6.6 Earned/Unearned Income (2024)

ISSUE DATE: 07/2024

Earned income

Earned income is income that results from work, effort, or labor. Use gross earned income for income calculations. Gross earned income is income from employment before any payroll deductions. Gross earned income includes 401K contributions, all insurance premium payments on the pay stub and pre-tax medical/dental accounts. CCAP allows for certain income deductions. See Chapters 2 (Glossary) and 6.18 (Income Deductions).

Unearned income

Unearned income is a payment a family member did not expend individual effort or labor to receive. See Chapter 2 (Glossary) for the definition of unearned income. Use gross unearned income for income calculations. Unearned income includes only:

·Cash assistance benefits, including, but not limited to:

·Cash portion of MFIP

·MFIP Housing Assistance Grant

·DWP

·Cost effective insurance reimbursem*nt from Medical Assistance

·Minnesota Supplemental Aid

·General Assistance

·Refugee Cash Assistance.

·Interest or dividends from investments and savings.

·Capital gains as defined by the Internal Revenue Service from any sale of real property.

·Proceeds from rent and contract for deed payments in excess of the principal and interest portion owed on property. See Chapter 6.15.9 (Annualizing Rental Property Income) for more information about annualizing rental property income.

·Income from trusts, excluding special needs and supplemental needs trusts.

·Interest income from loans made by the family or a household member.

·Unemployment insurance income that is received by an adult member of the assistance unit unless the individual receiving unemployment insurance income is:

·18 years of age and enrolled in a secondary school; or

·18 or 19 years of age, a caregiver, and is enrolled in school at least half-time.

·Disability insurance payments.

·Worker’s Compensation

·Retirement benefits such as pension payments and veteran benefits.

·Child or spousal support, medical or child care support which is not assigned to the state.

·Retirement, Survivors, Disability Insurance (RSDI). RSDI may have gross and net amounts.

·Cash prizes and winnings.

·Income from members of the United States armed forces identified as entitlements unless excluded from income taxes according to federal or state law.

See Chapter 2 (Glossary) for more information about nonrecurring income.

Expenses such as legal fees, may be needed to secure payment of unearned income or deductions may be withheld from an unearned income source. Expenses and deductions must be verified to be an allowable deduction from the unearned income (except for expedited child care applications). If the expense is not a verified allowable deduction, do not allow the expense as a deduction and count the full amount of the unearned income. If the expense is a verified allowable deduction, deduct the expense from the full amount of the unearned income.

For example, the RSDI award letter will identify a gross amount, a Medicare premium, and the net amount. The gross amount of RSDI is the amount to be annualized minus the Medicare premium as this is a verified allowable deduction. See Chapter 6.18 (Income Deductions).

Other financial supports not identified above – Not counted

Financial supports not identified above as earned or unearned income are not counted as income. If a family reports income that is not counted, it is recommended that the worker enter the reported amounts into MEC² in the appropriate category or in the “Other, not counted” income type.

Financial supports that are not counted include, but are not limited to:

·Tribal payments (i.e. payments to Tribal members from Tribal gaming revenue, business enterprises, land use, general welfare payments, treaty or trust obligations, and legal settlements).

·Income for lived-experience engagement about the impact of human services programs.

·Census income from working as a census enumerator or decennial worker.

·Supplemental Security Income (SSI).

·Student Financial Aid.

·Northstar Care for Children payments for Foster Care, Adoption Assistance, and Kinship Assistance.

·Legacy Foster Care, Adoption Assistance and Relative Custody Assistance payments.

·AmeriCorps Service Allowances.

·Other service program income.

·Rehabilitation (rehab) programs such as vocational rehabilitation programs and services.

·Earning and payments to individuals participating in programs under Title 1 of the Workforce Investment Act and other training program income.

·State and federal tax refunds and other recurring or non-recurring tax credits such as earned income tax credits and child tax credits.

·Establishment gift cards (nonrecurring and recurring) issued by a particular retailer or for a particular good or service (i.e., a Target or Walmart gift card).

·Student training program income. See STUDENT TRAINING PROGRAM in Chapter 2 (Glossary).

·Minnesota Frontline Worker Payments.

·Guaranteed income payments (also known as universal basic income payments or unconditional income payments). Typically, local governments and private funders operate the programs which issue guaranteed income payments.

·Nonrecurring income unless the source of the payment is on the list of counted unearned income. See “Unearned income” above.

·Cash payments, recurring or nonrecurring.

·Cash gifts recurring or nonrecurring.

·Prepaid credit card gift cards, recurring or nonrecurring (i.e. a Visa or MasterCard gift card).

·Inheritance.

·Insurance settlement.

Legal authority

Minnesota Statutes 119B.09
Minnesota Statutes 119B.011
Minnesota Statutes 256P.01
Minnesota Statutes 256P.06
Minnesota Rules 3400.0020
Minnesota Rules 3400.0170
Minnesota Session Law 2022, Chapter 50, Article 2
Laws of MN 2023, Regular Session, Chapter 70

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