Treatment

Revised December 28, 2020

Purpose:

This section contains general rules and procedures to decide if a type of income is excluded and disregarded, unearned, or earned.

WAC 388-450-0015  What types of income are not used by the department to figure out my benefits?

WAC 388-450-0025  What is unearned income?

• Clarifying Information and Worker Responsibilities

WAC 388-450-0030 What is earned income?

• Clarifying Information and Worker Responsibilities

Clarifying Information - WAC 388-450-0025 & WAC 388-450-0030 

See also Treatment of Income Chart.

Worker Responsibilities - WAC 388-450-0025 & WAC 388-450-0030

1. Ongoing Assistance from Volunteer Agency (VOLAG)

   Only exclude one-time refugee resettlement payments from VOLAG assistance.

   Some refugees receive ongoing benefits through the Matching Grant Program. Because federal law doesn't specifically exclude these ongoing payments, we must count this as assistance from another agency or organization under WAC 388-450-0055.

2. Adoption support is money given to families that adopt children with special needs and intended to help the family with the special expenses that these children have.
   
   1. For cash,  we exclude this money because it is needs-based assistance from another agency that doesn't cover ongoing living expenses. See WAC 388-450-0055 for more information.
   2. For Basic Food, we must count adoption support as unearned income.

3. Annuity

   For Basic Food and Cash: Count payments and interest received from an annuity as unearned income.

4. Bona fide loans

   Exclude bona fide loans for all programs. If a loan isn't bona fide, count the money someone receives as unearned income for the month they receive it. Determine if a loan is bona fide by getting proof of the loan details. Follow normal income verification processes.

Examples of proof that a loan is bona fide include:

1. When the loan is through a bank, credit union, or other institution that loans money as a part of their business:
   
   1. A copy of the formal loan agreement; or
   2. A written agreement to repay the money within a certain timeframe; and
   3. Proof that the money came from a person or business that loans money.
2. If the money is from a person or business who doesn't normally loan money, proof to show:
   
   1. That the borrower understands they must repay the loan either with or without interest;
   2. The borrower’s intent to repay by promising real property, personal property, or anticipated income; or
   3. A timetable and plan for repayment with details of the plan to repay the loan when the person receives the anticipated income.
3. If there isn't a formal written loan agreement, accept a written or verbal statement from the borrower and the lender about the terms of the loan. Request additional verification if the proof is questionable.

5. Child Support payments:

Budget all anticipated child support payments.  Workers can use SEMS to look at both the Disbursement History (DH) and Case History (CH) screens.  It will also be necessary to review the Case History (CH) screen in SEMS to determine if we can anticipate any arrears payments assigned to the custodial parent (shown in the Arrears (CP) column).

Budgeting For Basic Food: If the assistance unit receives food but not TANF, budget all anticipated child support payments.

• Code any child support arrears payments paid to the CP as “DP” as Unearned Income for the parent
• Code any current child support payment as "DC" as Unearned Income for the child..

Budgeting For TANF:

• During application, code any current child support payments already received in that month as DC. 
• When TANF is approved, don’t anticipate any current child support payments (DC) in ongoing months.  The household won’t receive current support, unless the TANF grant goes into suspense (this happens when the TANF grant is $0). See Income Special Types.
• Code arrears payments made to the custodial parent/caregiver as unearned (DP) for TANF.
• Effective February 1, 2021, code any child support pass-through payments as “CP” on the child’s unearned income screen.

6. Child Support Pass-Through payments: Starting February 1, 2021, each month Division of Child Support (DCS) collects child support, they will send TANF households:

• Up to $50 each month if the TANF AU includes one child, and
• Up to $100 each month if the TANF AU includes two or more children.

This child support sent to the TANF household is called a pass-through payment. The amount of the pass-through payment will not be more than DCS collects during that month.

Pass-through payments do not affect TANF/SFA grants. However, these payments must be budgeted for Basic Food.  Workers can use SEMS to look at both the Disbursement History (DH) and Case History (CH) screens.  If you use the “CP” valid value, this income will be budgeted correctly for Basic Food and exempt for TANF.

7. Court-ordered payments: Count payments, other than child support, made to someone by order of the court as follows 
   
   1. If someone receives the money as a one-time payment, count this as a lump-sum payment.
   2. If they will receive more than one payment, count the payments as unearned income.

8. Dividends and interest

Dividends

Count dividends as unearned income for the month we anticipate people will receive them.

Interest

1. Count interest income as unearned income unless the interest is earned on:
   
   1. Individual Development Accounts under WAC 388-470-0045. Exclude interest earned on IDAs; or
   2. Native American benefits excluded under WAC 388-450-0040. Exclude interest earned on benefits excluded under WAC 388-450-0040.
2. Give people the choice of whether you:
   
   1. Budget the income for the month you anticipate they will receive it; or
   2. Prorate the income over their certification period.
3. If we learn about someone’s unreported interest income and they were required to tell us about it, we count the interest as income for the month they got it.

9. Foster care maintenance payments
   1. For TANF/SFA:
      
      1. Exclude any unlicensed foster care assistance when the placement is temporary for less than 180 days, or
      2. When the child is listed in the AU as a non-recipient with a needy non-parental relative. See WAC 388-408-0025.
   2. For Basic Food:
      
      1. If the AU includes the foster child, count the foster care maintenance payment as unearned income to the AU; or
      2. If the AU doesn't include the foster child, exclude the foster care maintenance payment. See WAC 388-408-0034 & WAC 388-408-0035.

10. Funds for shared household costs

    1. When someone holds money for another person's personal obligation such as a car payment, credit card, or auto insurance, treat the money for the other person's obligations as funds held for the other person.
    2. When someone receives money for another person or family's share of household costs, we exclude this money using the table "When We Exclude Money For Shared Household Costs ".

11. In-kind Income

    1. For cash assistance: When someone works for something of value other than cash, count the value of the item they receive as earned income. People receive earned income in kind when they work in exchange for things like:
       1. Rent;
       2. Furniture;
       3. A car; or
       4. Any other item of value.

2. For Basic Food: Exclude in-kind income unless someone diverts the person’s available income to an in-kind source. If someone diverts income to in-kind source, we count the diverted funds as income to the AU. There is no requirement to verify income-in-kind for Basic Food unless we are counting income diverted to an in-kind source. See Vendor payments below for more information and examples regarding diverted income.

12. Joint Bank Accounts
    1. When someone has a joint bank account or holds funds for someone else, decide how much of the money belongs to them. See Worker Responsibilities of INCOME - Ownership and Availability to decide how much of the money belongs to them.
    2. If the person uses more than their share of the money in the account, count the money the person uses above their share as unearned income to the AU.

13. Military Pay

    1. Count the following allowances as earned income:
       1. Basic allowance for housing (BAH), living off-base;
       2. BAH with on-base housing when BAH is listed under pay then deducted; and
       3. Basic allowance for subsistence (BAS).
    2. Exclude the following allowances or in-kind benefits:
       1. Clothing maintenance allowance (CMA);
       2. Base housing or barracks (with no BAH listed on pay statement);
       3. Meals; and
       4. Reimbursement or an allowance for transportation or moving costs.
    3. Advance pay:
       1. Count advance pay as earned income for the month someone receives the income, unless requested for travel.
       2. If someone asked for advance pay for travel, exclude the amount that is to reimburse actual travel expenses. Count any excess as earned income for the month they will receive it.
    4. Count enlistment and re-enlistment bonuses as earned income for the month the person will receive it.

14. Military Income– Special and incentive pay received while serving in a combat zone.

    For Cash and Basic Food, we exclude additional pay members of the armed forces receive for deployments in a designated combat zone. 

    Military personnel in a combat zone are not members of the assistance unit, but may give income to people in the AU. If an AU receives income from an armed service member serving in a combat zone, decide how much income to budget as described below:

    1. First, determine the amount of money the service member made available to the AU before being deployed to a designated combat zone;
    2. Second, determine the amount of money the service member now makes available to the AU after being deployed to a designated combat zone; and
    3. Last, determine how much of the service person's military pay we must count as income to the AU:
       1. Before deployment to a combat zone: If the amount of military pay the service person makes available to the AU after deployment is equal to or less than before they were deployed to a combat zone, count the income currently made available to the AU as income for cash and food benefits.
       2. After deployment to a combat zone: If the military pay the service person makes available to their family is greater since being deployed to a combat zone , exclude the additional income for cash and food benefits

15. Money received for an absent or non-household member
    1. Exclude income the AU receives for the care and maintenance of an absent or non-household member as long as the AU doesn't keep the income. Examples of income for absent or non-household members include:
       1. CPI payment for a member of a multi-person grant;
       2. Child support the AU receives for a child that is temporarily out of the home or not on the TANF grant;
       3. Child support for an ineligible child;
       4. SSI benefits for a couple when one of the spouses is in a nursing home; and
       5. SSDI paid to a relative as the protective payee.
    2. If the AU keeps a portion of the income, count the portion the AU keeps as unearned income for the month they receive the income and as a resource in the next month.

16. Money withheld for repayment

    If people have money withheld from their benefits to recover an overpayment from the same income source, exclude the amount withheld from their gross benefit. Count the net benefit amount as income to the AU.

    • For Basic Food: If the money is withheld due to an intentional violation of a federal or state means-tested program, count the amount withheld to recover the benefit as unearned income. Count the gross benefit amount as income to the AU. Some means-tested programs include TANF, GA -U, and SSI.

17. Real estate / mortgage sales and contracts
    1. When someone sells real estate that they owe money on under a mortgage or contract, and they carry the contract for the new buyer, count the proceeds from the sale as unearned income for all programs after you subtract any amount paid for:
       1. Insurance;
       2. Property taxes; and
       3. Interest on the prior purchase.
    2. For cash assistance, look at the value of the contract to decide if the AU is eligible for benefits:
       1. If the value of the contract puts the AU over resource limit, the AU is ineligible for benefits.
       2. If the total resources are below the resource limit, the AU is resource eligible for benefits. Count payments from the contract as unearned income.

18. Reimbursements for out-of-pocket expenses

    Exclude money to reimburse a person's past or future out-of-pocket expenses. These payments are not a gain to the household. Examples of some reimbursements we exclude as income are:

    1. Work or training expenses;
    2. Title XX services (such as CHORE services); and
    3. HUD and FMHA utility allowances.
       
       NOTE:

       For health insurance reimbursements, see THIRD PARTY LIABILITY and LUMP SUM PAYMENTS.

19. Sanctions - Impact on Basic Food benefits

    When we sanction an active TANF/SFA or ABD cash case for failure of someone in the assistance unit to meet program requirements, we count the entire grant the AU would receive if they weren't in sanction. This prevents the assistance unit from receiving more Basic Food benefits because of the sanction.  This rule doesn't apply to individuals who fail to perform the required action at the time of application for cash benefits or at time of recertification for the cash benefits.

    If a TANF / SFA or ABD cash case terminates while still in sanction status, we stop budgeting the grant against the Basic Food benefits as they no longer receive public assistance.

20. Vendor or third party payments

    For cash assistance or Basic Food, we exclude:

    1. Support payments made directly to a third party for a household expense when:
       1. There is no court order for support; such as a separated parent paying the house payment of the parent still in the home when there is no court order; or
       2. The payment is more than the court-ordered amount. For example, an absent parent pays $50 over the court-ordered support to the landlord.
    2. Third-party payments as income when a payment:
       1. Is specifically directed to be paid to a third party;
       2. Doesn't pass through the assistance unit's control at any point; and
       3. Isn't otherwise payable to them.

For Medical, the exclusion only applies when the payment is inherent in the cost of obtaining the source of income the payment applies to, regardless of whether or not they make the payment directly.

For Basic Food and cash benefits, count money that is legally obligated and payable to the household but has been diverted to a third-party as income to the AU. Count the diverted payment as:

1. Earned income if the household diverted employment or self-employment income;
2. Unearned income if not earned by employment or self employment.

For Basic Food only, this does not include in-kind income that is not otherwise payable to the household.

21. Bonus or training incentive paid to childcare providers by the Department of Early Learning

    The Department of Early Learning’s collective bargaining agreement with childcare providers includes bonus payments for some providers who receive benefits from the department. We treat these payments as described below:

    $250 Bonus for exempt providers who become licensed family home providers.	Counted as earned income for Cash and Basic Food.
    $600 Financial Incentive for License exempt providers who received at least 10 hours of approved training.
    $200 Bonus for Exempt providers - Reimbursement of up to $200 for tuition costs or approved training.	Excluded.

    NOTE:

    Because we budget prospectively based on the income we expect a household to get for the month, we often won't learn about the bonus soon enough for it to impact benefits for the month the household will receive it.

22. Selling Personal Items

    1. Selling personal property as a necessity to pay living expenses isn't countable income. We would consider these payments as non-recurring lump sum payments. Any money remaining the client has in the following month would be a countable asset.
    2. We consider buying and selling items for a profit, as a regular venture, countable self-employment income if we can reasonably anticipate that this source of income will continue beyond the next 30 days.
    3. We consider selling any item for a profit and receiving regular payments for that item instead of a lump sum payment unearned income as long as the payments continue.

ACES PROCEDURES

See Interview - (EARN) Earned Income Screen

See Income Eligibility and Budgeting