16 Del. Admin. Code § 8000-8028
Earned income is the money an individual receives in return for work he/she performs. Earned income entitles the earner, who is a member of an assistance unit, to deductions that are not allowed for unearned income.
NOTE: Earnings paid to employees under contract are averaged over the number of months covered by the contract.
EXAMPLE: A teacher is under contract for a full calendar year, but may choose to collect his pay during the school year. His wages for public assistance purposes are budgeted over the full year.
Self-Employment Standard Deduction for Producing Income
The cost for producing income is a standard deduction of the gross income. This standard deduction is a percentage of the gross income determined annually and listed in the Cost-of-Living Adjustment (COLA) notice each October.
The standard deduction is considered the cost to produce income. The gross income test is applied after the standard deduction. The earned income deductions are then applied to the net self-employment income and any other earned income in the household.
The standard deduction applies to all self-employed households with costs to produce income. To receive the standard deduction, the self-employed household must provide and verify they have business costs to produce income. The verifications can include, but are not limited to, tax records, ledgers, business records, receipts, check receipts, and business statements. The self-employed household does not have to verify all their business costs to receive the standard deduction.
Self-employed households not claiming or verifying any costs to produce income will not receive the standard deduction.
The self-employment standard deduction will be reviewed annually to determine if an adjustment in the percentage amount is needed.
9 DE Reg. 1237 (02/01/06)
The following disregards are deducted from gross earned income in the RCA budgeting process. Disregards are applied to each earner's wages.
The $30 plus 1/3 disregard is applied to earned income for four (4) consecutive months. If TANF benefits end or employment ends before the fourth month, the earner is eligible for the disregard for four (4) additional months upon reapplication or re-employment.
When a case suspends for one (1) month because the earner received an extra paycheck, the month of suspension does not count as one of the four (4) consecutive months. The count picks up when the case is reinstated.
EXAMPLE: A case is budgeted in May and June with $30 plus 1/3 disregard. In July, the case is suspended because of an extra paycheck. In August, the case is reinstated and the $30 plus 1/3 disregard is again applied. August is the third month of the four (4) consecutive months.
When an earner's wages are so low ($90 or less in the month) that the income is zero before any part of the $30 plus 1/3 disregard can be applied, that month does not count as one of the four (4) consecutive months of the $30 plus 1/3.
EXAMPLE: A case is budgeted in May and June with the $30 plus 1/3 disregard. In July, the client earns $75. In August, the client earns $120. August is the first month of the four (4) consecutive months of the $30 plus 1/3.
Unlike the $30 plus 1/3 disregard which is dependent upon the client having sufficient earned income and being a TANF recipient, the $30 disregard is for a specific time period. This time period begins when the $30 plus 1/3 disregard ends and is not dependent upon the client having earned income or receiving TANF.
NOTE: When an earner has received the $30 plus 1/3 disregard in four (4) consecutive months and the $30 deduction has been available for eight (8) additional months, neither disregard can be applied to earned income until the individual has not received TANF benefits for twelve (12) months.
Earned income disregards (the standard allowance for work expenses and dependent care costs), are not deducted from earnings when a recipient quits a job without good cause, or reduces earnings without good cause.
Good cause for reducing earnings includes circumstances beyond the individual's control such as, but not limited to illness, illness of another family member requiring the wage earner's presence, a household emergency, the unavailability of transportation, or the lack of adequate child care.
Good cause for terminating employment includes those circumstances listed above. It also includes:
All EITC payments received by an RCA applicant or recipient are disregarded as income for eligibility and payment purposes. EITC payments are also excluded when determining a family's eligibility under the 185% gross income test.
EITC payments are not defined as earned income in the RCA Program even though advance EITC payments are made by the employer.
Exclude the earnings of a full time student from both the 185% gross income test and the net income test for six (6) months per calendar year. This exclusion is based on the child's full time student status, not the type of earnings. The income exclusion applies to both applicant and recipient full time students.
For applicants in which the six (6) month income exclusion time period has ended, the earned income of a child who is a student is included in determining the RCA assistance unit's financial eligibility. If the unit is financially eligible, the students' earned income is disregarded in determining the amount of the grant.
For active cases in which the six (6) month income exclusion time period has ended, the earned income of a child who is a student is included in the 185% gross income test. If the RCA unit's income is less than the 185% gross income limit, the student's earned income is disregarded in all further budget calculations.
A minor student is defined as a child who attends a school or a vocational training course full time. Student status is also extended to a child who attends school part time if the child is not a full time employee. Part-time school attendance is defined as carrying at least half of a full time schedule. Full-time employment is defined as working more than thirty (30) hours per week.
NOTE: The earned income a minor receives as a participant in the WIA sponsored Summer Youth Employment is disregarded in all income tests. (See DSSM 8030).
16 Del. Admin. Code § 8000-8028