When completing budgets for categorically eligible and/or elderly/disabled households the gross income test (130% of poverty) does not apply.  When an elderly/disabled or categorically eligible household with earned income reports an increase in income, complete a budget using the new income reported by the household.  Use the chart provided with memorandum IM-#76 to compare the household's gross monthly income to the 130% of poverty standard.  If the household's gross monthly income exceeds 130% of poverty, but 

• the categorically eligible household's income does not exceed the categorically eligible net income maximum or 

• an elderly/disabled household's income does not exceed the net income maximum, 

Example:  Mr. Smith who is considered as an elderly/disabled individual lives with his son Ray.  Ray is employed so the household is certified as an earned income food stamp household.  The following is the budget result at approval:
 
 

Gross Income            $1000	Net Income                 $310
Maximum Allowed         NA	Maximum Allowed     $938

The benefit amount is $145 and the household is informed its 130% of poverty reporting requirement is $1219.

Ray reports a pay raise that causes the household's gross income to exceed 130% of poverty.

Because the gross income amount now exceeds the 130% reporting requirement, compare the household's net income to the net income maximum.  In this example, the household's net income is less than the maximum allowed, therefore no action is taken.

The benefit amount remains at $145 even though the budget shows it should be reduced to $98.

• Review this memorandum with necessary staff.