SNAP Accuracy in Action

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Abner Parrish
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SNAP Accuracy in Action The many faces of Earned Income Accuracy in Action The Quality Assurance Team will be presenting quarterly issues of Accuracy In Action with the support of the Policy Analysts.

1 SNAP Accuracy in Action The many faces of Earned Income Accuracy in Action The Quality Assurance Team will be presenting quarterly issues of Accuracy In Action with the support of the Policy Analysts. With the new review process complete, we are still finding income as the number one error across the state. Why does income continue to be a struggle? There are many pieces to determining accurate calculation. In this issue we will tackle the many faces of income. This issue will guide you to where the policy is located. We will give you scenarios and examples to better help understand the policy. HELPFUL TIPS Review the application. What is the client reporting for hours and rate of pay? Check the IEVS screens. Check previous narration for important case information. February 2017 Volume 2, Issue 1 Narration and Interviews We continue to stress the importance of the interview process and your narration. It all starts with the conversation you have with the client and is key to ensuring the earned income is calculated correctly on a case. Make sure you have a complete conversation about the current situation: Who is your employer? How many hours do you work? How often do you receive a paycheck? Do you expect your situation to change at work? Are you expecting to continue to receive the same pay or will that be changing? If it is changing, why? Do you receive any other type of pay from your job, such as tips or bonuses? Tell me about the income verification you have provided (look at how often they are paid, is there over time, bonuses or tips?) Ask those clarifying questions when you find a discrepancy. Your narration should reflect the conversation that you had with the customer. It needs to tell the story behind the decision that you made. Narration Guideline Reference Multiple Program Worker Guides #14 MP-23 It all starts with the interview. Ask questions, listen carefully and document. Inside this issue Narration/Interviews 1 Tip Income Representative Income...2 Watch Out! It s a colon...3 Marginal Income. 3 Pay Frequency Activity 4 Income-Producing Property The Work Number...6 Situation Where you Don t need to Pend...7 Tips to Determine Frequency of Pay Pay Frequency Activity Answers... 8 Pay Frequency Activity Answers continued...9

2 TIP INCOME Remember all Tips! A client provides a month of wage stubs showing pay lines for Reg hour/wages and cr tip or vs/mc tip income. You don t know what these abbreviations mean. Do you stop there? No, you need to ask about these funny abbreviations. If the client states she is not sure, you call the employer. The employer states that the cr stands for credit card (as do vs/ mc) tip income they track. The employer further states that the employee is responsible for tracking and reporting their tip income to IRS. You ask the client about this and find they average about $20/day in cash tips as most of the customers charge the tips to their credit card. When calculating prospective income, don t forget to include cash and credit tips. And, Narrate! Narrate! Narrate! Tip income continues to be a big error state wide during our last Quality Assurance review cycle. Why? Data shows we over look the potential of tips in the jobs our clients are reporting. Tips are defined as a sum of money given for service over and above the payment that is due. Tips are considered part of a person s earned income and are countable. But who gets tips and where do we locate them on the pay stub? As part of the interview process, eligibility workers should be reviewing the application and discussing the client s employment. Some questions to consider and potentially ask: Does the client work for an establishment that would normally have tip income? Does the clients job entail some type of service work that others might think to tip? Did the client indicate on the application that they receive tip income? Do the paystubs reflect all tips received? Does the income noted on the application cover the client s expenses? We normally associate tip income with someone employed in the service industry, such as a wait staff, taxi drivers, hairdressers, and bartenders. Others jobs that may/may not receive tips include motel/hotel staff, gas station attendants, travel industry personnel, cooks, busboys, hostesses, to name a few. Tip income may or may not be shown on the wage stubs you view, this depends on the employer. If tips are showing make sure this is all the tip income by asking the client. Some employers list all the tips, others may just list the tips that come off of credit card or room charges, while others may not list them at all. The key is to ask questions and make sure you narrate. Examples of calculating Representative Income Kyle s last two months of pay stubs show average overtime (OT) of 15 hrs/month, working 40hours/week. YTD shows OT of $850. Kyle anticipated 40 hr/wk on his application but tells the worker he no longer anticipates OT because the company has hired 2 new people. Are we able to use the pay stubs or do we need further verification? Payment history indicates the OT should be anticipated. But, because Kyle reports no more OT, the pay stubs are not representative and we need to get further verification. Josh is a manager at a bank. He reapplies for SNAP in September, submitting his paychecks for August. August pay stubs show Josh has been working hours/week, but he now indicates he ll be working somewhere from hours/week. What do you do next? The pay stubs are not representative of what Josh is currently reporting. We will need to get further verification. This could be a call to the employer, more recent pay stubs if he has them, the work # if applicable. 2

Remember it is very important to explain reporting requirements during the interview with the client to ensure the customer reports accurately and timely and does not create an overpayment. WATCH OUT!

00 HOWEVER, What if you see this: Reg Hours: 44:30 Rate of Pay: $10.00/Hour Gross Wages: 445.00 Did you notice the difference?

3 Remember it is very important to explain reporting requirements during the interview with the client to ensure the customer reports accurately and timely and does not create an overpayment. WATCH OUT! IT S A COLON! Employers normally note on Wage Stubs the hours used in computing employees time. We see it as: Reg Hours: Rate of pay: $10.00/Hour Gross Wage: HOWEVER, What if you see this: Reg Hours: 44:30 Rate of Pay: $10.00/Hour Gross Wages: Did you notice the difference? The use of : (Colon) between Hour/Minutes means the actual minutes the client worked. The first example shows minutes in % of the hour. In the two examples both indicate the employee worked 44 and half of an hour. Why is this important? While in this scenario the two examples are the same, that is not always the case and cause miscalculation in determining income, JPI income and ERDC hours. For example reg hours: 35.5 = 35 1/2 hours vs. 35:5 = almost 36 hours. To convert to our normal hours divide the number showing after the colon by 60(minutes) =% to use. 50 divided by 60= % or.83. We would use 35.83reg/hr. Marginal Income Marginal income is self-employment income that is minimal and is difficult to verify. There is not an exact definition or dollar amount of what qualifies as marginal. You need to make your best determination after a conversation with your client. Here are some examples but not limited to: Donating plasma Picking up pop cans Doing odd jobs for various people Panhandling Marginal income does not need to be verified. In many cases, requiring them to provide written verification of self-employment earnings would be an unreasonable barrier to eligibility. To get an acceptable estimate of their income, ask the client about their typical monthly earnings. Narrate their response. If the person is not sure about how much money they earn ask them more specific questions. Note: If the customer is doing odd jobs for the same person each month it is reasonable to request verification from the person they are working for. Did You Know If a job has not started when you interview the customer the case should be coded with $0 income. Remember to ask Daycare Providers (DPU) if they receive USDA meal reimbursement income. If they do, use the calculator in the FSM Counting Client Assets B. 81. Money contributions and gift income received on a monthly basis is counted as unearned income. It needs to be verified and coded on SNAP case as OTH. Verification can be a phone call or statement from the giver. CA-B.14 Contributions CA-B.30 Gifts & winnings For additional information, go to Worker Guide CA

Pay Frequency Activity 1. Lucas is reapplying for SNAP benefits. On the application he states he is working for High Five Printing Press and is paid $9.75 an hour.

4 Pay Frequency Activity 1. Lucas is reapplying for SNAP benefits. On the application he states he is working for High Five Printing Press and is paid $9.75 an hour. Lucas submitted two pay stubs, how would you calculate his income? What on the pay stubs indicate his pay frequency? 2. Heidi is applying for SNAP benefits. During the intake she states that she has been working for Meow Meow Pet Store for the past 3 years, she is paid $10 per hour, works approx. 38 hours per week and thinks she is paid every other week but is not for certain. By looking at the pay stubs Heidi submitted can you tell how often she is paid and what income we should include on her SNAP case? What indicates how often she is paid? 3. Aiden submitted his Interim Report (DHS 852). He states that he works at Pho Tango Restaurant earning $15.00 per hour and working approx. 20 hours per week, Aiden did not state how often he is paid. Aiden provided the following two pay stubs, how would you calculate his income? What on the pay stubs indicate his pay frequency? For more TIPS on Pay Frequency see page 7. Multiple Program Worker Guide #22: Prospective Income Calculations 4

Income-Producing Property Income-producing property is any real or personal property that generates income for the financial group.

vacation homes, condominiums, or farmland. If an individual is receiving rent for the property they live in, do not count this as income unless it exceeds the expense for the property.

To determine how this income is treated we will need to ask customer: Are you actively managing the property 20 hours or more a week?

Yes: Self-Employment income (SEC) or (SEN) No: Income Producing Property (PTY) Types of verification that can be used for PTY income: 1.

5 Income-Producing Property Income-producing property is any real or personal property that generates income for the financial group. Examples of income-producing property include: Livestock, poultry and other animals Rental homes (including a room or other space in the home or on the property of a member of the financial group), vacation homes, condominiums, or farmland. If an individual is receiving rent for the property they live in, do not count this as income unless it exceeds the expense for the property. See Section 22 in SNAP G. 30 for Financial Eligilbity examples. This source of income can fall under self-employment or unearned income. To determine how this income is treated we will need to ask customer: Are you actively managing the property 20 hours or more a week? Actively managing property includes: collecting rent, taking applications, showing the apartments to prospective tenants, and personally doing maintenance and repairs on the rented units. Yes: Self-Employment income (SEC) or (SEN) No: Income Producing Property (PTY) Types of verification that can be used for PTY income: 1. Tax form (Schedule E) if income from last year is going to be the same this year. a. Part I, Lines 1 A-C for the type and address of rental properties b. Part I, Line 3 for the rental income received c. Part I, Line 4 for royalties received d. Part I, also will identify expenses. Important note: If SLF income, this section shows costs to allow SEC coding. If PTY, deduct only the current ongoing costs of the property Ownership (any listed here on lines 5-19 except for line 18) to determine income. e. Part II, Line 28 to identify if it is a partnership (SLF ) or Corporation (EML) status. f. Part II and III, if any of the income is noted as being from Schedule K- 1 request a copy of the K-1 2. Signed contract from renter(s) regarding how much rent they pay to the homeowner each month. More information can be found in FSM: SNAP G.17 and Counting Client Assets B.34. For more information on how to Read Tax Forms, please go to SNAP Desk Tools. Example 1: Bob and his wife own a duplex, Bob s family is residing in one side and renting out the other side to the Smith family. Bob is billed for mortgage for both units under one bill. His total mortgage including taxes and insurance is $1,995. Bob rents the other unit for $2,050. Bob and his wife manage property for 8 hours per month doing landscaping around the property. This property is in the great shape so no other expenses are reported at this time. This meets income producing property criteria (PTY). Income will be determined as following: $1,995 will be deducted from $2,050 total mortgage, equals $55 of the countable PTY income on the SNAP case with no allowable shelter deduction for Bob s family. There is no shelter deduction because it exceeds his reported shelter costs. Example 2: Beth owns a house with a monthly mortgage of $1,100 including insurance and taxes. She rents out two rooms to two different roommates, and receives $500 from each roommate. This is not income producing property. This is a shared shelter situation. Deduct $1,000 from $1,100 will equal to $100. The $100 will be coded as shelter deduction on SNAP for Beth. 5

6 Information found on the Work Number ( An important part of the eligibility process is checking the Work Number for all adults on the case. We use this database to verify employment and income information. It also saves ourselves and the client the extra work of a pending case. The Work Number database is updated each time an employer runs payroll. The Work Number needs to be checked when we complete certifications, recertifications, and at ICR time. Remember the Work Number is part of the IEVS screens. Name: Name of client. Check to make sure you have the correct person. Employee Information: This shows the address reported to the employer. It may include a phone number and date of birth for the employee. Information Current As of: This is the date the Work # was updated. The name of the employer: Knowing the name of the employer can sometimes tell us if there are potential commissions and/or bonuses. An example would be Walmart, which we know that in most instances pays an employee quarterly bonuses. Employment status: Active or Inactive (sometimes includes the date of separation when inactive) The hire and start date(s) of employment: This is most important when determining if the first check for a new job covers a full pay period or not. If not and it s not representative, don t use the income. Follow-up with the client and/or the employer. Job title: There are job titles that alert us to potential tips and/or commissions. Some examples include sales associates, waiters, & hotel maids. Pay rate: Make sure the hourly rate entered on the application is the same as the rate on the Work Number as there may have been a change in the rate. Address discrepancies and if there was a recent change in the rate, convert the income using the new rate. Frequency of pay: Your calculation should reflect the same pay frequency when converting the income. Overtime: Always address OT. If there is a substantial amount of YTD OT, this may indicate that there is ongoing OT and should be correctly calculated. If during a certification or recertification, the customer indicates they do not anticipate OT and there is a significant amount of YTD OT that makes this questionable, additional verification may be required. A detailed narrative, supporting your decision is key in this situation. Commissions: YTD income information alerts the worker to the potential of commission pay. It is important to determine the pay frequency when calculating the eml amount. Bonuses: YTD income information alerts the worker to the potential of bonuses. In many cases bonuses are paid quarterly or once a year, which is important when calculating the eml amount. Also, if the bonus is included in the gross amount, be sure not to count it twice. Other pay: this may include incentive or shift differential pay.

Situations Where You Don t Need to Pend Income verification and the amount on the application do not match this should be addressed in the interview and only pend if necessary after the conversation.

7 Situations Where You Don t Need to Pend Income verification and the amount on the application do not match this should be addressed in the interview and only pend if necessary after the conversation. Example: Customer reports on application $1200, but pay stubs reflect $1500. You talk with the customer and they reported net instead of gross. If you can, make contact with the employer to verify questionable or missing information then document the conversation with the employer. Narrate who you speak with. Seasonal employment it is ok to take a customer s statement about a reduction in hours as long as it is an expected change and in line with the industry. Marginal income if it would be a hardship for an individual to get or keep documentation it is not required. Excluded income does not need to be verified and this includes educational income that is deducted from the cost of attending school when the cost of attending is more than the income that is received. Terminated source of income. Job has not started yet not on the schedule yet. If job hasn t started, the case should be coded with $0. The verification was available on the Work Number, or one of the screens that we have available to us. You have received employer verification via a letter or by phone. An example of a new job where a customer hasn t started working. Lacey applies for SNAP on June 17 and reports she has been hired as a server at Denny s starting on July 1. She knows she will be paid minimum wage plus tips and will be working full time. What income will you use on the SNAP case? We would not pend for future income from a job that hasn t started. $0 income should be coded on the case. The start of this job is in the future and there is no guarantee she will actually start. Explain the client s reporting requirements so she knows when she will need to report income from the job. Check out the Pay Type/ Frequency and Treatment of income chart in the Multiple Program Worker Guide MP-22 Tips To Determine Frequency of Pay Look closely at the pay period and pay dates on the check for the pattern. Ask customer if they get paid on the specific day (Mon, Tue, Wed ), this is typical of a biweekly pay period or date (1 st and 15 th, or 7 th and 21 st ) which is typical of a bi-monthly (twice a month) pay period. New terminated Income Type Code EMT and UMT As of 12/2016, we have two new Income type codes for terminated income: `EMT` (for terminated earned income) `UMT` (for terminated unearned income). By using these codes, the system will recognize that this is terminated income and will remove the applicable income from the case at end of month. The system will automatically do the removal for the worker. These new codes can only be used for brand new CRT cases and Rec cases where there has been a break in benefits. For ongoing cases, if clients have an open case and report their income is ending, workers should follow the regular standard process for processing terminated income changes. Double check information customer reports by using calendar. 14 day pay periods are most typical for biweekly pay periods. 15 or 16 day pay periods are most typical for bimonthly (twice a month) pay periods. If you cannot tell the pay frequency from the pay stubs you can always call the customers employer. You do not need to state you are calling for a specific employee but rather just ask how often their employees are paid. 7

8 Pay Frequency Activity Answers from Questions on page 4. No Peeking! 1. How often is the customer paid? How can we tell? How do we confirm what the client stated? -During the interview, the customer stated they are paid twice a month, the 1st and the 14th of each month and he anticipates this income to continue. -To confirm the clients statement, look at the pay date on the check stub -Check the pay dates on a calendar. -Pay dates do not fall on consecutive days of the week (October 14 th falls on a Friday and November 1 st falls on a Tuesday), which is indicative of being paid bi-monthly; x 2. -The pay periods (9/26/16-10/10/16 and 10/11/16-10/25/16) cover one full month, which is indicative of being paid bi-monthly, x 2. Calculation for Lucas: 10/14/16: $ /01/16: $ $ EML / 2 pay checks = $ average per pay check x 2 (paid twice a month) = $ anticipated pay per month Or could use the hours and pay rate to determine anticipate income such as: 10/14/16: 31.9 hours + 11/01/16: hours hours / 2 pay checks = average per pay check x 2 (paid twice a month) = hours a month x $9.75 hourly pay = $ anticipated pay per month. Both calculations are accurate. What is key is the importance of narrating the income calculation and available verification CLEARLY! 2. How often is the customer paid? How can we tell? -During the interview, Heidi said she wasn t sure if she gets paid twice per month or every week. -Pay dates do not fall on consecutive days of the week (the 4th falls on a Thursday and the 17th falls on a Wednesday). -Pay periods are from the 16th - 31st and the 1st - 15th which cover a full month which is indicative of being paid bi-monthly (paid twice per month, x2). -The amount of days in the pay periods are not the same, the 1 st -15 th has 15 days and the 16 th -31 st has 17 days which is indicative of being paid bi-monthly (paid twice per month, x2). Calculation for Heidi: 08/04/16: $ /17/16: $ $ EML / 2 pay checks = $ average per pay check x 2 (paid twice a month) = $ anticipated pay per month. 8

9 Pay Frequency Activity Answers Continued from page How often is the customer paid? How can we tell? - If this is an existing job that the client had at initial certification, look at the case history. And check the Work Number. -Aiden is paid bi-weekly, or every other week; x Though Aiden is not paid on the same consecutive day for each pay date Aiden s pay periods 10/31/16-11/13/16 and 10/17/16-10/30/16 each have 14 days which is typically indicative of biweekly (every other week, 2.15) pay frequency. -When looking at both of Aiden s pay periods, they do not cover a full month of pay: 10/17/16 to 11/13/16. *Insider tip: Aiden works for a restaurant, tips are not listed on his pay stubs. Please remember to address cash tips with Aiden in the narration and include as earned income if representative.* Calculation for Aiden: 11/03/16: $ /17/16: $ $ EML / 2 pay checks = $ average per pay check x 2.15 (paid every other week) = $ anticipated pay per month. Helpful Tool The DHS 859C is a paycheck tracking calendar that is available for use. You may download this tool from this link or the forms server. Best Practice It s best practice to review the paystubs with the client(s) during the interview and determine what is representative. And to inquire on the frequency of pay with the client. 9

NARRATION, NARRATION, NARRATION!

NARRATION, NARRATION, NARRATION! On Target Other Income on the Work Number August 2017 The work number is a great resource available to verify income. In addition to providing us with a history of the participant s income we can also