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Minnesota Department of Human Services Child Care Assistance Program (CCAP) Policy Manual
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7.9 Income Verification

ISSUE DATE: 10/2017

When to verify income

Verify all included sources of income when:

  • · Processing an application,
  • · Processing a redetermination,
  • · Reducing a family’s copayment, or
  • · A family reports their income is over 85% of SMI during the 12 month eligibility period. See Chapter 7.4 (Verification – 12 month eligibility period).
  • Do not request verification of income changes during a family’s 12 month eligilibility period unless the family reports that their income is over 85% of the SMI. See Chapter 8.1.12 (Changes in income or expenses).

    Income that is not counted and does not affect the eligibility or amount of assistance the family will receive does not need to be verified.

    What to request as verification

    Request verification that proves when, what type and the amount of income a family member receives. A Minnesota Family Investment Program/Diversionary Work Program (MFIP) Employment Plan (EP) cannot be used as verification of income.

    All income must be verified using the documentation that is the best indicator of future income. The recommended standard is the most current 30 days of verification for income other than child support tracked through PRISM. If the most current 30 days of income verification is not reflective of expected future income, a different timeframe can be used. For child support tracked through PRISM, the recommended standard is the last six months of information. If the worker uses something other than these standards, it is recommended that they case note why they deviated and how verification is used to support the income components required in the calculation of annualized income.

    If the applicant or recipient cannot provide an actual document, ask him or her to provide a release of information signed by the family member receiving the income allowing you to contact the source of the income directly. A client statement cannot be used to verify income except in the following circumstances:

  • · Self-employment income: If existing verification is insufficient to accurately predict self-employment income (for example in the start-up phase of self-employment) a client statement may be used to verify self-employment income.
  • · Child support income: In cases where there is a previously agreed upon child support arrangement and the absent parent refuses to sign a verification of payment, the applicant may self-declare child support income during the initial application.
  • · Earned Income Ending: A signed client statement can be used to verify the date that employment ended and the date the last paycheck was received.
  • Earned income

  • · Paycheck Stubs
  • - Ask if the applicant or recipient has paycheck stubs for the timeframe that is the best indicator of future income. The recommended standard is the most current 30 days of verification. If the most current 30 days is not reflective of expected future income, such as for seasonal or temporary income, a different timeframe can be used. The paycheck stubs should specifically identify the number of hours worked, gross income based on those hours, payroll period covered, client and employer name.
  • - The worker may also use year-to-date totals as the best indicator of future income.
  • - If something other than the recommended standard is used to calculate the income components, it is recommended that the worker case note what was used and how it was used to determine the income components.
  • · Employer Statement
  • - If paycheck stubs are not available, or do not contain all the necessary information, ask the applicant or recipient to provide a letter from the employer on company letterhead with the necessary information.
  • - For seasonal or temporary income, paycheck stubs may not be reflective of expected future income. An employer statement can be used in combination with paycheck stubs to determine expected future income. The worker is not required to use the information on the paycheck stubs when calculating income if the paychecks are not reflective of expected future income.
  • Self-employment income

    Documentation of self-employment income must meet the following criteria:

  • · Ask for books and tax statements, if available, providing gross receipts and expenses from self-employment income.
  • · Self-employment business income records must be kept separate from the family’s personal income records.
  • · If business records and personal records are not separate, ask the parent to separate income records and resubmit according to Child Care Assistance Program requirements.
  • · If existing verification is insufficient to accurately predict self-employment income (for example in the start-up phase of self-employment) a client statement may be used to verify self-employment income. When child care is authorized based on estimated income, inform the participant of possible overpayment if the estimated income used does not reflect the actual income earned.
  • · If a self-employed person believes that they should not be subject to the higher minimum wage, the county should work with the applicant or client to identify the correct applicable amount. If a self-employed person believes that they should not be subject to the higher minimum wage but verification is not available, accept a statement from the person that states that they are not subject to that amount and the reason why.
  • Unearned income

  • · All counted unearned income must be verified using documentation from a timeframe that is the best indicator of future income. The recommended standard is the most current 30 days of verification, excluding child support tracked through PRISM.
  • · For child support tracked through PRISM, the last six months of information is the recommended standard.
  • · For child support that is not tracked through PRISM, the recommended standard is the most current 30 days of verification.
  • · If the worker uses something other than these standards to calculate the income components, it is recommended that the worker case note what was used and how it was used to determine the income components.
  • Examples of acceptable documentation of unearned income include but are not limited to:

  • · Court documents providing child support and/or spousal maintenance amounts.
  • · Documentation from the Child Support and Collections office. In cases where there is a previously agreed upon child support arrangement and the absent parent refuses to sign a verification of payment, the applicant may self-declare child support income during the initial application but must agree to cooperate with child support enforcement by completing the
  • · required paperwork. The self-declared child support received is included in the annualization of income.
  • · Award letters from the Social Security Administration, the Veterans’ Administration, etc.
  • · State Verification Exchange System (SVES) interface screen prints. See Chapter 7.24 (Verification – DHS systems).
  • · Bank statements indicating interest paid on a specific account.
  • · Copies of checks for pensions, trust funds, annuities, unemployment compensation, etc.
  • · Cash settlements/awards/winnings may be verified through copies of the “letters of award” or court order or other applicable items.
  • · A screen print of the TPCO screen in MMIS or a copy of We Have Determined Your Health Insurance is Cost Effective (DHS-7207A) as verification of cost effective insurance reimbursement.
  • Income deductions

    Request verification of the amount and type of expense and allow the required amount of time for the verification to be returned. See Chapter 7.1 (Verification due dates). If the requested verification is not received, do not allow the expense as a deduction and process the case without the income deduction. The following are examples of acceptable verification:

  • · Payroll deductions as indicated on the pay stubs. Request consecutive pay stubs to verify that the deduction is ongoing.
  • · Copy of invoice and receipt of payment from an insurance company. The documentation provided must verify the amount and type of expense covered.
  • · Copy of current invoice for Minnesota Care premiums.
  • Legal authority

    Minnesota Statutes 119B.011
    Minnesota Statutes 119B.025
    Minnesota Statutes 256P.06
    Minnesota Rules 3400.0170, subp. 1

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