LIHEAP - Income

An applicant must provide the names, gross income, and the source of income for all members of a shared household on the date of application. An individual who is a roomer or boarder will submit income information to determine the individual's eligibility.

SEE: Policy 2.2.0: Defining Household Types
Policy 1.3.1: Defining Income
Contractors must use the Household Income Information Form, or a similar form.

SEE: Exhibit 1.1.1 (B): Household Income Information Form
To verify earned income, contractors have the option to use an Employer Earned Income Form, or a similar form.

SEE: Exhibit 1.1.1 (C): Employer Earned Income Form
To obtain income, residence, and social security number verification, contractors may use the form entitled Visual Documentation or a similar form according to Policy 1.1.0 (C).

SEE: Exhibit 1.1.1 (E): Visual Documentation Form
Policy 1.1.0 (C): File Statements Can Be Used In Lieu Of Documentation

Policy 1.3.0 (B): Average Gross Income Will Be Calculated

All pay periods must be accounted for in the period used to establish eligibility.
For applicants applying for EAP, the average gross income is determined for income received during 3 or 12 calendar months prior to the month of application.
If the household is determined to be ineligible using a 3 month average, the applicant must be offered the opportunity to provide 12 month's income documentation to redetermine eligibility.
When rounding the average monthly income, contractors must round to the nearest whole dollar amount, when the number is .01 or greater. For example, 501.99 is rounded up to 502.00, and 501.01 is round up to 502.00 as well.

Policy 1.3.0 (C): Determining Average Gross Income

The contractor adds together the income for 3 or 12 months, and divides by the number of months considered to obtain the average gross income.

Example One:

A client from a two person household applies for EAP on February 10. Total gross monthly income received during the three months prior to the month of application (November, December, and January), must be considered for all members of the household. The household produces pay stubs or other documentation listing gross income in the following amounts:
1. November $612 December $592 January $619
2. Three month total: $1,823 minus $364.60 (20 percent of earned income) = $1,458.40
3. $1,458.20 divided by 3 months = $486.13, which is the average monthly income. This average monthly income and the household size (two persons) are compared to the Income Eligibility Guidelines. The maximum for a two-person household is $835 so this household is eligible for EAP. The same principle applies to determining a 12-month income average.
Example Two:

A woman applies for EAP on January 22, and on the standard form lists her name and her two children and reports a household of three. She also reports that her husband left on January 2, and is presumably not returning. Her husband earned $500 during December, but because he is no longer a member of the household, his income is not considered in determining eligibility.
Example Three:

Most documentation contractors receive will be for an entire calendar month. But if, for example, a contractor receives documentation that Mr. Richards received $119 every week in Unemployment Compensation throughout the month being considered, be sure that the $119 is applied to each week of the month.

If Mr. Richards applies in May, then income is verified for April, or for a month of 4 complete weeks. Mr. Richards has received an unemployment check of $119 four times during the month. His income is $476 from Unemployment Compensation.

(A period of 3 months equals 13 weeks, not 12.)

Policy 1.3.0 (D): A Deduction Will Be Applied To Earned Income, Retirement and Unemployment Income Which Are Taxed At The Time of Payout

The following deductions will be taken from the income from the following sources which are taxed at the time of payout:

Earned income – 20%
Retirement income – 10%
Unemployment benefit income – 10%

Policy 1.3.0 (E): Support Payments Deducted From Payer's Income

Actual payments for child support and spouse maintenance will be deducted from the payer's income for purposes of income determination. These deductions must be taken after any deductions referred to in section (C) above.

Verification must include:
- Either a court support order, or written declaration by both parties when no court order exists; and
- Documentation of actual payments made during the period considered to determine eligibility (for example, canceled checks, a collateral statement from spouse or child's guardian, pay stub deductions).
  
  SEE: Policy 1.3.1 (B), #2 Other Exclusions Identified

Policy 1.3.0 (F): Applicant Can Self-Declare Income

When documentation is unavailable for income declared by a household, through the efforts of the applicant and the contractor, income can be self-declared. The contractor must place in the file a note indicating what efforts were made to obtain the documentation and the reason it could not be obtained.

SEE: Exhibit 1.1.1 (G): Client Self-Dec Income Form

Policy 1.3.0 (G): Zero Income Might Be Declared By Some Clients

Contractors must document, to the most reasonable extent possible, an applicant's declaration of zero income for the household.

SEE: Exhibit 1.1.1 (D): Declaration of No Income

Policy 1.3.0 (H): Verifying Sources of Income

Once an applicant has provided household income information, the contractor will:

Verify information available from the client:
- Earned income:
  - Pay stubs
  - Pay envelope
  - Employee's W-2 Form
  - Wage tax receipts
  - Income tax return - state or federal
  - Self-employment - IRS Forms 1040, Schedule C or F
  - Sales and expenditure records
- Other pensions and benefits:
  - Unemployment Compensation award letter or determination notice
  - Pension award notice
  - Veterans Administration award letter
  - Official correspondence on benefits
  - Income tax record - state and federal
  - Railroad retirement award letter
- Other income could be obtained from a rental agreement or lease.
Verify information from other sources:
- Earned income:
  - Employer's wage records
  - Authorization to Release Information
  - Statement from client's employer
  - Occupation tax agency
  - Local wage tax agency
  - State income tax bureau
- Other pensions and benefits:
  - Support Enforcement
  - Employer's records
  - Union records
  - Workmen's Compensation
  - Veterans Administration
  - Lawyer's records
  - Insurance company records
  - Lodge, club, or fraternal organization records
  - Personal or income tax records
  - Railroad Retirement Board records
  - United Mine Workers (Black Lung Benefits)
  - Social Security Administration
  - Support Enforcement Parent Locater Service
- Other sources of income:
  - Rent receipts of tenant, roomer, or boarder
  - Receipts, agreements, leases of person(s) paying monies to client under this element
If an applicant claims zero income:
- Verify applicant's claim of zero income by accessing the DSHS Benefits Verification System (BVS), or obtaining a statement from their previous employer; and/or
- Obtain a brief statement signed by the applicant on the Zero Income Declaration Form on how basic living costs (food, shelter, utilities, etc.) have been met for the past three months.
  
  SEE: Exhibit 1.1.1 (D): Declaration of No Income