Attachment I (Accessible PDF).pdf

ETA Advisory File Text

Attachment I to TEGL 18-16 Change 2 I-1 Included Income Excluded Income and Examples of Methods to Calculate Income Tool Use this attachment in conjunction with TEGL 18-16 Change 2. The definition of a low-income individual under the Workforce Innovation and Opportunity Act WIOA Section 3 36 does not exclude unemployment compensation this includes Pandemic Emergency Unemployment Compensation Pandemic Unemployment Assistance and Extended Benefits old-age survivors insurance benefits or child support payments from income calculations as they were previously excluded under the Workforce Investment Act WIA Section 101 25 . ETA used the U.S. Department of Labor s Bureau of Labor Statistics definition of income to develop this tool. 1 This tool aims to increase NFJP grantees understanding of what types of income would count towards the income requirement to qualify for NFJP and provide examples of methods to calculate income. A. Examples of the types of income that could be included when making eligibility determination based on income are outlined in the table below. Included Income Income Earnings before Taxes Wages and salaries 2 Self-employment income Social Security Old-Age Survivors and Disability Insurance private and government retirement Interest dividends rental income and other property income Unemployment and workers compensation and Regular contributions for support alimony and child support Please note the term regular for this source of income. If an individual is a parent and cannot rely on receiving contributions such as child support grantees may consider this when calculating income. Important to Know When gathering information about an individual s income please note that some types of Federal State or local income- based public assistance may automatically qualify someone as low- income. For example under WIOA Section 3 36 A i an individual meets the low-income eligibility when they receive or in the past 6 months has received or is a member of a family that is receiving or in the past 6 months has received assistance through the supplemental nutrition assistance program SNAP established under the Food and Nutrition Act of 2008 7 U.S.C. 2011 et seq. the program of block grants to States for temporary assistance for needy families program TANF under part A of title IV of the Social Security Act 42 U.S.C. 601 et seq. or the supplemental security income SSI program established under 1 https www.bls.gov cex csxgloss.htm 2 https www.bls.gov bls glossary.htm Attachment I to TEGL 18-16 Change 2 I-2 title XVI of the Social Security Act 42 U.S.C. 1381 et seq. or State or local income-based public assistance Additionally per WIOA Section 3 50 the term public assistance means Federal State or local government cash payments for which eligibility is determined by a needs or income test. State or local income-based public assistance payments which includes but is not limited to the following type of assistance Utility Child care Nutrition Housing B. Examples of types of income that could be excluded when making eligibility determination based on income are outlined in the table below. When calculating income do not include any allowance earnings or payments stemming from participation in WIOA Title I programs. Per 20 CFR 683.275 d allowances earnings and payments to individuals participating in programs under title I of WIOA are not considered as income for purposes of determining eligibility for and the amount of income transfer and in-kind aid furnished under any Federal or Federally- assisted program based on need other than as provided under the Social Security Act 42 U.S.C. 301 et seq. . Excluded Income Volunteer Job Training Payments Allowances earnings and payments to individuals participating in programs under title I of WIOA Any payment to volunteers under Title I VISTA and others and Title II RSVP foster grandparents and others of the Domestic Volunteer Service Act of 1973 Payments to volunteers under Section 8 b 1 B of the Small Business Act SCORE and ACE and Payments and allowances to individuals participating in AmeriCorps to the extent excluded by the National and Community Service Act of 1990. Student Financial Aid Student financial assistance received under Title IV of the Higher Education Act of 1965 including the Pell Grant Supplemental Education Opportunity Grant State Student Incentive Grants National Direct Student Loan PLUS College Work Study and Attachment I to TEGL 18-16 Change 2 I-3 Byrd Honor Scholarship Programs to the extent excluded by the Act and Payments received under the Carl D. Perkins Vocational Education Act as amended by the Carl D. Perkins Vocational and Applied Technology Act Amendments of 1990 P.L. 101-392. Military Service- related Income Any amounts received as military pay or allowances by any person who served on active duty and certain other specified benefits paid while on active duty or paid by the Department of Veterans Affairs VA for vocational rehabilitation disability payments or related VA-funded programs are not to be considered as income in accordance with VA Title 38 U.S.C. 4213 and 20 CFR 683.230. For additional information about assisting Veterans please see Training and Employment Guidance Letter NO. 10-09. All pay and or financial allowances earned while a veteran was on active duty are exempt. Title 38 U.S.C. 4213 also exempts from inclusion in low income calculations any financial benefits received by a covered person under the following Chapters of Title 38 of the U.S. Code 11. Compensation for service-connected disability or death. 13. Dependency and indemnity compensation for service- connected deaths. 30. All-volunteer force educational assistance program. 31. Training and rehabilitation for veterans with service-connected disabilities. 35. Survivors and dependents educational assistance. 36. Administration of educational benefits Also excluded from low income calculations are benefits received under Chapter 106 of Title 10 U.S. Code Educational assistance for members of the selected reserve. Note Pension payments authorized by Title 10 U.S. Code such as those received by military retirees whether or not their retirement was based on disability are not exempt and are to be included in low income calculations. Also not exempt are pension benefits paid under Chapter 15 of Title 38 U.S. Code. Attachment I to TEGL 18-16 Change 2 I-4 Lump sum payments Lump sum payments or large cash settlements are not counted as income since they are not received on a regular basis. These funds may be provided as compensation for a loss that must be replaced such as payment from an insurance company for fire damage to a house. Note When lump sum payments are put into a savings account and the household regularly draws from that account for living expenses the amount withdrawn is counted as income. C. Examples of Methods for Calculating Income MSFWs experience earnings fluctuations throughout the year due to the nature of working in the agriculture industry. Determining whether an individual meets the low-income requirement by gathering source documentation for the past 12 months may be challenging and may distort an individual s financial circumstance at the time of application. NFJP grantees have the discretion to develop policies outline methodologies and select a method that annualizes an individual s income in a way that reflects the financial circumstances of an individual at the time of application. Grantees must document any changes in wages and salaries and document the reason they chose a specific method to annualize an individual s income. When calculating an individual s family income under WIOA Section 3 36 A ii grantees may use one item from the source documentation list for the Participant Individual Record Layout PIRL Data element 802 in Attachment II of TEGL 23-19 Change 2. NFJP grantees have the flexibility to use different methods for calculating income and should use a method that considers an individual s current income. Methods to annualize income are not limited to but may include the following approaches below. When annualizing an individual s income grantees must also include other sources of income that are listed above Net Income or Gross Income. Depending on the type of source documentation that an applicant provides a grantee may have access to an individual s net income or gross income information. To encourage flexibility and allow grantees to use the full list of source documentation while balancing consistency ETA recommends that grantees use the net income to calculate an individual s family income if it is available. However if the net income is not available grantees may use the gross income when calculating an individual s family income. 1 All methods must be aligned with the grantee organization s policies and procedures. Note Gross usually refers to total earnings before any deductions such as tax withholding including where applicable overtime payments shift differentials production bonuses cost-of- living allowances commissions etc. See definition at https www.bls.gov bls glossary.htm earnings. Net refers to total earnings after any deductions. Attachment I to TEGL 18-16 Change 2 I-5 under section A of this tool. The examples below demonstrate three different ways to calculate an individual s wages. The methods only reflect income calculations to determine an individual s eligibility for NFJP. Salary Method Use this method for individuals who have pay stubs or other source documentation covering the most recent 6 months of their family s wages. Grantees should use this method when there is little or no variation in the wages or salaries for any of the pay stubs submitted for income verification. To calculate an individual s annual income based on wages or salaries first multiply the pay listed on the paystub or source documentation by the number of pay periods in the six-month determination period. Next multiply the result by two to determine the annual wages or salaries. Example Five pay stubs are provided indicating wages of 772 each. The pay frequency is biweekly 13 times in six months . 772 13 10 036 2 20 072. Average Pay Method Use this method for individuals who have six monthly bank statements or other source documentation which show variation in the individual s wages. These variations may result for several reasons including overtime or work for a different employer. In circumstances where variation exists grantees can determine an individual s average wages by adding the total wages and dividing the result by the number of monthly bank statements. Example an individual shows bank statements from the most recent 6 months. The bank statements for 6 months show the following monthly income 770 290 490 490 490 and 490. The total income for the individual for 6 months is 3 020. To calculate the monthly average divide the result by 6. Then to calculate the individual s annual income from wages multiply the month average 503 by 12 to calculate annual income 503 12 6 040 . Intermittent Work Method Use this method for individuals who have irregular income or are self-employed. In circumstances where the individual does not have steady work the grantee should ask the individual to supply as many pay stubs or other source documentation as possible. To determine average wages use the individual s income from the prior month. When using the Intermittent Work Method the grantee must explain missing pay stubs non-work periods etc. and selected method in their case notes. Grantees should use any information that an individual submits to calculate annual income. NFJP grantees have the discretion to develop policies outline methodologies and select a method that gives a result that reflects the financial circumstances of applicants at the time of application. For example if the Salary Method provides a more accurate reflection of an individual s current income use the Salary Method to calculate annual income. If using the Intermittent Work Method with source documentation for the prior month s income provides a more accurate reflection of an individual s current income this method may be used as a basis for calculating annual income. ETA recommends NFJP grantees to work with their AJC and other local or state agencies that provide income-based public assistance to learn about other methods to calculate annual income for example energy assistance medical assistance child care assistance or community development block grant assistance .