Department of Human Services

Families First Online Policy Manual

Income

Revised:

20.3

EARNED INCOME

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Earned income is money derived from an individual’s work efforts, such as wages, salaries, commissions, or as profits from a self-employment enterprise.

 

The following monies are considered earned income:

 

·        Wages, salaries, commissions.

 

·        Garnished or diverted wages are considered to be earned income.

 

·        Profit from self-employment enterprises such as the following:

 

-        Farming.

-        Small business enterprises.

-        Roomers/boarders.

-        Rental receipts—Rent receipts from property owned/being purchased by an individual/family when the owner/purchaser is actively engaged in the production of the income are earned income.

-        Total gains of any capital goods or equipment related to the business, excluding the costs of doing business.

 

·        Rental income is considered earned if the individual is actively engaged in producing the income.  The cost of doing business is an allowable deduction regardless of whether the income is earned or unearned.

 

·        Training and Rehabilitation allowances—count as earned income any wages paid for on-the-job training or public service employment, except JTPA earnings of child applicants/recipients.  (See JTPA earnings for children clients later in this section.) Exclude all training allowances and incentive payments in Families First Work projects and JTPA projects.

 

·        Severance Pay and Vacation, Sick, Longevity, Bonus Pay, Maternity Leave Pay, and Jury Duty Pay.

 

-        Severance pay is counted as earned income.

-        Vacation, sick, longevity, bonus pay, maternity leave pay, and jury duty pay are counted as earned income when mandatory deductions are made.

 

·        JTPA payments to adults and minor caretakers are considered earned income if the payments are wages or compensation in lieu of wages.

 

·        Allowances and Other Benefits under the National and Community Service Trust Act of 1993:

 

This Act establishes the Corporation for National and Community Service, which administers national community service programs including AmeriCorps, which provides an individual with an education ward of $4,725 per year of completed national service.  There are three programs encompassed in AmeriCorps.

 

1.      AmeriCorps * USA for participants age 17 and over.

2.      AmeriCorps* VISTA for participants age 18 and over.

3.      AmeriCorps* NCCC for participants age 16 to 24.

 

Payments provided to AmeriCorps participants are:

 

·        Living Allowance: Treat this stipend as earned income for Families First participants who were not receiving Families First at the time they joined AmeriCorps VISTA.  Apply the earned income disregards EXCEPT in the case of VISTA volunteers.  This stipend is disregarded for VISTA volunteers.

·        For a participant who receives Families First as a dependent child, disregard it in determining the amount of grant if the child is a full-time student or a part-time student working less than full-time.)

·        Child Care Allowances: These allowances paid to participants are disregarded if used to pay child care.

·        The basic health insurance policy, child care services, auxiliary aid and services to disabled participants, and the national service education award are treated as in-kind benefits, which are disregarded in Tennessee.

 

In addition to these basic AmeriCorps programs, the Corporation for National and Community Service oversees the following programs:

 

·        The Senior Corps for participants over age 55.

·        The Youth Corps for participants age 14-17.

·        Learn and Serve for participants in grades K-12.

 

Even though only AmeriCorps participants receive the education award, some of the other Corporation programs provide “stipend” benefits (living allowance, child care allowance, in-kind benefits) to participants.

 

There is a summer program lasting 8-12 weeks (known by various names, such as Summer of Service, Summer of Safety) in which participants in all six programs are placed in AmeriCorps programs.  These participants are eligible for a $1000 education benefit upon completion of the service.

 

Reimbursements for normal living expenses such as rent, personal clothing, and food eaten at home, are a gain or benefit.  The amount by which a reimbursement exceeds the actual incurred expense is counted as earned income.  However, reimbursements are not considered to exceed actual expenses, and the expense amount need not be verified, unless the provider or the client indicates the reimbursement amount exceeds the expense.  When a reimbursement covers multiple expenses, individual expenses do not have to be separately identified if none of the covered expenses are normal living expenses.

 

Glossary

 

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