Tenn. Comp. R. & Regs. 1240-01-04-.14

Current through October 22, 2024

Section 1240-01-04-.14 - DEFINITION OF INCOME

Household or Aid Group income shall mean all monies from whatever source, earned or unearned, except the exclusions listed in 1240-01-04-.15.

(1) Earned Income. Earned income is income which is derived from the work efforts of an individual as wages, salaries, commissions, or as profits from self-employment enterprise, including farming, carried on either alone or jointly. It includes bonuses, vacation pay, pay received while on maternity leave and sick pay when mandatory deductions are made. Garnished or diverted wages, etc. are also considered in determining gross earned income. The following types of income are considered earned income:

(a) Wages, salaries, commissions

(b) Profit from self-employment enterprise such as the following:

1. Farming

2. Small business enterprises

3. Roomer/boarders

4. Rental Receipts

(i) Food Stamps Only - If an owner of rental property is actively engaged in the rental, maintenance, management of property at least 20 hours per week, the income from the property is earned.

(ii) AFDC Only. Rent receipts from property owned/being purchased by an individual/ family when the owner/purchaser is actively engaged in the production of the income are earned income.

5. Total gains of any capital goods or equipment related to the business, excluding the costs of doing business.

(c) Training and Rehabilitation Allowances

1. Food Stamps Only. Training allowances from vocational and rehabilitative programs sponsored by federal, state or local governments such as Work Incentive Program are considered earned income unless the allowances are excluded.

2. AFDC Only. Any wages paid for on-the-job training or public service employment are earned income, except JTPA earnings of child recipients. Training allowances and incentive payments in WIN and JTPA projects are excluded as income.

(d) Earned Income Tax Credits.

(e) Severance Pay (AFDC Only). Severance pay is considered earned income for AFDC.

(f) College Work Study Program as Earned Income.

1. Food Stamps Only. Allowable educational expenses [as defined in §§1240-01-04-.15(1)(k) 1(i) and (iii)] are excluded. All other work study amounts are considered earned income.

2. AFDC Only. The excess over tuition and mandatory fees (i.e., fees charged all students within a certain curriculum) is considered earned income subject to earned deductions (i.e., work expense allowance, child care expense, and $30 and 1/3 disregard, if applicable).

(g) Vacation Pay (Food Stamps Only). Vacation pay received in more than one installment, when mandatory deductions are applied.

(h) Food Stamps Only. Earnings to individuals who are participating in on-the-job training programs under the Job Training Partnership Act (JTPA) and who are age nineteen (19) or older, or under age nineteen (19) and not under parental control of another adult household member.

(2) Unearned Income. Unearned income is any income which does not meet the definition of earned income. No earned income exclusions or work expense deductions may be applied to unearned income as defined. The following payments are considered unearned income (this list is not all inclusive):

(a) Scholarships, educational grants, fellowships, deferred payment loans for education, veteran educational amounts and the like, in excess of amount excluded in 1240-01-04-.15 are considered unearned income.

(b) Unemployment Compensation and Workmen's (workers) Compensation-Food Stamp/AFDC.

(c) Strike Benefits.

1. Food Stamps. Strikers are eligible to participate in the program if they meet all eligibility requirements prior to the strike and their deemed income from the strike site, plus any other household income, does not exceed the appropriate income limit. For specific information regarding strikers, refer to § 1450-01-32.

2. AFDC. A parent on strike on the last day of a month renders the entire family ineligible for AFDC. Any other individual on strike on the last day of a month causes ineligibility for the individuals.

(d) Vacation and sick pay and bonuses are considered unearned when mandatory deductions are not made.

(e) Certain Rental Income.

1. Food Stamps Only. If an owner of rental property is actively engaged in the rental, maintenance, management of property at least 20 hours per week, the income from the property is earned. If he/she is actively engaged less than 20 hours per week, the income is unearned. In either case costs of doing business are deducted from gross income and the remainder is counted.

2. AFDC Only. Rental income is considered unearned if the individual is not actively engaged in producing the income. Income derived from rental property is considered as earned income if the individual(s) is/are actively engaged in producing such income. The amount of time the individual spends in producing such income is not a criterion for determining whether or not the income is earned or unearned. To be considered earned income, the individual must bear some responsibility in earning the income. This responsibility may include managerial. However, if the individual carries no specific responsibility in earning the income, such as where rental properties are in the hands of rental agencies, and the check is forwarded to the individual or where an individual rents farm land to others and receives a money payment, the income would not be classified as earned income. The cost of doing business is an allowable deduction regardless of whether the income is earned or unearned.

(f) Interest payments, dividends, royalties, interest and all other direct money payments which can be constructed to be a gain or benefit are considered income. If such payments are received on a weekly, bi-weekly, semi-monthly or monthly basis, they will be converted to monthly amounts and considered as currently available regular income. If such payments are received quarterly, they will be prorated over three months; semi-annually, prorated over six months; annually, prorated over 12 months AFDC/Food Stamps.

(g) Assistance Payment.

1. Food Stamps/Cash Assistance. AFDC (or its successor program(s)) payments, general assistance payments, SSI payments, pensions and/or other assistance payments based on need which are not excluded are considered unearned income.

2. Cash Assistance Only. AFDC (or its successor program(s)) payments and SSI benefits are not considered as income.

3. Food Stamps Only. When a Federal, state, or local needs-based payment is reduced because of a household member's intentional failure to comply with the requirements of that program, for the duration of that benefit reduction the household may not receive an increase in food stamp benefits because of their decrease in income.

(i) The food stamp allotment of the household shall be reduced by 20 percent so long as the needs-based program's reduction is in effect.

(h) Rehabilitation Payments. AFDC Only - Payments for rehabilitation made under Services to the Blind or Vocational Rehabilitation or other such programs are unearned income. Costs directly associated with a rehabilitation program and borne by a client are deducted from the gross payment and the remainder is income.

(i) Pensions and Benefits. Food Stamps/AFDC - Annuities, pensions, retirement, veterans, or disability benefits, Social Security benefits, military or Job Corps allotment and other such pensions and benefits are counted as unearned income.

(j) Support and Alimony. Food Stamps/AFDC - Support or alimony payments from non-household members made directly to the household and not transferred to the IV-D agency are considered as unearned income.

(k) Contributions.

1. Food Stamps Only - Any regular cash contribution made to the household is unearned income.

2. AFDC Only - Any regular cash contribution, other than from an absent parent, made to the assistance unit and not used for a designated expense of the contributing person is unearned income.

(l) Monies from Trust Funds.

1. Food Stamps Only. Monies which are withdrawn or dividends which are or could be received by a household from trust funds considered to be excludable resources under 1240-01-04-.15 are considered as income. Such trust withdrawals shall be considered income in the month received, unless otherwise exempt under the provisions of 1240-01-04-.15 of this section. Dividends which the household has the option of either receiving as income or reinvesting in the trust are to be considered as income in the month they become available to the household unless otherwise exempt under the provisions of 1240-01-04-.15 of this section.

2. AFDC Only. Money withdrawn from the body of a trust or interest/dividends paid to an A/R are considered unearned income. Such monies are treated as regular income, annualized income, or lump sums as appropriate, depending upon frequency of receipt.

(m) Income of Excluded Household Members. The following procedures shall be used to determine the amount of earned or unearned income of an excluded household member which is attributed to the remaining household members:

1. Ineligible aliens. Individuals whose Citizenship is Questionable, and Individuals Disqualified for Failure to Comply with the Enumeration Requirements. The earned and unearned income of such excluded household members shall continue to be counted as income to the remaining household members, less a prorata for the excluded individual.

2. Individuals Disqualified for Intentional Program Violation. The earned and unearned income of such excluded individuals shall continued to be attributed in its entirety to the remaining household members.

(n) Foster Care Payments. Food Stamps Only - Foster care payments for children or adults are counted as income. Foster care services fees to the provider of foster care are also income.

(o) Severance Pay. Food Stamps Only - Severance pay is considered unearned income when received subsequent termination of employment.

(p) Payments under Title I (VISTA, University Year for Action, etc.) of the Domestic Volunteer Service Act of 1973 ( PL 93-113 Stat. as amended) shall be considered earned income and subject to the earned income deduction excluding payments made to those households specified in paragraph (h) of this section.

Tenn. Comp. R. & Regs. 1240-01-04-.14

Original rule filed August 15, 1980; effective September 29, 1980. Repeal and new rule filed December 10, 1981; effective January 25, 1982. Amendment filed August 17, 1982; effective September 16, 1982. Amendment filed May 17, 1983; effective June 16, 1983. Amendment filed December 2, 1983; effective January 1, 1984. Amendment filed September 19, 1985; effective December 14, 1985. Amendment filed November 6, 1987; effective February 28, 1988. Amendment filed February 12, 1988; effective May 29, 1988. Amendment filed April 4, 1997; effective June 18, 1997.

Authority: T.C.A. §§ 14-1-105, 14-8-104, 14-8-106, 14-27-104 and 14-27-106; PL 97-35 and 99-198 §1583; 7 CFR §273.8(e)(15)(h)(1)(iv), 273.9(b)(1)(v), 273.9(b)(2)(iv), 273.11(c); 45 CFR §233.20.