Earned income is cash or in-kind profit from activity that results from the client's work, service, effort, or labor. See Chapter 2 (Glossary) for full definition of Earned Income. Earned income includes:
· Wages/salaries (including overtime and bonuses if ongoing).
· Paid vacation or sick leave.
· Self-employment income.
· Severence pay based on accrued leave time.
· Payments from training programs at a rate at or greater than the state’s minimum wage. This means:
- If the training program pays a rate at or greater than the state’s minimum wage, all of the the income is counted.
- If the training program pays a rate under the state’s minimum wage, none of the income is counted.
· Other profit including:
- Uniform, mileage and meal allowances if federal income tax is deducted from the allowance.
- Fair market value of housing if housing is provided as part of total work compensation.
- Incentive payments from work or training programs.
- Military pay or wages for members of the United States armed forces. Pay earned while in a combat zone is not counted.
Gross earned income is income from employment prior to any payroll deductions. Gross earned income includes 401K contributions, all insurance premium payments on the pay stub and pre-tax medical/dental accounts. CCAP does allow for certain income deductions. See Chapter 6.18 (Income Deductions).
Unearned income is a payment a family member did not have to expend individual effort or labor to receive. See Chapter 2 (Glossary) for full definition of Unearned Income. Unearned income includes:
· Cash assistance benefits, including, but not limited to:
- Cash portion of MFIP.
- MFIP Housing Assistance Grant.
- Cost effective insurance reimbursement from Medical Assistance.
- Minnesota Supplemental Aid.
- General Assistance.
- Refugee Cash Assistance.
· Interest or dividends from investments and savings.
· Capital gains as defined by the Internal Revenue Service from any sale of real property.
· Proceeds from rent and contract for deed payments in excess of the principal and interest portion owed on property.
· Income from trusts, excluding special needs and supplemental needs trusts.
· Interest income from loans made by the family or a household member.
· Unemployment insurance income.
· Disability insurance payments.
· Tribal per capita payments unless excluded by federal and state law.
· Retirement benefits including pension payments and veteran benefits.
· Child or spousal support, medical or child care support which is not assigned to the state.
· Retirement, Survivors, Disability Insurance (RSDI). RSDI may have gross and net amounts.
· Cash prizes and winnings.
· Income and payments from service and rehabilitation programs that meet or exceed the state’s minimum wage rate.
- If the service or rehabilitation program pays a rate at or greater than the state’s minimum wage, all of the the income is counted.
- If the service or rehabilitation program pays a rate under the state’s minimum wage, none of the income is counted.
· Income from members of the United States armed forces identified as entitlements unless excluded from income taxes according to federal or state law.
· Nonrecurring income over $60 per quarter unless earmarked and used for the purpose for which it is intended. This includes lump sums such as insurance settlements, court settlements and child support arrears.
Sometimes expenditures necessary to secure payment of unearned income or other deductions may be withheld from an unearned income source. These expenses must be verified and reviewed to determine if they are an allowable deduction from the unearned income. If the expense is not verified, do not allow the expense as a deduction and count the full amount of the unearned income. An example is RSDI. The RSDI verification will identify a gross amount, if any expenses were withheld and the net amount. Usually, the gross amount of RSDI is the amount to be annualized. Additionally, the worker should also be aware of any expenses the family had in obtaining the unearned income, such as legal fees. See Chapter 6.18 (Income Deductions).
Income sources not identified above as earned or unearned income are not counted as income. If a client reports income sources that are not counted, it is recommended that the caseworker enter the reported amounts into MEC² in the appropriate category or in the “Other not counted” income type.
These sources may include, but are not limited to:
· Supplemental Security Income (SSI).
· Student Financial Aid.
· Northstar Care for Children payments for Foster Care, Adoption Assistance, and Kinship Assistance.
· Legacy Foster Care, Adoption Assistance and Relative Custody Assistance payments.
· AmeriCorps Service Allowances and other service program income below minimum wage.
· Earning and payments to individuals participating in programs under Title 1 of the Workforce Investment Act and other training program income below minimum wage.
· State and Federal tax refunds and earned income tax credits.
Minnesota Statutes 119B.09
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Minnesota Statutes 119B.011
Minnesota Statutes 256P.01
Minnesota Statutes 256P.06
Minnesota Rules 3400.0170