340:10-3-39. Unearned income determination
(a) Unearned income. When the client has income from one or more of the income sources listed in (1) through (14) of this subsection, the income source and amount is verified and considered as unearned income.
(1) Capital investments. Proceeds from interest or dividends from capital investments that include savings accounts, bonds, other than United States (U.S.) Savings Bonds, notes, and mortgages received after certification constitute unearned income.
(2) Real property held as a resource. When the client has income from property held as a resource, the worker deducts actual business expenses before considering the remainder as unearned income.
(3) Life estate and homestead rights. When the client receives income from a life estate and homestead rights, it is counted as unearned income, per Oklahoma Administrative Code (OAC) 340:10-3-4(d).
(4) Minerals. When the client owns minerals, but not the surface rights, only actual income from minerals, delayed rentals, and production is considered. • 1 When the client does not have documentary evidence of the income amount, the worker or client obtains income verification from the firm or person who is making the payment.
(5) Contributions. Contributions the client recurrently receives are considered unearned income. Payments made to a vendor on the client's behalf are not considered countable contributions. • 2
(6) Child support. Child support assigned and retained by Oklahoma Human Services (OKDHS) Child Support Services (CSS) is not considered as income to the client, per OAC 340:10-10-7.
(A) Child support payments an applicant receives prior to certification are considered unearned income for the month received.
(B) When CSS sends the client child support after certification because more is collected than is owed to OKDHS, it is considered as unearned income.
(C) When the Temporary Assistance for Needy Families (TANF) payee is a minor parent and lives with an adult relative who receives child support for the minor parent, the child support is considered as unearned income for the minor parent as CSS does not assign or retain it. • 3
(7) Retirement, disability, and unemployment benefits. Income received monthly from annuities, pensions, retirement, veterans' or disability benefits, workers' or unemployment compensation, survivors' or Social Security benefits are considered unearned income. • 4 When the client receives retirement income as a lump sum payment upon retirement, it is considered as a resource instead of income, per OAC 340:10-3-5(a)(9)(D). Supplemental Security Income (SSI) is not considered because the SSI recipient is not part of the TANF cash assistance unit, per OAC 340:10-3-57(b).
(8) Military benefits. Military benefits such as pensions, compensation, dependents' allowances, and similar benefits are considered as countable unearned income. When the client states that any member of the assistance unit, former spouse, or a non-custodial parent is or was in the military, the worker checks with state and federal veterans' agencies to determine if any benefits are available to the assistance unit. • 5
(9) Financial aid from any agency or organization. Financial aid provided to students or financial aid provided by agencies or organizations that base their payment on the financial need of the household is only considered as countable unearned income when the purpose of the assistance duplicates the purpose of the TANF cash assistance.
(A) Financial aid given by other agencies or organizations because of a household's financial need does not constitute duplication when the financial aid is given for goods and services that are not included in the TANF need standard. • 6
(B) TANF cash assistance's purpose is to provide for the assistance unit's basic needs; such as food, clothing, basic medications, personal items, shelter, utilities, and household equipment, per OAC 340:10-1-3(e).
(C) When educational assistance serves the same purpose as TANF cash assistance, such as when the client receives a stipend for living expenses, the stipend is countable income.
(D) When the assistance an agency or organization provides duplicates the purpose of TANF and:
(i) does not exceed the difference between the TANF payment and need standard by family size, per OKDHS Appendix C-1, Maximum Income, Resource, and Payment Standards, Schedule IX, it is not considered as income; or
(ii) exceeds the difference between the payment and need standard, it is considered as unearned income.
(10) Casual and inconsequential gifts. Monetary gifts, such as Christmas, birthday, or graduation gifts are is counted as unearned income when the gift amounts per person exceed $30 per calendar quarter.
(A) When a single gift exceeds $30, the entire amount is counted as unearned lump sum income, per OAC 340:10-3-28.
(B) When the recipient claims the gift is intended for more than one person in the assistance unit, it can be divided among these persons. Gifts between assistance unit members are not counted. • 7
(11) Grants. Grants that are not based on financial need are considered income to the extent the grant is available for current maintenance. • 8
(A) Any portion of the grant that is expended, designated, or intended for items not included in current maintenance is excluded provided documentation is provided to justify the exclusion.
(B) The countable amount of a grant received for a period covering more than one month is prorated over the period it is intended to cover.
(12) Funds held in trust by Bureau of Indian Affairs (BIA). The BIA frequently puts a person's trust funds in an Individual Indian Money (IIM) account. • 9
(A) When the BIA states that the funds are unavailable and are not disbursed, the funds are not considered in determining eligibility. When the BIA disburses any portion of the funds to the client, guardian, or conservator, such funds are considered as available unearned income unless the income is disregarded, per OAC 340:10-3-40. When countable funds are disbursed:
(i) on a monthly basis, the income is treated as unearned income in the month received;
(ii) on a regular basis, less often than monthly, the income is averaged over the number of months it is intended to cover, per OAC 340:10-3-28(1); or
(iii) in a one-time payment, the income is considered a nonrecurring lump sum payment in the month received, per OAC 340:10-3-28(2).
(B) When the BIA states the account is unavailable and does not have a monthly disbursement plan, but an account review reveals a recent disbursement history to the client, guardian, or conservator, this may indicate that all or a portion of the account is available. When this occurs, the funds are considered as unavailable because of a legal impediment until the situation is resolved with the BIA. • 10
(C) When the BIA makes disbursements to a third-party vendor in payment for goods or services, the disbursements are not considered as countable income.
(13) Profit sharing. When a household member is a shareholder in an S corporation or a partner in a limited partnership or limited liability company, he or she may receive a distribution or profit share of the business. This is considered unearned income. • 11
(b) Unearned income determination. Unearned income is determined based on actual income received in the current or past month, when known, and the best estimate of anticipated income for future months. When the client receives unearned income in varying amounts, the worker may average the income over a six-month period to determine anticipated income when averaging income over a longer time period is more representative. The worker only uses representative income amounts.
(1) Income conversion to monthly amount. When the client receives income more often than monthly, the worker converts the income to a monthly amount as described in (A) - (D) of this paragraph. Income received: • 12
(A) on a daily basis is converted to a weekly amount, then multiplied by 4.3;
(B) weekly is multiplied by 4.3;
(C) twice a month is multiplied by 2; or
(D) every two weeks is multiplied by 2.15.
(2) Benefit changes. The client is responsible for reporting income changes within 10-calendar days of when the change takes place. The worker is responsible for taking timely action within 10-calendar days of the date the client reports the change. • 13
(A) When the anticipated unearned income change is over the payment standard, per OKDHS Appendix C-1, Schedule IX, the worker closes the TANF cash assistance benefit effective the next advanced notice date, per OKDHS Appendix B-2, Deadlines for Case Actions.
(B) The TANF benefit may be reopened due to administrative error, per OAC 340:65-5-6, when the client reports within 30-calendar days of the effective closure date that the anticipated income was not received or was less than expected and did not cause ineligibility.
3. (a) Payments made to Child Support Services may be verified by viewing the child support payment screen using the transaction CFRRPA. To view instructions for the CFRRPA transaction, enter M space CFRRPA.
(b) When the minor parent lives with his or her parent, the worker codes the child support as a contribution, and it continues to count as income after certification. Refer to OAC 340:10-3-57(e)(5) when the minor parent lives with his or her parent.
4. (a) To verify income, the worker obtains a copy of the person's award letter or benefit verification statement or uses data exchange files, per OAC 340:65-3-4(4).
(b) Exclude the cash value of pension plans or funds described in Section 4104 of the Food, Conservation, and Energy Act of 2008, Public Law (P.L.) 110-234. The list of excluded retirement savings and pension plans are:
(1) 457 of the Internal Revenue Code (IRC) plans, which are plans for state and local governments and other tax-exempt organizations;
(2) Section 401(a) of the IRC plans including:
(A) 401(k) plans, which are generally a cash or deferred arrangement limited to profit-making firms;
(B) SIMPLE 401(k) plans available only to small businesses;
(C) Profit Sharing Plans;
(D) Cash Balance Plans;
(E) pension or traditional defined-benefit plans; and
(F) Keogh plans;
(3) Federal Employee Thrift Savings plan;
(4) Section 403(b) of the IRC plans, which are tax-sheltered annuities provided for employees of tax exempt organizations and state and local educational organizations;
(5) Section 501(c)(18) of the IRC plans, which are retirement plans for union members consisting of employee contributions to certain trusts that must have been established before June, 1959;
(6) Section 408 and 408(A) of the IRC plans including:
(A) Individual Retirement Accounts (IRAs);
(B) SIMPLE IRAs;
(C) Roth IRAs; and
(D) Simplified Employer Plans (SEPs).
5. To verify receipt of military benefits, the worker obtains the information from the client’s award letter or from the specified agency. The worker calls the Department of Veterans Affairs at 1-800-827-1000 or sends Form 08MP095E, Request For Information Regarding Veterans Benefits, to the Oklahoma Department of Veterans Affairs to request information from state and federal veterans' agencies.
6. Expenses that are not considered in the Temporary Assistance for Needy Families (TANF) need standard may include when a private agency provides money for special training for a child or when Housing and Urban Development provides money to cover moving expenses. Examples of assistance or services that may be provided by the Department of Rehabilitation Services that are not considered in the TANF need standard are:
(1) car fare to a rehabilitation center;
(2) extra clothing;
(4) grooming needed for a training program; and
(5) any other such complementary payments.
9. (a) At application, the worker contacts the Bureau of Indian Affairs (BIA) in writing to determine the availability of a person's trust funds. At each reapplication or renewal, the worker contacts the BIA to obtain information regarding any:
(1) changes in fund availability;
(2) modifications to the Individual Indian Money (IIM) account; and
(3) prior disbursements.
(b) The worker records documentation regarding availability of funds, all disbursements since the most recent application or renewal, and why disbursed funds are countable or disregarded in the Family Assistance/Client Services (FACS) case notes.
10. When the worker is unable to resolve the situation with the BIA, the worker emails the Adult and Family Services (AFS) TANF Unit for assistance.
(1) The email must include specific details of the situation, including the worker's efforts to resolve the situation with the BIA. When AFS TANF Unit staff is unable to make a determination, TANF staff requests a legal decision from Legal Services regarding availability. Once AFS TANF Unit staff obtains the legal decision, he or she forwards the legal decision to the worker.
(2) The funds are considered unavailable because of a legal impediment unless AFS TANF Unit staff notifies the worker to count the funds.
11. (a) To calculate the household's profit sharing income from an S corporation, the worker uses the 'ordinary business income' shown on line 1 of the Schedule K-1, Shareholder's Share of Income, and divides the income by 12 or by the number of months the business existed in the tax year to arrive at the monthly gross unearned income.
(b) When a household member is a partner, the worker looks at line G on Schedule K-1, Partner's Share of Income that accompanies Form 1065, Partnership Return of Income, to determine the type of partnership. When it shows the business is a limited partnership or limited liability company, the worker uses the 'ordinary business income' shown on line 1 of Schedule K-1 and divides the income by 12 or the number of months the business existed in the tax year to arrive at the monthly gross unearned income. When line G shows the business is a general partnership, refer to OAC 340:10-3-32(a)(3) to calculate the income as self-employment income.
(c) The worker codes the profit-sharing income in the FACS Income tab and enters a FACS case note to document income calculations.
12. The worker exercises caution when determining if income is received twice a month or every two weeks. In computing monthly income, cents are carried at all steps until the monthly amount is determined and then rounded to the nearest dollar.
13. The worker is responsible for explaining timely reporting requirements to the client at initial application and each renewal.