(a) Sources of income considered.
Income may be received periodically or at irregular intervals. All income, unless specifically excluded per
Oklahoma Administrative Code (OAC) OAC 340:40-7-12 is considered in determining
monthly gross income. Income is
classified as earned or unearned income.
(b) Earned income. Earned income
means total money earned by a person through the receipt of wages, salary,
commission, or profit from activities in which the person is engaged as
self-employed or as an employee. • 2 Temporary disability insurance
payment(s) and temporary workers' compensation payments are considered earned
income when payments are employer-funded and the person remains employed.
(1) Wages. Wages include total
money earned for work performed as an employee including armed forces pay,
commissions, tips, piece-rate payments, longevity payments, and cash bonuses
before deductions, such as taxes, bonds, pensions, union dues, credit union
payments, or cafeteria plans are subtracted. • 3
(A) Countable wages for
military personnel include any allowance
included on the earnings statement, such as the Basic Allowance for Housing
(BAH) or Basic Allowance for Subsistence (BAS).
(B) Only the portion of the
cafeteria plan the client controls, including any excess benefit allowance
payments, is counted as income. • 4
(C) Reimbursements for
expenses, such as a uniform allowance or transportation costs, other than daily
commuting, are subtracted from the gross income.
(D) Payments made for annual
leave, sick leave, or severance pay are considered earned income during the
month such income is received whether paid during employment or at termination
(E) Wages that are garnished or
diverted and paid to a third party are also counted as income.
(2) Self-employment. Self-employment income is calculated based on
procedures listed in this subsection. • 5
(A) Persons considered self-employed. A person is considered self-employed when:
(i) he or she declares himself or herself to be
(ii) there is an employer/employee relationship and the
employer does not withhold income taxes or Federal Insurance Contributions Act
(FICA), even when required to do so by law; or
(iii) the employer withholds taxes and
the person provides proof he or she files taxes as self-employed.
(B) Records used and income calculation. The worker uses the records described in (i)
through (iii) of this subparagraph to calculate income. When the person
reports a loss instead of a profit on the business, the worker does not deduct
the loss from other household income.
(i) When the person filed a federal
income tax return for self-employment income for the most recent year, whether
the person's income is derived from his or her own business or from working for
an employer, the worker uses the gross self-employment income shown on the
person's federal income tax return, subtracts 50 percent of the income for
claimed business expenses, and divides the income by 12 or the number of months
the business has existed or the person started working for the employer, when
less than 12 months. The worker verifies
the person's start date with the employer when the person states he or she has
not worked for the employer for at least 12 months.
(ii) When the person did not file an
income tax return for the most recent tax year for his or her own business, the
worker calculates self-employment income using the person's
business records for the last 12 months or the number of months the business
has existed when less than 12 months.
When the client declares business expenses, the worker subtracts 50
percent of the gross self-employment income to arrive at the net profit.
(iii) When the
person works for an employer, did not file a federal tax return as
self-employed, and receives earnings from an employer, the person must provide
proof of the last 12 months of income from the employer. The worker divides
the gross income by 12 or the number of months the person worked for the
employer to determine monthly income. When
the person declares business expenses, the worker subtracts 50 percent of the
gross self-employment income before dividing the income by the applicable
number of months to determine monthly income.
(C) Profit sharing.
Households who operate S corporations, general or limited partnerships,
or limited liability companies may receive profit sharing that is reported on
the household's personal income tax return. When
a household member:
actively participates in the operations, the income from profit sharing is
considered part of the household's self-employed earned income; or
(ii) does not actively participate
in the operations, the income from profit sharing is considered part of the
household's unearned income.
(D) Monthly self-employment income.
Self-employment income received on a monthly basis is normally averaged
over a 12-month period. When the
averaged amount does not accurately reflect the household's actual monthly
circumstances because the household experienced a substantial increase or
decrease in income, the worker calculates the self-employment income based on
anticipated earnings. • 6
(E) Seasonal self-employment.
Self-employment income intended to meet the household's needs for only
part of the year is averaged over the period of time it is intended to
cover. • 7
(F) Annualized self-employment income.
Self-employment income that represents a household's annual support is
averaged and annualized over a 12-month period, even when the income is
received in a short time period.
(i) When the average annualized
amount does not accurately reflect the person's actual monthly circumstances
because the person experienced a substantial increase or decrease in income,
the worker calculates the self-employment income on anticipated earnings.
(ii) The worker does not calculate
self-employment income on the basis of prior earnings, such as income tax
returns, when an increase or decrease of business has occurred. • 6
(iii) When the person received the self-employment
income for less than 12 months, the worker averages the income over the
applicable number of months and projects the monthly amount for the coming
year. • 8
(G) Income from rental property.
Income from rental property is considered self-employment income. • 9
(H) Income from room and board.
Payments from roomers or boarders are considered self-employment when
the roomer or boarder pays a reasonable amount.
When the roomer or boarder is acting in the role of a spouse, OAC
340:40-7-6(b)(4) applies. • 10
training. Earned income from regular
employment for on-the-job training (OJT) is considered earned income. This includes OJT provided per Section
3(44) of the Workforce Innovation and Opportunity Act (WIOA) for persons 19 years
of age and older. This does not include classroom or institutional training
or intern assignments sponsored by WIOA, even when an hourly amount is paid for
such training per OAC 340:40-7-12(25)(G).
(4) Title I payments of Domestic Volunteer Services Act. Payments under Title I of the Domestic
Volunteer Services Act of 1973 as amended per Public Law 93-113 are considered
income unless excluded per OAC 340:40-7-12.
(5) Earnings of children. Earned
income of a minor parent is treated as adult earned income. Earnings of other children 17 years of age
and younger who are under the parental control of an adult household member are
excluded per OAC 340:40-7-12. • 12
(c) Unearned income. Unearned
income is income a person receives for which the person does not put forth any
daily, physical labor. Types of income
listed in paragraphs (1) through (10) of this subsection are considered
unearned income. • 13
(1) Assistance payments.
Assistance payments include state means-tested programs, such as Temporary Assistance for Needy Families (TANF),
including Supported Permanency benefits, State Supplemental Payment (SSP) to
the aged, blind, or disabled, and Refugee Resettlement Program (RRP) cash
assistance. • 14
(2) Pensions, disability, and Social Security benefits. Annuities, pensions, retirement benefits,
disability benefits from either government or private sources, or Social
Security survivor benefits are considered unearned income.
(A) When a minor
child receiving Social Security benefits no longer lives with the payee
receiving the Social Security benefits, only the portion of the child's Social
Security benefit used to meet the minor child's needs is considered
income. This may include cash
given directly to the minor child or money paid to a third party for room and
board for the minor child.
(B) The parent or caretaker or, when
appropriate, the minor child must take action to become
the payee within the 12 month eligibility period per OAC 340:40-7-9(d). When the parent, caretaker, or minor child
does not take action by renewal, the worker counts the total Social Security
benefit as income.
(3) Supplemental Security Income (SSI).
SSI is considered unearned income.
(4) Unemployment and workers' compensation. Income from unemployment insurance benefits
or workers' compensation is counted as unearned income.
(5) Child support, court-ordered or third party paid child care, and
alimony. Child support, child care
payments, and alimony payments, whether court-ordered or voluntary, made
directly to the household from non-household members are counted as unearned
income. • 16
(A) When a child care payment
is paid directly to the child care provider, it is not considered income for
(B) When the absent parent
reports he or she is paying a portion of the client's family share copayment to
the child care provider, the only action taken by the worker is to record this
in the case record.
(C) When the absent parent or
another third party, such as an employer, is making a payment to the provider
in addition to the client's copayment, it is considered an additional copayment
that must be met before the Oklahoma Department of Human Services (DHS) makes a
subsidy payment to the provider. • 17
(D) Any other payment made to a
third party for a household expense must be considered as income when a court
order directs the payment be made to the household. Payments for medical support are excluded.
(6) Veterans' compensation, pensions, or military allotments. Disability compensation, military allotments,
servicemen dependent allowances, and similar payments are considered unearned
income. • 18
(7) Contributions. Appreciable
contributions recurrently received in cash are considered unearned income
except when the contribution is not made directly to the client. To be appreciable, a contribution must exceed
$30 per calendar quarter per person.
(8) Dividends, interest, minerals, and royalties. Dividends, interest income, income from
minerals, royalties, and similar sources are considered unearned income. When income from these sources is received
irregularly or in varied amounts, it is averaged over 12 months. Income from royalties is treated as unearned,
self-employment income, subject to (b)(2) of this Section.
(9) Lump sum
payments. Recurring lump sum payments,
including income from earnings, are averaged over the period they are intended
to cover. • 19
(10) Irregular income. Income received irregularly but in excess of
$30 per quarter is considered income unless it is from an excluded income
source specifically mentioned at OAC 340:40-7-12. Countable irregular income is averaged over
12 months. • 20