Applying Income Deductions

1. Allowable deductions for the SNAP Program. Applying Income Deductions

2. 7 Income Deductions • Earned Income Deduction • Standard Deduction • Medical Deduction • Dependent Care Deduction • Legally Obligated Child Support • Homeless Standard Deduction • Shelter Deduction Details are on the following slides...

3. Non-Deductible Expenses Do NOT allow income deductions for: • Amounts that will be reimbursed • Amounts paid as a vendor payment • Payments made to another HH member • Medical expenses for household members who are not elderly or disabled • Any portion of a bill carried forward from past billing periods, even if included in most recent billing and paid by the household

4. Earned Income Deduction • Deduct 20% of the gross countable earned income. • KAMES automatically applies this deduction, when you enter earnings. $1000 x .20 $200.00 Example: If earnings are $1000, the deduction is $200.00.

5. Standard Deduction A Standard Deduction is allowed for all households, depending on the number of members on the case. • These amounts are subject to change! Go to the KAMES Eligibility Tables and locate the current amounts for the Standard Deduction.

6. Medical Deduction • Allow a deduction of any expenses totaling more than $35 for elderly or disabled members. • Also allow a deduction for a previous household member, if a current member is still responsible for their medical bills.

7. Do NOT Allow a Deduction for: • Any expense that will be reimbursed. • Any expense previously used in the SNAP case as a deduction. • Interest added when a bill is paid with a credit card • Surcharges or fees added to insurance premiums by insurance companies. • Any expenses listed in Vol. II, MS 5440.

8. Allowable Medical Expenses • Allowable Medical Expenses are listed in Vol. II, MS 5430. • Follow that link to the online policy manual and review Allowable Medical Expenses for SNAP.

9. Dependent Care Deduction • Deduct costs for care of a child or other dependents when necessary for a household member to seek, accept or continue employment, training or education preparatory to employment. • Policy for Dependent Care is in Volume. II, MS 5450.

10. Do NOT Allow a Deduction for: • Dependent care costs which are reimbursed through other programs, such as: • Employment Training Programs • Child care disregard in KTAP budget • Expenses paid by CCAP • Payments to another HH member. • Payments for Kindergarten education.

11. Calculating Dependent Care • Average the prior 2 months’ amounts, or verify anticipated amounts, if changing. • Manually Convert to a monthly amount. • Round to whole dollar amounts when dividing between children, so that the system counts the correct amount.

12. Rounding Example Client pays $50 per week for 2 children: • Convert to monthly: $50 x 13  3 = $216.67 ($217) • Divide between 2 kids: $217  2 = $108.50 per child We usually enter actual amounts, and let KAMES round. But in this case, the system would count $1 too much after rounding both amounts up.

13. Rounding Example Continued... • In order to get KAMES to count $217 per month, enter $108.00 on one child’s member screen, and $109.00 on the other. • Be cautious when dividing amounts between 2 or more members, so that KAMES counts the correct monthlytotal.

14. Child Support Deduction • Allow a child support deduction for members who are legallyobligated to pay, and are verified as paying, child support for an individual living outside the household. • Everything about the Child Support Deduction is found in Vol. II, MS 5510.

15. A Deduction IS Allowed for: • Amounts collected from income such as Unemployment Insurance intercept, salary garnishment, and income tax refund intercept, etc. • For amounts collected through tax intercept, allow the HH the option of using a one-time deduction, or averaging it over the cert period.

16. Do NOT Allow a Deduction for: • Payments made to individuals in the same household • Payments that are not legally obligated (Voluntary support) • Obligated Support amounts that are not currently being paid. • Payments are alimony or spousal support • Payments are made in accordance with a property settlement

17. Child Support Verification In order to use the Child Support Deduction, the individual must provide verification of: • The Legal Obligation (Proof that they are legally required to pay support.) • The amounts actually paid (Usually the prior 3 months payments, if representative of ongoing payments.)

18. Homeless Standard Deduction • A homeless standard allowance choice is available for homeless households who incur shelter expenses, in lieu of a deduction for shelter expenses. • Homeless households which reasonably expect to incur a shelter expense for rent or utilities are allowed to use the homeless standard allowance.

19. Homeless or Shelter Deduction? • Homeless individuals have the option to use actual rent expenses and utility deductions instead of the Homeless Standard, if actual expenses are higher. • If they decide to use actual rent and utility standards, shelter expenses must be verified.

20. Homeless Standard Amount • The Homeless Standard Deduction is subject to change each year. • Go to the KAMES Eligibility Tables, and locate the current Homeless Standard Deduction amount.

21. Shelter Deduction Deduct monthly shelter costs in excess of 50% of household’s income after all other appropriate deductions are given.

22. Example: • Income remaining after allowing all deductions (Standard, Earnings, Medical, Dep. Care, and Child Support) is $1000. • We would allow a Shelter Deduction for any expenses exceeding$500 (50%) • If the total Shelter expense is $750, we would allow a deduction of $250.

23. Shelter Deduction Maximum • The Shelter Deduction amount cannot exceed the maximum unless the HH contains an elderly or disabled member. • Go to the KAMES Eligibility Tables, and locate the current Shelter Deduction Maximum.

24. Please return to BlackBoard, and complete the Allowable Deductions and Dependent Care Activity. More on Shelter Later...