PM 08-01-02-b

See WAG 25-03-01 (1) chart titled Initial Employment Deduction for amounts.

See WAG 25-06-18 for historical data on the Initial Employment Deduction.

## Examples of calculating the IED

The following are examples of how the IED is calculated on new request for TANF cash.

Example 1: Ms. A applies for TANF cash for herself and her four children, in a Group 1 County. She has earned income of \$800 per month.  The IED is calculated as follows:

• \$28,780 (Annual FPL for 5 people)
• divided by 12 months
• equals \$2,398(Monthly FPL for 5 people)
• divided by 2
• equals \$1,199 (1/2 of the monthly FPL for 5 people)
• minus \$555 (payment level)
• equals \$644 (IED amount)

Ms. A passes the first test of eligibility as budgeted earned income of \$156 (\$800 earned income minus (\$644 IED)) is less than the payment level of \$555.

Example 2: Mr. R and Ms. Q apply for TANF for themselves and their five common children  in a Group 1 County.  Mr. R has earned income of \$2400 per month.  Ms. Q has earned income of \$1200 per month.  The IED is calculated as follows:

• Calculation of Mr. R.'s IED
• \$37,140 (Annual FPL for 7 people)
• divided by 12 months
• equals \$3,095
• divided by 2
• equals \$1,548
• minus \$657 (TANF payment Level)
• equals \$891 (IED amount)
• Calculation of Ms. Q.'s IED
• \$37,140 (Annual FPL for 7 people)
• divided by 12 months
• equals \$3,095
• divided by 2
• equals \$1,548
• minus \$657 (TANF payment Level)
• equals \$891 (IED amount)

Mr. R and Ms. Q do not pass the first test of eligibility.  Mr. R's budgeted earned income of \$1509 (\$2,400 earned income minus \$891 IED), plus budget earned income for Ms. Q of \$309 (\$1200 earned income minus \$891 IED) is over the TANF payment level of \$657.

## Special budgeting situations:

To determine family size for Parent Liability, see PM 10-04-04. To determine family size for an ineligible parent or excluded spouse, see Diverted Income WAG 10-04-02

Example 1: Parent Liability - Tonya is an unmarried 16 year old applying for TANF for herself and her child. She lives in Cook County with her employed parents, Bob and Sue, and her 2 younger brothers.

The parents' family unit size is 4, including Bob and Sue and their 2 dependent sons. Do not include Tonya and her child. Use the IED for a family unit size of 4 in County Group 1.

Example 2: Ineligible  Parent - Mrs. A. lives in Sangamon County and applies for TANF for herself and 2 children. Mr. A. is ineligible for TANF due to his immigration status, but since he is employed, his income must be used to determine financial eligibility for Mrs. A. and their 2 children. Mr. A. has a young son living with the family who also is an ineligible noncitizen.

The family unit size is 2, including Mr. A. and his dependent ineligible son. Use the IED for a family unit size of 2 in County Group 2.

Example 3: Excluded Spouse - Mrs. B. lives in Jasper County and applies for TANF for herself and her 4 children. Mr. B. is not the father of any of the children. He is employed, and is not applying for TANF as an optional person. Mr. B brought his own 2 young children to the marriage.

The family unit size is 3, including Mr. B. and his 2 dependent children. Use the IED for a family unit size of 3 in County Group 3.

## Treatment of earned income when a former client stops receiving child support

Example: Ms. V receives TANF for herself and her three children. The TANF Payment Level for Ms. V is \$474 (one adult and 3 children). Ms. V reports employment earning \$1600 each month. Child support in the amount of \$250 is also being paid to the Division of Child Support Services. After allowing the \$50 Pass Through, \$200 child support is used to compare to the cash benefit the client receives. The TANF calculation is as follows:

\$1600 Gross earned income

-\$1200 3/4 income deduction

\$400 earned income is budgeted.

+ \$200 Child Support (\$250-\$50 Pass Through)

= \$600.00 Compared to the Payment Level of \$474

The combination of budgeted earned income (\$400) and child support (\$200) makes the case ineligible for cash benefits. The cash assistance is stopped effective 10/15.

In 12/15, the child support stops and Ms. V requests cash assistance. Do not apply the first eligibility test using the IED. Apply the 2nd eligibility test. Ms. V is eligible for cash:

\$1600 Gross earned income

-\$1200 3/4 income deduction

= \$400 Compared to the Payment Level of \$474

Since \$400 is less than the Payment Level of \$474, Ms. V is eligible for cash benefits under TANF.