Getting the Whole Story

PAY stubs provide you with a lot of information about a client’s income, but they don’t always yield up their secrets without a little effort on your part. Here are some valuable tips on getting the important information you need.

Check Stub Identification

Make sure there is enough information on the check stub to identify both the employer and the employee.

Rate of Pay

Check all of the pay stubs a client gives you to determine if the rate of pay has changed. Increases in the rate of pay can easily be overlooked if the rate of pay is not listed on the pay stub.

Hours Worked Per Pay Period

Compare the hours worked on all pay stubs. Look for variances. Explain and
document any unrepresentative pay.

Year-to-Date (YTD)

Use the YTD figure to compute the amounts of missing pay stubs. Be sure to verify if there have been hourly rate changes during this period. You can also use this information to see how long an employee has been on the job.

Check Date

In months where actual pay is considered, it is important to know when a check was received. “Pay Period Ending” dates may not be the same as the date the check was issued. This can help you determine the frequency of pay as well.

Gross Income

Use only the gross income, not net pay. Gross pay can include such items as holiday pay, sick pay, overtime, bonuses, and tips.

Overtime

Compare hours of overtime on all pay stubs. Determine if there is a pattern. Never completely disregard a pay stub with infrequent overtime. You will need to document why you don’t want to use the overtime, but you’ll still need to use the regular pay to compute income.

Bonus

Determine how often a bonus is received. Do not consider a bonus as future earnings unless the bonus is expected to be received during the certification period. If a bonus is predictable or expected, it should be counted in the month of receipt or averaged over the period of time it covers.

Tips

Determine if the tips received are allocated or an actual amount received. Do not consider allocated tips as income. Obtain the actual amount received by the client. The tips recorded on a pay stub may or may not be actual. Document what the client tells you in regard to tips.

Reimbursements

Reimbursements are not counted as income. Reimbursements are typically given for such items as mileage, uniform allowances, tool allowances, per diem and so forth.

Garnishments

Garnishments are considered as part of the client’s income. You should determine what the garnishment is for, as it could be for court ordered child support.

Earned Income Tax Credit (EIC or EITC)

This is exempt income for all programs.

Flexible Benefits

If the client has no choice concerning medical benefits, do not count money provided to cover insurance as income. If the client has a choice and can receive money added to the paycheck if the amount allocated is not fully spent, count the money added as income.

Partial vs. Full Pay Periods

A partial pay period should never be used in determining anticipated income when it is the employee’s first paycheck. They can be used for the actual income amounts during an initial application, but don’t use them for projecting future earnings.Always use full pay periods in determining future earnings.

Representative Pay

Does the client consider the pay as representative of future earnings? Explain absences, days missed, illnesses, and so forth, in terms of whether they may be anticipated to reoccur during the benefit period.Remember many clients have irregular and fluctuating income. When you interview the client about income, try to get as clear a picture as possible regarding the likelihood of the income being received in the future. If so, when is it likely to reoccur? Is there any way to predict its receipt?

Check The Back

The back of the pay stub may have additional information such as codes that explain information included on the pay stub.

Highlight

Highlight important information on the pay stub copy. This will help you locate it when you need it.