CONTRACT INCOME (FSM)

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A yearly contracted wage which covers a specific period of work (12 months or less) and which is paid during that time. An individual may receive contract income for only 9, 10, or 11 months in a 12-month period. Nevertheless, contract income is considered available to the individual for the whole 12 months covered by the contract.

Treatment: Earned Income

Examples

A contracted teacher works 9 months of the year in an elementary school, beginning in September and ending in May. He receives a $24,000 yearly salary, paid to him during the 9 months he works. His monthly wage is determined by dividing his yearly salary by 12, so his countable earned income per month is $2,000.

A school bus driver works the same time periods as a teacher, but not under contract; that is, 9 months. She receives, in all, $9,000 yearly. This income is paid to her during the 9 months she works. Her monthly wage is determined by dividing her 9 months income by 9, so her countable earned income per month is $1,000 in the months she works, but $0 in the months she does not work.

Exception: Contract income which does not represent the household’s annual income and is not paid on an hourly or piece work basis is averaged over the period it is intended to cover.

Example

Mrs. Greene has a two month contract for November and December working in a nursery to prepare trees for the holiday season. She is paid $900 for this contract regardless of the number of hours she works or the number of trees she prepares for sale. Her monthly earned income is $450 for November and $450 for December ($900 divided by 2), in addition to any other income for those two months.

References: RSA 161:2, XIII; RSA 161:4-a, IV; RSA 167:4, I(a); RSA 167:7, IV; 7 CFR 273.9(b)(1)(i); 7 USC 2014(f)(1)(A)