G.1. Employment Income

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• (1) Employment income includes (but is not limited to) hourly wages, salaries, overtime pay, tips, bonuses, and commissions before any payroll deductions. Payments in lieu of employment income are also included; e.g., workers compensation, severance pay, unemployment and disability compensation. Earned income from employment of children (including foster children) is excluded.

• (2) Maximum benefits and annualized payments should not be used unless the source of funds is expected to continue throughout the certification period or for an indeterminable length of time. For example, if the third party does not indicate the length of time for which the tenant will be receiving a certain income, then the income should be annualized. In the event that the family cannot provide documentation that access to a specific source of income is for a limited and determinable time period, the benefits should be considered to be available for an indefinite time period and annualized.

• (3) Example 1: Benefits for Indefinite Time Period

  • John works as a telemarketer for $9.00 an hour, 40 hours a week. He does not work overtime, has no other source of income, and is not planning to leave his job. His anticipated income is computed as: ($9.00/hour) x (40 hours/week) x (52 weeks/year) = $18,720/year

• (4) Example 2: Benefits for Definite Time Period

  • A teacher’s assistant works nine months annually and receives $1,300 per month. During the summer recess, the teacher’s assistant works for the Parks and Recreation Department for $600 a month. The teacher’s assistant’s anticipated income is computed as: ($1,300 x 9 months) + ($600 x 3 months) = $13,500

• (5) If information is available on changes in income expected to occur during the year, use that information to determine the total anticipated income from all know sources during the year.[22]

• (6) Example 3: Anticipated Changes in Income

  • In May 2004, an unemployed plumber applies for LIHC housing. At that time, the plumber is receiving unemployment benefits of $250.00 per month and will qualify for benefits for 4 more months.23 Beginning in October, the plumber will be employed at $1,000 per month. The plumber’s anticipated income is computed for the period from May to September 2004 plus the income for October 2004 through May 2005. ($250.00 x 5 months) + ($1,000 x 7 months) = $8,250

  • Owners are expected to make reasonable judgments regarding the most reliable method for estimating the income a household will receive during the year. If the tenant’s income cannot be determined using current information, the owner may include actual income received or earned within the 12-month period before the determination of annual income.

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