Library: Policy

340:50-7-29. Income inclusions

Revised 9-15-21

(a) Sources of income considered. The worker considers all household income, unless specifically excluded, per Section 273.9(c) of Title 7 of the Code of Federal Regulations (7 § C.F.R. 273.9(c)) and Oklahoma Administrative Code (OAC) 340:50-7-22, in determining monthly gross income. Income is classified as earned or unearned. When one or more household members are absent from the home, before deciding whether to consider the absent household member's income, the worker must determine if the person returns to the home for part of the month.

(1) The worker does not include the absent member in the benefit amount and only counts the portion of his or her income that he or she makes available to the rest of the household when the household member does not return for part of the month, per OAC 340:50-5-2.• 1

(2) When the household member returns for part of each month, the worker includes him or her in the benefit amount and counts all of his or her income unless excluded, per OAC 340:50-7-22.

(b) Earned income. Per 7 C.F.R. § 273.9(b)(1), earned income is income a household receives in the form of wages, commission, self-employment, or training allowances, and for which a person puts forth physical labor.

(1) Wages. Wages and salaries include sick pay paid by the employer to an employee who plans to return to work when recovered, excess benefit allowance payments, • 2 and wages garnished or diverted to pay a third party for a household's expenses. • 3 Countable wages for military personnel include any allowance included on the earnings statement, such as the Basic Allowance for Housing (BAH) and the Basic Allowance for Subsistence (BAS).

(2) S corporations. When a household member is a shareholder in an S corporation, he or she may receive profits from the business in two ways; as a salary or as a profit share of the business. Both types of income are reported on the household member's personal income tax return. Salary income is considered as earned income and profit share income is considered as unearned income per (c)(7) of this Section. • 4

(3) Self-employment. Refer to OAC 340:50-7-30 for self-employment income procedures.

(4) Title I payments of the Domestic Volunteer Services Act (DVSA). Volunteer payments made to a household member under Title I of the DVSA of 1973, as amended, per Section 404 of Public Law (P.L.) 93-113, Section 5044(f)(1) of Title 42 of the United States Code and 7 C.F.R. § 273.9(c)(10)(iii), are counted as earned income when the household member started receiving the payments prior to applying for Supplemental Nutrition Assistance Program (SNAP) or public assistance. When the person receives SNAP or public assistance benefits at the time he or she joins the Title I program, the volunteer payments are not counted. Title I programs include AmeriCorps Volunteers in Service to America (VISTA) and Special Volunteer Programs.

(5) On-the-job training (OJT). The worker counts income from OJT positions as earned income. This includes OJT provided, per Section 3(44) of the Workforce Innovation and Opportunity Act (WIOA) of 2014, P.L. 113-128 for persons 19 years of age or older and monies paid by an employer. • 5

(6) Training allowances. Training allowances from vocational or rehabilitative programs recognized by federal, state, or local governments, such as the work incentive program, to the extent they are not a reimbursement. Training allowances received under WIOA are excluded.

(7) Sale of whole blood or plasma. The sale of whole blood or blood plasma is considered as earned income.

(8) Developmental Disabilities Services (DDS) payment. When the household receives a DDS payment as an extended family care provider for services provided in addition to the child's room and board payment, it is considered as earned income.

(c) Unearned income. In general, unearned income is income a household receives and is not in the form of wages, self-employment, or training allowances, and for which a person does not put forth physical labor. The income listed in (1) through (11) of this subsection, while not all inclusive, are considered unearned, per 7 § C.F.R. 273.9(b)(2).

(1) Assistance payments. The worker counts payments from a federally-aided public assistance program, such as Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), or assistance programs based on need, such as State Supplemental Payments, as unearned income. When such payments are received by a third party, they are counted as income for the person to whom it is legally owed. • 6

(A) A household's food benefit amount does not increase when the public assistance benefit the household receives under a federal, state, or local means-tested public assistance program is reduced, suspended, or closed because the public assistance program imposed a penalty due to an intentional program violation determined as fraud or a household member's failure to comply with a requirement of that program.

(i) To impose a food benefit sanction, the person must be certified for Supplemental Nutrition Assistance Program (SNAP) benefits at the time of the failure to comply and receiving regular benefits from the other program at the time fraud occurred or the household failed to comply with a substantive program requirement.

(ii) Examples of means-tested public assistance programs include SSI and TANF.

(iii) Substantive requirements are behavioral requirements of that program designed to improve the well-being of the household. For TANF, this includes:

(I) complying with TANF Work requirements, per OAC 340:10-2. OAC 340:10-2-2 explains the TANF penalty considered for SNAP when the household fails to comply with TANF Work activities; • 7

(II) cooperating to obtain child support, per OAC 340:10-10-5;

(III) providing a Social Security number, per OAC 340:10-12-1;

(IV) ensuring school-age children regularly attend school, per OAC 340:10-13-1;

(V) verifying children meet immunization requirements, per OAC 340:10-14-1; and

(VI) not using the TANF benefit in a prohibited business, per OAC 340:10-1-3.

(iv) Procedural requirements that do not trigger a penalty include failing to:

(I) provide verification;

(II) complete an interview; or

(III) complete a benefit renewal.

(v) When a worker is not able to obtain the necessary information and cooperation from another federal, state, or local means-tested welfare, or public assistance program to comply with the provision in (A) of this paragraph, OKDHS is not held responsible. The worker must make a good faith effort to get the needed information and record the details and results of this effort in the case file.

(vi) The worker does not reduce, suspend, or close the household's current food benefit amount when the benefits under another assistance program are decreased.

(vii) When the worker adds eligible members to the food benefit, the benefit must be adjusted regardless of whether the household is prohibited from receiving benefits for the additional member under another federal, state, local welfare, or public assistance means-tested program.

(viii) Changes in household circumstances not related to the penalty imposed by another federal, state, local welfare, or public means-tested assistance program are not affected by the provision in (A) of this paragraph.

(ix) The application of the provision in (A) of this paragraph applies for the duration of the imposed penalty or until OKDHS cannot determine the amount of the penalty. • 8

(x) SNAP sanctions extending beyond one year must be reviewed at least annually to determine if the sanction continues to apply.

(ix) The application of the provision in (A) of this paragraph applies for the duration of the imposed penalty or until DHS cannot determine the amount of the penalty.(B) The provision in (A) of this paragraph does not apply to persons or households subject to disqualification from SNAP for noncompliance with a comparable work requirement per Title IV of the Social Security Act or an unemployment compensation work requirement.

(2) Annuity, pension, retirement, and Social Security payments. Annuities, pensions, retirement, and Social Security benefits are considered as unearned income. When a third party receives Social Security benefits it is counted as income for the person to whom it is legally owed. • 6 The worker considers disability payments as:

(A) unearned income when the person is no longer considered an employee of the company and an agency outside of the company pays the disability benefits; and

(B) earned income when the person is still considered an employee of the company and the company pays the disability benefits.

(3) Veterans', disability, worker's or unemployment compensation payments, and striker's benefits. Veterans', disability, worker's or unemployment compensation payments, and striker's benefits are considered as unearned income. • 9

(4) Support and alimony. Support and alimony payments paid directly to the household from non-household members are considered as unearned income. • 10 Money deducted or diverted to a third party to pay a household expense is considered as unearned income when the court order directs the payment be made to the household. When the court order states the payment must be paid to a third party, it is not considered as income. • 11

(5) Grants, dividends, royalty, and interest payments. Payments from government sponsored programs, such as Agricultural Stabilization and Conservation Service Programs, grants, dividends, royalties, interest, and all other direct money payments from any source construed to be a gain or profit are considered as unearned income. The household must provide proof of income from these sources so income can be averaged to determine monthly countable income.

(6) Monies withdrawn or dividends that are or could be received by a household from trust funds. Monies withdrawn or dividends from a trust the household has the option of receiving as income or reinvesting in trust funds considered to be excludable resources are considered income in the month they become available to the household unless otherwise exempt, per OAC 340:50-7-22.

(7) Department of Veteran's Affairs (VA) Aid and Attendance. When a person receives VA Aid and Attendance income and does not pay someone outside of the food benefit household to care for him or her, this is considered as countable income. Any portion of the VA Aid and Attendance paid to someone outside of the food benefit household for care is excluded.

(8) 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 as unearned income. • 12

(9) Foster care and DDS room and board payments. The household has the option of including a child receiving a foster care payment that includes a kinship care payment or a DDS room and board payment in the food benefit household. When the household chooses not to include the child, his or her income is not considered, per OAC 340:50-5-5. Foster care payments for children or adults included as household members are considered an unearned income.

(10) Adoption subsidy and guardianship payments. When a member of the household receives an adoption subsidy or guardianship payment from OKDHS, it is counted as unearned income. The child for whom the payment is received must be included in the SNAP food benefit. • 13

(11) Sponsor's income. When a household contains a sponsored alien, refer to OAC 340:50-5-49 to determine if the income of the sponsor and the sponsor's spouse must be deemed to the sponsored alien.

(d) Income of excluded household members. Per OAC 340:50-5-10.1, excluded household members are termed as disqualified or ineligible. The worker does not consider the needs of a disqualified or ineligible household member when determining the household's size for purposes of assigning a benefit level to the household or comparing the household's monthly income with the income eligibility standard, per 7 § C.F.R. 273.11(c)(2)(iv).

(1) Disqualified household members. The worker counts the disqualified household member's income in its entirety as available to the remaining household members, per 7 § C.F.R. 273.11(c)(1)(i). The worker does not prorate utility, medical, dependent care, child support expenses, or excess shelter deductions. Per OAC 340:50-5-10.1, disqualified household members are those excluded for:

(A) committing an intentional program violation;

(B) failing to meet work registration requirements;

(D) being a probation or parole violator.

(2) Ineligible household members. The worker prorates the income of ineligible household members among all household members, per 7 § C.F.R. 273.11(c)(2)(ii) and (3).

(A) Per OAC 340:50-5-10.1, ineligible household members are those excluded because they do not meet a program requirement, such as:

(i) failure to obtain or refusal to provide a Social Security number;

(ii) being an ineligible alien;

(iii) being an able-bodied adult without dependents and not meeting work requirements; or

(iv) failure to cooperate with providing requested verification regarding unclear information.

(B) The worker counts a pro rata share of the ineligible household member's income as income available to the remaining members by first subtracting the allowable income exclusions, per OAC 340:50-7-22, from the ineligible member's income and dividing the income evenly among the eligible household members and the ineligible member.

(C) The worker counts all but the ineligible member's share as income available to the remaining household members. The earned income deduction, per OAC 340:50-7-31(a)(2), and OKDHS Appendix C-3, Maximum Food Benefit Allotments and Standards for Income and Deductions, applies to the prorated income attributed to the household when it was earned by the ineligible member.

(D) The portion of the household's allowable shelter, child support, and dependent care expenses paid by or billed to the ineligible member is divided evenly among the household members, including the ineligible member. All but the ineligible member's share is considered a deductible shelter expense for the remaining household members, with the exception of utility expenses, per 7 § C.F.R. 273.9(d)(6)(iii)(F), or the standard homeless shelter deduction, per 7 § C.F.R. 273.9(d)(6)(i). When the:

(i) household is responsible for utility expenses, the household is allowed the full utility standard for which it qualifies, per OAC 340:50-7-31; or • 14

(ii) homeless household is responsible for shelter costs, the household is allowed the full standard homeless shelter deduction, per OKDHS Appendix C-3, Maximum Food Benefit Allotments and Standards for Income and Deductions, or the prorated excess shelter deduction incurred by the household, whichever results in the most benefits for the household, per OAC 340:50-7-31(a)(6)(A)(v). • 15

INSTRUCTIONS TO STAFF 340:50-7-29

Revised 9-15-21

1. (a) Examples of household members who do not return for part of the month include persons away from home due to military deployment or employment in another state.

(b) When the absent member makes all or part of his or her income available to the rest of the household, the worker counts it as a contribution.

(c) When the absent member deposits his or her wages in a joint bank account, the worker only counts the portion of the wages the absent member states is for the household's use.

2. When the employer adds money to the employee's gross income as a benefit allowance to pay for a reimbursable expense, such as insurance or dependent care, the worker counts the regular gross earnings plus any excess money left after deducting the reimbursable expense as income. For example, when a person:

(1) receives a $300 benefit allowance to purchase insurance and uses the entire amount to purchase the insurance, none of the benefit allowance is counted as income;

(2) receives a $300 benefit allowance but only purchases $280 in insurance, the worker counts the remaining $20 as income;

(3) has an option of purchasing insurance with a $300 benefit allowance when insurance was purchased or receiving $150 of the $300 benefit allowance as cash when insurance is not purchased, the worker counts the $150 as an excess benefit allowance when the person chooses not to purchase insurance; or

(4) receives any excess benefit allowance at the end of the year instead of monthly, the worker excludes the one-time payment as income as it is considered a non-recurring lump sum payment, per Oklahoma Administrative Code (OAC) 340:50-7-22(10)(C).

3. Examples of wages garnished or diverted and paid to a third party for a household's expenses include wages withheld to pay:

(1) child support;

(2) rent, even when the employer is also the landlord; or

(3) the employer for uniforms or tools required to be purchased for use on the job.

4. Shareholders of S corporations complete Form 1120-S, U.S. Income Tax Return for an S Corporation with Schedule K-1, Shareholder's Share of Income. When the household member is a shareholder and receives a salary from the business, the household member must supply a copy of his or her W-2, Wage and Tax Statement. Line 1 on Form W-2 shows the household member's annual wages for the tax year. To calculate the household member's monthly income, the worker divides the income shown on line 1 by 12 or the number of months the S corporation existed during the tax year.

5. This provision does not apply to household members 18 years of age and younger who are under the parental control of another adult household member, regardless of school attendance.

6. Examples include, when a:

(1) mother applies for food benefits for herself and her 10-year old son. The son receives Social Security benefits as a dependent of his disabled father and his father is the payee for his son's SSA benefit. Since the son is included in his mother's food benefit application, the portion of the SSA benefit legally owed to the son is counted as unearned income for the food benefit household; or

(2) child receives Supplemental Security Income (SSI) income and resides half of the month with his mother and the other half with his father. The child and his father receive food benefits and the mother is the payee for the child's SSI income. Since the SSI is legally owed to the child, the SSI is counted as unearned income for the food benefit household.

7. Refer to OAC 340:10-2-2 Instructions to Staff # 4(6) to determine when the Temporary Assistance for Needy Families (TANF) penalty income is removed.

8. This may occur when the other program benefit closes or the person becomes ineligible for a non-penalty related reason, the worker stops imposing the food benefit sanction.

9. Refer to OAC 340:50-5-46 for more information regarding striker's income.

10. The worker counts child support as income to the parent, not the child. The worker counts cash medical payments as income when the child does not receive a SoonerCare (Medicaid) benefit. The worker verifies if the household receives cash medical by viewing the KI1 screen.

(1) The worker documents child support in Family Assistance/Client Services (FACS) case notes and codes it as income in the FACS Income tab for the child, even though it is considered income to the parent, when the child is included in the food benefits unless:

(A) child support is paid to a parent whose child is no longer in the food benefit; or

(B) the parent is an ineligible or disqualified household member.

(2) In the circumstances listed in (1)(A) or (B) of this Instruction, the worker codes the child support on the Income tab for the adult as a contribution.

11. (a) Example of when a payment to a third party counts as income. The household receives $400 in court-ordered monthly child support payments. At benefit renewal the household reports the non-custodial parent now pays $200 of the $400 directly to a creditor of the food benefit household. In this instance the worker continues to count the entire $400 as unearned income because the payment is from money owed to the household.

(b) Example of when a payment to a third party does not count as income. The household receives $400 in court-ordered child support. In addition, the court order directs the non-custodial parent to pay $200 to a bank for repayment of a loan. The worker does not count the additional $200 as income because the court order did not direct this payment be made to the household.

12. (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 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 340:50-7-30(b)(2) 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.

13. The worker counts adoption subsidy and guardianship payments as income to the parent, not the child.

(1) The worker documents the payment in Family Assistance/Client Services (FACS) case notes as income for the parent but enters the income in the FACS Income tab for the child when the child is included in the food benefits.

(2) When the child is not included in the food benefit or when the parent is an ineligible or disqualified household member, the worker enters the income in the FACS Income tab for the parent as a contribution and documents the reason in FACS case notes.

14. Example: The household size is four, including the ineligible household member. When the rent is $400, and the household pays heating and cooling costs, the worker divides the rent by four, $400/4 persons = $100 per person and multiplies this number by the three eligible household members to arrive at $300, $100 x 3 = $300. The worker enters $300 in the FACS 'shelter cost' field, Information Management System (IMS) block C54 and S in the FACS 'utility indicator' field, IMS block C59 of the FACS Shelter tab.

15. (a) The worker enters one of the four homeless shelter codes in the Case Information tab 'shelter type' field, IMS block A23, of the FACS Interview Notebook: A, B, C, or D. The worker also enters 'yes' or 'no' in the 'homeless shelter costs' field of the FACS Shelter Tab, IMS block C61 to indicate whether the household has shelter costs associated with being homeless. When the answer is:

(1) 'no,' the worker enters zero in 'shelter cost' field, IMS block 54 and 'N' in the 'utility indicator' field, IMS block 59 of the FACS Shelter Tab; or

(2) 'yes,' the worker enters the prorated portion of the claimed shelter expense in the 'shelter cost' field, IMS block 54 and when the household claims utility costs, the applicable utility indicator in the 'utility indicator' field, IMS block 59 of the FACS Shelter Tab. The system calculates the household's income and allows the shelter expense deduction that results in the most food benefits for the household.

(b) Example: The household consists of two adults, one is an ineligible alien. The household claims it is homeless and incurs a shelter cost of $300 and no utility costs. The eligible household member may receive the full-standard homeless shelter deduction or half of the claimed shelter costs totaling $150, 300/2 persons. The worker enters $150 in the 'shelter cost' field, IMS block 54 and 'N' in the 'utility indicator' field, IMS block 59. Once the case is saved and cleared, the correct shelter cost will show in IMS.