1115.035.30 Calculating Income Deductions

IM-#51 June 8, 2007IM-#36 April 4, 2006IM-#1 January 15, 1999

For billed expenses, except for expenses that can be averaged, allow a deduction only in the month the expense is billed or otherwise becomes due, regardless of when or if the EU intends to pay the expense. Do not consider the intent to pay. Amounts carried forward from past billing periods are not deductible.

EXAMPLE: Rent that is due each month will be included in the EU's shelter expenses even if the rent has not yet been paid.

Enter each expense type on its appropriate screen. Enter all expenses claimed by the EU. FAMIS includes the appropriate expenses based on policy.

Expenses paid by an ineligible student are not allowable even though the student lives with the EU except for the standard utility allowance (SUA) if the EU has received energy assistance (EA).

Agreed upon monthly installments on one-time medical expenses are allowable in the month that each installment is due. The expense is allowable even if the EU was initially billed and established a payment plan before the certification period began.

If an EU makes a timely arrangement with a provider to pay the expense in installments, the installment is considered the EU's expense in the month each payment becomes due.

The payment arrangement does not have to be a formal contract. A mutually recognized agreement is sufficient.

If the certification period expires before the balance of the installments has been paid, the monthly payment may be allowed as a deduction into the new certification period.

If a provider and EU renegotiate the payments for a one-time expense, allow the expense in accordance with the new agreement.

The eligibility specialist must record a comment concerning all expenses as outlined in the FAMIS Comments Quick Reference Chart pdf logo.

Always review the Food Stamp Budget Summary (FM4A) screen prior to authorizing a case action. From the Budget Summary screen press F14=INCSUM to view the Income Summary Detail (FM33) screen. From the Income Summary screen press F14=INCEXP to view the Income Expense (FMX1) screen.

To view other expenses from the Food Stamp Budget Summary (FMX1) screen press F15=EXPSUM to arrive at the Expense Summary (FM34) screen. Select the expense you want to view and press F6=DETAILS. Press F21=RETURN to return to the previous screen.

1115.035.30.05 Averaging Expenses

IM-#51 June 8, 2007IM-#1 January 15, 1999

EUs may elect to have expenses averaged if:

If no scheduled interval exists, average the expense over the period of time it was intended to cover.

The EU can change (once per certification period) from lump sum budgeting to averaging expense, or from averaged to lump sum. Do not allow an expense more than once.

EXAMPLE: Mr. B paid real estate taxes of $150 on 2/4. He applied for FS on 3/1 and elected to have his expenses averaged. He was certified for a period of four months, March through June. Since the taxes covered a period of 12 months, 1/12th of $150 is allowed for each month certified.
EXAMPLE: Mr. B paid his taxes of $150 on 3/10. He applied for FS on 3/12 and was certified for only one month, March. If he elects not to average expenses, the total expense for the taxes can be allowed in March. If he elects averaging, 1/12 of $150 is allowed.

1115.035.30.10 Anticipating Expenses

IM-#51 June 8, 2007IM-#110 June 8, 2001,  IM-#1 January 15, 1999

Calculate an EU's expenses based on the expenses the EU expects to be billed during the certification period. Use bills from the most recent months to anticipate expenses unless the EU is reasonably certain a change will occur.

EUs reporting one-time only medical expenses during the certification period may elect to have a one-time deduction or to have the expense averaged over the remaining months of the certification period. EUs certified for 24 months have a third option when the medical expense is incurred during the first 12 months of the certification period. EUs certified for 24 months may choose to average the expense over the remainder of the first 12 months of the certification period.

If a one-time medical expense is billed too late in the certification period to allow the expense in the applicable certification period, the expense can be averaged over the months of the new certification period provided no break exists between certification periods.

EXAMPLE: An EU is billed for a one-time expense on 11/27. December is the last month of the certification period. Since time does not permit the change to be effective for December, average it over the months of the new certification period, provided the EU is recertified for the next month.

The only other instance in which a one-time medical expense can be allowed outside of the certification period is when the EU timely agrees with the provider to pay the bill in installments.

1115.035.30.15 Disallowed Expenses

IM-#51 June 8, 2007

An expense covered by an excluded reimbursement or vendor payment is not deductible. For example, the portion of rent covered by excluded vendor payments is not calculated as part of the EU's shelter cost.

NOTE: This policy does not apply to energy assistance provided under the Low Income Home Energy Assistance Act of 1981.

That portion of an allowable medical expense not reimbursable is included as part of the EU's medical expenses. For EUs entitled to the medical deduction, consider the non-reimbursable portion at the time the amount of reimbursement is received or can otherwise be verified.

Expenses are deductible if the service is provided by someone outside of the EU and the EU does not pay for the service through an in-kind benefit. For example, a dependent care deduction is not allowed if another EU member provides the care or compensation for the care is in the form of an in-kind benefit, such as food.

Amounts carried forward from past billing periods are not deductible even if included with the most recent billing and actually paid by the EU.

EXAMPLE: Mr. J applied for FS on 3/6. He declared a shelter cost of rent of $300 for March. This included $150 for rent for February (past due) with the remaining $150 for March rent. Only $150 for March is an allowable rental expense.

Expenses previously allowed as a deduction are not allowed again.

1115.035.30.20 Deduction Conversion to Monthly Amount

Convert expenses billed less than monthly into a monthly amount. Multiply the expense amount billed weekly by 4.333 and expenses billed every two weeks by 2.166 to determine monthly deductions.