When a household applies for food stamp benefits (either initially or at recertification), when a change is reported, or when a semi-annual report is processed, eligibility must be re-determined prospectively.

Eligibility is based upon financial and non-financial eligibility factors.

The non-financial eligibility factors are summarized in charts found in FSC 7200. Chart 1 describes the non-financial eligibility factors applied to individual household members. Chart 2 describes the financial eligibility factors applied to the household as a whole.

The procedures used to determine eligibility based on the financial eligibility factors (resources and income) are described in this section. Also included is a full description of the budget process.

Sections 7400 - 7525 explain the steps used to determine a household's eligibility based upon income and resources.

All resources declared by the household must be considered. During the interview, the household should be questioned to determine if undeclared resources are available to the household.

Resources likely to be undeclared include:

1. Bank accounts for children,
2. Bank accounts established by an individual outside the household when a household member's name appears on the account (see FSC 4601),
3. Vehicles in the possession of an individual outside the household when the vehicle is registered to a household member - (ownership must be considered as per FSC 4811), and
4. Certificates of deposit or other accounts set aside by a household member as a "burial fund".

To determine the household's total resources, the worker must add together: a) countable liquid resources, b) the excess value of all countable vehicles, and c) the equity value of all countable non-liquid resources. The resulting figure will be compared to the applicable resource limit.

No Limit

Categorically eligible households have no resource limit in the Food Stamp Program. See FSC 1920.

Resource Limit - $3,000

This limit applies to households not classified as categorically eligible when there is a member aged 60 or older or a disabled member as defined in the [Glossary], definition of Aged/Disabled Household. (This includes one-person households.)

Resource Limit - $2,000

This limit applies to households not classified as categorically eligible when all household members are age 59 or younger.

Unless a household is categorically eligible, the household's total resources must be equal to or below the applicable limit. If not, the household's application will be denied.

Example - Mr. and Mrs. Monroe, ages 59 and 65, apply for food stamp benefits. On their application they declare the following resources:

1. A certificate of deposit valued at $1,000;
2. Two acres of land (other than their home) currently valued at $5,000 with $4,000 remaining to be paid on the Monroe's loan to purchase the land;
3. One vehicle 
4. A checking account with a balance of $900 including the Monroe's Social Security checks for this month. (They receive $600 per month Social Security.)

The Monroe's total resources are:

$1,000-certificate of deposit

+1,000-equity value of land ($5,000 less $4,000)

+        0-vehicle

+   300-resource in checking ($900 less $600)

$2,300 Total

The Monroes are resource eligible since there is a member over age 60.

Applications may be denied immediately when the worker determines that the household's resources exceed the limit if the household is not categorically eligible. See [FSC 12230] when resources exceed the limit at reported change or submission of semi-annual report.

Example - Mr. and Mrs. Polk apply for food stamp benefits. They are age 61 and 62. At the interview they declare that they have $3,000 in a certificate of deposit, $1,000 in their checking account (including their monthly income of $600), and a 1999 Lincoln Town Car.

$3,000 value of CD

$ 400 checking ($1,000 total less $600 monthly income)

$3,400 Total

Since $3,000 is the resource limit, the household is ineligible based upon declared resources. Therefore, the application may be denied at the time of the interview.

All households except categorically eligible or aged/disabled households must meet gross income limits. See the Glossary for definitions of [categorically eligible] and [aged/disabled].

A household's gross income is the household's total countable income before any deductions.

Example - A household applying for food stamp benefits declares self-employment income of $70,000 from the previous year as their only income. The cost of producing this income ($45,000) is excluded. To determine if this household meets the gross income pretest the worker completes the following calculation.

$70,000 Gross self-employment income

-45,000 Cost of producing the income

$25,000 / 12 months = $2,083 per month gross income

The household contains six members. As of October 1, 2001, the gross income allowed for six members is $2,567. The household meets the gross income pretest.

The following section provides lists of excluded income countable income.  For specific information, policy references are given.

The income listed below is excluded entirely when gross or net income is determined.

The income listed below will be included in all budget calculations. For ease of reference, the list is divided into earned income and unearned income.

06/01/04

The purpose of prospectively budgeting income is to anticipate the household's income for the assigned certification period; or if the household is subject to semi-annual reporting (SR), to anticipate the household's income for the upcoming six month period. (See FSC 5691 for special instructions on processing self-employment income received by SR households.) Income( other than annualized or averaged income) will not be counted in a perspective budget unless the amount of the income and the  date of receipt can reasonably be anticipated.  Income from a new source such as a government benefit check or a new job will not be counted in the food stamp budget until the amount and the date of the first payment has been reasonably established. For example, if a household reports at its application interview that a member has been laid off but should begin receiving unemployment insurance( UI) benefits, the UI benefits will not be counted in the household's budget until the date of receipt of the first check is known.

Income received within the past 30 days is normally used as an indicator of the income that is and will be available to the household during the certification period. (For SR households the indicator applies to income to be received in the next six-month period.)  For example, a household with the weekly -earned income applies for recertification and is interviewed on May 15.  The household reports that earnings are received every Friday and that there is a one-week "hold back" on the earnings.  The following pay check stubs will be used to anticipate monthly earnings for the upcoming period of certification.

Past income will not be considered an accurate indicator of future income when changes have occurred or can be anticipated during the upcoming certification period. (For SR households, this rule applies to the upcoming six-month period).  In these instances, the worker will use the most accurate information available to anticipate the household's income. Income other than annualized or averaged income, will be removed from the food stamp budget if the income is no longer being received. If the worker can determine that the household is ineligible for the month of application but will be eligible in subsequent months, the application will be approved. The certification period will begin with the first month of eligibility.   For example, if a household applied for food stamp benefits on July 7 and is ineligible for July benefits but eligible for August benefits, the period of certification will begin in August.

When a household is entitled to retroactive benefits, the amount of the retroactive benefits will be calculated, proration will be applied as necessary, and the retroactive benefits will be authorized.

If a household is not eligible for the current month but is eligible for a prior month or months in the application period, the household will be issued any retroactive benefits.

EXAMPLE - A household applies for food stamps benefits on March 15th. On May 2nd, the worker determines that the household is currently ineligible and the county was at fault for the delay in processing.  The household was eligible for food stamps benefits in March and April. so the worker calculates the household's March and April food stamps benefits.  March benefits are prorated to the date of application, March 15.  These benefits are authorized as retroactive benefits.

There are special procedures to be used at initial application or at any time when the household's income will vary from month to month due to anticipated changes. See FSC 7522.

There are special rules which apply when a household's TEA or SSI benefits are reduced, terminated or suspended due to that member's intentional failure to comply with an TEA or SSI program requirement. See FSC 12110

7512.1 Documentation

It is vital that case actions based on prospective budgeting contain the following documentation:

1. The dates and amounts of the income verification used in the prospective budgeting process;
2. If applicable, the household's statement about this income - whether they expect the income to continue, if any changes are expected, etc.; and
3. If any changes in the source or the amount of the income are expected, an explanation of the expected changes and resulting budget adjustments.

Good documentation is essential to the prospective budgeting process. Reviewers must be able to determine if the prospective budget was based on the best information available to the worker at the time the action was taken.

7512.2 Calculating Prospective Budgets

The methods used to calculate prospective budgets depends upon the type of income received by the household and the frequency of receipt. FSC 7513 through FSC 7513.2 provides guidelines for handling specific types of income.

NOTE: These instructions do not apply to budgets calculated to determine the amount of an overpayment. See FSC 15400 for instructions on preparing overpayments.

The purpose of using a conversion factor in a prospective budget is to "even out" the effect of variations in monthly income when income is received on a weekly or a bi-weekly basis. For example, in the months when a household receives four checks, the food stamp budget will reflect slightly more income than the household received; however, in the months when five checks are received the budget will reflect slightly less income than the household received. In this manner, the food stamp budget accounts for normal fluctuation in monthly income without monthly recalculations.

A conversion factor is not used when the worker is averaging two or more months income (see FSC 7521) or when there is less than a full month's income from any source.  A full month's income means that some pay was received from the same source for each pay date in that particular month.

EXAMPLE 1 - Mr. G. is paid every Saturday, but he is scheduled to be laid off on December 21. In December, he will receive the following pay: December 1 - $240; December 8 - $240; December 15 - $240; December 22 - $240; December 29 - $0. $240 + $240 + $240 + $240 = $960. His monthly-earned income is $960.

Since he will not be receiving a paycheck on December 29th, he will be receiving less than a full month's pay. Therefore, his December income will not be converted.

EXAMPLE 2 - Mr. H. works for the same employer and is also paid on Saturday; however, he is not scheduled to be laid off until December 24. In December, he will receive the following pay: December 1 - $200; December 8 - $200; December 15 - $200; December 22 - $200; and December 29 - $40. His monthly-earned income is $840.

Since he received a paycheck on each scheduled pay date in the month of December, his income will be converted when the budget for December is calculated. To convert, all pay received in December will be added together, the total will be divided by 5 (for five pay dates) and multiplied by the conversion factor of 4.334. $200 + $200 + $200 + $200 + $40 = $840 ¸ 5 = $168 x 4.334 = $728.11 rounded to $728.

EXAMPLE 3 - Mr. I, who also works for the same employer, was laid off on November 30 and received his last check of $100 on December 1. On December 3 he went to work for another employer. He received his first check for $200 on December 8. On December 15, 22, and 29 he received checks for $200. He did receive a check each Friday in December, but since his income is from two different sources, his income will not be converted when the December budget is calculated. Instead, all checks received in December will be added together. $100 + $200 + $200 + $200 + $200 = $900. His monthly-earned income is $900.

NOTE: These examples are intended only to illustrate either a full month's income or less than a full month's income. In each situation illustrated in these examples, it would be necessary for the worker to calculate a second budget to anticipate the household's January income.

When a household reports income from more than one source which is subject to conversion, each source of income must be converted separately. For example, if a household reports earned income from two sources, each source of income will be converted separately before the household's total earned income is calculated.

7513.1 Weekly Income - Conversion Factor - 4.334

Weekly income must be converted to a monthly amount using the conversion factor of 4.334 when a full month's income has been received or is anticipated. (See FSC 7513.)

To convert weekly income which does not vary from week to week, the unrounded weekly amount will be multiplied by 4.334.

EXAMPLE - Mrs. Miller receives unemployment benefits of $100 per week. To convert this to a monthly amount, $100 will be multiplied by 4.334. $100 x 4.334 = $433.40 rounded to $433. The monthly income from unemployment is $433.

To convert weekly income which varies from week to week, the following steps will be completed.

Step 1 - Unrounded weekly gross income amounts will be added together.

Step 2 - The resulting figure will be divided by four or by five as appropriate to obtain a weekly average. The weekly average will not be rounded.

Step 3 - The unrounded weekly average will be multiplied by 4.334. The resulting figure will be rounded up or down to the nearest dollar.

EXAMPLE - Mrs. Miller receives child support. The last four weekly amounts received were $40, $50, $50 and $40. Mrs. Miller states this represents the amount of child support normally received in a month. To convert this income, complete the following calculations - $40 + $50 + $50 + $40 = $180 ¸ 4 = $45 x 4.334 = $195.03 rounded to $195. The monthly income from child support is $195.

7513.2 Bi-Weekly Income - Conversion Factor 2.167

Bi-weekly income is income received every other week. Semi-monthly income is received only twice per month. See FSC 7514 for instructions on handling semi-monthly income..

Bi-weekly income must be converted to a monthly amount using the conversion factor 2.167 when a full month's income has been received or is anticipated.

To convert bi-weekly income which does not vary, the unrounded amount will be multiplied by 2.167.

EXAMPLE - Every other week Mr. Scott receives a worker's compensation check in the amount of $275.25. To convert this income - $275.25 x 2.167 = $596.46 rounded to $596. The monthly income from worker's compensation is $596.

To convert bi-weekly income which varies, the following steps must be completed.

Step 1 - Unrounded bi-weekly gross income amounts will be added together.

Step 2 - The resulting figure will be divided by two or three as appropriate to obtain an average figure. The average figure will not be rounded.

Step 3 - The unrounded average figure will be multiplied by 2.167 to determine monthly income. The monthly income will be rounded up or down to the nearest dollar.

EXAMPLE - Mr. Benton is employed and is paid bi-weekly. At his application interview on May 28 he presented two check stubs dated 5-10 and 5-24 as verification of May earnings. The gross amount of the check dated 5-10 was $420.50. The gross amount of the check stub dated 5-24 was $450.80. To convert this income: $420.50 + $450.80 = 871.30 ¸ 2 = 435.65 x 2.167 = $944.05 rounded to $944. Mr. Benton's anticipated monthly earnings are $944.

Semi-monthly income is income received twice per month - for example, the first and the fifteenth of the month. Income received every other week is called bi-weekly income. See FSC 7513.2 for instructions on handling bi-weekly income.

When income is received on a semi-monthly basis, the gross pay from each pay period is simply added together to determine monthly income. Individual income amounts will not be rounded. The monthly total will be rounded up or down to the nearest dollar.

EXAMPLE - Mr. Stone is paid on the first and fifteenth of each month. At his application interview on May 28 he presents check stubs dated 5-1 and 5-15 as verification of May income. The gross amount of the check dated 5-1 was $640.15 and the gross amount of the check dated 5-15 was $600.15. $640.15 + $600.15 = $1,240.30 rounded to $1,240. Mr. Stone's monthly earnings are $1,240.

Households receiving semimonthly income on a recurring basis must not have their monthly income varied merely because of changes in mailing cycles or pay dates for reasons such as, but not limited to, the occurrence of a weekend or holiday at the beginning or the end of the month.

When income is received more often than monthly but not on a weekly or biweekly basis, the monthly amount is determined by adding together all payments received in that month. Individual payment amounts are not rounded. The monthly total is rounded up or down to the nearest dollar.

EXAMPLE - Mr. Hempstead drives a truck hauling pulpwood for a logger when work is available. (He is not self-employed.) He is paid by the load. He applies for food stamp benefits on May 15. He verifies that in April he hauled 20 loads and was paid $25 per load. 20 loads x $25 per load = $500. Mr. Hempstead's monthly earnings are $500.

Income received on a monthly basis is not converted. When a household receives income on a recurring monthly basis, and two payments are received in one month due to changes in mailing cycles or pay dates for reasons such as, but not limited to, weekends or holidays, both payments are not to be counted as income in the same month. Instead, each payment will be counted as income in the month for which payment was intended.

Some households receive their annual income over a period of time shorter than one year. A monthly amount is determined by dividing the annual income by 12.

Self-employment income is annualized when the income from the enterprise is received in a short period of time but represents a household's annual support. For example, a farmer who raises cotton and soy beans receives all his annual income within the period of a few months.

Self-employment income received throughout the year is normally anticipated by determining the total annual income from the previous year and averaging this income over the upcoming year. It is recommended that the household's annual income be based upon the self-employment income and expenses declared on the tax return. For example, a man owns a log truck. He hauls logs throughout the year whenever work is available and/or the weather permits. His earnings for the previous year may be averaged to anticipate his earnings for the current year. If the income tax return is not available or does not reflect the current income, the household may furnish other verification.

See FSC 5600 for complete instructions on calculating income from a self-employment enterprise.

Employees who work under a contractual arrangement must have their income prorated over a 12-month period. A contractual arrangement exists if the employee and employer have a written agreement which stipulates, at a minimum, the annual or monthly salary. Individuals who are paid on an hourly or piecework basis will not have their income prorated over a 12-month period.

School teachers and school administrators are contract employees. 

Since arrangements vary from school district to school district, school employees other than administrators or teachers may or may not be considered contractual employees. The income of school employees who do not work under a contract will not be annualized. The income of employees who have a contract will not be annualized if the contract does not specify a yearly or a monthly amount. For example, the income of school cafeteria workers who are paid by the hour will not be annualized.

Contract income that is not the household's annual income and is not paid on an hourly or piecework basis will be prorated over the period the income is intended to cover.

Example: A man signs a contract to complete a specific job at a plant. The terms of the contract call for the man to receive $4,000 for the job and to complete the job in three months. He is to receive $2,000 when he begins the job and $2,000 when he completes the job. The $4,000 payment will be prorated over the three months period covered by the contract.

At the household's option, income intended to cover a period longer than one month may be averaged over the period of intended use. (The gross income is divided by the number of months in the period of intended use.) Types of income which may be averaged forward over the period of intended use include dividends and interest.

EXAMPLE - A household receives $15 interest on a quarterly basis.

$15 X 3 = $5.00. $5.00 is the household's monthly interest income.

If the household does not choose to average income intended to cover a period longer than one month, the entire payment will be counted as income in the month of receipt. At application, this will require the calculation of two budgets - one that includes the income and another that does not. See FSC 7523.3 for instructions on authorizing variable benefit amounts.

In cases where the receipt of income is reasonably certain but the monthly income may fluctuate, the household may elect to income average. (Income may not be averaged for destitute households as defined in [FSC 9446])

Before income may be averaged, the worker must obtain verification of at least two consecutive full month's income, and the household must agree that this income is representative of the income fluctuations anticipated for the coming months. The number of months used to arrive at the average income need not be the same as the number of months in the assigned certification period.

EXAMPLE 1 - Fluctuating income for two months is known and the household is reasonably certain that this income is representative of the income anticipated to be received in the coming months. The income for the two known months may be averaged and projected over a certification period longer than two months.

To calculate averaged income, the worker will obtain a monthly total for each month, add the monthly totals together and divide by the total number of months. Since averaged income represents more than one full month's income, no conversion factor will be used to obtain total monthly income.

EXAMPLE 2 - A household has elected to average three months' income and provides the following pay check stubs.

June - $1,212.50

July - 655.95

August - 1,171.30

TOTAL $3,039.75 x 3 months = $1,013.25 rounded to $1,013. $1,013 will be used as the total gross monthly

NOTE: This section of policy is not intended to furnish instructions on conversion of income. See FSC 7513 for instructions on conversion of income.

When an initial application is processed, the budgeting process must reflect the household's income for each month in the application period. To accomplish this it may be necessary to prepare more than one budget. This may result in an food stamp benefit amount which varies from month to month. See FSC 7523.3 for instructions on calculating a variable budget.

If the month has not fully lapsed at the time the application is processed, the budget must reflect the income the household expects to receive for the entire month. See FSC 7513 for instructions on conversion of this income.

At recertification or when a change or a semi-annual report is processed, the worker must make every effort to anticipate the effect of changes. This may require the calculation of two or more differing budgets for the same certification period. Weekly or biweekly income will be converted if a full month's income was received.  See FSC 7513.

At any case action, the exact methods used to handle a change anticipated by a household will depend upon the type of change. The methods selected by the worker will not be limited to the methods illustrated in the examples provided below. The method selected must be fully documented.

EXAMPLE 1 - A household applies for food stamp benefits on May 12. An interview is conducted on May 25 and verification of earned income is requested. The requested verification is furnished on June 6, but through county error, the application is not approved until July 2. When the application is approved, the worker must consider the household's circumstances during each month in the application period. If the household's income and/or expenses have varied from month to month, a separate budget must be prepared for each month during that period See FSC 7523.3. Weekly or bi-weekly income will be converted if a full month's income was received. See FSC 7513.

EXAMPLE 2 - (This example shows the proper method for determining if weekly or bi-weekly income is to be converted.) At the application interview on January 15, the household reports a member expects to be laid off some time in January. If the reported lay off and the date of the last check can be verified, the budget for January will be prepared using only the income the household anticipates receiving in January. If the member will not be receiving a paycheck for each pay period in the month of January, total unconverted income will be used in the January budget.

If the laid-off member will be receiving any holdback checks in February, these checks must appear in the household's February budget. If ESD benefits are scheduled to begin and the household is reasonably certain about the amount of the ESD benefit and when the member is to begin receiving this income, the benefits will included when the budget for February is prepared. Should additional changes be expected, yet another budget must be prepared for the month of March.

EXAMPLE 3 - A household is certified for 6 months. At the end of the second month of certification, a new household member is reported. This new member is disabled and is to begin receiving SSA disability benefits in the near future. The member will be added to the household but the SSA income will not be counted in the household's budget unless the member has received an award letter or other correspondence which states the initial month of benefit payment. In this case, the SSA may be added to the household's budget effective with the first month of receipt.

Normally, earned income will be anticipated by obtaining verification of earnings for the last 30 days, converting the income as instructed in FSC 7513 -7513.5 and including it in the household's budget. However, if the earnings are from a new source or the income is ending or if the income varies widely from month to month, the worker must proceed as instructed in FSC 7523.1. (NOTE - Complete instructions for verifying and documenting earned income may be found in FSC 5725 - FSC 5727)

When earnings are from a new source, the household will be asked to provide any check stubs available. (The worker should be alert to check stubs which reflect less than a full week's pay. These checks should not be used to anticipate normal monthly earnings unless the employee typically works less than a full week.) If the worker cannot determine the employee's normal pay from examining the available check stubs, it will be necessary to contact the employer to verify the household's normal working hours, rate of pay, and expected changes. If the employer cannot or will not provide this information, it may be necessary to anticipate income based on the household's statements about expected earnings.

Earnings from a terminated source will not be counted in the household's budget in any month in which these earnings are not received. See FSC 7512 for additional information.

7523.1 Fluctuating Earned Income

To anticipate earned income which varies widely from week to week, the worker must first determine why the earned income fluctuates.

When the fluctuation is caused by some unanticipated event such as, but not limited to, the illness of the employee, a household emergency or unexpected overtime, anticipated earnings should be based on the employee's normal rate of pay. It may be possible to determine the normal rate of pay by disregarding the earnings for the week or weeks in which the employee did not receive his normal rate of pay.

The earnings for the weeks in which the employee did receive his normal pay will be averaged. The averaged amount will be multiplied by the appropriate conversion figure in order to anticipate a full month's earnings. (See FSC 7513 - 7513.3 for instructions on income conversion.)

If the information on the remaining check stubs is not adequate to anticipate normal monthly income, the employer should be contacted for information about the employee's normal working hours, rate of pay and expected changes in employment. Based on this information, it may be possible to anticipate the earned income. If the employer cannot or will not provide information about an employee's normal rate of pay and/or hours worked, anticipated earnings will be based on the household's statements about expected earnings.

When paychecks include a one-time payment such as vacation pay or incentive pay, the one-time payment will be excluded when anticipating the employee's pay for upcoming months. If vacation pay is received in a month included in an initial application period, the pay will be included in the budget for that month and then excluded when the budget for subsequent months is prepared. See FSC 7522. Vacation pay received as a one-time payment after termination or lay off is considered to be a lump sum payment. See FSC 5409.

Incentive pay received on a regularly recurring basis (weekly, monthly, quarterly, etc.) will be counted as income.

Work incentive payments received upon completion of a job-training program are lump sum payments and, as such, totally excluded as income but counted as a resource. See FSC 4950 for additional information.

Annual bonuses included in weekly paychecks will be handled as specified in FSC 5502. Bonuses paid at regularly recurring intervals throughout the year cannot be considered to be annual bonuses. If the month of receipt and amount of the bonus can be anticipated, these payments will be counted as earned income in the month received or prorated over the period of intended use. If an employee has received one bonus payment but does not know if he will be receiving another, the bonus will be considered a lump sum payment and excluded as income but will be considered a resource. See FSC 4950.

When income fluctuations are caused by variations in the number of hours worked, it must be determined if the employee's earnings normally vary so drastically. If the household states or the case record reflects that the pay received in the last 30 days accurately represents normal variations in the hours worked by the employee, the worker may use this income to anticipate monthly earnings.  (If the normal pattern of pay includes weeks when little or no pay is received, these weeks must be included when anticipating monthly income.)

If an employee's income fluctuates to the extent the pay received in the last 30 days does not accurately portray the employee's normal monthly earnings, additional verification of earnings for earlier weeks may be requested. For example, the worker may request the household provide verification of earnings for the past six or eight weeks. The earnings for all six or eight pay periods would be averaged together and the weekly average would be converted as instructed in FSC 7513.1. (The household will not be penalized if it is difficult or impossible to obtain this additional verification. See FSC 5514.)

When the receipt of earned income is fairly certain but the amount fluctuates, the household also has the option of averaging several months’ earnings. See FSC 7520 for additional information.

When working with income such as farm labor or construction work that fluctuates seasonally, it may be appropriate to base anticipated earnings on earnings from the most recent season. Caution should be exercised when using income from a past season to anticipate current earnings since income may vary considerably from year to year as well as from season to season. For example, a farm worker may have high wages in a prior season that are not reflected in the current season due to heavy rains. Hourly wages may have changed. Changes in hourly wages may be anticipated by determining the number of hours worked at the old hourly rate and anticipating the same number of hours at the new rate.

All decisions regarding the methods used to anticipate fluctuating earned income must be fully documented. See FSC 7512.1.

7523.2 Wages Held by the Employer

When an employee requests that the employer hold his wages for any reason, the wages will be considered income to the household in the month the employer would have otherwise paid these wages.

With the following exceptions, when an employer holds wages as a general practice (even if in violation of the law) such wages will not be counted as income. Exception 1 - The household anticipates an advance from these wages. (See FSC 5512 for an explanation of a wage advance.) Exception 2 - The household is receiving income from wages that were previously held by the employer as a general practice if these wages have not previously been counted as income.  When handling wages held by the employee, the worker must document why the wages were held and whether or not the household anticipates any funds from the employer in lieu of these wages. If funds are anticipated in lieu of held wages, the worker must also document whether these funds are considered to be a wage advance or a loan. (Funds provided as a loan rather than an advance will be excluded as income. When the actual wages are later received, these wages must be counted as income in the month of receipt. See FSC 5512.)

7523.3 Variable Budgets

A variable budget must be prepared when a household is certified for differing benefit amounts during the same certification period. For example, a household is certified on July 1st for a benefit amount of $100 for July and $250 for August.

When an application is approved with a variable benefit amount, the approval must reflect the food stamp benefit amount for the current month.  The full certification period will be assigned. The food stamp benefits should extract that night.  The next work-day, the budget that reflects the benefits for the upcoming month must be keyed.

This process must occur prior to the next regular monthly extract. Therefore, if an application with a variable budget is approved on the last workday of the month, keying of the approval will be delayed until the first workday of the following month. The food stamp benefits for the first month(s) of the certification period will be shown as retroactive benefits. The authorization document must reflect the budget for the benefits to be issued as of the month of extract. Extract will occur via daily issuance.

All households other than categorically eligible households and aged/disabled households must meet gross income limits to participate in the Food Stamp Program. See the Glossary for definitions of both categorically eligible households and aged/disabled household. The gross income limits may be found on the current Food Stamp Issuance Charts, Exhibit A.

A household's total gross income is calculated by adding together all gross monthly income as calculated from each non-excluded source including annualized income. Prorated income will be included if the month for which eligibility is being determined is included in the period of intended use. Excluded income will not be used to determine gross income.

Except for the farm loss deduction explained in FSC 5670, no deductions will be allowed in the calculation of total gross income. The farm loss deduction will be applied to the household's gross income before the gross income pretest is applied.

EXAMPLE - A household making application for food stamp benefits has the following income:

1. Weekly earnings - $250 x 4.334 = $1,084 monthly income (rounded),
2. Bi-weekly worker's compensation payments - $134 X 2.167 = $290 monthly income (rounded), and
3. TEA - monthly income of $139

$1,084 + $290 + $139 = $1,513. The household's total gross income is $1,513.

If the household's gross income exceeds the pretest income shown on the Exhibit A for the appropriate household size, the household is ineligible and the application may be denied at this point. See FSC 7525.

7524.1 Net Income Eligibility

All households, except categorically eligible households, must meet the net income eligibility standards that appear on the Food Stamp Issuance Charts, Exhibit A. (See [FSC 8961]  -8963 for information about budgeting income for categorically eligible households.)

Net income is the household's income after all allowable deductions. These deductions are applied to the household's gross monthly income in a series of calculations known as a "food stamp budget." Not all deductions may be allowed for all households. For example, the medical deduction is allowable only for aged/disabled members. See FSC 7610 for instructions on calculation of a food stamp budget.

When a food stamp application is denied because income exceeds either the gross or the net income limits, the household's income must be documented. Documentation must include, at a minimum, all figures used to calculate the household's gross and/or net income and income verification, if available. Instructions for documentation of income appear in the following sections of policy: excluded income - [FSC 5416] earned income - [FSC 5516], self-employment income - [FSC 5650], and unearned income - [FSC 5727]. A denial notice must be issued to the household. In most cases the denial notice will be generated automatically.

Net income is the household's income after all allowable deductions are applied to the gross monthly income in a series of calculations normally referred to as a "food stamp budget". Not all deductions may be applied to all households. For example, only aged/disabled households are allowed medical deductions.

All deductions are listed below in the chart on the following page in the order of application with a brief summary and a policy reference provided.