Energy Assistance Program Income CalcuLation Training PY 2018

1. Energy Assistance Program Income CalcuLation Training PY 2018

2. Training Goal All participants will walk away feeling confident in their understanding of the basic income calculation methods. Each participant will be able to utilize the methods learned today and the tools provided to tackle the many different income scenarios we see on a daily basis.

3. Agenda • Best Practice • Prepaid Accounts • Review Policy • Calculate Crisis • Calculating Crisis • EAP Income Calculation • Review policy • Demonstration • Putting it into Action

4. Best Business Practices Excel spreadsheets being provided today will also be distributed electronically. These help eliminate human mathematical errors. They provide a clear picture of how the income calculations were derived for the auditors. They have been utilized effectively in previous years and have greatly reduced the number of income calculation findings. Income Calculation Worksheets

5. Prepaid Account Crisis Calculation(Manual 3.6 Crisis for Limiters, Meters and Prepaid Services Pg. 15-17) Prepaid customers are eligible for crisis. To calculate crisis on a prepaid account the LSP will determine the client’s monthly usage cost. The monthly usage cost up to $200 for regulated and $400 for unregulated will be given. The crisis amount is given in addition to their regular benefit amount.

6. Anna Banana Prepaid Bill

10. Crisis BenefitManual pg. 14-15

11. Calculating Crisis for Regulated UtilitiesManual 8.10 Pg. 56-57 • In addition to the regular benefit, the LSP may extend up to $200 in a crisis benefit to those with regulated utilities. • The household must meet one of the following criteria: • Imminent danger of disconnect • Already shut-off • To calculate the crisis benefit, the agency will take the disconnection amount subtract the regular benefit and utilize the crisis benefit for up to $200. • If it exceeds the $200 amount, the client is responsible for paying the difference prior to pledging.

12. Calculating Crisis for Unregulated Utilities Manual 8.11 Pg. 57- 58 • In addition to the regular benefit, the LSP may extend up to $400 in a crisis benefit to those with unregulated utilities. • Offer the maximum crisis ($400) at time of application to ensure a minimum number of deliveries or prevent the client from coming back later for the crisis benefit. • Offer clients a regular benefit at the time of application and allow come back for crisis later. • The crisis assistance may be split between the two utilities, as long as the total amount does not exceed $400 for both utilities. • If the amount needed to ensure a fill exceeds the $400 amount, the client is responsible for paying the difference prior to pledging.

15. Income Computations • Total household income is used to determine eligibility • Must be at or below 150% of the Federal Poverty Guidelines • Three (3) consecutive months of income is used for calculation. • Most recent complete three (3) months of income available and falls within the previous five (5) months • Calculation should be based on application date • Exception – Completion Date (Manual pg. 36)

16. Countable Sources of IncomeManual 7.1 Pg. 39 - 45 • Dividends, interest • Gambling winnings, awards • Pensions and Annuities • Retirement plans • Royalties • Strike benefits • Unemployment Benefits • Veterans benefits • Regular life insurance payments • Workers compensation • Alimony payments • Wages • Salary, tips, bonuses, commissions • Self-employment income • Profit from a business • Military Allotments • Blood plasma payments • Disability payments from insurance • Social security benefits • Railroad retirement and Railroad disability benefits • Black Lung Disability • Income from Rental Property • Military Allotments • Life Insurance Payments

17. What is not counted as income?Manual Pg. 45 - 50 • Changes to income that is not counted • Assets held by or disposed of are no longer included as income • Child support is not counted when received and can be deducted from income for the applicant paying the child support.(Must provide documentation) • TANF should no longer be counted as income

18. Deduct Child SupportManual Pg. 46 When an applicant is paying child support, payments can be deducted from income. LSPs should look at pay stubs, bank statements, or letters from other government agencies to determine how much an applicant has paid in child support for the three (3) month period.

19. Income from Employment Computations • Income must be verified by one of the following sources: • Paystub • W-2 • Wage Inquiry • Written Statement from Employer • Self-employment and Income from Rental Property • Tax forms (IRS tax transcript, 1040 including appropriate schedules)

20. Calculating Income Using a Paystub To calculate income using a paystub and they have worked at the same job for the last 12 months, use the following formula: Step 1: Gross year to date income is divided by the pay month. This total equals the estimated monthly income Step 2: Take the estimated monthly income amount times 3(months). This total is the income amount. Ex: October paystub gross year to date is $8,400 divide by 10 months = $840 X 3months = $2,520

21. Scenario 1 – Sandra Dee 1 Mamas Retirement Comm

23. Calculating Income Using a W-2 May only be used by itself in January, February, March, and April of the current heating season. Use Box #1divided by 4 to give us 3 months income

24. Scenario – Sandra Dee 2

25. Scenario – Sandra Dee 2

26. Calculating Income forMultiple Jobs Application Date is April 30th. Job A worked at all year, pay date April 28th. Take YTD divide by 4 and multiply the monthly amount times 3 months. Job B started on February 22nd , use the YTD amount. Gross income equals Job A quarterly amount + Job B YTD = Last 3 months of income

27. Scenario 2 Multiple Jobs

29. Calculating Income Using a Wage Inquiry Use the last full quarter available prior to the application date. Wages are listed by quarter and year. The first number is the quarter, and the second number is the year that wages were reported. See the following example. 1/4- First Quarter 2014 or January through March 2/4-Second Quarter 2014 or April through June 3/3-Third Quarter 2013 or July through September 4/3-Fourth Quarter 2013 or October through December If there is an instance where you need one or two months instead of the entire quarter: Step 1: Take the total amount of all income listed for that quarter. Step 2: Divide the quarter by three (3), or three months Step 3: Multiply that amount times the number of months needed (one or two) Do not split months in half and do not split quarters into weeks or days

30. Scenario – Marta Bus 7/14/2016

32. Calculating Self Employment IncomeManual Pg. 39-40 • Income must be verified by the IRS tax form 1040 for the most recent, complete calendar year. Use the Adjusted Gross Income, if it is 0 or a negative amount, the client is not required to provide a wage inquiry from the DWD. • If the Applicant cannot produce the most recent tax return, the applicant should self-declare the previous 3 months and allow the LSP to obtain a wage inquiry from DWD • Must provide appropriate schedules to complete self-employment verification: • Schedules C, E, F, or SE, along with the 1040. • Rental Income is considered self-employment income

33. Scenario Audrey Hepburn Self-employed client Application Date is 12/16/2015

36. Calculating Income for Self Employment and Wages When a client is self-employed and the spouse has earned income utilize the self-employed income from the appropriate schedule. AND Use currentincome verification for the spouse with earned income.

37. Scenario Robert Runway III 11/09/2015

38. Scenario Robert Runway III

40. Robert Runway IV

41. Robert Runway IV

43. Computation of Income using Unemployment Benefits (Page 44) • Claim Index Inquiry- the WBA should be used to calculate income. • Voucher History Inquiry- the Benefit Pay Amount should be used. • Claim Master Inquiry- the Original WBA should be used • Wage or Benefit Transcript- the WBA for unemployment and the wages for documenting income (if applicable) should be used • Uplink Unemployment Payment Summary- Deductions and entitlement amounts should be added to calculate gross benefit.

44. Scenario 4 – Ashley Hay 5/13/16

45. Scenario 4 – Ashley Hay 5/13/16

47. Other Income Documentation Manual Pg. 40-45 • Pensions and Annuities • Retirement plans • Royalties • Strike benefits • Unemployment Benefits • Veterans benefits • Regular life insurance payments • Workers compensation • Alimony payments • Disability payments from insurance • Social security benefits • Railroad retirement and Railroad disability benefits • Black Lung Disability • Income from Rental Property • Military Allotments • Life Insurance Payments • Dividends, interest • Gambling winnings, awards

48. SS/SSI/SSDI ComputationManual Pg. 41-42 • Award letter listing single amount: • EX: $710 monthly benefit amount $710 X 3= $2,130 • Award letter listing multiple amounts: • Ex: Award letter states client will receive $784 until February 1stand the new adjusted amount will be $832. It is March 23rd. $784 X 2 (December and January)= $1,568 $832 (February)= $832 $1,568 + $832 = $$2,400 Total annual income

49. What to look for on a bank statement • Must contain • Name of client • Name of bank • Include the pages containing all monthly deposits • Must be within last 5 months (Most recent is preferable) • Watch for • Other unidentified deposits • Employment direct deposit • Interest Earned

50. Scenario- Judy E11/25/2016