Projection is defined as anticipation of the income and circumstances that will exist during the certification period. To project income:
- Consider all factors to most accurately reflect the amount of income to be received in present and future months.
- Discuss with the EU any expected or predictable changes in income and expenses, such as how long with the present employer, hours worked (whether regular or irregular hours, overtime, etc.) wages received (whether a steady rate, piece work, commission, etc.), recent raises or promotions, anticipated raises or promotions, recent layoffs, or anticipated layoffs, etc.
- Use income received in the past 30 days as an indicator of the income that is and will be available to the household during the certification period.
- Do not use past income as an indicator of projected income for the certification period if changes in income have occurred or can be anticipated.
- Arrive at a mutually agreed upon projection of the current income and expenses.
- Do not vary monthly income for EUs receiving state or federal assistance payments (such as Temporary Assistance or SSI) on a recurring basis because mailing cycles may cause two payments to be received in one month and none the next.
- Budget the projected monthly income and expenses.
- Record the basis and method used for determining the amount of monthly income budgeted.
As a result of anticipating income, the EU’s allotment for the month of application may differ from its allotment in subsequent months.
Use guidelines to project monthly income as stated for each of the following situations:
- Contract or Self-Employment
- Mutually agree upon a period of past time that provides the most accurate indication of future income. Under these circumstances, a two month time period is recommended although a shorter or longer time period may be used to provide a better projection of income.
- NOTE: If income fluctuates seasonally, it may be appropriate to use the most recent season comparable to the certification period, rather than the 30 days as one indicator of anticipated income. Exercise caution in using income from a past season as the income may fluctuate from one season to the next.
- If the applicant’s income varies with no set pattern and is expected to continue in this manner. Look at income for at least the past 30 days and discuss anticipated changes to hours worked or pay rate to project the monthly amount of income to be budgeted.
- If no change in rate of pay has occurred or is expected and all pay periods being used are indicative of the applicant’s income pattern, average wages for several pay periods to project income.
- When a change in rate of pay has occurred or is anticipated, use the average number of hours worked times the new rate of pay to provide the best projection of income.
- If the applicant works the same number of regular hours each pay period but began working various amounts of overtime prior to the application, determine with the applicant if overtime is expected to continue. If the overtime is expected to continue, count it in the income projection. If the applicant does not expect the overtime to continue, discuss with the applicant why the change is expected. If a reasonable explanation is provided and the overtime is now stopping, the budget would be completed and the overtime amount would be entered on the FMX3 screen in the irregular income field FAMIS will not count the overtime in the income calculation. When contacting an employer to verify overtime, ask if there is an anticipated change in overtime being offered. As a rule, employers cannot anticipate how much overtime an individual will work, however, they will know if there is some change in business and whether or not they will be offering more or less overtime to their employees or certain groups of employees.
- When an EU reports income from a new source, determine the number of hours the individual will be working per pay period, rate of pay, and frequency of pay. If an applicant has just started employment, the eligibility specialist must carefully evaluate the information available from the employee, obtain information from the employer, if possible, and compare this data with known past earnings records and work patterns, if any, to determine the projected income amount.
Contract or Self Employment Income
- For households that derive annual income by contract or self-employment in a period of time shorter than one year, average income over a 12-month period, provided the income is not received on an hourly or piece-work basis. These households may include school employees, sharecroppers, farmers, and other self-employed households. (These provisions do not apply to migrant or seasonal farm workers. Refer to Computing Annualizing Self-employment Income and Farm Worker Employment for procedures for averaging self-employed income and income for migrant or seasonal farm workers.)
- When an EU has stable income, such as a regular weekly or monthly salary, as determined by reviewing verification of past income and discussion with the applicant, infrequent and unpredictable overtime or conversely, infrequent and unpredictable work days missed do not alter the certainty of the employment situation. Examples of projecting income:
EXAMPLE: Mrs. Green is employed as a temporary for AAA Employment Agency. Mrs. Green usually works every week, but her days and hours worked vary weekly. Mrs. Green states to the eligibility specialist that she receives a wage stub weekly but she has not saved them. The eligibility specialist asks Mrs. Green to sign an employment information request form to send to AAA Employment Agency and also gives her an FA-325 allowing 10 days for her to provide her next two wage stubs. The eligibility specialist is unable to obtain verification from the employer and Mrs. Green does not send in the wage stubs as requested. The system will reject the pending application for failure to provide verification on the 30th day.
If Mrs. Green provides the wage stubs prior to the 30th day, use the wage stubs provided and project income based on discussion with Mrs. Green.
NOTE: In this example, Mrs. Green has the ability to provide wage verification but has not provided it so the application is rejected. If due to circumstances beyond her control she is unable to provide wage verification, project income based on a discussion with Mrs. Green.
EXAMPLE: Mr. Cook works as “casual labor” for a trucking company and is paid in cash. Mr. Cook’s work pattern varies each week and he is paid by the job rather than by the hour or day. Mr. Cook has no record of his past income and the employer is not willing to provide wage verification for “casual labor”. Discuss patterns of income for at least the past 30 days and anticipated changes (e.g. busy season) to arrive at a mutually agreed upon projection of earned income. Advise Mr. Cook to keep his own record of earnings and report when his earnings exceed 130% of poverty.
EXAMPLE: Ms. Smith has worked at the local factory for the past three years doing piece work. She works a regular 40 hours per week. Her income varies from pay period to pay period depending on her production. No changes are expected in the piece work rate of pay or in the hours worked. After a discussion with Ms. Smith regarding variations in her earnings over the past several months, the eligibility specialist determines that eight pay stubs would prove the best projection of anticipated income. Document the use of eight wage stubs to adequately evaluate the income fluctuations.
EXAMPLE: Mrs. Barry has worked at a department store for the past two years. Her income varies from pay period to pay period due to hours worked. A discussion regarding anticipated changes in income reveals that Mrs. Barry has been approved for a pay increase of $.25 per hour. Her rate will change from $7.25 to $7.50 per hour for the next pay period as later verified by her supervisor. Determine the length of time that would best represent her changes in hours worked. Mrs. Barry indicates that five pay periods would provide a good representation of her hours worked and information from the past 30 days supports this. The last five wage stubs are provided. Multiply the hours on each check by the new rate of pay $7.50/hour. Record why five wage stubs were used to project income, and that the projection includes the client’s new rate of pay.
EXAMPLE: Ms. Johnson works as a clerk in an insurance firm. Her regular hourly rate is $8.00. However, for the past four months she has been working overtime during each weekly pay period. Ms. Johnson states she expects the overtime to continue. The eligibility specialist determines, through discussion with Ms. Johnson, that the past two months’ pay periods best represent wages she anticipates receiving. Two months after approval, Ms. Johnson, calls in to report that she is no longer working overtime. The employer verifies this.