Library: Policy

OKDHS:10-1-14. Earned income

Issued 4-1-98

     The term "earned income" refers to monies earned by an individual through the receipt of wages, salary, commission or profit from activities in which the individual is engaged as self-employed or as an employee. Payments made for accumulated annual leave, vacation leave, sick leave or as severance pay are considered as earned income whether paid during employment or at termination of employment. Temporary disability insurance payment(s) and temporary worker's compensation payments are considered as earned income if payments are employer funded and the individual remains employed. Income received as a one-time non-recurring payment is considered as a lump sum payment. Earned income includes in-kind benefits received by an employee from an employer in lieu of wages or in conjunction with wages. An exchange of labor or services, e.g., barter, is considered as an in-kind benefit. Such benefits received in-kind are considered as earned income only when the employee employer relationship has been established. The cash value of the in-kind benefits must be verified by the employer. Income from self-employment also includes in-kind benefits for a work activity or service for which the self-employed person ordinarily receives payment in the business enterprise. Medical insurance secured through the employer, whether purchased or as a benefit, is not considered in-kind income.

• (1) Gross earned income is used to determine eligibility for assistance. Gross earned income is defined as the "true wage" prior to payroll deductions or withholdings.
• (2) Countable earned income excludes income from:
  • (A) capital investments with respect to which the individual is not actively engaged. Dividends and interest or rental properties in the hands of a rental agent with the check forwarded to the recipient would be excluded from "earned income";
  • (B) benefits not in the nature of wages, salary or profit accruing as compensation or reward for services, or as compensation for lack of employment.
• (3) Income is verified by the best available information such as pay stubs presented by the client or an interview with the employer. The worker verifies medical insurance which may be available to the employed AFDC client and any dependents at the same time that income is verified. Pay stubs may only be used for verification if they have the clients name or social security number indicating that the pay stubs are in fact the clients wages. The stubs should also include the date(s) of the pay period and the amount of income before deductions. If this information is not included, employer verification is required.
• (4) When a member of the assistance unit accepts employment and has not received any wages, verification of the amount of income to be considered and the anticipated date of receipt must be obtained from the employer. Verified income which is expected to be received during a month is considered available to the assistance unit and is counted in determining eligibility for the month of receipt.