933.02 Annualizing Income (FAM)

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When a parent indicates that the current income does not reflect the total family income of the next 12 month period or the parent has irregular fluctuations in earnings over the course of a year, typically due to gaps in employment from month to month or season to season availability of work, income may be annualized over 12 months to better reflect the family’s annual income. Examples include: a contractor who completes a construction job in one month and has no additional work scheduled for the next month(s); a ski resort employee that works only during the winter season; or a farm worker that works only in spring and summer.

Allow for irregular fluctuations in earnings from employment or self-employment to be annualized when determining initial eligibility or at redetermination.

The FSS must ask the parent if the family income fluctuates throughout the year. If the family income does fluctuate, the parent must provide verification from the employer that includes an estimate of the yearly income.

If a family’s initial application or redetermination reflects current income over 85% SMI, but they have fluctuating income that averages less than 85% SMI, the income may be annualized to determine eligibility.

Allow for temporary increases of income over 85% SMI (i.e. one-time bonus, or short term 3-month employment increase).

Income must be verified before a case is determined eligible.

References: He-C 6910.06(g); 45 CFR 98.20