340:50-7-46 (C)(2) and ITS #7

When households derive their annual income by contract or self-employment in a period of time shorter than one year, the worker annualizes the income over a 12-month period.

School employees are generally all contract employees, however they are not all paid a salary, and some are hourly employees. It is important to know if the employee is a salaried employee or an hourly paid employee to correctly determine monthly income. It is also important to know if they have any excess benefit allowance that needs to be added to their monthly income.

Salaried Employees:

If the employee is salaried, we must use the contract amount divided by 12 and add any excess benefit allowance to arrive at the countable monthly income. This amount continues to be considered even in months they may not get a paycheck as long as they remain employed with the school.

Hourly Employees:

Hourly employees will have their income computed using the past 30 days of representative check stubs. Be sure to include any excess benefit allowance in the computation of the monthly income. For hourly employees who do not work during the summer, it is important to remove the income from the case when they report they are no longer being paid.

Duration of Contract:

For those school employees who receive their June, July and August paychecks at one time, we continue to count the amount determined by the appropriate method as described above. If they will no longer be employed and receive their June, July and August pay checks at one time, they are all counted in the month received as a non-recurring lump sum.

Example 1:

Client is a school employee and receives an $85 benefit allowance each month shown in her regular paycheck. This allowance is to be used to purchase health insurance. There is no cost of insurance shown on any of the client’s check stubs. Would this be considered earned income?

You count any money the client has left after they purchase insurance, whether they are required to purchase the insurance or not. This purchase includes employee and dependent health/dental, life, disability, vision, and accidental death and dismemberment.

Example 2:

Client works for the school system as a cafeteria worker. She is on a contract salary for 10 months of the year. Do I take the contracted amount and divide it by 12 month or by the 10 months to determine the client’s monthly income? The client only gets her check for 10 months.

In instances of a contract salaried employee, you should divide by 12 months rather than 10.

Example 3:

Client is employed with the local school district, but is not paid during the summer. She states she works in the cafeteria and is paid hourly and not salary. We verified with the school she is an hourly contract employee. How do we consider her income during the summer?

Since she is an hourly employee, we would only count her income during the months she is actually receiving it. We would not count it during the summer.

Example 4:

The client is a teacher at the local elementary school and says she was given her June, July, August checks the first of June. She says she will be still working there in the fall. How do we count this income?

Since her job is ongoing, we would consider her salaried contract amount over the entire year even though she received those 3 checks at one time. If this were terminated income we would count it all in the month received.

Example 5:

Client is employed with a school district. She has signed a seven month contract for the school year. How is the income considered? Do we still average over the 12 months?

No. This is a situation where we’d use just the contract timeframe or 7 months to calculate the average monthly income. Since the contract was signed later in the school year, we use the actual time the contract indicates.

Example 6:

Client is a substitute teacher for the public school district. She is not regular employee; she picks up shifts here and there as she is also a part time college student. How is this income considered?

We would use the irregular income scenario to calculate income. See Income – Daily Pay and Using MICAL | Quest (oucpm.org).

Example 7:

Client is a substitute teacher with the school district. She is long-term substituting for a teacher who is on maternity leave. After the school employee comes back, she plans to continue long term substituting. How is her income calculated?

We would treat her pay as an hourly employee. We would request 30 days of income for the school district. If that is not representative of her income, we may request up to 60 days.