TANF: Earned Income Disregard Scenarios

  1. Cindy Lou Horton receives a $292 cash assistance payment for a three person household.  She starts working and earns $700 per month.  After applying the $240 work related expense and $230 one half remainder earned income exemptions, the recipient remains eligible for a $62 cash assistance payment ($700 – $240 – $230 = $230.  $292 – $230 = $62).  Since she remains eligible for TANF, she is not eligible for the earned income disregard.
  2. Cindy Lou Horton receives a $292 cash assistance payment for a three-person household.  She begins earning $1950 per month on June 5, 2015.  After applying the earned income exemptions, $1950 – $240 = $1710 ÷ 2 = $855, is ineligible for TANF.  Since her earnings are less than $2064 and she has not received an earned income disregard within the most recent 12-month period, her earnings are disregarded for three months. The worker initiates the 3 month earned income disregard.   The disregard period is July, August, and September 2015.
    • On July 8, 2015, Cindy Lou Horton reports she lost her employment on July 3, 2015, within the first month of the disregard period.  Since it is before deadline, the worker removes the earned income for the next effective date (August 1, 2015). Because she can only receive the 3 month earned income exemption once in a 12 month period, the remaining months (August and September) are now forfeited. She will not be eligible again for the 3 month earned income disregard until July, 2016.
      Next Steps:As Cindy Lou’s worker followed procedure and had her sign a TW-2 when she began her employment, the worker must now determine if good cause exists for loss of employment.  If it was determined she did have a good cause reason for the loss of employment, the worker will need to get her placed in a new component as quickly as possible.  Using FACS, the worker will remove the earned income from the case.  If good cause does not exist, then the worker will follow the sanction process by closing the case on 52A and require the sanction to be cured prior to reopening the case. 
    • Cindy Lou Horton obtains a new job on September 8, 2015, with monthly earnings of $900.  $900 – $240 = $660 ÷ 2 = $330 that exceeds the TANF payment standard of $292 for a three-person household.  Because Cindy Lou is not eligible for a new disregard period until July 2016, the recipient’s TANF benefit closes the next effective date for excess earnings (Reason code 03).
    •  Cindy Lou loses her employment, reapplies, and is certified for TANF in January 2016.  In May 2016, she obtains new employment earning $1500 per month.   $1500 – $240 = $1260 ÷ 2 = $630.  Because Cindy Lou’s countable earnings exceed the $292 TANF payment standard and she is not eligible until July 2016, for a new earned income disregard period, her TANF benefit closes the next effective date.
  3. Sheldon Cooper applies for TANF for himself and two children in August 2015; he is currently employed and earns $900 per month. $900 – $240 = $660 ÷ 2 = $330 that exceeds the TANF payment standard of $292 for a three-person household and his application is denied.  Because Mr. Cooper is an applicant and not a recipient, he is not eligible for an earned income disregard.
  4. Penny Hofstadter receives a $292 cash assistance payment for a three-person household.  She obtains a job earning $3,000 per month.  Penny is not eligible for an earned income disregard because she earns more than $2,064 per month.
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