0410.015.00 Income

0410.015.05.05 Computing Earned Income

When computing earned income, determine the amount of income the claimant earns and will continue to earn. Discuss with the claimant his employment situation to obtain an accurate picture revealing information such as: how long with 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; and so on.

Once the claimant’s employment situation has been determined, budget the monthly income. Following are guidelines to determine the monthly income.

When it can be predicted with certainty the employment situation will not vary (e.g., the employee is guaranteed a wage and number of working hours), budget the monthly amount. Infrequent and unpredictable overtime or infrequent and unpredictable work days missed do not alter the certainty of the employment situation. If the claimant receives income on other than a monthly basis, convert the income to a monthly amount. If paid weekly, compute the monthly amount by multiplying the weekly amount by 4 1/3 or 4.333 weeks; if paid every two weeks, multiply the two week amount by 2 1/5 or 2.166; if paid semimonthly e.g., the 1st and the 15th), multiply the semimonthly amount by 2.

EXAMPLE: Ms. Nelson works at the local telephone office. She is paid every two weeks at the rate of $260 per pay period. She rarely misses a day of work and works no overtime. She does not expect to receive a pay raise or promotion in the near future. The caseworker verifies this information with the employer and shows the monthly income of $563.33 ($260 x 2.166) on the budget.

When an employee’s income varies from pay period to pay period, determine the likely pattern of future income to obtain a monthly average. If there are indications past patterns of income will continue, use the claimant’s previous six months of employment to determine the average monthly amount. Use a longer or shorter period of employment to determine monthly income if necessary to represent an adequate basis for determining monthly income.

In some situations recent past earnings may serve only as a partial guide for determining monthly income. For example, the employee or employer indicates a change in wage rates, hours of work, job responsibilities, etc. has recently occurred or is imminent. In other situations, there may be no recent past earnings to use as a guide (for example, the claimant has just started to work). In these situations, carefully compare the information available from the employee and employer with known past earnings records and work patterns, if any, to determine a monthly income amount. It may be necessary to set a priority to discover whether the monthly income arrived at is accurate.