CONTRACT INCOME SR 94-04, 04/94 (FSM-A)

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. He receives, in all, $9,000 yearly. This income is paid to him during the 9 months he works. His monthly wage is determined by dividing his 9 months income by 9, so his countable earned income per month is $1,000 in the months he works, but $0 in the months he does not work.