goes to the food unit that is in excess of the military person's pre-deployment pay. The exclusion lasts while the military person is deployed to the combat area.
If the amount of military pay from the deployed absent family member is equal to or less than the amount the food unit was receiving prior to deployment, all of the allotment would be counted as income to the food unit. Any portion of the military pay that exceeds the amount the food unit was receiving prior to deployment to a designated combat zone should be excluded when determining the food unit's income for FoodShare purposes.
Procedure
Follow these steps in determining how to budget combat zone pay:
Ask if the service member is deployed to a combat zone.
If the answer is no, verify military pay using a bank record or Leave and Earnings Statements (LES) and clearly document in case comments how income to the food unit was determined and verified.
If the answer is yes, verify the service member’s pay before deployment to a combat zone and the amount they receive due to being assigned to a combat zone. Leave and Earnings Statements (LES) or bank records can be used to verify this amount.
Any portion that is more than the amount the food unit was receiving immediately before deployment to a combat zone is exempt as combat pay.
Clearly document in case comments the combat pay source of verification and method used to determine amount to be disregarded and budgeted.
Note: Deployment to a combat zone can be established through a variety of methods including:
Example 3: John, his wife Bonnie and their daughter have an open FoodShare case. John is in the military stationed overseas, his monthly income is $1,000. John sends his wife $1,000 every month.
When John is deployed to a combat zone his pay is increased to $1,300 a month, which is deposited into a joint account. Because the $300 is combat pay, it is exempt income and not counted in the determination. The pre-combat pay of $1,000 is budgeted as unearned income for FoodShare . |
Example 4: Dori is in the military and receives $1,000 per month in wages. Dori’s husband Louie and their son Joe have an open FoodShare case. Dori has her military pay directly deposited into a bank account in her name only; Louie has no access to the funds or to the account. Do not count any of Dori’s income in the eligibility determination for Louie and Joe. |
Example 5: Ben is in the military. His paycheck is $1,000 a month. He has $500 directly deposited into his account and $500 directly deposited into a joint account with his wife, Andrea. The $500 directly deposited into the joint account is budgeted as unearned income in Andrea’s FoodShare determination. Since Andrea does not have access to Ben’s account, only the amount deposited in their joint account is counted. |
Example 6: Tim is in the military making $1,200 a month. An allotment check of $1,000 is paid directly to his wife Karla, and $200 to himself. $1,000 is budgeted as Karla’s unearned income for her FoodShare determination. |
Dottie Moore
Disregard as income any penalty payment paid as a result of the Dottie Moore lawsuit by DHS (formerly DHSS) to any Aid to Families with Dependent Children (AFDC) applicant or member. These $50 to $200 penalty payments have been ordered by the U.S. District Court for the Eastern District of Wisconsin in Civil Action No. 80-C-118.
Income Tax Refunds, Credits, and Rebates
Disregard income tax refunds, credits, and rebates as income.
Victims of Nazi Persecution
Disregard as income payments under PL 103-286 to victims of Nazi persecution.
Payments to Crime Victims
Disregard any payments received from a state established fund to aid victims of a crime.
Agent Orange Settlement Fund
Disregard payments received from the Agent Orange Settlement Fund or any other fund established in settling "In Re Agent Orange Product Liability Settlement Fund litigation M.D.L. No. 381 (E.D.N.Y.)." Continue to disregard the payments for as long as they are identified separately. Apply this disregard retroactively to 1-1-89.
Wartime Relocation of Civilians
Disregard payments under PL 100-383 to U.S. citizens of Japanese ancestry and permanent resident Japanese immigrants or their survivors and Aleut residents of the Pribilof Islands and the Aleutian Islands West of Unimak Island.
Radiation Exposure Act
Disregard payments from any program under the Radiation Exposure Compensation Act (PL 101-426) paid to compensate injury or death resulting from exposure to radiation from nuclear testing ($50,000) and uranium mining ($100,000). Apply this disregard retroactively to 10-15-1990.When the affected person is deceased, payments are made to the surviving spouse , children, parents, or grandparents of the deceased. The federal DOJ makes the payments. Continue to disregard the payments for as long as they are identified separately. Apply this disregard retroactively to 10-15-90.
Children of Vietnam Veterans Who Are Born With Spina Bifida
Disregard payments received under the provision of the Benefits for Children of Vietnam Veterans Who Are Born With Spina Bifida (PL 104-204). These payments are made to any child of a Vietnam veteran for any disability he or she experiences resulting from the spina bifida. Apply this disregard retroactively to 9-26-96. Continue this disregard as long as payments are identified separately.
Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970
Disregard reimbursements from the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970 (PL 91-646, Section 216).
Capital Gains
Disregard capital gains from the sale of a personal asset as income. Profits gained from the sale of an asset continue to be counted as an asset. (See 4.3.3.3 for policy related to self-employment).
Reverse Mortgage
Disregard reverse mortgage payments made to homeowners. Reverse mortgage payments are loans against the borrower's home and are considered an asset these payments are not considered income.
Payments to Filipino World War II Veterans
Disregard payments from the Filipino Veterans Equity Compensation Fund. The American Recovery and Reinvestment Act (ARRA) of 2009 created the fund for certain veterans and the spouses of veterans who served in the military of the Government of the Commonwealth of the Philippines during World War II. The compensation fund offers one time payments may be up to $15,000 to eligible persons.
Unemployment Insurance (Unemployment Compensation, or UC ) Stimulus Payment
Effective 11-06-09
The $25 supplemental weekly Unemployment Compensation (UC) payment (stimulus payment) authorized by the American Recovery and Reinvestment Act of 2009 (ARRA) for FoodShare.
This page last updated in Release Number: 20-01
Release Date: 02/03/2020
Effective Date: 02/03/2020
Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.
Publication Number: P-16001