Bonuses and Cash Incentives
  |
A bonus or incentive is income paid to the participant in addition to their normal wages.
Policy
Cash bonuses or incentives are countable earned income.
Noncash bonuses or incentives are not countable. This includes, and is not limited to any of the following:
●Gift cards
●Meals
●Prizes
●Merchandise
Countable income is used to determine an income budget. (See Income Budgeting to see how FAA determines the income budget.) FAA needs to know about income that is both countable and not countable to determine whether a budgetary unit’s expenses are exceeding their income. (See Income Eligibility for more information about how FAA uses countable and not countable income.)
Procedures
When the participant is present, have them sign the Authority to Release (FAA‑1765A) form to contact any companies or businesses involved. The FAA-1765A can be faxed or emailed to the participant's employer when it is not possible to use the Application for Benefits (FAA-0001A) or the HEAplus Authority to Release signed statement.
A cash bonus or incentive is budgeted and keyed separately from other types of income.
When the bonus or incentive is listed within the gross income amount of another type of income, complete all of the following:
●Manually subtract the cash bonus or incentive amount from the gross income amount.
●Discuss with the participant whether the bonus or incentive is received with a frequency. (e.g., weekly, quarterly, yearly, etc.) (See Example 1)
●Clarify with the employer when the participant is unsure whether the bonuses or incentives are ongoing. (See Example 2)
●Determine the bonus or incentive budget. When appropriate, enter the budget in AZTECS through the current system month using the appropriate Income Type Code.
See Income Budgeting for budgeting procedures.
Verification
System interface and the case file(g) must be reviewed before verification is requested. No additional verification is needed when AZTECS interface or HEAplus hubs have verified the information.
The participant has the primary responsibility for providing verification. (See Participant Responsibilities – Providing Verification for additional policy.)
For NA, all of the following income is required to be verified before eligibility is determined:
●Reported on a new application, during the interview of a new application, or changes reported before the eligibility determination of a new application.
●Changes after an eligibility determination of a new application (e.g., a renewal application, mid approval contact, etc.) and any of the following apply:
The source of the income has changed.
The income is questionable(g) or unclear(g).
The reported income amount has changed by $51 or more.
The previous verification in the case file is more than 59 calendar days old.
For CA, all income is required to be verified before determining eligibility.
Examples of verification that can be used for bonuses and incentives considered earned income include, and are not limited to, any of the following:
●System interface(g) when the participant agrees that the information is accurate
●A copy of a paycheck stub
●Copy of checks when the gross earnings are listed
●A printout from a third-party payroll verification source provided by the participant
●Third-party payroll verification sources when the employer uses the verification source as its legal agent to provide payroll services or respond to inquiries about employee records. (See Third-Party Payroll Verification Sources(g) for FAA approved sources, additional information, and instructions for requesting additional sources.)
●A New Employment Verification (C005) notice that is completed, dated, and signed by the employer or their payroll authority. To be considered complete, the statement needs to include all of the following:
Name, address, and telephone number of the employer
Gross pay for the periods needed
Frequency of pay (e.g., weekly, monthly, quarterly, etc.)
Day of the week or day of the month pay is received (e.g., Fridays, 5th and 20th of the month, first of the month, etc.)
Any expected change in pay
●For new or current employment verification, a completed Verification of New/Current Employment (FAA‑0053A) form that includes a date and the signature of the employer or their payroll authority
●For terminated employment verification, any of the following completed items that include a date and the signature of the employer or their payroll authority:
Verification of Terminated Employment (FAA-1701A) form
Verification of Terminated Employment (C019) notice
●Letter from the agency providing government-sponsored training
●Leave and Earnings Statement (LES) from the military
●A collateral contact with the employer or their payroll authority
NOTE Collateral contact is not used when contacting the employer would jeopardize the participant's employment or when the employer does not accept telephone verification.
●Participant statement verification when one of the following occur:
Obtaining documented or collateral contact verification may cause harm or undue hardship(g) for the participant.
When all of the following occur:
●Other attempts to obtain the verification have failed. This includes documented and collateral contact verification.
●The participant has requested assistance from FAA.
●The worker has evaluated the request for assistance and cannot obtain the verification from another acceptable source.
●The participant statement is not questionable(g).
NOTE Some companies do not allow verification over the telephone. When an FAA-0053A or an FAA-1701A must be completed by any of the following, see the company’s contact information to determine where FAA staff must send the form:
AZTECS Keying Procedures
Key cash bonuses or incentives on EAIC separately from other types of income using the OT Earned Income Type Code. (See Income Budgeting Basics Procedures, for more information about keying the hours for other types of countable income.)
Noncash bonuses or incentives are not keyed in AZTECS.
Document the case file(g) thoroughly to support keyed codes, amounts, and frequencies. See the AZTECS Data Entry Guide for instructions on keying the AZTECS income screens.
NOTE Documentation must support determinations of eligibility and benefit level. Document in sufficient detail to ensure that any reviewer can assess whether the determination is reasonable and accurate. Include specific information regarding the reason the income is determined to be normal. (See Budgeting Income Documentation Requirements for additional information.)
Examples
1) Jill works for Walmart She received a quarterly bonus of $200 for the last two quarters.
A collateral contact was made to Walmart who verified that Jill received a bonus for the last two quarters however, they could not anticipate if Jill would receive a bonus in the future.
After exploring further with the participant, Jill verified that she received the bonus in the last two quarters. With the information provided, it is reasonable to expect that she is going to receive the bonus in the future.
In this scenario, the prudent person concept should be used, and the bonus income should be budgeted as ongoing income.
2) Jack works for local grocery store and applies for NA on 11/05/2022. His last pay stub, dated 11/18/2022, includes a $150 incentive bonus and shows in the year-to-date section that he has received incentive pay of $245 for the year 2022 to date.
While discussing the incentive with Jack, he explains that this incentive pay is due to the completion of a special project. He’s unsure when he received the previous incentive or what it was for. A collateral contact was made to Jack’s supervisor who verified that incentives are not normal, and it cannot be anticipated whether Jack would receive another incentive in the future.
In this scenario, the incentive pay received on 11/05/2022 is budgeted for the budget month of 11/2022. The incentive pay is deleted for ongoing months because it cannot be reasonably expected to continue. (See Anticipating Income for additional budgeting information.)
Legal Authorities
AAC R6-12-501 – 503
A.R.S 46-292 (P-1)
7 CFR 273.9(b)(1)(i)
7 U.S.C. 2014 (f)(B)
last revised 10/02/2023